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A plaintiff in a civil case cannot refuse to enter into a settlement agreement once he’s verbally authorized his attorney to settle the case, a unanimous panel for the 7th U.S. Circuit Court of Appeals ruled this week in Chicago. According to the court, a series of phone conversations between the plaintiff and his attorneys in which settlement terms were discussed was evidence enough that the plaintiff knew that the case was being negotiated with an eye toward settling and that he had given his lawyer the green light to make a deal. The case began when Michael G. Pohl, an aircraft inspector, filed a lawsuit in 1997 alleging his employer, Chicago-based United Airlines, had discriminated against him because of his military status. Other allegations accused the airline of failing to give enough credit to his employee stock ownership account for the time spent fulfilling his duties to the Reserves. Michael G. Pohl, v. United Airlines, Incorporated, No. 99-4007. Pohl’s attorney and the company agreed to terms sometime in June 1999. But, Pohl refused to sign the settlement agreement, claiming his attorney had no authority to settle the case. Following an evidentiary hearing, Chief Judge Sarah Evans Barker, of the U. S. District Court for the Southern District of Indiana, entered an order enforcing the agreement. The settlement negotiations, the court noted, had centered on the issue of not crediting Pohl’s stock ownership account. United eventually agreed not enough credits had been added to the account. And, in exchange for Pohl dropping the suit, the airline agreed to credit the account, not to retaliate against him for filing the lawsuit, and to pay reasonable attorneys fees. “During the negotiation period from December 15 (1998) until March 8 (1999), there is an absolute correlation between phone calls by Pohl’s counsel to opposing counsel, and calls by Pohl’s counsel to Pohl on the same day,” said the May 10 opinion written by Judge Ilana Diamond Rovner. The jurist recognized that the case of Koval v. Simon Telelect, 693 N.E.2d 1299, 1301 (Ind.1998) had held that the retention of an attorney does not grant implied or apparent authority for an attorney to settle a case. Still, Rovner stated, there were other actions taken by Pohl, namely the phone calls between him and his attorney during the negotiations, that granted the authority in this case. “The court specifically relied on the objective evidence of communications between Pohl and his counsel, which supported the testimony of Pohl’s counsel that Pohl was informed of each aspect of the settlement and approved of each one,” Rovner wrote. Pohl believed he had the final authority on a settlement based on handwritten language he added to the retainer agreement he signed with his attorneys, the opinion conceded. But Rovner concluded that language only meant that the attorney could not settle the case without Pohl’s authority and did not require his written authorization. “Pohl’s misplaced belief that he could back out of the settlement at any time prior to signing it does not entitle him to legal relief from a settlement negotiated with actual authority by his attorney,” Rovner wrote. Judges Frank H. Easterbrook and William Bauer joined in the opinion.

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