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James Scott v. Janet A Napolitano

September 27, 2012

JAMES SCOTT,
PLAINTIFF,
v.
JANET A NAPOLITANO, DEPARTMENT OF HOMELAND SECURITY, DEFENDANTS.



The opinion of the court was delivered by: Barry Ted Moskowitz, Chief Judge United States District Court

ORDER DENYING DEFENDANT'S MOTION TO ENFORCE SETTLEMENT

On September 18, 2012, the Court held an evidentiary hearing on Defendant's Motion for Judgment Based on ADR Settlement. For the reasons discussed below, the Court holds that Plaintiff can rescind the August 12, 2010 Memorandum of Settlement based on unilateral mistake and DENIES Defendant's motion.

I. BACKGROUND

Plaintiff and Defendant filed competing motions to enforce settlement. In an order filed on July 10, 2012, the Court denied Plaintiff's motion to enforce an alleged settlement reached on July 28, 2011, and granted an evidentiary hearing on Defendant's motion to enforce the August 12, 2010 Memorandum of Settlement ("Memorandum").

The Court granted an evidentiary hearing on the issue of whether Plaintiff could avoid enforcement of the Memorandum based on unilateral or mutual mistake of fact. The Court found that there was a factual question as to whether there was a mutual or unilateral mistake with respect to (1) whether Plaintiff had the option of obtaining federal health coverage through an OPM waiver; and (2) whether $150,000 was sufficient to provide comparable health coverage to Plaintiff and his family.

On August 31, 2012, Defendant filed an ex parte motion to cancel or limit the scope of the evidentiary hearing. In an order filed on September 14, 2012, the Court granted in part and denied in part the ex parte motion. The Court ruled that Plaintiff was not statutorily eligible for an OPM waiver and limited the evidentiary hearing to the issue of whether there was a unilateral or mutual mistake as to whether $150,000 was sufficient to provide comparable health coverage to Plaintiff and his family.

On September 18, 2012, the Court held the evidentiary hearing. The only witnesses were Plaintiff James Scott and his wife, Lisa Scott.

II. DISCUSSION

After considering the testimony at the evidentiary hearing and reviewing the post-hearing briefing, the Court concludes that Plaintiff may rescind the Memorandum based on unilateral mistake - i.e., Plaintiff's erroneous belief that the $150,000 designated by the Memorandum to "defer the costs of health insurance for Plaintiff and his family" would be sufficient to cover the premiums of the insurance plan he had in place at that time until he reached the age of 65.

A. Evidentiary Hearing Testimony

Mr. Scott testified that obtaining a health care plan that was comparable to FEHB and

that he could afford was a very important issue during the settlement discussions. (Evidentiary Hearing Transcript ("EHT") 27:19-28:1.)

When it became clear that the government could not provide FEHB benefits, the $150,000 figure was proposed as compensation in lieu of the benefits. (EHT 29:7-10.) At the hearing, Mr. Scott testified that he thought that the $150,000 was to provide health care comparable to FEHB for him and his family. (EHT 29:12-13.)

However, Mr. Scott did not know how the $150,000 figure was derived. He only recalled that his wife had extensive conversations with the mediator and that the mediator had come up with the figure based on the discussions. (EHT 28:7-15, 42:24-25.) Mr. Scott did not follow the discussions his wife had with the mediator. (EHT 40:23-24.) Mr. Scott trusted his wife to handle the family's financial and medical issues. (EHT 40:15-17.) Mr. Scott relied on ...


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