Fаrrokh YASSAN, Plaintiff-Appellant, v. J.P. MORGAN CHASE AND COMPANY, et al., Defendants-Appellees.
No. 12-2313.
United States Court of Appeals, Seventh Circuit.
Argued Oct. 26, 2012. Decided Feb. 28, 2013.
708 F.3d 963
III. Conclusion
Accordingly, we DISMISS Moral‘s petition for want of jurisdiction.
Michael S. Welsh, Attorney, Welsh Law, Haddonfield, NJ, for Plaintiff-Appellant.
Peter Petrakis, Attorney, Anneliese Wermuth, Attorney, Meckler Bulger Tilson Marick & Pearson LLP, Chicago, IL, for Defendants-Appellees.
TINDER, Circuit Judge.
Farrokh Yassan brought suit in the Cook County Circuit Court against his former employer, J.P. Morgan Chase & Co. (hereinafter, Chase), approximately nineteen months after the termination of his employment. In his complaint, Yassan alleged that Chase had terminated him in violation of both the Age Discrimination in Employment Act (ADEA),
Shortly after filing suit—but before Chase‘s deadline to answer the complaint—Yassan‘s counsel failed to appear at a status hearing. As a result, the Cook County Circuit Court judge dismissed the case for want of prosecution. Unaware of this dismissal, Chase filed a notice to remove the case to federal district court the following day. The parties brought this potential removal problem to the district court‘s attention, but the district court concluded that the removal after dismissal constituted a procedural defect that had been waived by Yassan‘s failure to object within thirty days. The district court then granted Chase‘s motion to dismiss under
I
Because the district court decided this case on a
The terms of the release discharged Chase from “all liability for any claims or potential claims relating to [Yassan‘s] employment,” including (but not limited to) “any claims under ... the Age Discrimination in Employment Act of 1967 ... [and] any claims under ... tort (including ... wrongful or abusive discharge ... [and] fraud).” The release explicitly defined the term “claims” to include “claims I know about and claims I do not know about, as well as the continuing effects of anything that happened before I sign below.” Certainly, the release drafted by Chase was broad, but Chase allowed Yassan forty-five calendar days to evaluate it, consult an attorney (if desired), and decide whether to sign it. Moreover, the terms of the release permitted Yassan to change his mind, allowing Yassan to revoke the release within seven calendar days of signing it.
Yassan signed the release on May 13, 2010, forty-three calendar days after Chase gave it to him, and never attempted to revoke the agreement thereafter. (Yassan now asserts that “he is ready, willing, and able to [revoke and] tender the full amount of the severance settlement” back to Chase.) Two months after signing the release, however, Yassan learned that another Chase employee, Spiro Maros, had been offered Yassan‘s former job. This discovery angered Yassan; while his termination from Chase initially appeared to be simply part of a reduction in force, it now seemed much more personal—that is, discriminatory and retaliatory. As a result, Yassan filed the present suit in Cook County Circuit Court on December 15, 2011. Chase was served with Yassan‘s complaint on January 25, 2012, which gave Chase until February 23, 2012 to respond.
On February 8, 2012, Yassan‘s attorney did not appear for a status hearing, leading the Cook County Circuit Court judge to dismiss Yassan‘s case for want of prosecution on February 22, 2012—the day before Chase‘s deadline to respond. On the day of Chase‘s deadline, unaware that Yassan‘s case had been dismissed for want of prosecution, Chase filed a notice of removal in federal district court. Only later did the parties learn that the dismissal order and the notice of removal had “crossed in the mail.” The parties pointed out this timing issue, which they referred to as a potential removal defect, to the district court judge, but the district court judge characterized the situation as a mere “procedural defect.” Furthermore, since “neither party object[ed] to the case proceed
A party that settles a claim of fraudulent inducement cannot revisit that settlement by asserting that the alleged defrauding party did not make a full disclosure of its own fraud. This is so even if the defrauding party has an independent duty to disclose, and even when the release was executed without knowledge of certain specific frauds.
Nycal Corp. v. Inoco PLC, 988 F.Supp. 296, 306 (S.D.N.Y.1997) (citations omitted), aff‘d, No. 98-7058, 166 F.3d 1201 (2d Cir. Dec. 9, 1998).
After the district court‘s dismissal for failure to state a claim, Yassan filed a timely appeal with this court. We review de novo the district court‘s determination that it had subject matter jurisdiction over Yassan‘s case. Village of DePue, Ill. v. Exxon Mobil Corp., 537 F.3d 775, 782 (7th Cir.2008). Because we conclude in the next section that the district court did indeed have jurisdiction, we review Yаssan‘s case on the merits de novo as well, construing Yassan‘s complaint in the light most favorable to him, accepting all well-pleaded facts as true, and drawing all inferences in his favor. Tamayo, 526 F.3d at 1081.
II
We are obliged to inquire into the existence of federal jurisdiction whenever
First, we are concerned that the jurisdictional requiremеnts of
Second, even if this case was “pending” at the time of removal, we are concerned that the jurisdictional requirements of the U.S. Constitution prohibit the federal court from hearing this case. Regardless of how a case ends up in federal court,
Turning first to our concern regarding
Outside the criminal and habeas contexts, other circuits have held thаt pending cases can include cases that have resulted in a final district court order—so long as the parties are still actively contesting the order in the court system. For example, in Beverly Community Hospital Association v. Belshe, 132 F.3d 1259, 1264 (9th Cir.1997), the Ninth Circuit had to interpret what Congress meant when it decreed that new amendments to the Medicare Act,
Informed by these previous discussions, we conclude that a stаte civil action is “pending” for the purposes of
Although we now have a working definition of what it means for a civil action to be pending in a state court under
Illinois courts have inherent authority to dismiss a case for want of prosecution, and this authority “exists independent of any statute.” Bejda v. SGL Indus., Inc., 82 Ill.2d 322, 45 Ill.Dec. 113, 412 N.E.2d 464, 467 (1980) (quotation and citation omitted). Illinois courts recognize this authority as “necessary to prevent undue delays in the disposition of causes ... and also to empower courts to control their dockets.” Sander v. Dow Chem. Co., 166 Ill.2d 48, 209 Ill.Dec. 623, 651 N.E.2d 1071, 1080 (1995). Still, despite this interest in promoting efficiency, Illinois courts prefer resolution of a case on the merits, and a dismissal for want of prosecution in Illinois is not a dismissal on the merits. Keilholz v. Chicago & Nw. Ry. Co., 59 Ill.2d 34, 319 N.E.2d 46, 47-48 (1974). For this reason, when an Illinois court dismisses a case for want of prosecution, as here, the dismissal can become a final order, but it does not become one immediately.
When a dismissal for want of prosecution becomes a final order is dictated by
When Chase purported to remove Yassan‘s suit to federal court on February 23, 2012, only one day had passed since the suit‘s dismissal for want of prosecution. Under
Furthermore, even if the Cook County judge‘s dismissal order had been final and appealable, the order was so recent that it could have been easily vacated had the case remained in Illinois state court.
Having satisfied ourselves that the case was pending in Illinois state court at the time of removal, we must further satisfy ourselves that Yassan‘s case was live at the time of removal—and has remained live throughout its рendency in federal court.
When a defendant successfully removes a case to federal court, the “federal court inherits a removed case in its procedural posture on the date of removal.” LaPlant v. Nw. Mut. Life Ins. Co., 701 F.3d 1137, 1142 (7th Cir.2012). At first glance, it appears that when Chase removed this case to federal court on February 23, 2012, the federal court inherited a case that was still pending, but needed to be reinstated before further proceedings. But Yassan‘s case was never explicitly reinstated. The Cook County Circuit Court could have reinstated his case before removal under
We know from our earlier review of Illinois case law that, had Yassan‘s case remained in the Cook County Circuit Court untouched and without reinstatement, the interlocutory order dismissing the case for want of prosecution would have become final once the
First, Yassan‘s case does not present the typical live case or controversy problem. Generally, when once-live cases become dead during the course of litigation, mootness is to blame. Years of litigation sometimes outlast the natural course of the contested conduct. When it does, the federal court becomes “unable to grant any effectual relief,” and the case becomes moot. Medlock v. Trs. of Ind. Univ., 683 F.3d 880, 882 (7th Cir.2012). Moot cases run afoul of the live case or controversy requirement under
Second, even though the Cook County Circuit Court judge never explicitly reinstated this case before removal, we believe there is a good argument that the case was implicitly reinstated as soon as Chase filed a removal petition. Illinois appellate courts recognize the equitable doctrine of revestment, which implicitly reinstates a matter that was never explicitly reinstated after dismissal. As one Illinois appellate court explained it:
It is axiomatic that when a case is dismissed, the parties are out of court and any further proceedings are unauthorizеd until the judgment of dismissal is vacated and the cause reinstated. However, an exception to the general rule arises where the parties actively participate in further proceedings or where the party in whose favor dismissal was entered otherwise conducts himself in a manner inconsistent with the order of dismissal. Such action operates to nullify the order of dismissal and revests the trial court with jurisdiction.
Third, even if Yassan‘s case were not equitably reinstated in Cook County Circuit Court before removal, we believe there is a good argument that the federal district judge implicitly reinstated Yassan‘s case after removal. As the federal district court judge noted in her order dismissing the case, both Chase and Yassan brought the dismissal for want of prosecution to the district court‘s attention. By bringing the dismissal to the district court‘s attention, Chase and Yassan did all they could to remedy the situation; only the district court judge had the power to reinstate the case. Once the district court judge became aware of the dismissal, thе judge could have explicitly reinstated the case; however, the judge viewed the situation as a procedural error in removal and, as a result, did not believe an explicit reinstatement was necessary. Still, by deciding that the prior dismissal did not raise a jurisdictional issue and by subsequently moving on to decide the merits, the federal district court judge implicitly reinstated Yassan‘s case.
For these three reasons, we believe that Yassan‘s case has at all times remained a live case or controversy under
III
At the center of Yassan‘s case is the release prepared by Chase and signed by Yassan after forty-three days of consideration—a release that was a prerequisite to Yassan receiving a severance package equivalent to almost six months’ salary. The release contains a choice-of-law clause providing that disputes about the release will be governed by New York law. We enforce choice-of-law provisions as long as they are reasonable. Kuehn v. Childrens Hosp., Los Angeles, 119 F.3d 1296, 1301 (7th Cir.1997). Because Chase‘s principal place of business is in New York, and because neither party objects to the application of New York law, we apply New York law to Yassan‘s allegations about the release.
Chase drafted the release, and the release is unquestionably broad; however, Chase gave Yassan forty-five days to consider the agreement, more than ample time to consult with a lawyer. Yassan does not allege that Chase forced him to sign the release. On the contrary, Yassan was an at-will employee; with his signature, Yassan explicitly acknowledged that he “was signing this Release in exchange for benefits to which [he] would not otherwise be entitled.” Despite the fact that Yassan received valuable consideration for agreeing to release Chase from all potential claims (both known and unknown), Yassan argues that Chase fraudulently induced him to sign thе release.2 But this
Chase gave Yassan a severance package solely in return for his agreement to waive all claims against Chase, including “claims he kn[e]w about and claims [he did] not know about.” (emphasis added). There was no other reason for Chase to pay Yassan six months’ salary after his termination. Yassan knew this when he signed the release. Chase may have misrepresented its reasons for terminating Yassan, and Chase may have had ulterior motives for terminating Yassan. But Yassan explicitly released Chase from all tort claims, including fraud. Yassan should have considered the possibility that Chase was lying to him before he signed a release wаiving any claims that arose out of Chase lying to him.
The terms of the release plainly bar all of Yassan‘s claims, but Yassan could still have a case if New York courts were reluctant to enforce a release this broad. In reality, New York courts enforce releases liberally, giving a “general release ... its full literal effect where it is directly or circumstantially evident that the purpose is to achieve a truly general settlement.” Mangini v. McClurg, 24 N.Y.2d 556, 301 N.Y.S.2d 508, 249 N.E.2d 386, 389-90 (1969); see also Lucio v. Curran, 2 N.Y.2d 157, 157 N.Y.S.2d 948, 139 N.E.2d 133, 136 (1956) (finding a general release defeats “not only ... controversies and causes of action between the releaser and releasees which had, by that time, actually ripened into litigation, but ... all such issues which might then have been adjudicated as a result of pre-existent controversies, ... even though no such litigation had then been instigated“).
Releases of claims unknown at the time of signing (like the release signed by Yassan) are enforceable under New York law. Mangini, 249 N.E.2d at 391 (holding that if “there was a conscious and deliberate intention to discharge liability from all consequences of an accident, the release will be sustained and bar any future claims of previously unknown injuries“). More specifically, releases of fraud claims unknown at the time of signing are enforceable under New York law—even if the alleged defrauder did not disclose his fraud to the party signing the release. Bellefonte Re Ins. Co. v. Argonaut Ins. Co., 757 F.2d 523, 527 (2d Cir.1985) (rejecting the argument that parties “cannot be bound by a settlement agreement unless the alleged defrauder has made full disclosure to the other party prior to settlement“). Aсcording to the New York Court of Appeals:
[A] release may encompass unknown claims, including unknown fraud claims, if the parties so intend and the agreement is fairly and knowingly made. . . . [A] party that releases a fraud claim may later challenge that release as fraudulently induced only if it can identify a separate fraud from the subject of the release. Were this not the case, no party could ever settle a fraud claim with any finality.
Centro Empresarial Cempresa S.A. v. Am. Movil, S.A.B. de C.V., 17 N.Y.3d 269, 929 N.Y.S.2d 3, 952 N.E.2d 995, 1000 (2011) (emphasis added) (quotations and citations omitted).
Consequently, Yassan‘s release is fully enforceable under New York law unless Yassan can identify a fraud that is separate from the terms of the release. A separate fraud might include Chase deceiving Yassan about what he was signing. But Chase did just the opposite herе: Chase gave Yassan forty-five days to consider the release, encouraged Yassan to consult with an attorney, and made it clear
The fraud that Yassan alleges is not a separate fraud, but a fraud that “falls squarely within the scope of the release.” Centro, 952 N.E.2d at 1001. As long as plaintiffs like Yassan are given sufficient time to evaluate the scope of the release, New York law rejects any later attempts “to be relieved of the release on the ground that [the plaintiffs] did not realize the true value of the claims they were giving up.” Id. As a result, we have no trouble concluding that Yassan‘s age discrimination, wrongful discharge, and fraud claims all fail because Yassan explicitly waived his right to make these claims when he agreed to sign a sweeping release in exchange for a severance package.
IV
In addition to his substantive arguments, Yassan makes a procedural argument that the district court‘s dismissal of his action on a
At the dismissal stage, the court is typically confined to the pleadings alone, but “[i]t is ... well-settled in this circuit that ‘documents attached to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff‘s complaint and are central to his claim.’ ” 188 LLC v. Trinity Indus., Inc., 300 F.3d 730, 735 (7th Cir.2002) (quoting Wright v. Assoc. Ins. Cos., Inc., 29 F.3d 1244, 1248 (7th Cir.1994)). Because Chase attached a copy of the release to its motion to dismiss, and because Yassan‘s complaint repeatedly referenced the release, it was proper for the district court to consider the text of the releаse in dismissing this case.
What was not proper was the rule under which the district court dismissed this case. The problem with Yassan‘s case is not that he failed to state a claim; the problem is that he signed a release waiving the right to make a claim. As a result, the district court judge dismissed Yassan‘s case on the basis of the release (and not the complaint‘s failure to state a claim). A release is an affirmative defense under
Nevertheless, Yassan argues that dismissal under any rule was inappropriate because he needed the opportunity for discovery to develop his case more fully. But his argument falls short because—even if the district court allowed discovery, and everything Yassan alleged proved to be true—Yassan‘s case would still fail under the terms of the release. As explained in Section III, if Chase knowingly lied to Yassan about its reasons for terminating him, Yassan‘s case fails because he subsequently released Chase from all “potential claims ... [of] fraud.” If Chase deliberately terminated Yassan because it was angry about his whistle-blowing activities (althоugh it is not clear from Yassan‘s complaint that he ever blew the whistle about anything illegal), Yassan‘s case fails because he subsequently released Chase from all “potential claims ... [of] wrongful or abusive discharge.” Even if Chase purposefully discriminated against Yassan on the basis of his age, Yassan‘s case fails because he subsequently released Chase from all “potential claims ... [under] the Age Discrimination in Employment Act of 1967.” In exchange for all these releases, Yassan received valuable consideration to which he was not otherwise entitled. Yassan‘s procedural argument fails, just as his substantive arguments fail.
V
As we have stated previously, “a deal‘s a deal.” Indus. Representatives, Inc. v. CP Clare Corp., 74 F.3d 128, 132 (7th Cir.1996). Yassan believes he has made a bad deal, but “a court cannot improve matters by intervention after the fact. It cаn only destabilize the institution of contract, increase risk, and make parties worse off.” Id. at 131-32. Yassan had plenty of time to consider the repercussions of his deal, but he still decided to accept it. He agreed to waive a long list of current and future claims against Chase, and in return, Chase gave him almost six months’ salary. Everything Yassan agreed to waive was spelled out in the plain language of the release. We will not ignore the plain language of the release just because Yassan failed to appreciate the extent of what he was waiving. For that reason, we AFFIRM the district court‘s dismissal of Yassan‘s suit.
TINDER
CIRCUIT JUDGE