Corey v. Prof'l Rodeo Cowboy Ass'n, Inc.

506 F.Supp.3d 1106

Clint COREY, Plaintiff,

v.PROFESSIONAL RODEO COWBOY ASSOCIATION, INC., Defendant.

Civil Action No. 18-cv-1682-WJM-KMT

United States District Court, D. Colorado.

Signed December 11, 2020

Bradley Aaron Levin, Jeremy Andrew Sitcoff, Peter G. Friesen, Levin Sitcoff PC, Elizabeth A. Walker, Overturf McGath & Hull, P.C., Denver, CO, Elisabeth L. Owen, Franklin D. Azar & Associates PC, Aurora, CO, for Plaintiff.

L. Anthony George, Steven James Perfrement, Zachary Wood Fitzgerald, Bryan Cave Leighton Paisner LLP, Denver, CO, for Defendant.

ORDER GRANTING IN PART PLAINTIFF'S MOTION TO VACATE OR MODIFY JUDGMENT

William J. Martínez, United States District Judge

This matter is before the Court on Plaintiff Clint Corey's Motion to Vacate or Modify Judgment ("Motion"), which seeks to vacate the final judgment entered by the Court on February 7, 2020 (ECF No. 105), enter an order enforcing the terms of a purported settlement agreement reached by the parties prior to the Court's entry of judgment, and compel the parties to file a mutual dismissal of all claims. (ECF No. 107.)

On October 29, 2020, the Court denied the Motion—to the extent it sought a modification of the final judgment pursuant to Defendant Professional Rodeo Cowboy Association's (the "PRCA") Federal Rule of Civil Procedure 68 offer of judgment—because Mr. Corey's purported acceptance of the offer of judgment was inconsistent with the terms of the PRCA's offer. (ECF No. 138 at 3–6.) The Court reserved ruling on the Motion to the extent it sought to vacate the Court's February 7, 2020 Order granting summary judgment in favor of the PRCA and entry of final judgment, as well as enforce the putative settlement agreement between the parties, pending an evidentiary hearing. (Id. at 8.) Thereafter, the Court held an evidentiary hearing on November 23, 2020. (ECF No. 154.)

For the reasons set forth below, the Court grants the Motion in part.

I. FACTUAL FINDINGS

Based on the parties’ filings and the documentary and testimonial evidence received at the evidentiary hearing, the Court makes the following findings of fact for purposes of resolving Mr. Corey's Motion.¹

This case arises out of the PRCA's alleged termination of Mr. Corey's employment in violation of Title VII of the Civil Rights Act of 1964 and Colorado law. Mr. Corey filed his complaint on July 3, 2018 (ECF No. 1) and an amended complaint on February 25, 2019 (ECF No. 33). After the close of discovery, the PRCA filed a motion for summary judgment (ECF No. 45).

Between February 6 and 7, 2020, while the motion for summary judgment remained outstanding, Peter Friesen, counsel for Mr. Corey, and Steven Perfrement, counsel for the PRCA, engaged in numerous settlement discussions. (ECF No. 107-1 at 1 ¶ 3.)

On February 6, 2020, the PRCA submitted an offer of judgment pursuant to Federal Rule of Civil Procedure 68 to enter judgment in the amount of $365,000. (ECF No. 107-2 at 2.)

The next morning, Mr. Perfrement informed Mr. Friesen that the offer of judgment was not the PRCA's final offer and that the PRCA had room to continue negotiating.

(Evidentiary Hearing Transcript ("Tr.") at 74.)²

On the morning of February 7, 2020, Mr. Friesen and Mr. Perfrement continued to engage in settlement discussions. Before lunch, the parties reached agreement as to a monetary settlement amount that would be acceptable to both parties. (Tr. 20, 70–71.) Thereafter, they agreed that their settlement agreement would contain a confidentiality agreement, a non-disparagement clause, an agreement that Mr. Corey would not re-apply for PRCA employment or judging positions, a liquidated damages provision by which Mr. Corey would pay $5,000 per breach of the settlement agreement, and mutual releases. (Tr. 21–22, 71–73.)

Mr. Friesen and Mr. Perfrement did not explicitly discuss whether Mr. Corey's wife, Beverly Corey, or friend, Jeffrey Reeves, would be bound by the settlement's non-disparagement term and releases.³ (Tr. 41–42, 73, 152, 155–56.) Nor did they discuss the notion that they would not have a full binding settlement agreement until they had an executed written document. (Tr. 29.)

Mr. Friesen testified that he then asked Mr. Perfrement whether he could think of anything else, and Mr. Perfrement indicated that he could not think of anything.⁴ (Tr. 25.) According to Mr. Friesen, there was "[n]o question in [his] mind" that the parties had entered into a binding settlement agreement at that point. (Tr. 28–29.)

Thereafter, the parties discussed that they would need to file a notice of settlement so that the Court would vacate the deadline for a number of pretrial deliverables due that day. (Tr. 25–27, 76–77.) Mr. Perfrement indicated that his firm would prepare the notice. (Tr. 27, 76.)

Jennifer Pearce, a paralegal at Mr. Perfrement's firm, prepared a draft notice of settlement (the "Notice of Settlement") by copying and pasting the language included in the Court's practice standards regarding notices of settlement. (Tr. 78, 121.) At 1:32 p.m., Ms. Pearce e-mailed Mr. Friesen the Notice of Settlement and said, "[Mr. Perfrement] asked that I forward the attached to you for review." (ECF No. 107-3 at 1.) The Notice of Settlement states:

1. A settlement has been reached between the Plaintiff and Defendant;

2. A meeting of the minds has been reached as to all material terms of the settlement;

3. The settlement will finally and fully resolve all of the claims in this action.

(ECF No. 107-3 at 2.) At 1:36 p.m., Mr. Friesen e-mailed Ms. Pearce, stating, "You can esign my name to this. Thanks." (ECF No. 107-4 at 1.) After receiving Mr. Friesen's email, Ms. Pearce emailed Mr. Perfrement stating, "Let me know when you want me to file."⁵ (Exhibit D at 1.)⁶

Thereafter, Mr. Perfrement's associate, Zachary Fitzgerald, began drafting a written settlement agreement to memorialize the parties’ agreement. (Exhibit E; Tr. 77.) Mr. Perfrement made changes to the draft settlement agreement, which he sent back to Mr. Fitzgerald at 2:23 p.m. (Exhibit F; Tr. 84.) Specifically, Mr. Perfrement amended the language of the releases in the draft settlement agreement to delete the phrase "family members" from the definitions of the "PRCA Released Parties" and "PRCA Releasors." (Compare Exhibit E with Exhibit F.) However, he did not delete the reference to "family members" from the definition of "Corey Releasors" and "Corey Released Parties." (Id. ) Neither draft version of the settlement agreement referenced Beverly Corey or Mr. Reeves by name. (Id. )

At 2:29 p.m., the Court entered the Order granting the PRCA's motion for summary judgment. (ECF No. 104.) At 3:02 p.m., the Clerk entered a final judgment in favor of the PRCA. (ECF No. 105.)

At approximately 4:20 p.m., Mr. Friesen called Mr. Perfrement and left a message. (Tr. 31, 91.) Mr. Perfrement did not return his call.⁷ (Tr. 32.)

The next morning, at 7:59 a.m. on Saturday, February 8, 2020, Mr. Friesen sent the following e-mail to Mr. Perfrement:

Steve, just making sure you saw my confirmation of the settlement. My clients are interested in moving forward without delay. Can I tell them when to expect the release?

Thanks, Peter

(ECF No. 107-7 at 1.) Mr. Perfrement did not respond. (Tr. 32, 138.)

On February 12, 2020, a paralegal at Mr. Friesen's firm e-mailed the firm's W-9 to Mr. Perfrement: "Please have check payable to Levin Sitcoff PC Trust Account in Trust for Clint Corey." (ECF No. 107-8 at 1.) Mr. Perfrement did not respond. (Tr. 33–34, 139.)

The following day, Mr. Friesen called Mr. Perfrement again. (Tr. 34.) That afternoon, Mr. Fitzgerald sent the following e-mail to Mr. Friesen: "Hi Peter, the parties did not enter into a binding settlement agreement. Steve will be available tomorrow to discuss." (ECF No. 107-9 at 1.)

Mr. Friesen spoke with Mr. Perfrement on February 14, 2020 for the first time since the Court issued its order on summary judgment. (Tr. 35.) Mr. Friesen asked Mr. Perfrement whether he had a problem with any of the terms of the settlement agreement.⁸ (Tr. 35.) According to Mr. Friesen, Mr. Perfrement replied, "no, no, we're good about that." (Tr. 35.) However, Mr. Perfrement informed Mr. Friesen that the PRCA believed that there was a mutual mistake of fact because the parties did not know how the Court planned to rule on summary judgment at the time the parties reached their settlement agreement. (Tr. 35, 94, 141.) The parties also discussed whether: (1) the Court had jurisdiction in light of the final judgment; and (2) the effect of the outstanding Rule 68 offer. (Tr. 36–37, 141–42.) During their conversation, Mr. Friesen asked Mr. Perfrement for legal authority supporting the PRCA's position. (Tr. 36.)

Mr. Perfrement did not indicate during that conversation that he believed that the parties had not entered a settlement agreement because there were material terms that still needed to be negotiated. (Tr. 38, 97, 144.) Mr. Friesen first learned that the PRCA was disputing that they had negotiated all material terms of the settlement when he read the PRCA's response to the Motion. (Tr. 40, 144–46.)

On February 19, 2020, Mr. Perfrement e-mailed Mr. Friesen authority regarding "(i) mutual mistake of fact, and (ii) the ability to accept an offer of judgment after summary judgment has been granted and a final judgment has already been entered." (Exhibit 10 at 1.)

II. ANALYSIS

A. Effect of a Valid And Enforceable Settlement on an Action

A determination about whether relief is warranted under Federal Rule of Procedure 60(b) depends on whether a valid settlement agreement existed at the time the Court entered judgment.⁹ See Sheng v. Starkey Labs. Inc. , 117 F.3d 1081, 1083–84 (8th Cir. 1997).

When litigants enter into a valid and enforceable settlement agreement, even one that contains executory terms, there is no longer a live case or controversy, and the underlying dispute is moot. See Tosco Corp. v. Hodel , 804 F.2d 590, 591–92 (10th Cir. 1986). Mootness is an issue of subject matter jurisdiction. If ...