Second Circuit: Plaintiff was Denied Hearing Contesting Attorney-Dismissal of his Lawsuit against Ne
Gomez was a former NYC Police Officer who filed a complaint in the Southern District of New York alleging that, after he was attacked, NYPD officers arrested Gomez, detained him for five days and denied him access to medical care for his three broken ribs. Although the charges against Gomez were dismissed, the NYPD held an administrative hearing and fired Gomez based on the same incident. Less than a month after filing Gomez's amended complaint, the attorney Gomez hired signed a stipulation and order dismissing several of Gomez's claims. In April, 2013, counsel for the Plaintiff signed a stipulation dismissing most of his claims against the City of New York. The Judge so-ordered the stipulation later that day. Less than a week later, Gomez filed a pro-se motion asking the Court to reopen his case because his attorney signed the stipulation without the Plaintiff's knowledge or consent. The district court denied the Plaintiff's motion. The District Court relied on the fact that each party is bound by the acts of his or her attorney.
“A district court is said to ‘abuse its discretion’ if it ‘bases its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence, or render[s] a decision that cannot be located within the range of permissible decisions.’” Optimal Inv. Servs., S.A. v. Berlamont, 773 F.3d 456, 459–60 (2d Cir. 2014) (brackets omitted) (quoting Sims v. Blot, 534 F.3d 117, 132 (2d Cir. 2008)). The Second Circuit noted that "courts are generally reluctant to recognize attorney error as a basis for relief from an order or judgment." Pp. 10 (citing United States v. Cirami (Cirami I), 535 F.2d 736, 739 (2d Cir. 1976) (“This Circuit has rather consistently refused to relieve a client of the burdens of a final judgment entered against him due to the mistake or omission of his attorney by reason of the latter’s ignorance of the law or the rules of the court, or his inability to efficiently manage his caseload.”)). The primary reason for this reluctance is “our system of representative litigation, in which each party is deemed bound by the acts of his lawyer‐agent.” Link v. Wabash R.R. Co., 370 U.S. 626, 634 (1962).
Differentiating the case here, "unlike many other acts that an attorney undertakes on a client’s behalf, the decision to settle or otherwise dismiss claims “rests with the client' and is “not automatically bestow[ed] . . . on retained counsel.' ” Pp. 11 (quoting Pereira v. Sonia Holdings Ltd. (In re Artha Mgmt.), 91 F.3d 326, 329 (2d Cir. 1996). And although “we presume that an attorney‐of‐record who enters into a settlement agreement, purportedly on behalf of a client, had authority to do so,” this presumption is rebuttable. Id.; see also United States v. Int’l Bhd. of Teamsters, 986 F.2d 15, 20 (2d Cir. 1993) (“The burden of proving that an attorney entered into a settlement agreement without authority is not insubstantial.”).
So what happened here? Obviously the client and attorney were not on the same page. “In circumstances where a former attorney and his client dispute the giving of authority, courts generally require the holding of an evidentiary hearing on the question of authorization.” Michaud v. Michaud, 932 F.2d 77, 81 (1st Cir. 1991); see also Sur. Ins. Co. of Cal. v. Williams, 729 F.2d 581, 583 (8th Cir. 1984); Assocs. Disc. Corp. v. Goldman, 524 F.2d 1051, 1053–54 (3d Cir. 1975). Rather than evaluate the client's contentions and conduct a fact-finding hearing, the District Court dismissed the Plaintiff's request for relief. The Second Circuit noted that the Plaintiff gave the court "a detailed letter setting forth his assertion that [his former attorney] lacked authority to dismiss his claims." The Second Circuit noted that, although this presumption exists, that the attorney-of-record has authority to settle a matter, this presumption is rebuttable. Far from dispositive, the conflict here requires an evidentiary hearing. This was not something that was to occur on Appeal, as the City would assert, but rather something that the District Court should have considered. "When, as here, a party promptly raises a colorable argument that his or her attorney lacked authority to settle or otherwise dismiss his or her claims, a factual dispute arises that must be resolved through an evidentiary hearing, unless, of course, the parties agree that no such hearing is necessary." Pp. 14. Case remanded.
Holding: "[T]he district court abused its discretion by failing to hold an evidentiary hearing to examine the plaintiff’s assertion that his attorney lacked authority to stipulate to a dismissal of his claims." Pp.2
The case is Gomez v. City of New York, 14-3583 (2d Cir. Nov 5, 2015).