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Keywords

lawsuitsettlementattorneyappealdiscriminationobjection
settlementattorneymotion

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Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40, 31 Fair Empl.Prac.Cas. (BNA) 1169, 32 Empl. Prac. Dec. P 33,618
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Pohl v. United Airlines, Inc., 213 F.3d 336, 164 L.R.R.M. (BNA) 2629, 78 Empl. Prac. Dec. P 40,039, 140 Lab.Cas. P 10,711, 24 Employee Benefits Cas. 1545

Facts

The case arose from a lawsuit by Michael Pohl against United Airlines, alleging violations of USERRA, including discrimination based on military status and retaliation. Following several settlement discussions between Pohl's attorney and United Airlines, the attorneys informed the court of a full settlement. However, Pohl expressed surprise upon learning of the settlement and later refused to sign the agreement, arguing that his attorney did not have the authority to negotiate the settlement.

The billing records from Pohl's attorney document ten phone calls between Pohl's attorney and either Pohl or his wife in the time period from December 15, 1998, to March 8, 1999.

Issue

Did Pohl's attorney have the authority to settle the case on behalf of Pohl, and is Pohl bound by the settlement agreement?

Pohl asserts that his attorney lacked the authority to negotiate a settlement of his case.

Rule

Under Indiana law, an attorney must have express, implied, or apparent authority to bind a client to a settlement agreement. Retention of an attorney does not automatically confer authority to settle; such authority must be derived from the client's actions or explicit grants of authority.

As the Indiana Supreme Court held in Koval v. Simon Telelect, Inc., 693 N.E.2d 1299, 1301 (Ind.1998), in order to bind a client to a settlement, an attorney must have either express, implied, or apparent authority, or must act according to the attorney's inherent agency power.

Analysis

The court reviewed the communications between Pohl and his attorney during the settlement negotiations and found that Pohl had been informed of the settlement terms and had not objected to them. The court determined that Pohl's attorney had actual authority to settle the case based on the evidence presented, including Pohl's lack of objection to the settlement and his prior communications with his attorney.

The district court determined that Pohl's attorney had actual authority to settle, and we review that decision only for abuse of discretion.

Conclusion

The Court of Appeals affirmed the district court's ruling, concluding that Pohl's attorney had actual authority to settle the case, and Pohl was bound by the settlement agreement.

Accordingly, the decision of the district court is affirmed.

Who won?

United Airlines prevailed in the case because the court found that Pohl's attorney had the authority to settle the claims, and Pohl's objections were not sufficient to invalidate the settlement.

United then brought a motion to enforce the settlement, which Pohl opposed on the ground that his attorney did not have the authority to negotiate the settlement.

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