743 F.3d 221
7th Cir.2014Background
- This case concerns a long-running fee-allocation dispute among fiber-optic cable plaintiffs’ lawyers seeking to divide national settlements.
- Three groups formed for the fee dispute: Susman, the 48-Firm Group, and Gotfryd.
- Mediators issued a final, “take-it-or-leave-it” proposal allocating 87% to the 48-Firm Group, 8.5% to Gotfryd, and 4.5% to Susman, with a pro rata adjustment for Litman.
- A written agreement memorializing the mediation terms included enforcement provisions (arbitration; fee forfeiture for noncooperation) and was circulated in early July 2012.
- Susman did not sign the final written agreement and later objected, claiming the terms exceeded the Mediators’ Proposal; the district court held Susman bound based on assent by conduct.
- The district court’s ruling was upheld on appeal, with emphasis on the parties’ course of dealings and Susman’s silence treated as assent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Susman assented to the written agreement without signing. | Susman did not sign and objected; assent requires signing under Illinois contract law. | Silent assent and course of dealings show Susman accepted the terms, despite not signing. | Susman bound by written agreement despite non-signature. |
| Whether Susman’s silence constituted assent under an objective standard. | Silence, given prior dealings, can indicate acceptance. | Silence cannot constitute assent when objections exist or later disputes arise. | Silence reasonably interpreted as assent given the context and prior conduct. |
| Whether the district court erred in its factual findings supporting assent. | Findings lack support; Susman’s two-week silence and later signatories undermine assent. | Factual findings—especially conduct and timing—are supported; review for clear error. | No clear error; findings sustain assent. |
| Whether Illinois contract law governs and whether meeting of the minds occurred on all material terms. | Abbott Labs. requires mutual assent to all material terms. | Parts of the agreement (enforcement mechanisms) were within the scope of assent due to conduct. | Assent to all material terms established. |
| Whether the enforcement provisions were enforceable given Susman’s objections. | Enforcement provisions were part of the final written agreement and supported by assent. | Susman objected; enforcement terms should not bind if not accepted. | Enforcement provisions upheld as part of the binding agreement. |
Key Cases Cited
- Abbott Labs. v. Alpha Therapeutic Corp., 164 F.3d 385 (7th Cir. 1999) (mutual assent required for binding contract; meeting of minds; objective standard)
- Newkirk v. Village of Steger, 536 F.3d 771 (7th Cir. 2008) (objective theory of assent; written records govern formation)
- First Nat’l Bank of Chi. v. Atl. Tele-Network Co., 946 F.2d 516 (7th Cir. 1991) (silence as acceptance in limited circumstances based on dealings)
- Carlton at the Lake, Inc. v. Barber, 928 N.E.2d 1266 (Ill. Ct. App. 2010) (signing not always necessary to bind; conduct can show assent)
- Schafer v. UnionBank/Central, 973 N.E.2d 449 (Ill. App. Ct. 2012) (meeting of minds; terms must be agreed upon to form contract)