Hesham Ismail v. Interstate Resources Inc ( 2021 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 20-1291
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HESHAM ISMAIL,
Appellant
v.
INTERSTATE RESOURCES INC; UNITED CORSTACK LLC, (Successors to
Interstate Resources), TDBA DH Smith Reading Mill, TDBA Interstate Resources Inc;
DS SMITH HOLDINGS INC, (Successors to Interstate Resources), TDBA DS Smith
Packaging Reading and Interstate Resources, TDBA DS Smith Reading Mill, TDBA
United Corstack LLC, TDBA Interstate Resources; INTERSTATE CONTAINER
READING LLC, (Successors to Interstate Resources), TDBA DS Smith Reading Mill,
TDBA Interstate Resources Inc; DS SMITH PLC
____________________________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 5-18-cv-02881)
District Judge: Honorable Jeffrey L. Schmehl
____________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
February 12, 2021
Before: CHAGARES, PHIPPS and COWEN, Circuit Judges
(Opinion filed February 16, 2021)
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OPINION*
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*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
PER CURIAM
Pro se appellant Hesham Ismail appeals from the District Court’s order enforcing a
settlement agreement with his former employer, Interstate Resources, Inc., and its
corporate affiliates (collectively, the “Defendants”). For the reasons set forth below, we
will affirm the District Court’s judgment.
I.
Because we write primarily for the parties, we will recite only the facts necessary
for our discussion. In July 2018, Ismail filed a complaint in the District Court against the
Defendants, raising employment discrimination claims under Title VII of the Civil Rights
Act and the Pennsylvania Human Relations Act. The case was referred to the Magistrate
Judge, who conducted a settlement conference on April 3, 2019. At the conclusion of the
four-hour conference, counsel for Ismail and counsel for the Defendants stated that they
had reached an oral settlement. The parties agreed to the terms of the settlement on the
record and expressed their intention to reduce the agreed-upon terms to a writing. The
Magistrate Judge issued an order dismissing the case as settled but retaining jurisdiction
for purposes of enforcing the settlement agreement. See generally Kokkonen v. Guardian
Life Ins. Co. of Am., 511 U.S. 375, 379–81 (1994).
After the agreement was put in writing and reviewed by the parties’ attorneys,
Ismail refused to sign it. Ismail’s counsel and counsel for the Defendants moved to
enforce the settlement agreement. The Magistrate Judge held a hearing and took
testimony from Ismail. He testified that, based on his conversations with unidentified
friends who are criminal attorneys, he believes that his attorney misled him to settle for
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an amount that was too low. He primarily alleged that his attorney misinformed him
regarding his ability to recover certain damages and attorney’s fees.
The Magistrate Judge issued a report and recommendation that the settlement
agreement be enforced in accordance with the terms of the written agreement that Ismail
had refused to sign. On December 19, 2019, after reviewing the record and Ismail’s
objections de novo, the District Court adopted the recommendation and ordered that the
settlement agreement be enforced. Ismail then purported to exercise Sections 24 and 25
of the unsigned written agreement, which stated that he had 21 days to consider the
agreement and that he could revoke the agreement within seven days of signing it. Ismail
filed various requests that the case be reinstated based on his alleged revocation.
The District Court denied Ismail’s requests to reinstate the case. The District
Court explained that it had ordered the enforcement of the April 3, 2019 oral settlement
agreement and that Sections 24 and 25 of the unexecuted written agreement were not a
part of the settlement. On January 6, 2020, the District Court amended its December 19,
2019 order to clarify that it was ordering the enforcement of the settlement agreement in
accordance with the terms reached on the record on April 3. Ismail then sent emails to
the District Judge challenging the amended order and again requesting that the case be
reinstated. On January 27, 2020, the District Court denied Ismail’s requests. Ismail filed
his notice of appeal on February 6, 2020.
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II.
We have jurisdiction under 28 U.S.C. § 1291.1 “This court applies plenary review
to a district court’s construction of settlement agreements, but should review a district
court’s interpretation of settlement agreements, as well as any underlying factual
findings, for clear error.” Coltec Indus., Inc. v. Hobgood, 280 F.3d 262, 269 (3d Cir.
2002); see also Tiernan v. Devoe, 923 F.2d 1024, 1031–32 (3d Cir. 1991).2
III.
We agree with the District Court that the parties entered a binding and enforceable
settlement agreement pursuant to the terms placed on the record at the April 3, 2019
settlement conference. “The enforceability of settlement agreements is governed by
principles of contract law.” Mazzella v. Koken, 739 A.2d 531, 536 (Pa. 1999). “As with
any contract, it is essential to the enforceability of a settlement agreement that the minds
of the parties should meet upon all the terms, as well as the subject-matter, of the
1
Because the District Court’s January 6, 2020 order resolved a substantive ambiguity in
the original judgment, the 30-day time period to appeal began anew. See F.T.C. v.
Minneapolis-Honeywell Regul. Co., 344 U.S. 206, 211–12 (1952) (explaining that an
order that substantively changes, or resolves a genuine ambiguity in, a judgment
previously rendered begins anew the time period for appeal); Keith v. Truck Stops Corp.
of Am., 909 F.2d 743, 746 (3d Cir. 1990) (“An order substantively changing a judgment
constitutes a new judgment with its own time for appeal at least where the change is the
subject matter to be reviewed.”). We construe Ismail’s challenges to the January 6 order
as a timely motion for reconsideration, which the District Court denied in its January 27,
2020 order. Ismail’s timely notice of appeal from that order “brings up the underlying
judgment for review.” See Long v. Atl. City Police Dep’t, 670 F.3d 436, 446 n.20 (3d
Cir. 2012) (quotation marks and citations omitted).
2
Under the circumstances here, we apply Pennsylvania law to the enforceability of the
settlement agreement. See Tiernan, 923 F.2d at 1032–33 & n.6.; see also Three Rivers
Motors Co. v. Ford Motor Co., 522 F.2d 885, 889 (3d Cir. 1975).
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[agreement].” Id. (quotation marks and citation omitted). “An agreement to settle a
lawsuit, voluntarily entered into, is binding upon the parties, whether or not made in the
presence of the Court, and even in the absence of a writing.” Cooper-Jarrett, Inc. v. Cent.
Transp., Inc., 726 F.2d 93, 96 (3d Cir. 1984) (quotation marks and citation omitted).
Here, the transcript from the settlement conference reflects that Ismail accepted
the Defendants’ offer to settle the case on a set of definite terms that included valid
consideration. See Channel Home Ctrs., Div. of Grace Retail Corp. v. Grossman, 795
F.2d 291, 299 (3d Cir. 1986) (“Applying Pennsylvania law, then, we must ask (1)
whether both parties manifested an intention to be bound by the agreement; (2) whether
the terms of the agreement are sufficiently definite to be enforced; and (3) whether there
was consideration.”). During a colloquy with the Magistrate Judge, Ismail affirmed that
he had adequate time to discuss the matter with his counsel and that he felt he was well
represented by counsel. Ismail said he understood that accepting the settlement would
release his claims against the Defendants, that the settlement amount included all costs
and counsel fees, and that he would not be entitled to make a separate request for
reimbursement of those fees. Ismail stated that he had no questions and he explicitly
agreed to the terms of the settlement.
Ismail’s arguments to invalidate the settlement are meritless. There is no support
in the record for his contention that he was misinformed and misled into settling the case
on the basis of fraud sufficient to invalidate the agreement. There is no evidence that
Ismail was misinformed regarding his likelihood of recovering damages in excess of the
settlement amount, and merely “[h]aving second thoughts about the results of a valid
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settlement agreement does not justify setting [it] aside.” Hensley v. Alcon Labs., Inc.,
277 F.3d 535, 540 (4th Cir. 2002) (alteration and internal quotation marks omitted).
Ismail’s engagement letter with counsel and his colloquy with the Magistrate Judge fully
informed him regarding the issue of attorney’s fees.
Ismail’s failure to sign the settlement documents does not invalidate the settlement
agreement. When the parties have agreed on the essential terms of a contract, the fact
that they intend to formalize their agreement in writing but have not yet done so does not
prevent enforcement. See Grossman, 795 F.2d at 298–300; see also Am. Eagle Outfitters
v. Lyle & Scott Ltd., 584 F.3d 575, 582 (3d Cir. 2009) (explaining that “parties may bind
themselves contractually although they intend, at some later date, to draft a more formal
document” (quotation marks and citation omitted)). Here, the settlement documents were
exchanged to memorialize the terms of an already-reached agreement, and Ismail’s
obligation to sign the documents was part of what he had already agreed to do.
Further, there is no basis for Ismail to revoke the settlement agreement pursuant to
Sections 24 or 25 of the unexecuted written documents. The District Court properly
determined that the oral agreement reached on April 3, 2019, established the terms of the
settlement. The transcript from the settlement conference makes clear that the material
terms of the parties’ agreement did not contemplate revocation in any form. Ismail does
not cite any legal authority supporting his claim that he had the right to rely on provisions
in unexecuted settlement documents in order to cancel a valid and enforceable oral
agreement that the parties had previously reached.
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Finally, the District Court properly denied Ismail’s motion for reconsideration,
which was based on a repetition of his meritless arguments to invalidate or revoke the
settlement agreement. See generally Max’s Seafood Cafe ex rel. Lou-Ann, Inc. v.
Quinteros, 176 F.3d 669, 677 (3d Cir. 1999). We have carefully reviewed the rest of
Ismail’s arguments on appeal, and we find them to be meritless.
Accordingly, we will affirm the judgment of the District Court.
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