# Appendix — Matlaw v. Hug (No. 07-121)

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_1249%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 2007

## Text

Supreme Court, U.S.
FILED

07-121JUL 27 2007

In The
Supreme Court of the Gnited States

LESLIE VALERIE MATLAW
(d/b/a LESLIE V. MATLAW, P.C.),

Petitioner.
versus

U.S. MAGISTRATE JUDGE JEFFREY COLE

(NORTHERN DISTRICT OF ILLINOIS),
Respondent.

Appendix

LESLIE V. MATLAW, P.-C. *N.b., Petitioner proceeds
28 East Jackson herein pro se; presently,
Tenth Floor, #M-995 she seeks both admission
Chicago, IL 60604-2263 to this Court’s Bar and
(312) 804-3527 already-admitted Counsel
Counsel for Petitioner *Counsel of Record

APPENDICES

Item, Contents Page
APPENDIX A —
Seymour v. Hug, 485 F.3d 926 (7th Cir. 2007) ........... la
APPENDIX B —

May 7, 2007 Order entered in Seymour v. Hug et al.,
Doc. No. 154 in No. 04-C-2041 (N.D. IIll.; unpub’d)..... 10a

APPENDIX C - January 20, 2007 Order and
December 18, 2006 Order, each having been

entered in Seymour v. Hug (Appeal of Matlaw),
Seventh Circuit No. 06-2502 (unpub'd) ............... 13a

APPENDIX D — December 15, 2006 Order entered in
Gathe v. Housing Authority of the City of Lafayette,
Doc. No. 12-1 in No. 06-CV-1455 (W.D. La.; unpub’d) . .17a

APPENDIX E — August 3, 2006 Decision, Doc.
No. 140 in No. 04-C-2041 (N.D. Ill.; unpub’d) ........ 2la

APPENDIX F — May 19, 2006 Order Denying Motion
originally filed by Petitioner on April 26, 2006 and

thereafter amended and supplemented (Post-Judyiment

“Rule 72 Objections to Magistrate Judge’s Order,”

Doc. No. 103 in No. 04-C-2041 (N.D. Ill.; unpub’d)..... 30a

APPENDIX G - April 11, 2006 Final Settlement
Order (entered April 14, 2006), Doc. No. 89
in No. 04-C-2041 (N.D. Ill.; unpub’d) ................33a

(continued)

Item, Contents

APPENDIX H - March 30, 2006 Orders of
the New York Surrogate’s Court (Doc. 86,
No. 04-C-2041 (N.D. Ill.; unpub’d)) and
Reports of the NYSC Guardian Ad Litem
(Docs. 84-1 and 84-2 in No. 04-C-2041

Creda Se EE och babet cv nereackeeene y's

APPENDIX I — November 8, 2005 Opinion
and Order and November 9, 2005 Opinion
on Plaintiff’s Motion for Reconsideration,
Doc. Nos. 65 and 69, respectively, in

No. 04-C-2041 (N.D. Ill.; published at

413 F. Supp. 2d 910 (N.D. Ill. 2005),

EE Es PED ob co ave beet iene shee eees

Page

APPENDIX A:

Seymour v. Hug, 485 F.3d 926 (7th Cir. 2007).

United States Court of Appeals
for the Seventh Circuit

DONNA L. SEYMOUR,
Plaintiff,
v.
CAROL HUG er 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 repre-
sented plaintiff Donna Seymour in this case. Ms. Matlaw, act-
ing on her own behalf, seeks to set aside the settlement
agreement reached in this case and related orders entered in the
district court. Ms. Matlaw lacks standing to bring this appeal
and therefore the appeal is dismissed.

2

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 de-
fendants are the real estate agents, potential sellers, and others
associated with the contested transaction. The case was ini-
tially assigned to District Judge George M. Marovich. In Au-
gust, 2004, the parties consented, pursuant to 28 U.S.C.
§635(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 Magis-
trate 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 fi-
nalizing the settkement document. Judge Cole dismissed the
case with leave to reinstate within sixty days and retained ju-
risdiction to enforce the settlement agreement. In July, 2005,
the parties returned to Judge Cole filing cross motions to en-
force 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 con-
cluded 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 plaintift’s claims and her
minor children’s potential claims against the defendants. Al-
though 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 the plaintiff had agreed to a global settle-
ment covering both the mother’s actual claims and any poten-
tial claims by the children. To account for the children’s claims,
the settlement required an allocation of the total settlement
amount between the plaintiff and her children.

The plaintiff and the 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 Peti-
tion 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 settlement agreement required
the plaintiff to petition to the Surrogate Court and obtain ap-
proval 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 plaintiff and her attorneys
acted improperly in their representations to the defendants dur-
ing 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 allo-
cated to the children. To achieve this goal, the petition to the
Surrogate Court incorrectly represented that the children had
no independent 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 chil-
dren’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’ agree-

ment as to the children’s potential claims. Judge Cole also met
informally with the parties and suggested that the defen-
dants be compensated for the attorney’s fees incurred
for enforcing the setthkement 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 agree-
ment reached by the parties. He again dismissed the case with
leave to reinstate, this time with ninety days, and also stated
thaj,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. Mat-
law objected to Judge Cole’s findings that she had been dis-
honest in the settlement proceedings and before the Surrogate
Court. She also argued that the April 2006 settlement had ef-
fectively 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 settle-
ment amount to the defendants’ attorney’s fees incurred in en-
forcing the settlement agreement. Ms. Matlaw stated that she
was to receive a percentage of the award received by the plain-
tiff. 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 plaintiff relat-
ing 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 participa-
tion in the case ended when the parties consented to the mag-
istrate judge's jurisdiction back in August 2004. His order cited
28 U.S.C. § 636(c)(3) and informed Ms. Matlaw that the ap-

propriate procedure was a direct appeal to the court of appeals.
Ms. Matlaw then filed a notice of appeal on May 26, 2006 ap-
pealing 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 ar-
guing 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 defen-
dants filed a motion with this court arguing Ms. Matlaw’s ap-
peal is frivolous and that she should be sanctioned pursuant to
Rule 38 of the Federal Rules of Appellate Procedure. The de-
fendants 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 ar-
gues that she is able to bring this appeal on her own behalf be-
cause: (1) Judge Cole’s opinions have negatively affected her
reputation, and (2) the April 2006 settlement has effectively re-
duced the amount of attorney’s fees and costs she would have
otherwise recovered in this case.

The “general rules [is} that a nonparty cannot challenge on
appeal the rulings of a district court.” Gautreaux v.
Chicage Hous. Auth., 475 F.3d 845, 850 (7th Cir. 2007) (cit-
ing 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 bring an ap-
peal on her own behalf when challenging a district court deci-
sion imposing monetary sanctions on the attorney, but this rule
does not allow an appeal of otherwise critical comments by
the district court when no monetary sanctions have been im-

posed. Crews & Assoc., Inc. v. United States, 438 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 therefore 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 ap-
peals 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 suffi-
cient for an appeal. See Bowers v. Nat’! Collegiate Athletic
Ass'n, 475 F.3d 524, 542-44 (3d Cir. 2007); Butler v. Biocore
Med. Tech. Inc., 348 F.3d 1163, 1166-69 (10th Cir. 2003); Pre-
cision Specialty Metals, Inc. v. United States, 315 F.3d 1346,
1350-53 (Fed. Cir. 2003; In re Williams, 156 F.3d 86 (ist Cir.
1998) (discussing the positions of the various circuits in this
area of law).

We reaffirm our decision that it is appropriate to limit and ap-
peal to situations involving monetary sanctions only. This lim-
itation On our jurisdiction is based on the realization that
allowing appeals by those allegediy harmed by a judge’s com-
ments, including “[l]Jawyers, witnesses, victorious parties, vic-
tims, [and] bystanders” would result in a “breathtaking
expansion in appellate jurisdiction.” Bolte, 744 F.2d at 573;
see also Hoagsland ex rel. Midwest Transit Inc. v. Sandberg,
Phoenix & Von Gontard, P.C., 385 F.3d 737, 740 (7th Cir.
2004) (“Jurisdictional 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
should be litigated. The more mechanical the application of a
jurisdictional rule, the better.”) (internal citations and quota-

tions omitted). Our rule faithfully adheres to the traditional
maxim that as an appellate court we “review . . . judgments, not
statements in opinions.” E.E.0.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 have recognized in Bolte,
an attorney is not without a remedy because a petition for man-
damus 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 al-
leged reduction in Ms. Matlaw’s attorney’s fees. Thus, any dis-
pute over whether Seymour’s actions breached the client
agreement is between Seymour and Ms. Matlaw. This is a tra-
ditional contract claim that should be brought in another pro-
ceeding. 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., 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 concluded that it is better to allow Judge Cole
to evaluate that motion first and therefore we deny the defen-
dants’ 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.

fil. CONCLUSION

The appeal is dismissed for want of jurisdiction. The defen-
dant’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

APPENDIX B:

May 7, 2007 Order entered in Seymour v. Hug
et al., Document Number 154 in No. 04-C-2041
(N.D. Ill.; unpublished).

10

Case 1:04-cv-02041 Document 154 Filed 05/07/2007 Page | of 1

United States District Court, Northern District of Illinois

« Name of Assigned Judge Jeffrey N. Cole
or Magistrate Judge
Sitting Judge if Other than Assigned Judge mi
CASE NUMBER 04 C 2041
DATE 5/7/2007
CASE TITLE _ Seymour v. Hug

Status hearing held on 5/7/2007. Defendants’ motion for
sanctions and for fees [142] is withdrawn. All other pending
motions [90], [95], and [98] are denied as moot. SEE TEXT
BELOW FOR FURTHER DETAILS.

TAT

At my request, the parties appeared in court to discuss the
Seventh Circuit’s decision of 5/3/2007. Mr. Sanchez and Mr.
Howard appeared for the Defendants, Ms. Donaldson was un-
able to appear. Ms. Matlaw appeared for hersclf. I discussed
with the parties the closing sentence of the Seventh Circuit's
opinion in which, after denying the defendant's application
for attorneys fees pursuant to Rule 38, Federal Rules of Ap-
pellate Procedure, the Court expressed the same view and
asked Mr. Howard if he would be willing to withdraw the
Motion for Fees. I made it clear to him that he was under no
obligation to do so, and I acknowledged his agreement with
me prior to the time the fee petition was filed that there were
interests that often transcended an award of fees or simply
winning or losing a component of litigation, but that events
had occurred that precipitated and indeed mandated the filing
of the motion. There is simply no question but had those

1]

events not occurred, Mr. Howard would not have filed the
motion for fees. At my request, and in light of the lumi-
nously clear statement in the Court of Appeals opinion dis-
missing Ms. Matiaw’s appeal, Mr. Howard agreed to
withdraw the pending motion for fees.

If ever there were a case where the message of Ecclesi-
astes should be should be heeded, this is it: “For everything
there is a season, and a time for every purpose under heaven.
* * * a time for war and a time for peace.” Ecclesiastes 3:1,8.
With the withdrawal of the motion for fees, the case is, as the
Court of Appeals hoped, at long last, “at an end.” Slip op. at
8. There are no further proceedings pending in the federal
court, and any attempt to revive or revisit any aspect of this
litigation would not only be barred but would be in the up-
most bad faith and would warrant a significant fee award to
the defendants and/or their counsel (depending on the nature
of the allegations).

At every stage of this case, Mr. Howard and Ms. Donald-
son comported themselves admirably and exhibited those
qualities of character and professionalism that all lawyers
should possess, but too few do. Therefore, Defendants’ mo-
tion for sanctions and for fees [142] is withdrawn. All other
pending motions [90], [95], and [98] are denied as moot.

APPENDIX C:

January 20, 2007 Oral Argument Order and
December 18, 2006 Order, each having been

entered in Seymour v. Hug (Appeal of Matlaw),
Seventh Circuit No. 06-2502 (unpublished).

Gnited States Court of Appeals

For the Seventh Circuit
Chicago, Illinois 60604

December 22, 2006
Before

Hon. ILANA DIAMOND ROVNER, Circuit Judge

DONNA L. SEYMOUR ] Appeal from the United
Plaintiff, ] States District Court for
} the Northern District of
No. 06-2502 v. ] Illinois Eastern Division
J
CAROL HUG and ROGER, ] No. 04 C 2041
HUG doing business as ]
RE/MAX TEAM2000, ] Jeffrey N. Cole,
PATRICIA BROWN-WYRICK, ] Magistrate Judge
CENDANT MOBILITY ]
CORPORATION, et al., ]
Defendants-Appellees,,. ]
] George M. Marovich,
APPEAL OF: ] Judge.
LESLIE V. MATLAW |

Upon consideration of the APPELLANT’S
MOTION TO EXPEDITE DECISIONMAKING,
filed on December 19, 2006, by the pro se appellant,

IT IS ORDERED that the motion is DENIED.

Gnited States Court of Appeals

For the Seventh Circuit
Chicago, Illinois 60604

NOTICE OF ORAL ARGUMENT
Date: January 18, 2007

By the court: No. 06-2502

DONNA L. SEYMOUR, Plaintiff,

v.
CAROL HUG and ROGER HUG, doing business as
RE/MAX TEAM 2000, PATRICIA BROWN-WYRICK,
CENDANT MOBILITY
CORPORATION, et al., Defendants-Appellees,

APPEAL OF: LESLIE V. MATLAW

Appeal for the United States Northern District Court for the
Northern District of Illinois, Eastern Division
No. 04 C 2041, George M. Marovich, Judge

IT IS ORDERED that this case be orally argued on Tues-
day, February 20, 2007, in the Courtroom of the United States
Court of Appeals for the Seventh Circuit, 219 S. Dearborn,
Room 2721, Chicago, Illinois at 10:30 a.m.

Oral argument will be no more than 10 minutes for each
side. Counsel are advised that the panel of judges assigned to
oral argument may decide, after reading the briefs, that less
time is required for oral argument.

IT IS FURTHER ORDERED that counsel notify the Cal-
endar Clerk (312-435-5850) who will present oral argument by
completing and returning the enclosed post card to the court.

15

Notice must be received in the clerk’s office no later than §
business days prior to the scheduled argument date.

Copies of this notice have been sent to counsel of

record.

APPENDIX D:

December 15, 2006 Order entered in Gathe v.
Housing Authority of the City of Lafayette,
Document Number 12-1 in No. 06-CV-1455
(W.D. La.; unpublished).

Case 6:06-cv-01455 Document 12-1} Filed 12/15/2006 ~— Page 1 of 3

RECEIVED
DEC 15 2006 /S/gbr
Robert S. Shemwell, CLERK
Western District Of Louisiana
LAFAYETTE, LOUISIANA

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF LOUISIANA
LAFAYETTE/OPELOUSAS DIVISION

Emily B. Gathe Civil Action 06-1455

versus Judge Tucker L. Melancon

Housing Authority of Lafayette Magistrate Judge C. Michael Hill
ORDER

Before the Court is a Motion to Admit Visiting Attorney
Pursuant to LR83.2.6W filed by Gregory L. Landry, counsel
for plaintiff Emily B. Gathe, to permit Leslie V. Matlaw to
appear and participate as a visiting attorney, trial attorney and
co-counsel in this action [Rec. Doc. 3]. As required by
LR83.2.6W, the applicant notified the Court of the pending
disciplinary proceedings against her, In Re: Leslie Valerie
Matlaw [Illinois Bar Number 9709176], Illinois Supreme
Court’s Attorney Registration and Disciplinary Commission
Inquiry Number 05-C1-5384, [Rec. Doc. 3, Affidavit of Leslie
Matlaw at par. 6] as well as a proceeding pending in the
United States Court of Appeals for the Seventh Circuit. This
motion was Originally set for hearing on September 27, 2006
at 2:00 p.m. [Rec. Doc. 5] and reset for hearing on December
12, 2006 at 11:30 a.m. [Rec. Doc. 7].

18

In In re Evans, 524 F.2d 1004 (5th Cir. 1975), the Fifth
Circuit Court of Appeals set forth both the procedural and
substantive requirements of denying a pretrial motion to ap-
pear pro hac vice. Procedurally, if the court has evidence of
behavior that it believes justifies a denial of admission pro
hac vice, the court must provide the attorney with adequate
notice of all alleged misbehavior or unethical behavior that
will be charged against him and the court must set a hearing
on the issue. Specific allegations must be made; general ac-
cusations about an attorney’s demeanor are insufficient. The
hearing must be on the record and present the attorney with
adequate opportunity to defend himself and his professional
reputation. Jn Re Evans, 524 F.2d 1004, 1008 (Sth Cir. 1975).

Substantively, admission to a state bar creates a presump-
tion of good moral character that cannot be overcome merely
by the whims of the District Court. An applicant for admis-
sion pro hac vice who is a member in good standing of a state
bar may not be denied the privilege to appear except on a
showing that in any legal matter, whether before the particu-
lar district court or in another jurisdiction, he has been guilty
of unethical conduct of such a nature as to justify disbarment
of a lawyer admitted generally to the bar of the court. Jn Re
Evans, 524 F.2d 1004, 1007-8 (Sth Cir. 1975); see also USA
v. Nolen ___ F.3d ___, 2006 WL 3598522 at 8 (Sth Cir.
2006).

As the Illinois Supreme Court disciplinary proceedings
and the matter before the Seventh Circuit Court of Appeals
are ongoing, this Court is not in the position to determine
whether Ms. Matlaw’s conduct during her representation of
Donna L. Seymour, plaintiff in the litigation, Seymour v. Hug,
et al, No 04c2041, United States District Court, Northern
District of Illinois, Eastern Division, rises to the level of dis-
barment. Accordingly, at this time, the Court does not have
sufficient information to act on applicant's request.

IT IS ORDERED that the hearing scheduled for Tuesday,
December 12, 2006 at 11:30 a.m. is UPSET to be refixed

19

upon a decision by the Illinois Supreme Court disciplinary
council and the decision by the Seventh Circuit Court of Ap-

peals.

IT IS FURTHER ORDERED that applicant file in to the
record of this proceeding a copy of all of the parties briefs in
the Seventh Circuit proceeding as they are filed.

IT IS FURTHER ORDERED that the Clerk of Court or
his designee shall serve a copy of this order on applicant
Leslie V. Matlaw, at the address provided in her Motion to
Admit Visiting Attorney (Rec. Doc. 3].

THUS DONE AND SIGNED in Lafayette, Louisiana, on
this 12th day of December, 2006.

/S/ Tucker L. Melangon
United States District Court Judge
Copy Sent:
DATE: 12-15-06
BY: /S/gbr

TO: Matlaw -mailed

20

APPENDIX E:

August 3, 2006 Decision,
Document Number 140 in
No. 04-C-2041 (N.D. Ill.; unpublished).

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

DONNA L. SEYMOUR, Plaintiff, _ )
v. ) Case No. 04 C 2041.
CAROL HUG and ROGER HUG, _)

d/b/a REMAX TEAM 2000; ) Magistrate Judge
PATRICIA BROWN-WYRICK; ) Jeffrey Cole
CENDANT MOBILITY CORP., )

a Corporation; and CURTIS )
CASTLE and CAROL CASTLE, )

Defendants. )

MEMORANDUM OPINION AND ORDER
INTRODUCTION

This case has its genesis in Donna L. Seymour’s unsuc-
cessful attempt to purchase a home in a suburb of Chicago
from realtors, Roger and Carol Hug, Patricia Brown-Wyrick
and H&H Realty, Inc. and Cendant Mobility Corp. and Curtis
and Carol Castle. According to Ms. Seymour, although she
had successfully negotiated a contract for the purchase of the
home, the defendants “sold it out from under her” when they
discovered she was African-American. On March 18, 2004,
Ms. Seymour filed a complaint alleging unlawful discrimina-
tion against her on the basis of race in violation of the Fair
Housing Act, 42 U.S.C. §§ 3604, 3605, 3617, and breach of
contract under Illinois state law. A week later, she amended
her complaint, and she did so again on August 20, 2004. Dis-
covery ensued as did intensive settlement discussions.

After much back and forth, the parties agreed upon terms
of settlement. Since the plaintiff's minor children were impli-
cated in the case, although not formally named as parties, the
defendants insisted on a release of any potential claims by

oe)

them approved by the Surrogate’s Court in New York. It was
agreed that some (minimal) amount of the $40,000 that was
being paid to Ms. Seymour would be allocated to her children
so that there could be no question about whether the release
was supported by consideration. On this issue, the defendants
were unyielding. Ms. Seymour’s lawyers agreed that there
would be an allocation and counsel for the defendants were
informed that there was a settlement and its terms were
spelled out through an exchange of emails.

From that point on, things dramatically devolved: Ms.
Seymour informed her lawyers she would not agree to any al-
location, and her volte face was concealed from defense
counsel by her lawyers. In addition, the allocation require-
ment in the formal settlement agreement was deleted by Ms.
Seymour’s lawyers, and the importance of the deletion mini-
mized and misrepresented. Contrary to the terms of the settle-
ment agreement and the requirements of New York law, Ms.
Seymour’s lawyers failed to “fully apprise” the Surrogate’s
Court of all of the information needed to make an informed
determination of whether the settlement “was in the chil-
drens’ best interests.” Quite the contrary; they affirmatively
misled the Court by making it appear that the children had no
possible claims and no involvement the discrimination
against their mother.

Ultimately, the defendants became suspicious and de-
manded answers, which were not immediately forthcoming.
Ultimately, all that had occurred was revealed. Both sides in-
sisted that they were in the right, and that they had been ill-
used by their colleagues. Cross-motion to eniorce their
respective versions of the settlement agreement ensued. The
squalid details are discussed in Seymour v. Hug, 413
F.Supp.2d 910 (N.D.III. 2005). | concluded that the defen-
dants’ were in the right and that Ms. Seymour’s lawyers had
misled their colleagues and the Surrogate’s Court in New
York. | ordered what in effect was specific performance of

23

what | found to be the agreement that Ms. Seymour and the
defendants had made. The defendants, not surprisingly, had
sought an award of attorneys’ fees. Since the request was es-
sentially unsupported and unexplained, I ordered additional
briefing. /d. at 933. The plaintiffs’ motion for reconsideration
was denied on November 10, 2005. /d.!

Thereafter, in an informal meeting in my chambers with
counsel for both sides, including Ms. Matlaw, I suggested
that counsel might consider agreeing on a mutually accept-
able figure that would compensate the defendants for the
work that they had done in connection with the plaintiff's
motion to enforce the settlement agreement and in their
cross-motion. In due course, Ms. Seymour’s lawyers
complied with the terms of the settlement agreement and ap-
prised Judge Seibert of all that had occurred. In early April
2006, an agreement on fees was reached between the defen-
dants and Ms. Matlaw and her co-counsel that was approxi-
mately half the amount that the defendants contended
they had expended in legal fees.

On April 10, 2006, I entered an order - prepared by Ms.
Matlaw’s co-counsel - captioned “Settlement Order.” To the
opening sentence, “this matter coming on to be heard on the
motion for entry of a settlement order and the Court being
fully advised in the premises,” - | added in my handwriting,
the following: “that the case is settled:” I initialed my
handwritten addition.* The order went on to provide that
within 14 days certain payments would be made, which in-
cluded payments for attorneys’ fees to the defendants that

' The punctuation after the word “settled” is a colon, not a question
mark.

> The motion for reconsideration was based on a false factual premise,
which the plaintiff's lawyer, Ms. Matlaw, ultimately was forced to

concede. The motion for reconsideration was il-considered and baseless

Ms. Matlaw and her co-counsel had undeniably agreed to do.
Paragraph 3 of the order provided that the case was dismissed
without prejudice, with the court to retain jurisdiction for 90
days to enforce the settlement agreement.

On April 26, 2006, Ms. Mailaw, acting on her own behalf,
filed “Objections” with Judge Marovich to my order of April
11, 2006, even though Judge Marovich had no jurisdiction
since the case was here by consent since August 25, 2004. On
May 3, 2006, I granted the defendants’ motion to modify the
order to extend for 10 days compliance with the settlement
agreement. Meanwhile, on May 19, 2006, Judge Marovich
denied Ms. Matlaw’s objections since jurisdiction to hear any
appeal from final orders or magistrate judges in consent cases
lies exclusively with the Court of Appeals. See 28 U.S.C.
§636(c)(3). Judge Marovich’s order was docketed on May 23,
2006. On May 26, 2006, Ms. Matlaw filed her notice of ap-
peal to the Seventh Circuit of Judge Marovich’s denial of her
“objections” to my April 11, 2006 order, which the notice of
appeal states “is also being appealed herein.”

While her case is pending in the court of appeals, Ms.
Matlaw has returned here and asked me to “rescind” the post-
November 10, 2005 fee arrangement she admittedly made
with the defendants.? She contends that Rule 60(b), Federal
Rules of Civil Procedure, authorizes the relief since the
agreement is “unenforceable having resulted from a material
Mutual Mistake of Fact (that defendants could incur liability
to the Minors upon their achieving majority, and that Plain-
tiff’s Initial Petitions to Approve Settlement on their behalf,
in not advising of such “springing liability,” was materially
deceptive in the manner by which she sought the Judge’s ap-
proval.” (Amended and Supplemented Memorandum of

* Although the agreement was not signed, Ms. Matlaw’s supporting
memorandum concedes both its enforceability (in the absence of fraud
mistake) (Memorandum at unnumbered page 2).

25

~

Law in Support of Counsel’s Request for Partial Relief From
Judgment at unnumbered page 2) (parenthesis in original).
Astonishingly, Ms. Matlaw notes that she seeks no sanctions
against the defendants. (/d. at unnumbered page 5).4 This
statement, especially in the overall context of the case,
“bring[s}] to mind George Jacques Danton’s famous phrase —
l‘audace, encore de |l’audace, toujours de l’audace (audacity,
more audacity, always audacity) ....” United States v. Walsh,
700 F.2d 846, 850 (2d Cir. 1983) (parenthesis in original).

The motion is supported by general propositions about
mutual mistake of fact and their effect on contract formation.
But “general propositions do not decide concrete cases.”
Lochner v. New York, 198 U.S. 45, 76 (1905) (Holmes, J.,
dissenting). See also Daubert v. Merrell Dow, 509 U.S. 579,
598 (1993) (Rehnquist, C.J. concurring in part and dissenting
in part) (“ ‘general observations’ ” suffer from the common
flaw that they are not applied to the specific matter and
“therefore they tend to be not only general, but vague and
abstract.”); Wisehart v. Davis, 408 F.3d 321, 326 (7th Cir.
2005) (Posner, J.).

oc é

In the instant case, the argument that there has been a
“bedrock mutual mistake of fact or of law,” and a “uniform
misapprehension of New York law” is frivolous and ignores
the November 8, 2005 opinion and the denial of Ms. Mat-
law’s motion for rehearing on November 10, 2005.5 There
were no material mistaken assumptions on which Ms. Mat-
law and the defendants based their fee agreement. It is non-
sensical to suggest that there was a mutual mistake of fact

‘The parties are agreed that the pendency of Ms. Matlaw's appeal in the
Seventh Circuit does not deprive me of jurisdiction to hear this motion,
and | am proceeding on that assumption.

* [Nb (Petitioner's Note): This footnote contains no text.)

regarding what I found to be the materially deceptive manner
in which Ms. Matlaw sought the Surrogate’s Court’s ap-
proval. Ms. Matlaw certainly did not agree with that holding,
and indeed, protested vigorously at the oral argument today
that she was innocent of any wrongdoing. Thus, the parties
did not proceed on some shared misperception about what the
opinion said or its validity.* Similarly, there was no mutual
mistake of fact regarding the question of consideration for the
release of the children. As explained in the November 8 and
10, 2005 opinions, the defendants insisted that there be an al-
location to the children so that there could be no future claim
that the release was invalid because unsupported by consider-
ation. It did not matter whether the defendants’ concerns
about New York law’s requiring consideration for a release
were well-founded or whether New York law did or did not
actually have such a requirement. As discussed in detail in
the November 10" opinion, the defendants bargained for
some payment to the children to alleviate the possibility of a
future claim, and Ms. Seymour’s lawyers agreed to it.

Thereafter, Ms. Seymour changed her mind, but her
lawyers chose not to tell the defendants and allowed them to
proceed on the mistaken assumption that there was going to
be an allocation. Consistent with their concealed breach of
the settlement agreement, Ms. Seymour’s lawyers gulled
the Surrogate’s Court as described at length in the November
8" and 10" opinions. The only mistake of fact in this case is
unilateral and was the defendants who relied, foolishly as it
turns out, on Ms. Seymour’s lawyers’ representations.

Finally, Ms. Matlaw’s present contention that there was a mu-
tual mistake of fact regarding the applicability of the statute

* If Ms. Matlaw concluded that the opinion was correct, that ts not a
mutdal mistake of fact as that term is used in the law.

of limitations to any claims that might be brought by the chil-
dren is singularly disingenuous. (Plaintiff's Memorandum at
unnumbered page 9). As pointed out in the November 10"
opinion, the statute of limitations was never discussed with
defense counsel. 413 F.Supp.2d at 934.

If Ms. Matlaw thought the November 8 and November 10
decisions wrong, her recourse was not to have agreed to pay
the defendants’ attorneys’ fees in connection with the miscon-
duct that I found existed, but rather to have allowed a fee
award to be entered - if in fact it was deemed appropriate -
and then to appeal that award. She chose a very different
course, and she is bound by her voluntary decision.’ In ef-
fect, Ms. Matlaw’s agreement with the defendants regarding
the question of liability for attorneys’ fees constituted a settle-
ment agreement with the defendants on the discreet issue of
her liability for attorneys’ fees. A settlement agreement is a
contract and is governed by principles of law applicable to
contracts generally. Lumpkin v. Envirodyne Industries, Inc.,
933 F.2d 449, 455 (7th Cir.), cert. denied, 502 U.S. 939
(1991). Parties to a settlement agreement, otherwise enforce-
able, cannot avoid the agreement merely because one of them
has second thoughts. Jaylor v. Gordon Flesch Co., 793 F.2d
858, 863 (7th Cir. 1986). This principle is reflective of the
more encompassing principle that since equity does not act to
relieve parties of voluntarily undertaken obligations, in order
to rescind a settlement agreement, the disgruntled party must
demonstrate through clear and convincing evidence that the
agreement was entered into as a result of fraud or mutual

Following the November |0# denial of the motion for reconsideration,
Ms. Seymour terminated her relationship with Ms. Matlaw and agreed to
all the terms of the settlement, with which she fauhfully complied. Ms.
Seymour was thus acting on her own behalf.

mistake. Cameron v. Bojusz, 305 Ill.App.3d 267, 271, 711
N.E.2d 1194, 1197 (1999); Melzer v. Bausch & Lomb, Inc.,
193 Ill. App.3d 59, 549 N.E.2d 817 (1989). Those factors are
strikingly absent here.®

Neither the shortness of life nor the scarcity of judicial
resources can countenance an approach to settlement agree-
ments that makes them test runs, subject to revision whenever
a party decides she does not like the terms.

In sum, there was no mutual mistake of fact on which the
original settlement was bottomed, and there most assuredly
was no mutual mistake of fact (or law) on which Ms. Mat-
law’s agreement to pay attorneys’ fees to the defendants was
based. Ms. Matlaw’s current motion simply ignores all that
has occurred in the case, and effectively puts out of view the
November 8" and November 10" opinions. It is, in some
ways, nothing more than a thinly disguised motion to recon-
sider those decisions. Apart from being frivolous, it is un-
timely under Rule 59(e), Federal Rules of Civil Procedure.
Ms. Matlaw’s motion for partial relief from judgment [125]
[126] is denied.?

ENTERED: /S/ Jeffrey Cole
United States Magistrate Judge
DATE: 8/3/06

* Even preposterous terms are enforceable if that is what is actually
intended. Beanstalk Group, Inc. v. AM General Corp., 283 F.3d 856
(7th Cir. 2002) (Posner, J.).

* Ms. Matlaw said that the mutual mistake was not apparent until Judge
Seibert had issued his orders, although she could not explain how those
orders affected the present issues. Moreover, Judge Seibert’s orders were
issued months before Ms. Matlaw’s present motion. Ms. Matlaw also said
that she continues to represent Ms. Seymour even to this day and thus,
quite apart from the fact that orders are matters of public record, she
would have known about the order, which she now claims 1s so critical to
her motion.

APPENDIX F:

May 19, 2006 Order Denying Motion originally
filed by Petitioner on April 26, 2006 and thereafter
amended and supplemented (Post-Judgment “Rule

72 Objections to Magistrate Judge’s Order’),
Document Number 103 in No. 04-C-204]
(N.D. Ill.; unpublished).

30)

United States District Court, Northern District of Illinois

Name of Assigned Judge George M. Marovich
or Magistrate Judge oa

Sitting Judge if Other than Assigned Judge

CASE NUMBER 04 C 2041

DATE 5/19/06

CASE TITLE Seymour v. Hug

Plaintiff's Objections are denied. Motion hearing set for
May 24, 2006 is stricken.
/ S / George M. Marovich ,

For further details see below. Docketing to mail notices.

STATEMENT

When plaintiff Donna L. Seymour (“Seymour”) filed her
complaint in March 2004, the case was assigned to this
Judge. On or about August 19, 2004, every party to this case
signed a consent form, thereby consenting to proceed before
the Magistrate Judge for all proceedings through and includ-
ing judgment. On August 25, 2004, this Court entered an
order reassigning the case to the Magistrate Judge.

Since that time, this case proceeded before the Magistrate
Judge (originally Magistrate Judge Levin and, since May 6,
2005, Magistrate Judge Cole). On April 11, 2006, Judge Cole
entered an order dismissing the case without prejudice due to
the parties’ report that the case had settled. Judge Cole re-
tained jurisdiction over the case for 90 days and stated that
the dismissal would be automatically changed to a dismissal
with prejudice if the case were not reinstated within 90 days.
After additional motions, Judge Cole entered an order on
May 3, 2006 modifying the April 11, 2006 order and granting
defendants ten days to comply with the settlement agreement.

\

Plaintiff’s attorney has now noticed before this Court ob-
jections to Judge Cole’s order, citing Rule 72(a) of the
Federal Rules of Civil Procedure as the authority. Nothing in
Rule 72 provides this Court the authority to review Judge
Cole’s order. Rule 72(a) allows a party to file objections with
the district court with respect to an order a magistrate enters
with respect to “a pretrial matter not dispositive of a claim or
defense of a party” that the district judge “referred” to the
magistrate judge. See Fed. P. Civil P. 72(a). By its plain lan-
guage, Rule 72(a) applies only to orders on pre-trial, non-dis-
positive matters the district court referred to the magistrate.
Nor does Rule 72(b) apply. That rule allows a party to file
with the district court objections to an order by a “magistrate
judge assigned without consent of the parties to hear a pre-
trial matter dispositive of a claim or defense of a party . . .”
See Fed. R. Civ. P. 72(b) (emphasis added). These rules do
not apply because, in this case, the order Magistrate
Judge Cole entered was neither an order on a pre-trial matter
referred to him by this Judge nor an order on a dispositive
matter referred without consent. Rather, these parties con-
sented to proceed before the Magistrate for all proceedings
through and including final judgment.

In a case such as this, where the parties have consented to
proceed before the Magistrate for all matters through and in-
cluding judgment, the parties stil] have a means of having the
Magistrate Judge’s orders reviewed, but it is not at the district
court. Rather, 25 U.S.C. § 636(c)(3) allows such a party to
“appeal directly to the appropriate United States court of ap-
peals from the judgment of the magistrate judge in the same
manner as an appeal from any other judgment of a district
court.” See 28 USC § 636(c)(3).

Because the Court has no authority to review Magistrate
Judge Cole’s order, this Court hereby denies the plaintiff's
objections and strikes the May 24, 2006 hearing date.

APPENDIX G:

April 11, 2006 Final Settlement Order
(entered April 14, 2006), Document
Number 89 in No. 04-C-2041
(N.D. Il.; unpublished)

33

Case 1:04-cv-02041 Document 89 Filed 11/09/2005 Page | of 2

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
DONNA L. SEYMOUR, Piaintiff,
V. Case No. 04 C 2041.
CAROL HUG and ROGER HUG,

d/b/a REMAX TEAM 2000; Magistrate Judge
PATRICIA BROWN-WYRICK; Jeffrey Cole
CENDANT MOBILITY CORP.,

a Corporation; and CURTIS
CASTLE and CAROL CASTLE,

Defendants.

SETTLEMENT ORDER

This matter coming on to be heard on the motion for entry
of a settlement order and the Court being fully apprised in the
premises, {handwritten insertions: “/S$/JC_ that the case is
settled : ”]

IT IS HEREBY ORDERED THAT:

|. Within fourteen (14) days of the date of entry of this
order Defendants shall deliver the following checks:

a. A check made payable to The John Marshall law
School in the amount of $13,333.00 delivered to
F. Willis Caruso, 28 E. Jackson Blvd., Suite S00,
Chicago, Illinois 60604

b. A check made payable to Donna Seymour in the
amount of $27,607 delivered to her attorney,
Andrew C. Bluinenberg, 440 Route 146, Clifton
Park, New York, 12065

34

2. Within fifteen (15) days of the date that the Check for
$13,333.00 made payable to The John Marshal! Law
School clears, The John Marshall Law School shall
deliver to the Defendants the following checks:

a. Acheck made payable to Cozen O’Connor Trust.
for the benefit of Certain Underwriters of Lloyds.
Ref. REPM No. 084334.000 in the amount of
$3,000.

b. A check made payable to Sanchez & Daniels
Client Account in the amount of $14,916.00.

3. The case is dismissed without prejudice and the Court
retains jurisdiction for enforcement of this Settlement
Order for ninety (90) days.

4. Atthe end of the ninety (90) days, if the parties have not
requested additional action by the Court, the Court will
enter a Final Order dismissing the case with prejudice.

Enter: /S/ Jeffrey Cole

{handwritten: Magistrate] Judge

Dated:__ 4/11/06 -

Order Prepared by:

F. Willis Caruso

The John Marshall Law School
Fair Housing Legal Clinic

28 E. Jackson Blvd., Suite 500
Chicago, Illinois 60604

(312) 786-2267

APPENDIX H:

March 30, 2006 Orders of the New York
Surrogate’s Court (Document Number 86 in No.
04-C-2041 (N.D. Ill.; unpublished)) and Reports of
the New York Surrogate’s Court Guardian Ad Litem
(Document Numbers 84-1 and 84-2 in
No. 04-C-2041 (N.D. Ill.; unpublished)).

36

STATE OF NEW YORK
FOURTH JUDICIAL DISTRICT
SARATOGA COUNTY SURROGATE’S COURT

County of Saratoga )

State of New York ) ss
Surrogate’s Office

Recorded on the 30"

day of MARCH, 2006

In 46 [ illegible ] Orders 92

/ § / Debra D. Baker, Court Clerk

In re the Estate of ) ORDER
PETER. MADKIN, JR. ) — File #1836-78
A Minor. ) Judge Harry W. Siebert, Jr.

The petitioner Donna Seymour, the parent and guardian of
the above Minor ward, having moved this Court, on Decem-
ber 7, 2005, to approve a Settlement Agreement and Consent
Order in Case No. 04 C 2041, and the parties having come to
be heard on the 10" day of January, 2006,

Now, upon reading the petition, which was filed December 7,
2005 and reviewing the recommendation of the Guardian ad
litem, James G. Snyder, it is

ORDERED that the petition be granted in full and specifi-
cally that:

A) The above Minor Ward receive One thousand dollars
($1000) to be issued from the settiement proceeds to
Donna Seymour as Guardian of Peter Madkin, Jr.
jointly with Saratoga Co. Surrogate’s Court.

37

B) That an allowance be made to James G. Snyder, Esq. as
guardian ad litem of Peter Madkin, Jr. in the amount of

$2126.00.

C) That an allowance be made to Andrew C, Blumenberg,
as attorney for petitioner, in the amount of $1,000.

D) Donna Seymour, Guardian file with this Court proof of
deposit of said funds.

Enter.

Dated: March 30, 2006 /S/ Harry W. Siebert, Jr.
Surrogate

[Fax header]
4/10/2006 11:46 518-884-4774 S ARA CO SURR CT PAGE 02/05

Case 1:04-cv-02041 Document 86-2 Filed 04/10/2006 Page | of 5

STATE OF NEW YORK Saratoga County Surrogate’s Court

SURROGATE’S COURT [ File Stamp ]
SARATOGA COUNTY FILED MAR 7 2006
In the Matter of Guardianship Proceeding of
REPORT OF
GUARDIAN AD LITEM
PETER LANE MADKIN, JR. File # 1836-78

I, James G. Snyder, Counselor-At-Law, having been duly
appointed the Guardian ad Litem of PETER LANE MADKIN,
Jr., infant for the purpose of appearing for and protecting his
interest in the above entitled proceeding, do hereby report as
follows:

FIRST: That the interest of said infant is that of proposed
recipient of a portion of money out of the proceeds of the
lawsuit commenced and prosecuted by Donna Seymour, his
mother in Illinois.

SECOND: That I have examined the papers purporting to
be the Petition and Affidavit of Minors Guardian to Approve
Settlement dated 5/20/05 and proof of service herein and all
other papers in this proceeding and the previous petition and
order seeking similar relief. The proceeding was brought in
[ilinois District Court for racial discrimination in the pur-
chase of a home by my ward’s mother. She sued the case as
plaintiff individually without including her children as plain-
tiffs. The matter in Illinois can be settled in the amount of
$40,000.00, if approved. Petitioner proposes to receive

39

$24,776, as her share of the settlement less attorneys’ fees
with $1,000.00 each going to her children. She originally pe-
titioned this Court for approval of a similar settlement with-
out requesting that her children receive money. That petition
was approved by this Court. Subsequently, the magistrate in
Illinois directed that some portion of the settlement proceeds
be distributed to the children. Petitioner has proposed $1,000
to each child. It appears that one of the reasons the money
for the children was proposed is that the defendants in said
case seek releases from the children in addition to the ag
tiff. i

THIRD: I have researched these issues extensively and
have had several phone conversations and correspondence
with Petitioner’s attorneys and on of the defense attorneys in
the Illinois action. In my opinion, New York law does not re-
quire that the infants receive any portion of this settlement
unless they were

[4/10/2006 11:46 518-884-4774 S ARA CO SURR CT PAGE 03 / 05]

parties to this action. Furthermore, it is difficult to under-
stand how they would have any viable claims in said action as
the facts have been explained to me. All of the above
notwithstanding, J recommend to this Court that the settle-
ment as proposed be approved and the release be signed as
presented. As guardian ad litem for said ward, I cannot de-
cline the offer to my ward of $1,000.00 no matter how it is
obtained. The plaintiff’s attorneys are entitled to their one-
third pursuant to a retainer agreement. After payment of the
expenses of this matter in Surrogate’s Court, Donna Seymour
should be entitled to the balance of the settlement proceeds.

Dated: March 3, 2006

/ S/ James Snyder Guardian ad Litem

40

[Fax header]
4/10/2006 11:46 518-884-4774 S ARA CO SURR CT PAGE 04/05

Case 1:04-cv-02041 Document 86-2 Filed 04/10/2006 Page 3 of 5
STATE OF NEW YORK. Saratoga County Surrogate’s Court

SURROGATE’S COURT [ File Stamp ]
SARATOGA COUNTY FILED MAR 7 2006

In the Matter of Guardianship Proceeding of
REPORT OF
GUARDIAN AD LITEM
DEVIN LAUREN MADKIN File # 1836-79

I, James G. Snyder, Counselor-At-Law, having been duly
appointed the Guardian ad Litem of DEVIN LAUREN MADKIN,
infant for the purpose of appearing for and protecting his in-
terest in the above entitled proceeding, do hereby report as
follows:

FIRST: That the interest of said infant is that of proposed
recipient of a portion of money out of the proceeds of the
lawsuit commenced ar prosecuted by Donna Seymour, her
mother in Illinois.

SECOND: That I have examined the papers purporting to
be the Petition and Affidavit of Minors Guardian to Approve
Settlement dated 5/20/05 and proof of service herein and all
other papers in this proceeding and the previous petition and
order seeking similar relief. The proceeding was brought in
Illinois District Court for racial discrimination in the pur-
chase of a home by my ward's mother. She sued the case as
plainuff individually without including her children as plain-
tiffs. The matter in Illinois can be settled in the amount of
$40,000.00, if approved. Petitioner proposes to receive

4]

$24,776, as her share of the settlement less attorneys’ fees
with $1,000.00 each going to her children. She originally pe-
titioned this Court for approval of a similar settlement with-
out requesting that her children receive money. That petition
was approved by this Court. Subsequently, the magistrate in
Illinois directed that some portion of the settlement oroceed:
be distributed to the children. Petitioner has prop » <d $1,000
to each chiid. It appears that one of the reasons the money
for the children was proposed is that the defendants in said
case seek releases from the children in addition tc :he plain-
tiff.

THIRD: I have researched these issues extensively and
have had several phone conversations and correspondence
with Petitioner’s attorneys and on of the defense attorneys in
the [Illinois action. In my opinion, New York law does not re-
quire that the infants receive any portion of this settlement
unless they were

[4/10/2006 11:46 518-884-4774 SARA CO SURR CT PAGE 05 / 05]

parties to this action. Furthermore, it is difficult to under-
stand how they would have any viable claims in said action as
the facts have been explained to me. All of the above
notwithstanding, I recommend to this Court that the settle-
ment as proposed be approved and the release be signed as
presented. As guardian ad litem for said ward, I cannot de-
cline the offer to my ward of $1,000.00 no niatter how it is
obtained. The plaintiff's attorneys are entitled to their one-
thirc pursuant to a retainer agreement. After payment of the
expenses of this matter in Surrogate’s Court, Donna Seymour
should be entitled to the balance of the settlement proceeds.

Dated: March 3, 2006

/ S/ James Snyder Guardian ad Litem

STATE OF NEW YORK
FOURTH JUDICIAL DISTRICT
SARATOGA COUNTY SURROGATE’S COURT

County of Saratoga )

State of New York ) ss
Surrogate’s Office

Recorded on the 30"

day of MARCH, 2006

In 46 [ illegible ] Orders 92

/ S$ / Debra D. Baker, Court Clerk

In re the Estate of ) ORDER
DEVIN LAUREN ) Eile #1836-79
MADKIN, A Minor. ) Judge Harry W. Siebert, Jr.

The petitioner Donna Seymour, the parent and guardian of
the above Minor ward, having moved this Court, on Decem-
ber 7, 2005, to approve a Settlement Agreement and Consent
Order in Case No. 04 C 2041, and the parties having come to
be heard on the 10" day of January, 2006,

Now, upon reading the petition, which was filed December 7,
2005 and reviewing the recommendation of the Guardian ad
litem, James G. Snyder, it is

ORDERED that the petition be granted in full and
specifically that:

A) The above Minor Ward receive One thousand dollars
($1000) to be issued from the settlement proceeds to
Donna Seymour as Guardian of Devin Lauren Madkia,
Jr. jointly with Saratoga Co. Surrogate’s Court.

43

B) That an allowance be made to James G. Snyder, Esq. as
guardian ad litem of Devin Lauren Madkin, in the
amount of $2126.00.

C) That an allowance be made to Andrew C, Blumcxberg,
as attorney for petitioner, in the amount of $1,000.

D) Donna Seymour, Guardian file with this Court proof of
deposit of said funds.

Enter.

Dated: March 30, 2006 /S/ Harry W. Siebert, Jr.
Surrogate

34

APPENDIX I:

November 8, 2005 Opinion and Order and
November 9, 2005 Opinion on Plaintiff’s
Motion for Reconsideration, Document Numbers
65 and 69, respectively, in No. 04-C-2041
(N.D. Ill.; published at 413 F. Supp. 2d 910
(N.D. Ill. 2005), 2005 WL 3050635).

45

Case 1:04-cv-02041 Document 65 Filed 11/08/2005 Page 1 of 37

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

DONNA L. SEYMOUR, Plaintiff,
v. Case No. 04 C 2041.
CAROL HUG and ROGER HUG,

d/b/a REMAX TEAM 2000; Magistrate Judge
PATRICIA BROWN-WYRICK; Jeffrey Cole
CENDANT MOBILITY CORP.,

a Corporation; and CURTIS
CASTLE and CAROL CASTLE,

Defendants.

MEMORANDUM OPINION AND ORDER [1]
INTRODUCTION

This case has its genesis in Donna L. Seymour’s unsuc-
cessful attempt to purchase a home in a suburb of Chicago
from realtors, Roger and Carol Hug, Patricia Brown-Wyrick
and H & H Realty, Inc. (collectively “Realtor Defendants”),
and Cendant Mobility Corp. and Curtis and Carol Castle (col-
lectively “Owner Defendants”). According to Ms. Seymour,
although she had successfully negotiated a contract for the
purchase of the home, the defendants “sold it out from under
her” when they discovered she was African-American. On
March 18, 2004 Ms. Seymour fiied a complaint alleging un-
lawful discrimination against her on the basis of race in viola-
tion of the Fair Housing Act, 42 U.S.C. §§3604, 3605, 3617,
and breach of contract under Illinois state law. A week later,

FN1. The case is before me pursuant to the parties’ consent. 28 U.S.C.
§636(c).

46

she amended her complaint, and she did so again on August
20, 2004. Discovery ensued as did intensive settlement dis-
cussions.

On May 24, 2005, the parties filed a Joint Status Report,
stating that they “were in the process of finalizing an agreed
settlement,” and that they had “agreed in principle to a settle-
ment of all claims. A condition of the settlement is that plain-
tiff must seek approval from the Surrogate’s Court in New
York, the state of residence of plaintiff and her children, in
order to procure a valid release of any potential claims of her
minor children.” (/d.) [2] On June 20, 2005, counsel for cer-
tain of the defendants reported at a status hearing that the
case was settled, and that the execution of the formal settle-
ment agreement by all parties was imminent. Accordingly, I
dismissed the case with leave to reinstate within 60 days in
the event of any unanticipated problem and retained jurisdic-
tion to enforce the settlement agreement. [3]

FN2. The approval of the New York court was necessary because a release
by a parent does not bind the child. Santangelo v. City of New York, 66
A.D.2d 880, 881, 411 N.Y.S.2d 666 (1978).

FN3. Enforcement of a settlement agreement is more than a continuation
of a dismissed suit and thus, requires a separate basis for federal jurisdic-
tion. Kokkonen vy. Guardian Life Insurance Co. of America, 511 U.S. 375,
378 (1994). The Supreme Court has instructed that a district court retains
jurisdiction over enforcement of a settlement agreement if the court el-
ther: (1) expressly retains its jurisdiction over the agreement, or (2) incor-
porates the agreement’s terms into its dismissal order. /d. at 381. The
dismissal order must not provide that the dismissal is with prejudice or
the court will not have post-dismissal jurisdiction, even if the order pro-
vides for a retention of jurisdiction to enforce a settlement. Lynch, Inc. v.
SamataMason, Inc., 279 F.3d 487, 489 (7th Cir. 2002); Jessup v. Luther,
277 F.3d 926, 929 (7th Cir. 2002). As I conditionally dismissed this case
without prejudice and expressly retained jurisdiction to enforce the settle-

ment agreement, there is jurisdiction to resolve the present dispute.

47

Apparently, over the course of the next week, the defen-
dants concluded that they had been had - and rather badly at
that - by the plaintiff and her lawyers. They demanded that
Ms. Seymour make further application to the Surrogate’s
Court and provide the Court with the information they in-
sisted she had withheld. The plaintiff's lawyers refused. On
June 29, 2005, Ms. Seymour filed this present Motion to En-
force the Settlement Agreement or, in the Alternative, to Va-
cate Dismissal, Reinstate Case, and Enter Judgment on the
Agreement. On July 15, 2005, the defendants filed a Cross
Motion to Enforce Settlement and For Fees, in which they
contend that Ms. Seymour failed to comply with the terms of
the parties’ March 14, 2005 settlement agreement. The mo-
tion argued that Ms. Seymour and her lawyers had deceived
the defendants and the Surrogate’s Court in New York into
approving the settlement of the instant case and authorizing a
release of the claims of Ms. Seymour’s children. [4] Ms. Sey-
mour’s view of the matter is, predictably, quite different. She

FN4. Although the word “fraud” does not appear in the defendants’ brief-
ing, the accusation of fraud is beyond debate. For example, the plaintiff
and her counsel are accused of: having made “substantial and material”
“misrepresentations to the [Surrogate’s] Court”; having “acted in bad
faith” of having filed petitions with the Surrogate’s Court containing “bla-
tant misrepresentations”; having concealed [plaintiff's] change in position
and thereafter attempt[ing] to unilaterally change the agreed upon terms
of the settlement by manipulating the language in drafts of the release;
having “[{sJurreptitiously utiliz[ed] a modified form of the” Apmnil 28" ver-
sion of the settlement and release; having without authorization changed
the language of the formal agreement approved by the defendants; having
made “patently false” representations to the Surrogate’s Court in New
York; having withheld critical information from that court, having falsely
informed the [Surrogate’s Court] that any claims held by the minors were
not contemplated, resolved and/or encompassed by the settlement of the
underlying action”; and having “deceiv[ed] and mislead [ ]” the Surro-
gate’s Court and having used “deception in an effort to prevent any of the
money from going into the children’s’ trust... “” (Joint Brief in Support
of Defendants’ Cross-Motion to Enforce Settlement at 10, 12, 13; Defen-
dants’ Reply Brief at 4, 6,9, 11, 12-14).

48

denies that there was any settlement on March 14" and insists
that the settlement is that contained in a document prepared
by the defendants on April 28, 2005, which required that she
obtain a release of the childrens’ claims. For her, form is sub-
stance, and having obtained on May 20, 2005 an order of the
Surrogate’s Court approving the settlement and releasing any
claims of her children, her obligations have been fulfilled.

The difficulty, however, is that form is not substance, and
Ms. Seymour’s contention that she has complied with the
terms of the settlement agreement merely by securing an
order of the Surrogate’s Court, regardless of the circum-
stances under which the order was obtained, is plainly mis-
taken. Under New York law, the Surrogate’s Court had to be
“fully apprised” of all the relevant facts and circumstances in
order to make an informed determination of whether the ap-
proval of the settlement was in the children’s “best interest.”
Unless that occurred, the defendants would be subject to pre-
cisely the risks of future litigation by Ms. Seymour’s children
that the settlement agreement was designed to avoid. Only
the “latitudinarian attitude of Alice in Wonderland towards
language,” National Mutual Insurance Co. v. Tidewater
Transfer Co., 337 U.S. 582, 654 (1949) (Frankfurter, J., dis-
senting), could support the plaintiff’s contention that the peti-
tions Ms. Seymour filed in New York fully and properly
informed the Court of the nature of the children’s claims and
the allegations made by Ms. Seymour in the underlying ac-
tion. The disquieting reality is that the Surrogate’s Court was
ill-served by Ms. Seymour and her legal advisors, and that by
failing to comply with New York law in her presentation to
the Surrogate’s Court, Ms. Seymour breached the settlement
agreement she made with the defendants.

49

I, FACTUAL BACKGROUND

A. The Complaints, Discovery, And
Early Settlement Demands

All of Ms. Seymour’s pleadings repeatedly referred to her
“family” and “children.” The complaint and amended com-
plaint charged that she “celebrated with her children having
successfully negotiated for their new home.” (Compl., at 160;
Am. Compl., at 57). She also alleged that she brought her
children to see the home. (Am. Compl., at 49). All three ver-
sions of her complaint alleged that the defendants’ actions
caused Ms. Seymour “and her family economic injury, conse-
quential damages and personal harm,” (Compl., at 477, 80,
82, 84; Am. Compl., at {G102, 105, 107, 109; 2nd Am.
Compl., at {J]111, 114, 116, 118) (emphasis supplied), and
requested compensatory and punitive damages “for discrimi-
nation against her and her children.” (Compl., at [84 Prayer;
Am. Compl., at {102 Prayer (d), 105 Prayer (d), 107 Prayer
(d); 2nd Am. Compl., at JJ111 Prayer (d), 114 Prayer (d), 116
Prayer (d)) (emphasis supplied).

Consistent with these allegations of harm to her children,
in the complaints, Ms. Seymour demanded in August 2004
that in addition to payment of $150,000 in damages to her,
her two children were entitled to $50,000 “to compensate
them for defendants’ illegal actions, and the resulting emo-
tional distress.” (Defendants’ Brief, Ex. B). Ms. Seymour's
insisience that her children were harmed by the defendants’
actions - and thus had their own claims - continued into dis-
covery. When asked at her deposition in December 2004 to
explain what damages were being claimed, Ms. Seymour said
that it had been “a very painful experience for myself, for my
children,” and that she relocated “my family because of this
occurrence.” (Defendants’ Br. Ex. C at 34). When counsel for
the owner defendants, asked if Ms. Seymour understood that

her children were not party to this lawsuit, Ms. Seymour re-
sponded that while her children were not parties, “my chil-
dren have been affected by the discrimination that this
lawsuit is about ....” /d. at 35.

When asked if she was making a claim on behalf of her
children, Ms. Seymour declared: “My children’s lives have
been forever altered as a result of this lawsuit, which was us
having to relocate across the country. I have not chosen at
this time to file a lawsuit on their behalf.” Jd. (Emphasis sup-
plied). There then followed this telling exchange between
Ms. Donaldson and Ms. Seymour:

Q: Are you making a claim in this lawsuit for damages
that you claim were suffered by your children as a re-
sult of this transaction?

A: I’m making a claim in this lawsuit that my children’s
lives have been affected by what has occurred in this
transaction.

Q: And you’re making that claim despite the fact that
your children are not plaintiffs and this action is not
brought on their behalf.

A: That’s correct.

Id. at 36. (Emphasis supplied).

It is thus clear that Ms. Seymour was of the view that her
children had their own independent, substantial claims, and,
although they were not being asserted “in a lawsuit” “at this
time,” the specter of future litigation by the children loomed
like a brooding omnipresence. From any prudent perspective,
a settlement with Ms. Seymour had to include the children’s
unpled claims. That, at least, was the defendants’ non-nego-
tiable position.

51

B. The Early Settlement Negotiations

The unpled claims of Ms. Seymour’s children remained a
central issue as the settlement negotiations continued into
early 2005. On March 11, 2005, Mark Howard, counsel for
the realtor defendants, emailed the terms of defendants’ set-
tlement offer to William Caruso, one of Ms. Seymour’s coun-
sel. (Defendants’ Br. Ex. D1). The first two of five terms
predictably dealt with the children’s claims:

1) Plaintiff to amend complaint to include minors’
claims prior to dismissal pursuant to settlement, and
to petition [Magistrate Judge] Levin in accordance
[with] N.Y. state law Chapter 308, section 1207
(reproduced below) and allocate a reasonable amount
to the minor’s [sic] claims, and in the event Levin
declines to exercise jurisdiction, then plaintiff will
institute a special proceeding in NY;

2) $37,500 total offer divided among the plaintiff and
her children in the manner approved by the
appropriate court, inclusive of any and all attorneys
fees and costs...

Id. (Parenthesis in original). Mr. Howard sent along a copy
of §1207 of the New York Civil Practice Law and Rules,
adding emphasis to the portions he believed pertinent:

1207. Settle f action o i infant, judici
— incom onary peer reige by whom motion
| pr : notice; oO f settleme

“ps me at of a possi of the property or guardian
ad litem of an infant or, if there is no such guardian,
then of a parent having legal custody of an infant, or if
there is no such parent, by another person having legal
custody, or if the infant is married, by an adult spouse re-
siding with the infant, or of the committee of the property

of a person judicially declared to be incompetent, or of
the conservator of the property of a conservatee, the
court may order settlement of any action commenced
by or on behalf of the infant, incompetent or conserva-
tee. If no action has been commenced, a special pro-
ceeding may be commenced upon petition of such a
representative for settlement of any claim by the in-
fant, incompetent or conservatee in any court where
an action for the amount of the pr -posed settlement
could have been commenced.

Id. (Boldface added by Mr. Howard, underlining in §1207).
Acknowledging the offer on March 13, 2005, Mr. Caruso in-
dicated that he still had not received approval from Ms. Sey-
mour, but that he would be speaking with her that day. Mr.
Caruso told Mr. Howard that he thought “it [the final settle-
ment figure] will go at $40,000.” (Defendants’ Br. Ex. D2).

On March 14, 2005, Mr. Howard spoke with Leslie Mat-
law, Ms. Seymour’s co-counsel, regarding settlement negotia-
tions and the defendants’ March 11 offer. As a follow-up to
their conversation, Mr. Howard faxed to Ms. Matlaw a two-
page letter that set forth the defendants’ “offer” to settle. (De-
fendants’ Br. Ex. D3). The letter stressed that “all our offers
have included court approval of the minor’s [sic] claims,” and
explained that, after his review of New York law, he believed
it was necessary to have the matter approved by the court,
and cited, in haec verba, the relevant New York statute and
provided case authority to support his interpretation. /d. Fol-
lowing his lengthy and reasoned explanation of why approval
of settlement of the minors’ claims was legally required and
the sine qua non of any settlement agreement, Mr. Howard
enumerated the five conditions for settlement:

(1) Plaintiff to amend complaint to include minors’

claims prior to dismissal pursuant to settlement, and
to petition [Magistrate Judge} Levin in accordance

53

[with] N.Y. state law Chapter 308, section 1207, and
allocate a reasonable amount to the minor’s [sic]
claims, and in the event [Magistrate Judge} Levin
declines to exercise jurisdiction, then plaintiff with
institute a special proceeding in NY;

(2) $40,000 total offer divided among the plaintiff and

her children in the manner approved by the
appropriate court, inclusive of any and all attorneys
fees and costs; In the event that Judge Levin declines
jurisdiction over the approval process, we will pay an
additional $1,000.00 to defray costs of the approval
process in New York.

(3) Plaintiff’s acknowledgment in the release that the

defendants claim that the settlement is of a disputed
claim, and made solely to avoid litigation and that
liability 1s denied.

(4) Confidentiality as to all terms and conditions of

settlement, by all parties and counsel;

(5) A release of all claims for legal or equitable relief to

be drafted by defendants for execution by plaintiffs,
incorporating the above terms.

Id. (Emphasis supplied).

That same day, Ms. Matlaw responded to this letter. (De-
fendants’ Br. Ex. D4). First, she summarized her conversation
with Mr. Howard that morning, conveying “Ms. Seymour's
counter-offer to settle ... for a Confidential $45,000 total offer
(or $40,000 with a Gag Order) and her acceptance of all
other terms set forth in your fax other than the filing of a
[separate] New York action in relation to her children’s

54

claims.” /d. (Emphasis supplied). [5] Ms. Matlaw further re-
ported that she was “very pleased to report that Ms. Seymour
has accepted a total offer of $40,000 for all Defendants and
will accept the Confidentiality Provision in Full and Final
Settlement of all claims with no Defendant acknowledgment
of liability.” (Boldface by Ms. Matlaw). According to Ms.
Matlaw, Ms. Seymour was prepared to execute the defen-
dants’ release “subject to our review and approval.” /d.

Ms. Matlaw went on to explain why a new action in New
York would not be needed:

Ms. Seymour is both Devin and Peter Madkin’s parent and
their Guardian pursuant to an already-existing Minors’ Es-
tate in New York Surrogates’ [sic] Court. Thus, rather than
filing a separate lawsuit which would show up in a litiga-
tion search contrary to Ms. Seymour’s wishes, we should
be able to get the necessary judicial approval by simply pe-
titioning the New York judge for approval of our Agreed
Consent Order.

Id. (Emphasis supplied). Upon considering the relevant pro-
cedure and costs, Ms. Matlaw informed Mr. Howard that De-
fendants’ offer of $1,000 toward “the costs of judicial
approval of the minors’ claims” was more than adequate. /d.
In closing, Ms. Matlaw expressed her belief that “we can re-
solve all outstanding issues and develop agreed-upon lan-
guage in the very near future” and that she was “prepared to
report to Judge Levin [the following] Wednesday morning
that we have settled this case in principle, that Plaintiffs are
preparing an Amended Complaint and Draft Agreed Consent
Order for production to Defendants, and that we anticipate
presenting these for Judge Levin's approval by the end of the
month.” Jd.

FNS. Attached to Ms. Matlaw’s March 14th letter was Mr. Howard's ear-
lier jetter that day. (See Ex. D4).

Additional discussions ensued and, late; that day, Mr.
Howard sent an email to Ms. Matlaw and Mr. Caruso ex-
pressing his agreement that “we do not need to amend the
complaint if you are going to get the New York court to ap-
prove the settlement.” (Defendants’ Br. Ex. DS). Mr. Howard
included a draft affidavit on which he had been working for
Ms. Seymour’s approval of settlement that he felt comported
with the requirements of New York law, CPLR §1208. Para-
graphs 4 and 5 of the draft affidavit made clear that the chil-
dren had their own claims that the Surrogate’s Court was to
consider:

4. Plaintiff has claimed that the children’s expectations
were disappointed when they were unable to obtain a
home, and general emotional damages have been
claimed. There are no related medical or psycholog-
cal treatments or bills that have been incurred on be
half of either minor child.

5. For all claims, defendants have proposed a settlement
in the total amount of $40,000, $30,000 payable to
Donna Seymour to resolve her claims and $5,000
each payable to the estates of Peter Madkin and Devin
Madkin. The minors settlement amounts will be
reduced by application of a 1/3 attorney fee, resulting
in a net payment to each of 3,333.33, which I will
hold for them ... until the respective minor child
reaches the age of majority.

Id. Replying to Mr. Howard via email later that evening, Ms.
Matlaw said she agreed that they need not amend the com-
plaint, but simply proceed directly to petition the Surrogate’s
Court, which was overseeing the “already-existing Minors’
Estate” for approval of the settlement and release of their
claims. (Defendants’ Br. Ex. D6). She also reported that she
spoke in detail with a clerk in the New York Surrogate’s

Court and learned that the court could rule in approximately
two weeks based upon a statement as to the “nature of the ac-
tion [and] why it is fair and in the wards’ best interests.” (De-
fendants’ Br. Ex. D6). Ms. Matlaw also indicated some
confusion over whether she could represent the children in
New York or whether Seymour will proceed pro se. Id. She
concluded with an assurance that “[w]e’ll straighten it all out
and make sure that a proper New York Petition is on file by
the end of the week so that the Order approving the Settle-
ment of the minors’ claims can be part of the Petition before
Judge Levin.” (Emphasis supplied).

Thus, by the end of the day on March 14, 2005, it is clear
that the parties had agreed to the following:

1. Ms. Seymour was to be paid $40,000 in full and final
settlement of all claims;

2. She was to allocate a reasoable amount of this sum to

her children’s claims in the manner approved by the

appropriate court;

The settlement was to be confidential;

There would be a denial of liability by the defendants;

The plaintiff would seek approval from the Surro-

gate’s Court in New York of the settlement agreement

and the release of the children’s claims;

6. The defendants would pay $1,000 to defray the costs
of the approval process in New York if New York
counsel were used.

APY

That Ms. Matlaw had agreed on behalf of her client that
some portion of the $40,000 was to be allocated to the chil-
dren is reenforced by the events of March 22, 2005. That day,
Mr. Howard followed up with both Ms. Matlaw and Mr.
Caruso to request projections on the timing of the Surrogate’s
Court's approval. (Defendants’ Br. Ex. D8). On March 24,
2005, Ms. Matlaw replied that she needed an approved settle-

57

ment agreement as an exhibit to support the petition that
would be filed in New York. /d. Just a few minutes later, Mr.
Howard replied via email and asked Ms. Matlaw to provide
“the allocations that you will propose to the court for the chil-
dren” and indicated that he would amend the draft after ap-
proval from defendants’ other counsel. /d. The next day,
March 25, 2005, Ms. Matlaw replied that “[w]e envisioned a
pro-rata breakdown similar to that found in the damages
statement we provided following our in-chambers discussion
with Judge Levin. We’ve conveyed proposed amounts to
[Seymour], but have yet to hear back from her.” Id. She then
asked for the current draft of the agreement so she could re-
view the other terms and “fill in the blanks” once Ms. Sey-
mour had decided on the breakdown. /d. [6]

Thus, by March 25", the only open issue was the amount
Ms. Seymour would allocate to the children. That there was
to be an allocation in some amount was agreed upon. On
March 29, 2005, Mr. Howard sent the proposed draft release
and settlement agreement (the “March 29 Version”) and
asked both Mr. Caruso and Ms. Matlaw to review and indi-
cate whether it was acceptable. (Defendants’ Br. Ex. D9).
Consistent with all the parties’ prior exchanges, the formal
written agreement envisioned some payment to the minors
and court approval of the settlement. Thus, paragraph b. pro-
vided: Donna Seymour agrees to obtain approval of the pro
posed settlement of the claims of the minor children named
Peter Madkin and Devin Madkin from a court in New York
state where the children reside, and provide a copy of the
order authorizing the settlement and directing the amounts to

FN6. Presumably, the pro-rata breakdown would be $5,000 to each of the
children. This amount is 25% of $40,000 which bears the same ratio that
the $50,000 settlement demand bore to the $200,000 total originally de-
manded by Ms. Seymour on August 31, 2004.

be paid to the minors’ estates [7].

The next day, March 30", Ms. Seymour had a change of
heart and sent this email to Ms. Matlaw:

I received your fax. There is no aplit [sic] concerning
Peter and Devin. I am the one whohas[sic] gone in to [sic]
debt and should be reimbursed. I will not ettle [sic] if any
of this money is going in to [sic} their trusts and not to
me.

(Brief in Support of Plaintiff’s Motion To Enforce Settlement
(“P/.Br.” ) Ex. D). Ms. Seymour’s lawyers never told defense
counsel of this email or Ms. Seymour’s position. Instead, they
embarked on what the evidence compellingly suggests is a
pattern of deception designed to gull not only the defendants’
lawyers, but the Surrogate’s Court in New York as well.

In her brief, plaintiff calls the March 30" fax an “unequiv-
ocal rejection” of designating any part of the settlement to her
children’s trusts. (Pl. Br., at 2). Perhaps it was. The difficulty
is that Ms. Seymour’s lawyers chose to conceal it from the
defendants until the briefing on the present motions, and Ms.
Seymour’s undisclosed rejection - whether unequivocal or not
- is thus analytically meaningless. See infra at 25.

FN7. Paragraph |. provided that the realtor defendants would contribute
up to an additional $1,000 toward attorney's fees and expenses payable to
New York counsel for time and expenses directly incurred in connection
with obtaining New York Court approval for the minor's settlements,
Paragraph k. provided for indemnification under certain circumstances
and paragraph h. contained a confidentiality provision.

C. The Plaintiff’s Lawyers Changes to the Language
Regarding the Children’s Claims Following the
Receipt of Ms. Seymour’s Email of March 30°

If it be true that honesty of purpose prompts frankness of
statement, Crosby v. Buchanan, 90 U.S. 420, 454 (1874), the
post-March 30" conduct of Ms. Seymour’s lawyers does not
fare well. Rather than tell defense counsel of Seymour’s volte
face, Mr. Caruso acted as if nothing had occurred and that
everything was on track in accordance with the March 14"
exchange of emails. On March 31, 2005, he was “revising the
settlement agreement and preparing materials to obtain re-
lease of claims by minors.” (Defendants’ Br. Ex. D9). On
April 1, 2005, Mr. Howard was sent a revised draft of the set-
tlement agreement for his review. The covering email stated:

We believe the key factors are 1) the releases should be
joint and mutual, and 2) Paragraph K in your draft [the
Indemnity Paragraph] was stricken because the New York
court order will obviate the need for that paragraph. We
made other minor changes, which did not amount to any
substantive changes.

(Defendants’ Br. Ex. D10) (Emphasis supplied).

Among the purportedly “minor” “[non-] “substantive
changes” was a change to what had been Paragraph b. (but
now was redesignated as Paragraph c.). In Mr. Howard’s
March 29" draft, Paragraph c. provided:

Donna Seymour has obtained approval of the proposed
settlement of the claims of the minor children named
Peter Madkin and Devin Madkin from a court in New
York state where the children reside, and provided a copy
of the order authorizing the settlement and directing the
amounts to be paid to the minors’ estates.

60

(Defendants’ Ex. 1). [8]

In the April 1* version, as changed by Ms. Seymour’s
lawyers following her March 30" email, the critical phrase,
“of the claims of the minor children named Peter Madkin and
Devin Madkin from a court in New York state where the chil-
dren reside, and provided a copy of the order authorizing the
settlement and directing the amounts to be paid to the minors’
estates” was deleted.[9] Mr. Howard, “supposing he was

FN8. It is undisputed that Paragraph c. as drafted by Mr. Howard, con-
tained this language. (Plaintiff's Response to Defendants Joint Brief in
Support of Their Cross-Motion to Settlement [sic], at 1-2).

FN9. Although the plaintiff maintains that the defendants “themselves ex-
cised this language from the final draft presented for plaintiff's approval,”
(Amended Brief in Support of Plaintiff’s motion to Enforce Settlement, at
2), the defendants deny it, and the evidence and common sense support
the defendants’ version of events. From the beginning, it was the defen-
dants’ view that the release of the children’s claims had to be supported
by consideration and thus there had to be some allocation of the settle-
ment amount to them. There is simply no basis to conclude that they
would have suddenly had a change of heart and unilaterally excised lan-
guage that was critical to their view of New York law and that no one had
objected to. Moreover, pursuant to my order of September 30, 2005, 1
have been provided with a copy of the plaintiff's April Ist revisions to
Mr. Howard’s March 29th draft. It is plain that the plainuff, not the de-
fendants, excised the language quoted above, and then tendentiously char-
acterized it as one of the “minor,” non-substantive changes they made.
Beyond this, a review of the exhibits and the word-track functions on the
documents attached to the parties’ briefs makes clear that it was the plain-
tff’s lawyers who were responsible for the deletion of the language. See
generaliy Defendants’ Joint Reply in Opposition to Plaintiff's Motion to
Enforce Settlement, at 5; Defendants’ Brief Ex. D10 and Ex. 3 to Defen-
dants* Joint Reply in Opposition to Plaintiff's Motion and D22 to Defen-
dants’ Opening Brief.

61

dealing with ... honorable [people] ... of high-standing at the
bar, whose professional robe indicated the higher virtues,”
considered he was secure in relying on the assurance that the
deletion in Paragraph c. was minor and not at all substantive.
Dickerman v. Burgess, 20 Ill. 266 (Ill. 1858).

D. The Aftermath

The remaining correspondence between the parties fo-
cused on the settlement agreement’s confidentiality provision,
with no further mention of the children’s claims. On April 28,
2005, Mr. Howard sent a revised draft of the proposed settle-
ment agreement and documents stipulating to the dismissal of
the case. (Defendants’ Br. Ex. D22). Paragraph c. incorpo-
rated the purportedly minor non-substantive change and Para-
graph j. provided that the defendants would pay $1,000 to
New York counsel for time and expenses incurred in obtain-
ing New York approval for the terms of the settlement. In the
email accompanying this version, Mr. Howard asked: “Please
review, and answer the eternal question - Are we there yet?”
(Defendants’ Br. Ex. D22). According to the plaintiff, the
manner in which defendants presented the April 28 version
left no reason to believe that it was anything other than the
final language for which the defendants sought the plaintiff's
assent. (Amended Brief in Support of Plaintiff's Motion to
Enforce Settlement, at 3; Plaintiff's Response to Defendants’
Joint Brief, at 2-3).

The course Ms. Seymour's lawyers pursued after receiving
this email mirrored the course they pursued after receiving
Ms. Seymour’s March 30" email. Just as they did not tell Mr.
Howard and his colleagues that on March 30" Ms. Seymour
had refused to go along with any allocation, they did not tell
Mr. Howard that they were going to take the draft agreement
to New York, that they would make it appear that the children
had absolutely no claims, or that they would make another
change to the language of Paragraph c. Indeed, there was no

further communication between the parties until May 23,
2005. And even then the information provided to the defen-
dants was misleading.

E. The Proceedings in the Surrogate’s Court in New York

On May 20, 2005, unbeknownst to defendants, Ms. Sey-
mour petitioned the Saratoga County Surrogate’s Court in
New York State to approve the settlement agreement, which
only she had signed and which her lawyers had surrepti-
tiously altered. (Defendants’ Br. Exs. Fl, F2). Ms. Seymour
filed two identical petitions in the Surrogate’s Court, one on
behalf of Devin and one on behalf of Peter. The petitions pre-
sented a misleading picture of the claims of her children and
their importance to the agreed upon settlement of her Fair
Housing Act claim in the Northern District of Illinois.

Under New York law, it was absolutely critical that the
“best interests” of the children be protected, and to do that
the Surrogate’s Court had to be “fully apprised” of all of the
critical facts. See New York Civil Practice Law and Rules.
§§1207-1208. Cf Jay Burns Baking Co. v. Bryan, 264 US.
504, 520 (1924) (Brandeis, J., dissenting) (“Knowledge is es-
sential to understanding, and understanding should precede
judging.”). The importance of absolute candor with the New
York court was essential in light of the non-adversarial nature
of the proceedinys. [10]

FN10. Just as “skill of counsel, where found on one side only, terrifyingly
weights the scales of judgment,” Llewellyn, The Common Law Tradition:
Deciding Appeals 31 (1960), so too do deceptive presentations in a non-
adversarial setting. In that context, the need for absolute candor is per-
haps greater since there is no one to challenge the presentation. Thus,
rules of ethics as they pertain to lawyers require disclosure to the tribunal
in an ex parte proceeding of “all material facts known to the lawyer which
will enable the tribunal to make an informed decision, whether or not the
facts are adverse.” Rule 3.3(d), Illinois Supreme Court Rules of Profes-
sional Conduct.

63

The presentation to the Surrogate’s Court by Ms. Seymour
through her petitions was not designed to “fully apprise” the
Court as New York law required. For example, the petitions
did not reveal that Ms. Seymour’s claim involved the at-
tempted purchase of a home, only that “property” was in-
volved, that she was in the active business of investing and
dealing in real estate, and that the damages sought included
“the loss of commissions, business, and business opportunity
because of discrimination against her....” (Defendants Ex.F 1).
The Court was thus led to believe that Ms. Seymour’s busi-
ness interests only were implicated. Concealed was the fact
that, according to Ms. Seymour, she was forced to relocate
her entire family as a consequence of the defendants’ dis-
crimination against her and her children.

But this was fairly subtle, and so the petitions stressed that
only Ms. Seymour was affected by the defendants’ miscon-
duct and only she had a claim, which she had decided to set-
tle for $40,000, to avoid the cost, delay, uncertainty, and
burden of further litigation in Illinois. (Defendants’ Br. Exs.
F1-F2, at ]4). The petition relating to Devin alleged:

In the federal complaint, there is no mention of Devin
Madkin, who is the child of Petitioner. She was not
named in the complaint, no claim was made on her be-
half, and defendants have not claimed that there is evi-
dence of any damages for or liability to Devin Madkin.

(Emphasis supplied). The petition relating to Peter is identi-
cal except for his name and gender reference.

Of course the “defendants” had not claimed there were
any damages to the children. They had denied liability. Ms.
Seymour, however, had insisted that her children had been
profoundly affected by all that occurred. It was manifestly
false to say that the defendants “did no discovery regarding

the existence of any possible interest of any minor child” and
that “there were no allegations or claims to that effect.” (De-
fendants’ Br. Ex. F1, at [8; Defendants’ Br. Ex. F2, at 78).
The petitions were careful to make no mention of the plead-
ings’ insistence that the defendants had “caused her and her
family, economic injury, consequential damages, and eco-
nomic harm” or that she had sought compensatory and puni-
tive damages “for discrimination against her and her children
...” (2nd Amended Complaint, {111; Prayer for Relief (d);
4114; Prayer for Relief(d); 4116; Prayer for Relief (d); {118
(Emphasis supplied)). Nor did they reveal that Ms. Seymour
had originally asked for $25,000 each for her children in one
of her settlement demanded, that she repeatedly referred to
the alleged discrimination’s effect on the children during her
deposition, or that she had claimed at her deposition that her
“children’s lives have been forever altered as a result of this
lawsuit, which was us having to relocate across the country. I
have not chosen at this time to file a lawsuit on their behalf.”
In short, the petitions could scarcely have been more mislead-
ing as they related to the existence of claims by Ms. Sey-
mour’s children and the importance the release of those
unpled claims played in the settlement discussions.

Ms. Seymour asked the New York Court to approve the
settlement agreement and “specifically find that Devin Mad-
kin has no interest in such settlement and such order shall be
a waiver, release, and satisfaction of all claims Devin Madkin
had, has or may have against any” of the Defendants. (De-
fendants’ Br. Ex. F1, at]11). She made an identical request
with respect to Peter Madkin. (Defendants’ Br. Ex. F2, at
qi). As a result, the Surrogate’s Court, thinking itself “fully
advised in the premises,” ordered the settlement “approved as
being in the Ward’s best interest” and ordered that the exe-
cuted settlement be filed with the court within 30 days of exe-
cution and entry of the Agreed Consent Decree. (Defendants’
Br. Exs. El. E2).

65

The settlement agreement presented by Ms. Seymour to
the New York Court and attached to its order was, essentially,
the April 28 version, with one change, made by the plaintiff’s
lawyers without the knowledge or approval of defense coun-
sel: the phrase in Paragraph c., “Miss Donna Seymour has
obtained approval of the proposed settlement of the claims of
the minor children,” was changed to “Donna Seymour has
obtained approval of the proposed settlement of any claims of
the minor children.” (Emphasis supplied). The document was
signed by Ms. Seymicur and notarized on May 20, 2005.

“Of course, the [change] ... would not have been [made]
unless it had been intended to have some effect, and we do
not see what effect it could be expected to have” upon Judge
Seibert of the Surrogate’s Court “except to influence him”
that the children had no claims. Schenck v. United States, 249
U.S. 47, 48 (1919) (Holmes, J.). Cf United States v. Ladish
Malting Co., 135 F.3d 484, 490 (7th Cir. 1998) (“The prose-
cutor must have thought that the instruction mattered; why
else so vigorously oppose Ladish’s request for an actual-
knowledge instruction”). The intended effect seems obvious:
the phrase “the claims of the minor children” connotes the
existence of actual concrete claims, while the phrase, “any
claims of the minor children,” suggests the kind of hypotheti-
cal, non-existent claims that are often the subject of releases
because of lawyers’ excessive (but quite proper) caution.

In deciding whether a release of claims where the minors
receive nothing is in the minor’s “best interests,” a court
would certainly have wanted to know whether actual or theo-
retical claims were involved. The petitions presented to Judge
Seibert left no doubt that only Ms. Seymour had been
harmed, and that the children had no real basis for complaint.
On May 20", the Surrogate’s Court entered its approval or-
ders. (Defendants’ Br., Ex. El, E2). Neither the application
to nor the approval of the New York court was communicated
to defense counsel.

66

F. The Parties’ Report to This Court and
the Subsequent Dispute

On May 23, 2005, the parties re-initiated communications
via email regarding the preparation of a joint status report.
Mr. Caruso indicated that he could get the report prepared,
and he said that he believed the parties had reached an agree-
ment “subject only to the defendants’ requirement of protec-
tion from any action by a child when they reach maturity.”
(Defendants’ Br., Ex. D24). The email made no mention of
Judge Seibert’s May 20" order. On May 24", the parties filed
a Joint Status Report summarizing, inter alia, the status of
settlement negotiations:

The parties have agreed in principle to a settlement of all
claims. A condition of the settlement is that plaintiff
must seek approval from the state courts of New York, the
state of residence of plaintiff and her children, of the set-
tlement in order to procure a valid release of any potential
claims of her minor children.

(Defendants’ Br. Ex. G) (Emphasis supplied). Apparently,
the defendants still had not been informed of the New York
court’s approval of the settlement. (Amended Brief in Support
of Plaintiff's Motion to Enforce Settlement, at 4; Defendants’
Joint Reply in Opposition to Plaintiff's Motion, at 7).

On June 20", Mr. Howard, in an email to counsel for both
parties, noted that the release approved in New York was not
the version with the confidentiality language last approved.
(Defendants’ Br. Ex. D27). Ms. Donaldson, in particular was
dismayed by the confidentiality language, and indicated via
email on June 21, 2005, that “no one at [her firm], counsel
for the ‘owner’ defendants, had finally approved or consented
to the language in the draft release attached to the orders.
This oversight needs to be corrected.” (Defendants’ Br. Ex.

67

D29). Mr. Caruso responded, informing Ms. Donaldson that
he was under the impression that she had approved the lan-
guage before he sent the agreement to New York for approval.
(Defendants’ Br. Ex. D30). Later that day, after speaking with
her clients, Ms. Donaldson indicated acceptance of the Re-
lease already approved by the New York Court, but requested
a copy of the petitions that were filed in New York. Jd.

Despite a further exchange,.of emails, Ms. Donaldson, as
of June 27", still had not received the copies she had re-
quested. Also, at that point, having finally learned of the
presentation by Ms. Seymour to the Surrogate’s Court, Ms.
Donaldson sent an email to plaintiff’s counsel complaining of
what she deemed to be a breach of the settlement agreement:

As addressed in the Release, the purpose of involving the
New York court was to obtain ‘approval of the proposed
settlement of any claims of the minor children.’ And, as
noted in the Joint Status Report, ‘to procure a valid re-
lease of any potential claims of [the] minor children.’ The
Petitions allegedly presented to the court do not comport
with this purpose. The Petitions ask for a finding that the
children have NO interest in the settlement and assert that
the petitioner has settled HER claim for $40,000. If this
is so, then the Petitions would need to unequivocally con-
cede that the children are without claims and were not in-
jured by the alleged ‘wrong’ in order to be in compliance
with the terms and conditions of the settlement. The Peti-
tions are silent on this point, and instead, speak to an as-
sertion that any claims of the minors were not part of the
underlying litigation and therefore the minors have no in-
terest in the settlement fund. As such, the plaintiff is in
breach of the agreement as she has not ‘obtained ap-
proval of the proposed settlement of any claims of the
minor children ....

68

(Defendants’ Br. Ex. D32) (Emphasis supplied). Ms. Don-
aldson described what she viewed as “several false and
wholly unsupported statements set forth in the draft Peti-
tions” and insisted that the certain representations made by
Ms. Seymour were “patently false.” Jd.

On June 28, 2005, Mr. Howard amplified these concerns.
He argued that the Surrogate’s Court’s order was obtained on
incomplete information, which prompted the defendants’
concern that the release, entered into on behalf of the minor
children, could be subject to attack for, under New York law,
orders of the Surrogate’s Court obtained by fraud or mistake.
Id. He explained that he “would still like to see the settlement
go through,” and suggested that Ms. Seymour try again in
New York, offering an additional $1,000 “to be payable to a
New York attorney for prospective work on straightening this
out.” (Defendants’ Br. Ex. D35). Not surprisingly, given what
had occurred, Mr. Caruso responded that he “disagree[d] with
[Mr. Howard’s] interpretation of the settlement” and notified
Mr. Howard of this pending motion to enforce the settlement.
(Defendants’ Br., Ex. D36).

G. The Parties’ Contentions in this Court

The parties are united in insisting that there is a binding
settlement agrccment (Mution to Enforce Settlement Agree-
ment, at 1; Joint Brief in Support of Defendants’ Motion to
Enforce Settlement, at 1). Their dispute focuses on the terms
of that agreement and when it was reached. According to the
plaintiff, the settlement agreement is the April 28" version,
and all that it required was that she obtain approval of the
proposed settlement of any claims of her minor children and
provide a copy of the order authorizing the settlement from
the Surrogate’s Court. Having done that, says she, that is the
end of the matter, and the defendants owe her $40,000.

69

The defendants have a very different view. They submit

’ that the material and essential terms of the parties’ agreement
are contained in the written email exchanges, which consti-
tute a binding settlement agreement, which came into being |
on March 14". They contend that Ms. Seymour was required
to allocate some portion of the $40,000 to her children and
without such an allocation, the release is without considera-
tion and thus not binding. In addition, Ms. Seymour had to
comply with New York law and to fully apprise the court of
the children’s claims in order for any release to be valid. They
argue, persuasively, that Ms. Seymour’s presentation did not
comply with New York law in that it was underinclusive and
deceptive. For the defendants, the April 28" version was not
the settlement agreement, but merely a “draft Release.” (De-
fendants’ Joint Reply in Opposition to Plaintiffs’ Motion, at
8). The plaintiff summarily dismisses these concerns, argu-
ing that she was completely candid with the New York court,
and that the releases are valid. In any event, she argues that
the defendants are protected from future litigation by the chil-
dren because the statute of limitations on Fair Housing Act
claims has run.

Il, ANALYSIS

A. The Parties Reached an Enforceable Settlement
Agreement on March 14, 2005

Settlement agreements are contracts, and their construc-
tion and enforcement are governed by principles of local law
applicable to contracts generally. Laserage Tech. Corp. v.
Laserage Laboratories Inc., 972 F.2d 799, 802 (7th Cir.
1992); McCall-Bey v. Franzen, 777 F.2d 1178, 1186 (7th
Cir.1985). Under Illinois contract law “ ‘the primary object
in construing a contract is to give effect to the intention of the
parties involved.” In re Doyle, 144 Ill.2d 451, 468, 581
N.E.2d 669 (1991). An agreement is binding if the parties

70

agree on all material terms. Abbott Laboratories v. Alpha
Therapeutic Corp., 164 F.3d 385, 387 (9th Cir. 1999); Mid-
land Hotel Corp. v. Reuben H. Donnelley Corp., 118 Tl.2d
306, 313-314, 515 N.E.2d 61 (1987). Whether the pa «es
came to agreement is determined not by their subjective in-
tent, but by what they expressed to each other in their writ-
ings. Abbott, 164 F.3d at 387. Thus, the parties decide for
themselves whether the results of preliminary negotiations
bind them, but they do so through their words. /d. at 388; see
also Empro Mfg. Co. v. Ball-Co Mfg., Inc., 870 F.2d 423, 425
(7th Cir. 1989) (citing Chicago Inv. Corp. v. Dolins, 107
I1.2d 120, 481 N.E.2d 712 (1985)). (11)

Unless parties expressly condition their agreement on the
signing of a formal document, informal writings manifesting
each party’s intent to be bound by the material terms pro-
posed constitute a binding settlement agreement. Abbott, 164
F.3d at 388-89; see also Empro, 870 F.2d at 425. A contract
is sufficiently definite and enforceable as long as the court
can, under proper rules of construction and applicable princi-
ples of equity, ascertain what the parties have agreed to.
Academy Chicago Publishers v. Cheever, 144 Ill.2d 24, 29,
578 N.E.2d 981 (1991); see also Dawson, 977 F.2d at 373.
There is no requirement that an agreement be “signed, sealed,
and delivered” to be binding, Abbott, 164 F.3d at 389, and
Illinois courts have not becn shy about enforcing promises
made in the context of ongoing negotiations and often involv-
ing preliminary or incomplete agreements. Dawson v. Gen-
eral Motors Corp., 977 F.2d 369, 374 (7th Cir. 1992).
Phrased differently, a contract is enforceable even though
some terms may be missing or left to be agreed upon by the
parties. Academy Chicago Publishers, 144 Ill.2d at 30, 578
N.E.2d 981; see also Johnson v. Jung, Nos. 02 C 5221,04C

FN1I1. New York law is in accord. Flores v. The Lower East Side Service
Center, Inc., 4 N.Y.2d 363, 828 N.E.2d 593 (2005).

71

6158, 2005 WL 1126897, at *3 (N.D.IIl. May 4, 2005); Rose
v. Mavrakis, 343 Ill.App.3d 1086, 1090-91, 799 N.E.2d 469
(2003).

Application of these fundamental principles leads to the
conclusion that by virtue of the exchange of emails, a binding
contract arose on March 14, 2005. (Defendants’ Joint Reply
in Opposition to Plaintiff’s Motion, at 10-11). By the end of
the day, the parties had agreed to all the material terms and
conditions of the contract, including:

1. Ms. Seymour was to be paid $40,000 in full and final
settlement of all claims;

2. She was to allocate a reasonable amount of this sum

to her children’s claims in the manner approved by

the appropriate court;

The settlement was to be confidential;

There would be a denial of liability by the defendants;

5. The plaintiff would seek approval from the Surro-
gate’s Court in New York of the settlement agreement
and the release of the children’s claims;

6. The defendants would pay $1,000 to defray the costs
of the approval process in New York if New York
counsel were used.

allay

It is no answer to say that Ms. Seymour’s March 30%
email to her lawyers was an “unequivocal rejection” of the al-
location provision - a provision she had accepted two weeks
earlier through her lawyers. Under basic principles of agency.
that approval bound her. Knisley v. City of Jacksonville, 147
Il.App.3d 116, 120, 497 N.E.2d 883 (1986); Jn re Marriage
of Clarke, 194 Ill.App.3d 248, 252, 550 N.E.2d 1220 (1990)
(attorney’s statements may bind the client to a settlement
agreement even when the client later claims to have misun-
derstood the terms of the settlement). In addition to coming
too late, Ms. Seymour’s “rejection” was never communicated

to the defendants, and a secret, undisclosed “mental reserva-
tion” on the part of one party to a settlement agreement is in-
effectual. See Steinberg v. Chicago Medical School, 69 I\\.2d
320, 330-331 (1977), citing 1 Williston, Contracts, §22, at
46-48 (3d. ed. 1957); American College of Surgeons v. Lum-
bermens Mut. Casualty Co., 142 Ill. App.3d 680, 693-694 (1*
Dist. 1986). “[P]rivate intent counts only if it is conveyed to
the other party and shared.” Robbins v. Lynch, 836 F.2d 330
(7th Cir. 1988).

The Plaintiff Breached the March Agreement By
Failing to Make Any Allocation of the Settlement
Amount to Her Children and By Misleading
The Surrogate’s Court About the Existence
and Nature of Her Childrens’ Claims

Unwilling to accept a release that in their view might be
subject to attack on the ground that it lacked consideration,
the defendants, from the beginning, insisted that there be
some allocation of the $40,000 to the children. Ms. Seymour
had “accept[ed]” this provision through Ms. Matlaw’s March
14" email. Of course, the Surrogate’s Court was free not to
approve the release and settlement if it concluded that the al-
location was not in the childrens’ “best interests.” If that oc-
curred, there would be no settlement, but the plaintiff would
have performed under the agreement. Ms. Seymour was not,
however, free to eliminate her obligation to make an alloca-
tion or at least to allow the Surrogate’s Court to do so.

To ensure that there would be no allocation to her children,
Ms. Seymour’s petitions to the Surrogate’s Court were
drafted in such a way that they neither adequately nor accu-
rately informed Judge Seibert of the Surrogate’s Court of the
information statutorily required be included in the petitions.
Without that information, he could not make an informed
judgment about whether the settlement agreement was in the
childrens’ “best interest.” as required by §§ 1207-1208 of New

73

York’s Civil Practice Law and Rules. In order to make that
discretionary judgment, id., Judge Seibert manifestly, had to
be “fully advised” of the relevant facts. See Edionwe v. Hus-
sain, 777 N.Y.S.2d 520, 522 (2d Dept. 2004). Not only did the
petitions not “fully advise” the Court, they badly misled him.

Section 1208(a) provides the procedures that must be fol-
lowed and the information that must be provided by affidavit
when petitioning the Surrogate’s Court for approval of a set-
tlement affecting a minor or incompetent:

1. name, residence and relationship to the infant;
name, age and residence of the infant;

3. the circumstances giving rise to the action or claim
[of the infant];

4. the nature and extent of the damages sustained by the
infant;

5. the terms and proposed distribution of the settlement
and his approval of both;

6. the facts surrounding any other motion or petition for
settlement of the same claim, of an action to recover
on the same claim or of the same action;

7. whether reimbursement for medical or other expenses
has been received from any source; and

8. whether the infant's representative or any member of
the infant’s family has made a claim for damages
alleged to have been suffered as a result of the same
occurrence giving rise to the infant’s claim and, if so,
the amount paid or to be paid in settlement of such
claim or if such claim has not been settled the reasons
therefore. [12]

FN12. The plaintiff's lawyers were aware of §1208 through Mr. Howard's
March 14, 2005 email. (Def. Br., Exs. DS, D6). Mr. Howard went so far
as to provide a draft affidavit, which accurately portrayed plaintiff's Fair

Housing Act claim as it related to her children and made specific refer-
ence to an allocation to the children. (/d. at 94-5).

Without such information, the Court could not fulfill its
duty of “scrutinizing” the proposed settlement “to assure that
it was fair and reasonable and in the infant plaintiff’s best in-
terests.” Edionwe, 777 N.Y.S.2d at 522. Unless the require-
ments of §§1207 and 1208 are complied with, the approval is
subject to collateral attack. Ferraro v. Stripekis, 401 N.Y.S.2d
252 (2d Dept. 1978); Caglioti v. Medi-Cab, Inc., 382
N.Y.S.2d 311 (1st Dept. 1976); Valdimer v. Mount Vernon
Hebrew Camps, Inc., 195 N.Y.S.2d 24, aff’d, 210 N.Y.S.2d
520 (N.Y. 1961). [13] A settlement approval might also be set
aside on substantive grounds such as fraud, duress or mistake.
Fletcher v. Hatch, 602 N.Y.S.2d 718, 719-20 (N.Y.A.D. 3d
Dept. 1993). [14]

Ms. Seymour’s petitions did not fully advise the court of
the nature of the minors’ claims, the circumstances giving
rise to those claims, and the nature and extent of the damages
purportedly sustained by them. All they did was to explain
Ms. Seymour’s claims, thereby defeating the whole purpose
of the exercise. Thus, Ms. Seymour’s petitions stated:

By her complaint, that alleged discrimination, Peti-
tioner sought damages. The damages sought included
the loss of commissions, business, and business op-
portunity because of discrimination against her. The

FN13. The plaintiff’s attempt to distinguish these cases on the basis that
the minor was a named plaintiff in the underlying litigation ignores the
unambiguous text of §1207 which makes clear that the requirements of
§1207 have nothing to do with whether there is even a pending action, let
alone whether the minor is named in it. By its plain terms, §1207 is appli-
cable even where “no action has been commenced.”

FN14. Ms. Seymour's children would be in a position to blame their
mother’s lawyers for the underinclusive presentation to the Surrogate’s
Court. Being innocent of any wrongdoing, they would contend that their

interests must be protected and the releases set aside.

amount ... lost that she sought to recover exceeded
$90,000.00. Petitioner has decided to settle her claim
for a lower amount, $40,000, to avoid the cost, delay,
uncertainty, and burden of further litigation in Illinois.

(Defendants’ Br. Exs. F1-F2, at 74). It misses the mark to say
that this statement was literally true, for “ ‘a statement which
is technically true as far as it goes may nevertheless be fraud-
ulent, where it is misleading because it does not state matters
which materially qualify the statement as made. In other
words, a half-truth is sometimes more misleading than an
outright lie.’ St. Joseph Hospital v. Corbetta Construction
Co., 21 Ull.App.3d 925, 953, 316 N.E.2d 51 (1974). See also
People v. Curry, 11 A.D.3d 150, 782 N.Y.S.2d 66 (N.Y.A.D.
Ist Dept. 2004) (“relating only part of the truth can accom-
plish a deception as effectively as presenting a complete fab-
rication.”’). [15]

The second amended complaint alleged no fewer than
three times that the defendants discriminated “against {[Ms.
Seymour] and her children.” And there appears no fewer than
six times the allegation that both she “and her family” are en-
titled to damages. (2nd Amended Complaint, 4111; Prayer for
Relief (d); 4114; Prayer for Relief (d); 4116; Prayer for Re-
lief(d); ¥118). Yet, Ms. Seymour’s petitions make no mention
of any of these allegations. The “misleading omissions” con-
tinue in paragraph 7 of the petitions, which state: “there is no
mention of Devin Madkin or Peter Madkin in the “federal
complaint.” (Defendants’ Br. Exs. F1-F2, at 47). Although the

FN1S. Cf. Emery v. American General Finance, Inc. 71 F.3d 1343, 1348
(7th Cir. 1995) (Posner, J.) (“But it is not truce that if you are not a fiduci-
ary anything goes, short of false statements. A half truth, or what is usu-
ally the same thing a misleading Omission, is aclionable as fraud.”);
Neptuno Treuhand-Und Verwaltungsgesellschaft Mbh v. Arbor, 295

Ill. App.3d 567, 692 N.F.2d 812, 817 (1998); Heider v. Leewards Creative
Crafts, Inc., 245 IILApp.3d 258, 613 N.E.2d 805, 811 (1993).

76

federal complaint refers to “her children” or her “family” at
least seven times, the plaintiff’s lawyers argue that paragraph
7 is not misleading because the second amended complaint
does not mention the children “by name.” (Plaintiff's Re-
sponse to Defendants’ Joint Brief in Support of Their Cross-
Motion, at 3-4).

On its face, this argument is preposterous. The only thing
about it that “we can commend is the hardihood in supposing
[it] could possibly succeed.” United States v. Minneci, 142
F.2d 428, 429 (2d Cir.1 944) (L. Hand, J.). More than a cen-
tury ago, Justice Holmes cautioned that “[wJe must think
things, not words, or at least we must constantly translate our
words into facts for which they stand, if we are to keep to the
real and the true.” Holmes, Law and Science and Science and
Law, 12 Harv.L.Rev. 443, 460 (1889). The inescapable reality
is that although Ms. Seymour’s children were mentioned re-
peatedly in the pleadings, Judge Seibert was misled into be-
lieving that they were strangers to the complaint and thus to
the discrimination itself. In short, Ms. Seymour’s presentation
to the Surrogate’s Court did not comply with New York law
and constitutes a breach of the settlement agreement. [16]

C. The Plaintiff Breached the Terms of the
April 28 Version of the Settlement Agreement

The plaintiff contends that there was no settlement agree-
ment until after she assented to Mr. Howard’s April 28" ver-
sion by making application on May 20" to the Surrogate’s
Court. Even if one were to assume that the April 28" version
is the settlement agreement, Ms. Seymour breached it.

FN16. While there was no express mention of compliance with New York
law, that compliance was obviously an implicd and indispensable term of
the agreement. Sacramento Navigation Co. v. Salz, 273 U.S. 326, 329
(1927); Jensen v. Quik international, 345 Ill.App.3d 713, 715, 801 N.E.2d
1124, 1126 (2003); 11 Williston, Contracts §31.7 at 321 (4th Ed. 1999)
(footnotes omitted).

77

Following Ms. Seymour’s March 30" rejection of the allo-
cation provision in the exchange of emails, the plaintiff’s
lawyers eliminated language in Paragraph c. of the settlement
agreement and release relating to the childrens’ claims, and
then assured the defendants’ counsel that the changes were
minor and non-substantive. Whether one applies basic princi-
ples of estoppel or the fundamental contract principle that
acontract is to be construed strictly against the drafter, Liau-
taud v. Liautaud, 221 F.3d 981, 986 (7th Cir. 2000), the result
is the same: the parties had agreed that there would be an al-
location of some amount in order to satisfy the defendants’
analysis of New York law that specific consideration was re-
quired to support the release of the minors’ claims. Ms. Sey-
mour breached this provision of the settlement agreement by
refusing to make an allocation. Thus, the defendants are now
subject to the threat of future litigation in which they would
have to litigate the validity of the release - the very evil they
sought to avoid. [17]

In addition to this change, the plaintiff’s lawyers made an-
other, which they did not disclose. They changed the phrase
in Paragraph c., “the claims of the minor children,” to “any
claims of the minor children.” Reference to “the claims of the
minor children” connotes the existence of an extant contro-
versy, not some abstract, theoretical claim which is connoted
by the phrase, “any claims of the minor children.” All this
was part of the plaintiff’s overarching attempt to obtain an
approval of the settlement agreement without allocating any
part of the $40,000 to Ms. Seymour’s children. Central to that
end was failing to inform Judge Seibert about the circum-
stances surrounding the childrens’ claims and the damages
she claimed they suffered, as explicitly required by New York
law. CPLR §1208.

FN1!7. Indeed, part of the present motion deals with quarrels over the
need for separate consideration. Thus, the defendants are already con-
fronted with an issue they should not have had to face.

78

According to the petitions, the plaintiff “decided to settle
her claim for ... $40,000.” (Defendants’ Br. Exs. F1-F2, at
44). Further on in the document, the plaintiff requested that
the court “approve the Settlement Agreement, ... and specifi-
cally find that [Devin and Peter] Madkin ha[ve] no interest in
such settlement ....” (Defendants’ Br. Exs. F1-F2, at (11).
This is not what the April 28" version obligated her to do.
Even under the plaintiff’s version of the pertinent language,
plaintiff was to “obtain[ ] approval of the proposed settlement
of any claims of the minor children named Peter Madkin and
Devin Madkin from a court in New York” - not the approval
of her settlement and a declaration that the children have no
interest in it. (Defendants’ Ex. E2). Given the deceptive man-
ner in which plaintiff dealt with the New York court, no court
would have hesitated to declare that the children had no real
claims and thus no interest in the $40,000 settlement. In
short, the approval of the plaintiff’s own $40,000 settlement
is simply not the same thing as the approval of the settlement
of her children’s claims, which the court was misled into be-
lieving were non-existent. For the reasons discussed earlier,
Ms. Seymour’s petitions fell far short of “fully advising”
Judge Seibert of the nature of the Fair Housing Act claim, the
nature of the children’s claims and damages. Consequently,
they were noncompliant with New York law, and Ms. Sey-
mour has thus breached her contractual duties even as meas-
ured by the April 28" version.

Whether a “fully informed decision maker” might have
approved the settlement and the release of the minors’ claims
without any allocation, Cleveland Board of Education vy. Lou-
dermill, 470 U.S. 532, 544 (1985), is impossible to know. It
is certainly possible that had the argument been made by Ms.
Seymour to Judge Seibert that she made to her lawyers in her
March 30" email regarding the unfairness of any payment to
her children, he would have concluded that it was still in the
minors’ best interests to approve a release of whatever claims

719

they had. [18) But Ms. Seymour and her lawyers obviously
did not have faith in that position or in how Judge Seibert
would react. [19]

D. The Defendants Are Entitled to the Settlement
Agreement They Bargained For

Saving the least for last, the plaintiff raises three addi-
tional points: the settlement of the children’s claims was an
insignificant matter; regardless of any impropriety in New
York, the defendants are nevertheless adequately protected
from any claims by Ms. Seymour’s children by the statute of
limitations; and finally, the release is valid because, und

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_1249%3A2. Public record. Not legal advice.
