May 26, 2020

Seventh Circuit Reinforces Importance of Memorializing Agreements in Mediation

Put it in writing.

How many times have those four words been uttered in the course of commerce?

Many more than we care to count, to be sure. For the fact remains that the act of putting pen to paper, ribbon to page, or transmitting bits in a particular fashion (the complicated subsurface of modern technology foils us here), all to memorialize the meeting of the minds, is a significant—and consequential—step.

That is the essence of the Seventh Circuit’s decision in Beverly v. Abbott Laboratories, No. 15-1098 (7th Cir. Mar. 16, 2016), a case in which the court upheld the district court’s decision to enforce a handwritten agreement reached in mediation. Judge Ann Claire Williams wrote for the court. The case, decided under Illinois law, is a notable exhibition of the court’s pro-enforcement attitude on these issues.

Abbott Labs fired Martina Beverly in 2010, and she sued, alleging that her former employer had violated Title VII of the Civil Rights Act and the Americans with Disabilities Act by discriminating and retaliating against her for her German nationality and her disabilities.

The parties mediated their dispute without a definite resolution, and near the end of their day-long session both parties and counsel signed the following handwritten agreement:

I Jon Klinghoffer will commit that my client will communicate to its internal business client the fact that Abbott/AbbVie has offered $200,000 + Abbott/Abbvie pays cost of mediation to resolve this matter and that Martina Beverly has demanded $210,000 + Abbott/AbbVie pays cost of mediation to resolve this matter. Both parties commit that their offer and demand will remain open until Tuesday, July 22, 2014, 3:00 PM central.

Abbott’s lawyer accepted Beverly’s offer the next day in an email: “My client has accepted Martina Beverly’s demand to resolve her claims in the above referenced matter for $210,000 plus the costs of yesterday’s mediation. I have attached a draft settlement agreement for your review.”

To which Beverly’s counsel responded, “Oh happy days! Best $10,000 Abbott has ever spent. You are a gem.”

Beverly’s counsel forwarded Abbott’s acceptance, but Beverly did not share her lawyer’s enthusiasm and decided not to sign. Abbott moved successfully to enforce the agreement.

On appeal, Beverly argued that the handwritten agreement was not enforceable because it omitted material terms found only in the unsigned draft proposal—viz., indemnification, future cooperation, her future employment at Abbott, the precise allocation of the settlement funds, and express language for release and waiver.

The Seventh Circuit wasn’t buying it. Instead, it noted that “these various provisions, taken together, constitute nearly the entire six-page typewritten proposal; certainly they are not all equally essential.”

The court dismissed Beverly’s concerns regarding the indemnification, cooperation, and future-employment provisions, noting that she dealt with them on appeal in a “cursory fashion” and “with no attempt to explain how any of these issues are so vital.”

As to the release-and-waiver provisions, the court said that the promise to “resolve this matter” found in the handwritten agreement was sufficient.

The district court decision to enforce the settlement was affirmed. Abbott is surely grateful that it had this one in writing.

© 2020 Foley & Lardner LLP


About this Author

Eric G Pearson, Business Litigation Attorney, Appellate, malpractice, Foley
Senior Counsel

Eric G. Pearson is a business litigation lawyer with Foley & Lardner LLP, where his practice involves counseling and litigating in a variety of areas, including appellate litigation, professional-malpractice cases, and financial- and accounting-related controversies. In addition, he has represented clients in internal investigations and enforcement-defense actions in the financial, health care, and sports industries. Mr. Pearson is a member of the firm’s Appellate, Business Litigation & Dispute Resolution, and Government Enforcement, Compliance & White Collar...