Seymour, Donna L. v. Hug, Carol ( 2007 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 06-2502
DONNA L. SEYMOUR,
Plaintiff,
v.
CAROL HUG et al.,
Defendants-Appellees.
APPEAL OF:
LESLIE V. MATLAW
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 04 C 2041—Jeffrey Cole, Magistrate Judge.
____________
ARGUED FEBRUARY 20, 2007—DECIDED MAY 3, 2007
____________
Before MANION, KANNE, and WOOD, Circuit Judges.
KANNE, Circuit Judge. Attorney Leslie V. Matlaw
represented plaintiff Donna Seymour in this case. Ms.
Matlaw, acting on her own behalf, seeks to set aside the
settlement agreement reached in this case and related
orders entered by the district court. Ms. Matlaw lacks
standing to bring this appeal and therefore the appeal
is dismissed.
2 No. 06-2502
I. HISTORY
Plaintiff Donna L. Seymour filed a lawsuit in March
2004 alleging that she had been discriminated against on
the basis of race in violation of the Fair Housing Act when
she tried to purchase a home in suburban Chicago. The
defendants are the real estate agents, potential sellers and
others associated with the contested transaction. The
case was initially assigned to District Judge George M.
Marovich. In August 2004, the parties consented, pursuant
to 28 U.S.C. § 636(c), to proceed before Magistrate Judge
Ian Levin. Judge Levin retired from the bench and the
Executive Committee of the Northern District of Illinois
reassigned the case to Magistrate Judge Jeffrey Cole in
May 2005.
In June 2005, the parties reported to Judge Cole that
they had reached a settlement and were in the process of
finalizing the settlement document. Judge Cole dismissed
the case with leave to reinstate within sixty days and
retained jurisdiction to enforce the settlement agreement.
In July 2005, the parties returned to Judge Cole filing
cross motions to enforce the settlement agreement.
In a thirty-seven page opinion issued in November 2005,
Judge Cole granted the defendant’s motion to enforce the
agreement and denied the plaintiff ’s cross motion. He
concluded that the plaintiff and her attorneys had been
less than honest during the settlement proceeding. Judge
Cole stated that the parties’ intent during the June 2005
settlement was to reach an agreement that covered both
the plaintiff ’s claims and her minor children’s potential
claims against the defendants. Although the children
were not parties to the case, the plaintiff referenced
alleged harm to her children in her complaint and during
discovery. As such, the defendants wanted, and Judge Cole
concluded that the plaintiff had agreed to, a global settle-
ment covering both the mother’s actual claims and any
No. 06-2502 3
potential claims by the children. To account for the chil-
dren’s claims, the settlement required an allocation of the
total settlement amount between the plaintiff and her
children.
The plaintiff and children are residents of the State of
New York. Under New York law, the plaintiff does not
have authority to settle her children’s claims. Instead, a
petition must be brought before the New York Surrogate
Court which makes an independent evaluation of the
children’s claims to insure that the children’s interests
have been fairly represented. Consequently, the settle-
ment agreement required the plaintiff to petition to the
Surrogate Court and obtain approval as a condition of
settlement. The settlement agreement also required the
plaintiff to bear the costs of petitioning the Surrogate
Court.
Judge Cole concluded that the plaintiff and her attorneys
acted improperly in their representations to the defen-
dants during the settlement and in their petition to the
Surrogate Court. According to Judge Cole, the plaintiff
decided that the entire settlement amount should go to
her and none should be allocated to the children. To
achieve this goal, the petition to the Surrogate Court
incorrectly represented that the children had no independ-
ent claims and therefore had no interest affected by the
settlement agreement. The language in the settlement
agreement was also altered to make it appear that it did
not cover any potential claims by the children. Judge
Cole concluded that the plaintiff and her attorney had
deceived both the Surrogate Court and the defendants
because the children’s potential claims had been an
integral part of the original settlement. Judge Cole ordered
the plaintiff and her attorneys to make a second petition
to the Surrogate Court and readjust the settlement
agreement to properly reflect the parties’ agreement as to
the children’s potential claims. Judge Cole also met
4 No. 06-2502
informally with the parties and suggested that the defen-
dants be compensated for the attorney’s fees incurred
for enforcing the settlement agreement. The plaintiff
filed a motion for reconsideration a week after the original
opinion but Judge Cole denied the motion.
In April 2006, Judge Cole entered the new settlement
agreement reached by the parties. He again dismissed the
case with leave to reinstate, this time within ninety days,
and also stated that he would retain jurisdiction to enforce
the settlement. Two weeks later, Ms. Matlaw, on her own
behalf and before Judge Marovich, filed objections to the
settlement agreement pursuant to Rule 72 of the Federal
Rules of Civil Procedure. Ms. Matlaw objected to Judge
Cole’s findings that she had been dishonest in the settle-
ment proceedings and before the Surrogate Court. She
also argued that the April 2006 settlement had effectively
reduced the amount of attorney’s fees and costs that she
would receive.
Apparently, in light of Judge Cole’s November 2005
order, the parties had allocated a portion of the original
settlement amount to the defendants’ attorney’s fees
incurred in enforcing the settlement agreement. Ms.
Matlaw stated that she was to receive a percentage of the
award received by the plaintiff. Consequently, her fee
amount was reduced under the April 2006 settlement
agreement because the overall amount awarded to the
plaintiff was less. However, the April 2006 settlement
agreement does not mention Ms. Matlaw or any payment
of fees to her. Any agreement between her and the plain-
tiff relating to fees was done separately and not placed in
the April 2006 settlement agreement.
Judge Marovich issued an order on May 19, 2006
denying Ms. Matlaw’s objections and informing her that
his participation in the case ended when the parties
consented to the magistrate judge’s jurisdiction back in
No. 06-2502 5
August 2004. His order cited 28 U.S.C. § 636(c)(3) and
informed Ms. Matlaw that the appropriate procedure was
a direct appeal to the court of appeals. Ms. Matlaw then
filed a notice of appeal on May 26, 2006 appealing Judge
Marovich’s denial of her Rule 72 objections and Judge
Cole’s November 2005 opinions. Ms. Matlaw presently
characterizes her Rule 72 objections as a Rule 59 motion.
In July 2006, Ms. Matlaw filed a Rule 60 motion before
Judge Cole to amend the April 2006 settlement agreement
arguing that there had been a mutual mistake of fact
and law by the parties. Judge Cole denied Ms. Matlaw’s
Rule 60 motion in August 2006. During the briefing of this
appeal, the defendants filed a motion with this court
arguing that Ms. Matlaw’s appeal is frivolous and that
she should be sanctioned pursuant to Rule 38 of the
Federal Rules of Appellate Procedure. The defendants
also have a pending motion for sanctions before Judge
Cole.
II. ANALYSIS
Ms. Matlaw seeks to overturn the April 2006 settlement
agreement and Judge Cole’s November 2005 and July 2006
opinions that were critical of her conduct in this case. She
argues that she is able to bring this appeal on her own
behalf because: (1) Judge Cole’s opinions have negatively
affected her reputation, and (2) the April 2006 settlement
agreement has effectively reduced the amount of attor-
ney’s fees and costs she would have otherwise recovered
in this case.
The “general rule [is] that a nonparty cannot challenge
on appeal the rulings of a district court.” Gautreaux v.
Chicago Hous. Auth., 475 F.3d 845, 850 (7th Cir. 2007)
(citing Marino v. Ortiz, 484 U.S. 301, 304 (1988) (per
curiam); B.H. ex rel. Pierce v. Murphy, 984 F.2d 196, 199
(7th Cir. 1993)). We have recognized that an attorney can
6 No. 06-2502
bring an appeal on her own behalf when challenging a
district court decision imposing monetary sanctions on the
attorney, but this rule does not allow an appeal of other-
wise critical comments by the district court when no
monetary sanctions have been imposed. Crews & Assoc.,
Inc. v. United States, 458 F.3d 674, 677 (7th Cir. 2006);
Clark Equip. Co. v. Lift Parts Mfg. Co. Inc., 972 F.2d 817,
820 (7th Cir. 1992) (citing Bolte v. Home Ins. Co., 744 F.2d
572, 573 (7th Cir. 1984)). Judge Cole has not imposed a
monetary sanction on Ms. Matlaw in this case and there-
fore she cannot base her appeal on the alleged damage to
her professional reputation regardless of how harmful
Judge Cole’s comments might have been.
Ms. Matlaw notes that our position of limiting an appeal
to monetary sanctions conflicts with the positions taken
by other circuits. We recognize that other circuits allow
appeals involving critical comments but those circuits
have split among themselves over whether the district
court must formally sanction the attorney to allow the
appeal or whether critical comments by themselves,
without a formal sanction, are sufficient for an appeal. See
Bowers v. Nat’l Collegiate Athletic Ass’n, 475 F.3d 524,
542-44 (3d Cir. 2007); Bulter v. Biocore Med. Tech., Inc.,
348 F.3d 1163, 1166-69 (10th Cir. 2003); Precision Spe-
cialty Metals, Inc. v. United States, 315 F.3d 1346, 1350-53
(Fed. Cir. 2003); In re Williams, 156 F.3d 86 (1st Cir. 1998)
(discussing the positions of the various circuits in this
area of law).
We reaffirm our decision that it is appropriate to limit
an appeal to situations involving monetary sanction only.
This limitation on our jurisdiction is based on the realiza-
tion that allowing appeals by those allegedly harmed by
a judge’s comments, including “[l]awyers, witnesses,
victorious parties, victims, [and] bystanders” would re-
sult in a “breathtaking expansion in appellate jurisdic-
No. 06-2502 7
tion.” Bolte, 744 F.2d at 573; see also Hoagland ex rel.
Midwest Transit, Inc. v. Sandberg, Phoenix & Von
Gontard, P.C., 385 F.3d 737, 740 (7th Cir. 2004) (“Jurisdic-
tional rules ought to be simple and precise so that
judges and lawyers are spared having to litigate over not
the merits of a legal dispute but where and when those
disputes shall be litigated. The more mechanical the
application of a jurisdictional rule, the better.”) (internal
citations and quotations omitted). Our rule faithfully
adheres to the traditional maxim that as an appellate
court we “review . . . judgments, not statements in opin-
ions.” E.E.O.C. v. Chicago Club, 86 F.3d 1423, 1431 (7th
Cir. 1996) (quoting Black v. Cutter Lab., 351 U.S. 292, 297
(1956)); see, e.g., Acevedo v. Canterbury, 457 F.3d 721, 723
(7th Cir. 2006) (“ ‘[W]e review judgments, not opinions.’ ”)
(quoting Rubel v. Pfizer Inc., 361 F.3d 1016, 1020 (7th Cir.
2004)). Finally, as we recognized in Bolte, an attorney
who believes that she has been wronged is not without a
remedy because a petition for a writ of mandamus is
available. 744 F.2d at 573.
Ms. Matlaw’s other argument for standing is that she
has effectively lost money in this case because the April
2006 settlement agreement resulted in reducing the
amount of attorney’s fees that she was otherwise to
receive. However, her claim to attorney’s fees was not
spelled out in the settlement agreement and it was
plaintiff Seymour’s actions in this case that resulted in the
April 2006 settlement and the alleged reduction in Ms.
Matlaw’s attorney’s fees. Thus, any dispute over whether
Seymour’s actions breached the client agreement is
between Seymour and Ms. Matlaw. This is a traditional
contract claim that should be brought in another proceed-
ing. There is no need for the district court to exercise
supplemental jurisdiction over this dispute because the
original federal claims have already been dismissed. See
28 U.S.C. § 1367(c); Baer v. First Options of Chicago, Inc.,
8 No. 06-2502
72 F.3d 1294, 1298-1301 (7th Cir. 1995) (noting a district
court’s ability to exercise supplemental jurisdiction over
a fee dispute between an attorney and client when the
agreement to award attorney’s fees is codified in the
settlement agreement).
Finally, we note the defendant’s pending Rule 38 motion
for sanctions. A pending motion for sanctions is also before
Judge Cole. We conclude that it is better to allow Judge
Cole to evaluate that motion first and therefore we deny
the defendants’ Rule 38 motion. We also note our view
that it is in the best interest of all involved that this
case be at an end.
III. CONCLUSION
The appeal is dismissed for want of jurisdiction. The
defendant’s motion for sanctions of June 23, 2006 is
denied.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—5-3-07