Cassandra Washington v. Chicago Board of Education ( 2019 )

NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted July 30, 2019*
Decided September 13, 2019
Before
ILANA DIAMOND ROVNER, Circuit Judge
DAVID F. HAMILTON, Circuit Judge
MICHAEL B. BRENNAN, Circuit Judge
No. 18-2626
CASSANDRA WASHINGTON, Appeal from the United States District
Plaintiff-Appellant, Court for the Northern District of Illinois,
Eastern Division.
v. No. 17-CV-2343
CHICAGO BOARD OF EDUCATION, Manish S. Shah,
Defendant-Appellee. Judge.
ORDER
Cassandra Washington appeals the dismissal of her complaint seeking, among
other things, a declaration that a settlement agreement between her and the Chicago
Board of Education, her former employer, is unenforceable. The district court ruled that
the agreement was valid and dismissed the suit. We affirm.
* We have agreed to decide the case without oral argument because the briefs and
record adequately present the facts and legal arguments, and oral argument would not
significantly aid the court. See Fed. R. App. P 34(a)(2)(C).
No. 18-2626 Page 2
We accept as true the allegations in Washington’s complaint and take judicial
notice of the information in the settlement agreement that she attached to it.
See Williamson v. Curran, 714 F.3d 432, 435–36 (7th Cir. 2013). Beginning in 2014, the
Board employed Washington as the principal of Stephen F. Gale Community Academy.
But in 2016, Washington’s supervisor issued her a Corrective Action Plan which,
according to her, set “unreasonable” and “unrealistic” goals for the students’ academic
performance at the school. According to Washington, the plan was part of the Board’s
unwritten policy of “systematically target[ing] experienced African-American female
contract principals who were more than forty years of age for unjustified removal.”
Two months later, the Board demanded that Washington resign or else face involuntary
termination after a public hearing.
The Board’s attorneys then presented Washington and her attorney with a
Settlement Agreement and General Release, which she and the Board’s general counsel
signed. Washington consented to her removal as principal of Gale, without going
through a contested hearing under 105 ILCS 5/34-8.3(d)(2). This provision allows the
CEO of Chicago Public Schools, with the Board’s approval, to remove and replace the
principal of a school on probation that does not make adequate progress. Washington
also agreed, “after being afforded the opportunity to receive the advice and assistance
of counsel of her own choosing,” to “release[] and forever discharge[] all claims or
causes of action which she has or may have against the Board,” including those arising
out of her employment and separation. In exchange, the Board agreed to remove the
Corrective Action Plan from Washington’s file and not to place her in a negative light
during the uncontested hearing. But it could present “some references to poor academic
results” to justify her removal. The Board would also “reassign” Washington to an
administrative position at the same salary for four months and then transfer her again
to unpaid leave until the end of the school year. Further, the Board agreed not to contest
any unemployment-compensation claims.
Washington’s next step was this lawsuit, which she pursued with the assistance
of counsel at all times in the district court. The operative complaint asked the district
court to declare that the settlement agreement is unenforceable under state and federal
law and to order the rescission of the contract. She alleged that the agreement violated
the Board’s own rules, which required (1) the consent of the Local School Council before
removing her as principal, and (2) the Board’s approval of the agreement (rather than
just its general counsel’s) because it obligated payment to Washington of more than
$50,000.
No. 18-2626 Page 3
Washington also alleged that the Board had procured the settlement by fraud.
She claimed that a “special relationship” existed between her and the Board’s attorneys,
giving them “influence and superiority over her” and thus requiring them to disclose to
her accurate and complete information. But, she said, the attorneys did not explain the
Board’s procedures for a removal hearing under 105 ILCS 5/34-8.3(d) and did not
explain that she was waiving her due process rights. Finally, she alleged that the Board
breached the agreement by denying her a raise tied to a collective bargaining agreement
and placing her in a negative light during the removal hearing.
The Board moved to dismiss the second amended complaint, arguing that
Washington had knowingly and voluntarily executed the settlement agreement, in
which she released all her claims against it. The district court agreed with the Board that
the settlement agreement was enforceable and dismissed the suit. Washington asked
the court to reconsider its rulings and for leave to file another complaint (her fourth),
but the district court denied both requests.
We review the dismissal de novo. Matlin v. Spin Master Corp., 921 F.3d 701, 704–05
(7th Cir. 2019). State contract law governs the formation, construction, and enforcement
of settlement agreements. Beverly v. Abbott Labs., 817 F.3d 328, 333 (7th Cir. 2016). Under
Illinois law, which governs this contract, a settlement generally is enforceable if there
was mutual assent to material terms. Id.Washington first argues that the settlement agreement is void because § 4-1(c)(6)
of the Board’s rules required the Local School Council’s consent to remove her as
principal. The Board’s rules have the force of law. See Veazey v. Bd. of Educ. of Rich Twp.
High Sch. Dist. 227, 59 N.E.3d 857, 866 ¶ 30 (Ill. App. 2016). But § 4-1(c)(6) allowed the
Board to remove Washington after a hearing under 105 ILCS 5/34-8.3 “or upon consent
of … the Local School Council.” Because the Board removed her under the statute, the
Council’s consent was unnecessary.
Washington also maintains that the agreement is void because its value exceeded
$50,000, and the Board did not approve it as required by § 3-2 of the Board’s rules. A
contract that is “beyond the power of the municipality is absolutely void and cannot be
ratified by later municipal action.” Ad-Ex, Inc. v. City of Chicago, 565 N.E.2d 669, 673 (Ill.
App. 1990). Section 3-2 permits the general counsel “to settle any matter” for “a sum”
up to $50,000 without Board approval. The settlement provided that Washington would
be “reassigned” to an administrative position and “continue” to receive the same pay,
which, for four months, would have been more than $50,000. We agree with the district
court that we should, if possible, interpret this obligation to be consistent with the law
and public policy of Illinois. See Enterprise Leasing Co. of St. Louis v. Hardin, 956 N.E.2d
No. 18-2626 Page 4
1059, 1064 (Ill. App. 2011). This agreement provided only for reassignment, not the
payment of “a sum.” The Board did not incur additional liability, and payment of more
than $50,000 was not inevitable. Washington could have quit, and if she had, the Board
could have stopped paying her. Her interpretation would make it difficult for the
general counsel to settle any employment dispute on terms that allow an employee to
keep working.
Washington next argues that the settlement is void as against public policy
because it released “non-waivable” claims, specifically: (1) Equal Pay Act claims for
denying her a raise after her reassignment, (2) unemployment-compensation claims,
and (3) workers’ compensation claims. Illinois prohibits construing a release to “include
claims not within the contemplation of the parties” or to “cover claims that may arise in
the future.” Feltmeier v. Feltmeier, 798 N.E.2d 75, 89–90 (Ill. 2003). We assume, without
deciding, that an employee cannot waive claims under the Equal Pay Act. See Boaz
v. FedEx Customer Info. Servs., Inc., 725 F.3d 603, 607 (6th Cir. 2013). But the general
language in the release did not waive Washington’s claims under that Act because they
are based on conduct that occurred after she signed it. Feltmeier, 798 N.E.2d at 90.
Illinois also restricts the ability to waive unemployment and workers’ compensation
claims. 820 ILCS 305/23 & 405/1300. The Board agreed not to contest unemployment
claims, however, so the release did not cover them. Moreover, the Board has not argued
that Washington released any workers’ compensation claims, which in any event would
require the approval of the Illinois Workers’ Compensation Commission. See 820 ILCS
305/23. Thus, the parties did not draft the release to cover these claims. See Feltmeier,
798 N.E.2d at 90.
Nor can Washington void the settlement on a theory of fraudulent concealment.
To prevail on this claim, she had to allege the existence of a special relationship giving
rise to a duty to speak on the Board’s part. See Vandenberg v. Brunswick Corp., 90 N.E.3d
1048, 1056 (Ill. App. 2017). Washington contends that, because she took legal advice
from Board attorneys in the past, she developed a special relationship with them
requiring them to explain the consequences of the settlement; instead, she says they
concealed this information. But in the context of adversarial settlement negotiations, the
Board’s interests were obviously contrary to Washington’s, so the Board and its
attorneys owed her no duty to speak. See Auto-Owners Ins. Co. v. Konow, 57 N.E.3d 1244,
1250 (Ill. App. 2016) (victim’s attorney owed no fiduciary duty of disclosure to
tortfeasor or his attorney regarding potential liens affecting settlement); Oakland Police &
Fire Retirement System v. Mayer Brown, LLP, 861 F.3d 644, 651–52 (7th Cir. 2017)
(borrower’s law firm owed no fiduciary duty of disclosure to lenders and their
attorneys); Autotech Tech. Ltd. P’ship v. Automationdirect.com, 471 F.3d 745, 749 (7th Cir.
No. 18-2626 Page 5
2006). She also had her own counsel. Now, she asserts that her lawyer was not
“independent,” but she waived that issue by raising it for the first time on appeal.
See O’Gorman v. City of Chicago, 777 F.3d 885, 890 (7th Cir. 2015).
Washington’s allegations of coercion and economic duress likewise fall short.
See In re Marriage of Tabassum & Younis, 881 N.E.2d 396, 410 (Ill. App. 2007) (duress and
coercion are “basically the same”). She argues that she sufficiently alleged duress
because the Board threatened to remove her after a humiliating public hearing, and she
had a “medical condition,” though she provides no detail about it. But “one cannot
successfully claim duress … when he had an alternative to signing the agreement.”
Pierce v. Atchison, Topeka & Santa Fe Ry. Co., 65 F.3d 562, 569 (7th Cir. 1995). Threatening
to remove Washington was not illegal or wrong. See 105 ILCS 5/34-8.3(d)(2); In re
Marriage of Tabassum & Younis, 881 N.E.2d at 410. She could have contested her removal
rather than consent to it; the financial pressure she faced does not establish economic
duress. Bank of America, N.A. v. 108 N. State Retail LLC, 928 N.E.2d 42, 57 (Ill. App. 2010).
Washington also raises the “pre-existing duty” rule to suggest that she received
no consideration under the settlement agreement. When a party agrees to do what it is
already legally obligated to do, “there is no consideration as there is no detriment.”
Urban Sites of Chicago, LLC v. Crown Castle USA, 979 N.E.2d 480, 494 (Ill. App. 2012).
Washington asserts that the Board was already required to (1) pay her principal salary,
(2) remove the Corrective Action Plan from her file, and (3) not contest unemployment
claims. If a settlement agreement could be set aside on this theory that the other party’s
legal position lacked merit, thus showing the absence of consideration for the settlement
agreement, no case could be settled with confidence.
Moreover, as a matter of fact and law, the Board had the authority to remove her
as principal, so it did not have to keep employing and paying her. 105 ILCS 5/34-
8.3(d)(2). Washington cites no authority requiring the Board to remove the Corrective
Action Plan from her file except her opinion that it was not “based on facts.” And
despite her view that the Board would have no basis to challenge an unemployment
claim, it was free to do so. See, e.g., 820 ILCS 405/804; Ill. Admin. Code. tit. 56,
§ 2720.130. The Board’s promise to refrain from contesting a claim was also
consideration given to Washington.
Washington further complains that she did not have an opportunity for a hearing
before the Board. She consented, however, to removal as principal after an uncontested
hearing. And her claim that her own attorney did not explain the consequences of the
agreement to her is insufficient to conclude that her consent was not knowing and
voluntary. See Baptist v. City of Kankakee, 481 F.3d 485, 490–91 (7th Cir. 2007).
No. 18-2626 Page 6
Washington next contends that, even if the settlement agreement is valid, the
Board breached it by denying her a pay raise and referencing Gale’s poor academic
results at the removal hearing, thereby placing her in a negative light. The Board agreed
to pay her “the same pay and benefits that she received as the principal of Gale.” She
contends that this entitled her to a raise given to other principals because her salary as
principal was tied to a collective bargaining agreement. But the obligation is phrased in
the past tense and does not state that the rate would change. Moreover, the agreement
contained an integration clause and did not incorporate her earlier contract or the
collective bargaining agreement. See GCIU Emp’r Ret. Fund v. Chicago Tribune Co.,
66 F.3d 862, 865 (7th Cir. 1995). Thus, the Board did not breach the agreement by
freezing her salary at “the same pay” she had as principal. And the agreement expressly
permitted references to poor academic results at the hearing, so the Board did not
breach the agreement by placing her in a negative light.
Finally, Washington argues that the district court abused its discretion by
denying her request to file another amended complaint. We will uphold a district
court’s decision when it reasonably explains why it denied the proposed amendment.
See Gonzalez-Koeneke v. West, 791 F.3d 801, 808 (7th Cir. 2015). Here, the district court
denied leave to amend because Washington had filed three complaints before the
dismissal, which the court considered ample opportunity to state a claim. Moreover,
Washington provided no excuse for why she (and her counsel) delayed adding her new
theories and claims until filing a fourth complaint, much less an explanation for the
sheer volume of undeveloped and cursory arguments that she has presented during
this litigation. See McCoy v. Iberdola Renewables, Inc., 760 F.3d 674, 687 (7th Cir. 2014).
The district court did not abuse its discretion.
The court also permissibly exercised its discretion to deny Washington’s motion
for reconsideration under Federal Rules of Civil Procedure 59(e) and 60(b)(3). Rather
than showing a manifest error of law or introducing new evidence, she merely put a
different spin on the same arguments about the necessity of the Local School Council’s
consent and waiver of supposedly non-waivable claims. See Fed. R. Civ. P. 59(e);
Cincinnati Life Ins. Co. v. Beyrer, 722 F.3d 939, 954 (7th Cir. 2013). She also failed to
supply evidence that the Board hindered her case by concealing from her one of the
Board’s public rules and a paycheck that she had received from the Board. She already
had access to both the rules and the paycheck. See Fed. R. Civ. P. 60(b)(3); Philos Techs.,
Inc. v. Philos & D, Inc., 802 F.3d 905, 917 (7th Cir. 2015).
No. 18-2626 Page 7
We have considered Washington’s other contentions, and none has merit. The
judgment of the district court is
AFFIRMED.