14-3583 Gomez v. City of New York UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

_______________

August Term, 2015

(Submitted: October 28, 2015 Decided: November 5, 2015)

Docket No. 14‐3583

_______________

MANUEL GOMEZ,

Plaintiff‐Appellant,

—v.—

CITY OF NEW YORK,

Defendant‐Appellee.

NEW YORK CITY POLICE DEPARTMENT,

Defendant. _______________

B e f o r e:

KATZMANN, Chief Judge, POOLER and CHIN, Circuit Judges.

1 _______________ Following entry of final judgment, appeal from an order of the district court (Sullivan, Judge), which denied the plaintiff’s motion for relief from a stipulation dismissing most of his claims. We hold that the 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. We therefore VACATE the district court’s judgment and its order denying relief from the stipulation of dismissal and REMAND for further proceedings. _______________

CHUKWUEMEKA NWOKORO (John A. Scola, Jr., on the brief), New York, New York, for Plaintiff‐Appellant.

DIANA LAWLESS, Assistant Corporation Counsel (Richard Paul Dearing, Assistant Corporation Counsel, on the brief), for Zachary W. Carter, Corporation Counsel of the City of New York, New York, New York, for Defendant‐Appellee. _______________

PER CURIAM:

On April 11, 2013, Trevor A. Reid, who at that time was counsel for

Plaintiff‐Appellant Manuel Gomez, signed a stipulation dismissing most of his

client’s claims against Defendant‐Appellee City of New York. The U.S. District

Court for the Southern District of New York (Sullivan, Judge) so‐ordered the

stipulation later that day. Six days later, Gomez filed a pro se motion and attached

letter asking the court to “reopen” his case because his attorney had filed the

stipulation without his knowledge or consent. App. 29. The district court

2 construed the request as a motion for reconsideration pursuant to Rule 59(e) of

the Federal Rules of Civil Procedure. Without holding an evidentiary hearing or

otherwise receiving additional submissions from the parties, the district court

denied the motion, relying principally on the proposition that each party is

deemed bound by the acts of his or her lawyer‐agent under our system of

representative litigation. While this proposition is generally true, it does not end

the inquiry. Rather, the decision to settle a case rests with the client, and although

we presume that an attorney‐of‐record has authority to settle a case, this is a

rebuttable presumption. Here, Gomez’s motion raised a factual dispute

concerning his attorney’s authority to stipulate to a dismissal of his claims.

Accordingly, it was necessary to hold an evidentiary hearing to address this

dispute.

BACKGROUND

Gomez is a former officer with the New York City Police Department

(“NYPD”) who filed a pro se complaint in the Southern District of New York on

August 21, 2012. Gomez’s complaint describes an off‐duty incident that occurred

on August 27, 2009, and it alleges that, after several individuals attacked Gomez,

NYPD officers arrested him, detained him for five days, and denied him access to 3 medical care for his three broken ribs. Gomez’s complaint further alleges that the

Bronx County District Attorney’s Office dismissed the criminal charges against

him stemming from the arrest but that the NYPD held an administrative hearing

and fired him based on the same incident.

In early 2013, Gomez hired Reid to represent him in his civil action. Gomez

explains on appeal that he hired Reid because Gomez was deploying to

Afghanistan and feared that he would be unable to prosecute the action on his

own while overseas. On March 15, 2013, Reid filed on Gomez’s behalf an

amended complaint, which is consistent with his pro se complaint but contains

additional factual detail and legal claims. Gomez’s amended complaint contends

that the City’s agents acted with the specific intent to deprive him of his

constitutional rights to due process and equal protection under the Fourth, Fifth,

and Fourteenth Amendments,

and 1985, and

,

asserting the following violations: illegal confinement and imprisonment;

physical assault, physical abuse, coercion, and intimidation; illegal termination of

his property rights of employment; illegal identification procedures; lack of timely

and effective investigation; denial of legal representation; false arrest; and illegal

search and seizure. 4 On April 11, 2013, less than one month after Reid filed Gomez’s amended

complaint, Reid signed a stipulation and order of dismissal that dismissed with

prejudice substantially all of Gomez’s claims.1 The district court so‐ordered the

stipulation the same day that it was signed. The following day, April 12, 2013, the

district court held an initial pretrial conference with Gomez, Reid, and attorneys

for the City. At that conference, the district court granted Gomez leave to file an

amended complaint, presumably limited to the employment claims that the

stipulation did not affect.2

On April 17, 2013, just five days after the initial pretrial conference, Gomez

filed a pro se “notice of motion for reconsideration and withdraw[a]l of attorney”

in which he states:

1 The stipulation provides: “Plaintiff agrees to dismiss, with prejudice, pursuant to Fed. R. Civ. P. 41(a)(1)(A)(ii), all claims of false arrest, malicious prosecution, excessive force, abuse of process, denial of a fair trial, denial of medical treatment, and any other claim related to plaintiff’s arrest on August 27, 2009 and subsequent detention and prosecution, raised in this matter against all defendants, whether served or not, and against all individuals who could have been named in regard to those claims, including: the City of New York, the New York City Police Department, and any present or former employees and agents of the City of New York or any entity represented by the Office of the Corporation Counsel . . . .” App. 27–28. The record does not indicate that Gomez received any consideration for agreeing to the dismissal.

2 Specifically, “the stipulation [did] not affect any possible claims related to plaintiff’s previous employment with the [NYPD].” App. 28. 5 Please refer to attached letter. Request reopen of court case because my attorney filed a stipulation and order of dismissal without my knowledge or my consent. And at no time did explain to me his actions. I have filed a letter explaining everything dated 4‐16‐2013 with the pro se office.

App. 29. As indicated in this notice, Gomez filed an attached letter that details the

reasons for his motion to “reopen” and “withdraw[]” counsel. Among other

things, that letter states:

I respectfully write you this urgent letter to inform you of the grave injustice that was done to me while in conference with you in your chambers. I just returned back from Afghanistan and only been home for couple weeks. The day I went to your court was the first time I saw my attorney in a few months. I was totally unaware that my attorney wrote a document called a STIPULATION AND ORDER OF DISMISSAL. That document was never shown to me before going into your chambers, and I was totally unaware of its existence! . . . While I was in your Chambers I heard the Corp Counsel, my attorney, and you discuss the dismissal of 1983 claims but I did not understand or know what that meant. If I knew the conversation was talking about throwing out all my claims I would have objected immediately . . . . You’re Honor I respectfully request in the interest of justice that the Stipulation and Order of Dismissal be deemed a Nullity and Voided. On the fact it was generated without my consent or knowledge and that makes that document not legal. My lawyer did not have my permission to dismiss all my claims . . . .

6 ECF No. 21.3 Six days after Gomez filed his pro se motion and attached

letter, Gomez’s new counsel, John Andrew Scola, Jr., filed a notice of

appearance.

On May 6, 2013, the district court denied the motion. (The City did not

file an opposition to Gomez’s motion and neither party submitted any

additional filings before the district court denied the motion.) The district

court’s two‐page ruling provides three reasons for denying Gomez’s motion

for relief from the stipulation of dismissal: First, allowing a party to evade

the consequences of the acts or omissions of his freely chosen agent would

be inconsistent with our system of representative litigation; second, Gomez

asserted that he was overseas when Reid signed the stipulation, but Gomez

provided no support for this assertion; and third, Gomez was present at the

April 12, 2013 conference at which the stipulation was discussed, but he did

not assert at the conference that he did not consent to the stipulation.

3 Electronic Case Filing (“ECF”) citations refer to the district court’s docket. All errors in original. (ECF No. 21 is not publicly available from the district court’s docket.) 7 Scola subsequently filed a second and then third amended complaint

on Gomez’s behalf, both of which were limited to federal and state

employment claims (namely for discrimination and retaliation under

). The City then moved to dismiss Gomez’s third amended

complaint for failure to state a claim. On August 14, 2014, the district court

granted the motion, dismissing Gomez’s § 1981 claims and declining to

exercise supplemental jurisdiction over his state‐law claims. Gomez appeals

only the district court’s May 6, 2013 order denying his motion to vacate the

stipulation of dismissal, not the August 14, 2014 order dismissing his § 1981

claims.

DISCUSSION

We begin our discussion with the appropriate standard of review. Gomez’s

pro se motion, which he labeled as one “for reconsideration and withdraw[a]l of

attorney,” did not specify which rule of the Federal Rules of Civil Procedure he

was invoking. App. 29. The district court construed the motion as having been

made pursuant to Rule 59(e), which governs motions for a new trial or to alter or

amend a judgment. It seems, however, that motions for relief from an order or

8 judgment based on an attorney’s error or misconduct are generally made

pursuant to Rule 60(b), rather than Rule 59(e). See, e.g., Nemaizer v. Baker,

(2d Cir. 1986) (“Relief from counsel’s error is normally sought pursuant to

[Rule] 60(b)(1) on the theory that such error constitutes mistake, inadvertence or

excusable neglect.”); United States v. Cirami (Cirami II),

(2d Cir.

1977) (recognizing attorney’s mental illness as grounds for relief under Rule

60(b)(6)). Regardless of whether the motion should have been made or construed

pursuant to Rule 59(e) or Rule 60(b), the standard of review is the same: abuse of

discretion. See Schwartz v. Liberty Mut. Ins. Co.,

(2d Cir. 2008)

(Rule 59(e)); ISC Holding AG v. Nobel Biocare Fin. AG,

(2d Cir.

2012) (Rule 60(b)). “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,

, 459–60

(2d Cir. 2014) (brackets omitted) (quoting Sims v. Blot,

(2d Cir.

2008)).

The district court’s decision appears to assume that an attorney’s actions

are invariably imputed to his or her client. Specifically, the ruling equates Reid’s 9 actions with gross negligence, rather than a lack of authority, and ends the

inquiry there, observing that parties are generally held to account for even the

gross negligence of their attorneys. We respectfully write that this conclusion is

not based on a complete assessment of the law.

It is true that courts are generally reluctant to recognize attorney error as a

basis for relief from an order or judgment. See, e.g., United States v. Cirami (Cirami

I),

(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.,

(1962).

But the rule deeming a party bound by the acts of his or her attorney is not

absolute. Rather, we have recognized as bases for Rule 60(b) relief an attorney’s

disappearance or mental illness where the party “tried diligently” to contact his

or her attorney. Vindigni v. Meyer,

(2d Cir. 1971) (attorney

disappearance); see also Cirami II,

(attorney mental illness). In such 10 cases, we have remanded for evidentiary hearings on the allegations raised in the

motions for relief and the parties’ diligence in prosecuting their cases. See Cirami

II,

; Vindigni,

.

Moreover, 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.” Pereira v. Sonia

Holdings Ltd. (In re Artha Mgmt.),

, 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,

(2d Cir.

1993) (“The burden of proving that an attorney entered into a settlement

agreement without authority is not insubstantial.”).

Perhaps in light of its assumption that an attorney‐of‐record’s actions are

always imputed to his or her client, the district court did not hold an evidentiary

hearing to resolve the dispute over Reid’s authority to sign the stipulation. We

have previously observed that “[a] hearing is not necessary” if the parties

contesting their attorney’s authority failed “to allege that they did not give their

attorney authority to sign [a] settlement agreement for them.” Pereira, 91 F.3d at 11 330. But “[i]n 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,

(1st Cir.

1991); see also Sur. Ins. Co. of Cal. v. Williams,

(8th Cir. 1984);

Assocs. Disc. Corp. v. Goldman,

, 1053–54 (3d Cir. 1975). As the First

Circuit explained, “[a]fter such a hearing, of course, the court can resolve any

conflict in the testimony; it may, for example, disbelieve the client. But such a

determination cannot be made without first giving the client a fair opportunity to

have his say.” Michaud,

. We agree.

The circumstances of this case clearly raised a factual dispute concerning

Reid’s authority to dismiss Gomez’s claims. Within days of the stipulation’s

signing, Gomez filed a pro se motion for relief from the stipulation and a detailed

letter setting forth his assertion that Reid lacked the authority to dismiss his

claims. Because the presumption that an attorney‐of‐record has authority to settle

a case is rebuttable, the district court should not have denied Gomez’s motion

without holding an evidentiary hearing to address Reid’s authority to dismiss

Gomez’s claims. And contrary to the City’s contention that Gomez should have

come forward on appeal with additional evidence supporting his assertions, 12 Gomez’s detailed letter to the district court below is sufficient to warrant a

remand for further development of the record. Cf. Cirami II,

(“For

the purposes of this opinion, we take the facts to be as the Ciramis allege, for all

we are to do on this appeal is determine whether those allegations, if proved,

would justify relief.”).

Finally, the district court’s additional reasons for denying Gomez’s motion

do not provide an alternative basis to affirm because they are clearly erroneous.

First, the district court faulted Gomez for failing to provide support for the

assertion that he was in Afghanistan at the time Reid signed the stipulation. But

neither Gomez’s motion nor his attached letter asserts that he was in Afghanistan

when Reid signed the stipulation; Gomez’s letter merely states that he “returned

back from Afghanistan and [had] only been home for [a] couple weeks.” ECF No.

21. Put simply, Gomez’s failure to provide support for an assertion that he never

made cannot supply a basis for denying his motion.

Second, the district court notes that Gomez was present at the April 12,

2013 conference at which the stipulation was discussed and that he failed to assert

at the conference that he did not consent to the stipulation. In his letter submitted

four days after the conference, however, Gomez explains that “[w]hile I was in 13 your Chambers I heard the Corp Counsel, my attorney, and you discuss the

dismissal of 1983 claims but I did not understand or know what that meant.” ECF

No. 21. Coming from a layperson, this is unsurprising. Moreover, Gomez’s

subsequent actions—immediately moving for relief from the stipulation,

requesting withdrawal of counsel, and hiring a new attorney—are consistent with

his statement that he did not understand what was happening at the conference

or authorize his attorney to sign the stipulation. At best, Gomez’s silence at the

conference is ambiguous; his subsequent actions are not. Cf. Assocs. Disc. Corp.,

524 F.2d at 1053–54 (“[W]hen, as here, the manifestations of the client’s anxiety

occur almost simultaneously with the entry of judgment and are inconsistent with

an understanding of its consequences, the fact of consent requires scrutiny.”).

CONCLUSION

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. On remand, the district

court should hold an evidentiary hearing and determine whether Reid had

authority to stipulate to a dismissal of Gomez’s claims. If Gomez rebuts the 14 presumption that Reid had authority to dismiss his claims, he is entitled to relief

from the stipulation of dismissal that Reid signed.

For the reasons stated herein, we VACATE the district court’s judgment

and its order denying relief from the stipulation of dismissal, and REMAND for

further proceedings consistent with this opinion.

15