Thursday, January 10, 2019

Cases like this are the reason judges drink

Many cases settle with assistance from the Magistrate Judge who will talk with the parties and their attorney to find a way to resolve the case without the burdens of additional discovery and risk of trial. If the magistrate can broker a deal, the judge usually brings everyone back into the courtroom to put the deal on the record. There are reasons why judges do this.

The case is Doe v. Kogut, a summary order issued on January 9. This is a domestic violence tort claim that the plaintiff filed in federal court, probably because the parties lived in different states, providing the federal court with "diversity jurisdiction." After the parties agreed on the terms of settlement, the judge immediately put it on the record. Now, a judge could ask the parties to place the deal in writing after they get back to their offices and then have the parties sign it. But judges know better. They know that parties can be mercurial and try to walk away from the deal, as lawsuits can be emotional and difficult, and many clients have buyer's remorse after agreeing to settle. The court system deals with this by having the parties stand before the judge and place the deal on the record in open court right after they achieve the handshake agreement in the judge's chambers. Only then can the lawyers return to their offices to draft a formal agreement. But usually, the open-court agreement on the record is enough to officially settle the case.

The judge in this case put the deal on the record in open court. The plaintiff then tried to challenge the deal, claiming there were never a written deal. But at the settlement conference, the magistrate judge said the parties would agree to the verbal settlement on the record, and no one objected to that. Second Circuit law holds that an "agreement need not be reduced to writing if it entered into voluntarily on the record in open court." That case is Powell v. Omnicom, 497 F.3d 124 (2d Cir. 2007).

The plaintiff also objects to the in-court settlement because she entered into it under duress. The Magistrate Judge rejected this argument, and the Court of Appeals (Jacobs, Sullivan and Korman [D.J.] affirms. Plaintiff says the judge told her that defendant threatened to report her to the IRS if she did not settle. But the Magistrate Judge did not recall saying that. Plaintiff's lawyer is also not backing her up on this allegation. The Court of Appeals credits the magistrate judge's view that there was no such threat during settlement discussions. While plaintiff further says she was in bad psychological shape during the settlement conference because her psychiatrist had physically assaulted her only one day earlier, the Court of Appeals notes that "mental fragility is insufficient to show duress." For that proposition, the Court cites Blatt v. Manhattan Med. Grp., P.C., 131 A.D. 48 (1st Dept. 1987). I guess there is no federal case standing for that proposition. We have one now.   

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