Friday, October 12, 2007

settlement agreements - enforcement

Thomas v. University of Pennsylvania - ED Pa. - October 2, 2007

Held, the parties entered into a binding settlement agreement of plaintiff's race discrimination case.

At a settlement conference, the parties agreed that defendant would pay plaintiff, a former employee, a certain amount. The court then dismissed the case. However, a dispute arose when the defendant added a no-rehire provision to the final written settlement agreement. Plaintiff objected to this provision and asked the court to vacate its dismissal of the case. Defendant eventually agreed to withdraw the offending provision. "The issue is whether the University's agreement to delete the language that [plaintiff' found unacceptable constituted an acceptance of an offer to settle the case" --a position advanced by the university, which sought enforcement of the agreement.

Settlement agreement are governed by ordinary principles of contract law, including the need for a meeting of the minds on all terms. An agreement to settle a lawsuit, voluntarily entered into, is binding on the parties, whether or not made in the present of the court, and even in the absence of a writing. Such an agreement is binding even where one party had a change of heart between the time s/he agreed to the terms of the settlement and when those terms were reduced to writing.

When plaintiff told the court that she would accept a certain financial settlement provided that there was no bar to her being rehired, she made a definite and specific offer to settle. When the University accepted, plaintiff became bound by the terms of her offer. Once the offer was accepted, the case was settled. A settlement is at bottom a contract, and it is basic contract law that an offer cannot be withdrawn after it has been accepted.

contracts - sales - venue - approval/acceptance of credit

84 Lumber Co. v. Fish Hatchery, L.P. et al. - Superior Court - Ocftober 1, 2007

Plaintiff-appellant is a building supplier who sued defendants-appellees for breach of contract, alleging non-payment for lumber and building materials purchased at plaintiff's retail location in Northampton County. Plaintiff sued in Washington County, the location of its corporate headquarters and the place where defendants' credit application was approved. Defendants were located in Lehigh County, as was the residential construction project for which the materials were purchased.

Defendants filed preliminary objections alleging improper venue, and the lower court transferred the case to Northampton County, which was a) the location of the lumber yard where defendants bought the materials, b) the location where defendants applied for credit, and c) the location where defendants made payments to plaintiff.

Noting that trial courts have "considerable discretion" in change-of-venue cases, the appellate court interpreted Rule 1006 (venue for civil actions generally) and Rule 2130 (venue where partnerships are parties), and sustained the change of venue to the Northampton County, where it held that the "transaction" had taken place and "not merely some part of the transaction...." The court said that the civil rules do not permit a lawsuit to be instituted in any country where some facet of a complex transaction -- such as the approval of the buyer's credit application -- has occurred.

The court said that there was no "substantial relationship" between Washington County and the parties' dispute which would justify venue there. It was at the retail location in Northampton County "where the offer to purchase goods was accepted by Appellant in its delivery of such good for payment." [sic] The court rejected the contention that approval of credit amounted to the actual acceptance of the contract, since there was no suggestion that the approval was necessary to form the contract.