Doris E. Neely v. United States District Court for the Southern Good Samaritan Hospital, District of Ohio

NOT FOR FULL-TEXT PUBLICATION
File Name: 09a0531n.06
NO. 07-4281
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
DORIS E. NEELY,
Plaintiff-Appellant,
ON APPEAL FROM THE
v. UNITED STATES DISTRICT
COURT FOR THE SOUTHERN
GOOD SAMARITAN HOSPITAL, DISTRICT OF OHIO
Defendant-Appellee.
___________________________________/
BEFORE: MARTIN, SUHRHEINRICH, and GIBBONS, Circuit Judges.
PER CURIAM. Doris Neely (“Neely”) appeals from an order of the district court granting
Good Samaritan Hospital (“Good Samaritan”)’s motion to enforce a settlement agreement executed
pursuant to a mediation. The district court found that the parties had not bargained for the right to
revoke at mediation and, accordingly, ordered the parties to execute the settlement agreement with
its revocation clause excised. For the reasons that follow, we REVERSE and REMAND for further
proceedings.
I. Background
On March 20, 2002, Neely filed a complaint in district court alleging, inter alia, a claim for
race discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et.
seq., and state-law claims for harassment, hostile work environment, and retaliation against her
employer, Good Samaritan. However, Neely never complained of age discrimination. Upon Good

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The parties agreed to keep the amount of the settlement payment confidential. The1
amount has not been disclosed to this Court.
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Samaritan’s motion for summary judgment, the district court dismissed all claims except Neely’s
race discrimination claim. The district court scheduled a trial on that claim for March 7, 2005.
On March 3, 2005, the district court referred Neely’s case for mediation before a magistrate
judge. The following day, the magistrate judge conducted a three-hour mediation, which resulted
in an agreement to settle the case. The essential terms of the settlement were placed on the record
in open court by the magistrate judge:
First, “The agreement of the parties is that the defendant will pay the plaintiff the
sum of _____. That will be paid by way of a check directly to Ms. Neely . . . .”1
“The second provision of the settlement agreement will be that the terms and
conditions of the settlement agreement will be absolutely confidential for both
parties.”
Finally, “The plaintiff will execute a general release. And it’s understood that the
plaintiff intends to continue her employment at Good Samaritan Hospital.”
On March 7, 2005, the parties reported to the district court that they had settled. That same
day, the district court entered an order dismissing the case with prejudice but expressly retaining
jurisdiction to enforce the terms of settlement between the parties if necessary.
Per the parties’ agreement, Good Samaritan subsequently drafted the written “Settlement
Agreement and Release.” The Settlement Agreement and Release contained three provisions
relevant to the issue presently before this Court.
First, the written agreement contained the following language of release (“paragraph 2”)
(emphases added):
2. Employee, for herself, her heirs, personal representatives, successors and assigns,
does hereby release and forever discharge the Hospital, its parent and affiliated

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corporations and all of their past, present and future officers, directors, agents,
employees, shareholders and attorneys (the “Released Parties”) of and from any and
all manner of action or actions, cause or causes of action, suits, debts, covenants,
contracts, agreements, judgments, executions, claims and demands whatsoever in law
or equity, whether known or unknown, which she now has or may have against the
Released Parties for or by reason of any transaction, matter, cause or thing
whatsoever to the date of this Agreement, whether based on tort, contract, express or
implied, or any federal, state, or local law, statute or regulation including but not
limited to claims based on the Family and Medical Leave Act, the Americans With
Disabilities Act, the Age Discrimination in Employment Act, the Older Workers
Benefits Protections Act, Title VII of the Civil Rights Act of 1964, Ohio Revised
Code Chapter 4112, common law and any and all other claims which have arisen out
of Employee’s employment with the hospital.
Second, the written agreement contained the following paragraph, which allows Neely time
to consider and revoke the agreement (“paragraph 9”) (emphasis added):
9. This Agreement was first delivered by e-mail to Employee’s legal counsel on
March 9, 2005. The parties agree that Employee shall have twenty-one (21) days
within which to consider whether she wishes to enter into this Agreement. This
Agreement shall not become effective or enforceable for seven (7) days after
Employee signs the Agreement, and during this seven (7) day period Employee may
revoke this Agreement at her sole discretion. Written notice of any revocation by
Employee must be hand delivered to the Hospital’s counsel, Karen T. Dunlevey, on
the effective date of revocation. Employee acknowledges that, if this Agreement is
executed prior to the expiration of the twenty-one (21) day period, it was Employee’s
free and voluntary act.
The parties do not dispute that this right to revoke was not discussed at mediation. As explained in
its brief to this Court, Good Samaritan added paragraph 9 so that the Settlement Agreement would
comply with the terms of the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 621
et seq. To make a claim under the ADEA, the employee must be at least 40 years old. Id. § 631(a).
Because Neely is over 40, Good Samaritan sought to protect itself from any age claims by adding
the timing provision and other language based upon the provisions of the Older Worker Benefit
Protection Act, 29 U.S.C. §§ 626(f)(1)(F)(1)-(2). Those provisions provide, in part, that an

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employee waiving a claim for age discrimination in a written agreement must do so knowingly and
voluntarily, after having been given a period of at least 21 days to consider the agreement, and
further provide that the agreement must include a provision allowing the employee to rescind the
agreement for a period of at least 7 days following execution of the agreement. See 29 U.S.C. §
262(f)(2).
Third, the settlement agreement contained the following merger clause (“paragraph 13”):
13. This Agreement and the representations contained in this Agreement constitute
the entire understanding and agreement between the parties hereto.
Like the revocation clause, the merger clause was not discussed at mediation and was never placed
into the record by the magistrate judge.
On March 29, 2005, Neely signed the Settlement Agreement. On April 4, 2005, however,
Neely had a “change of heart” and notified counsel for Good Samaritan that “[a]fter much
consideration, [she] has chosen to rescind the Settlement Release.” Neely then informed the district
court that the settlement was not consummated, and the district court vacated its prior dismissal.
More than two years later, on June 13, 2007, Good Samaritan filed a Motion to Enforce
Settlement. On September 14, 2007, the district court held an evidentiary hearing on Good
Samaritan’s motion. At the hearing, counsel for Good Samaritan asked Neely if she agreed to a
settlement at the March 2005 mediation, to which Neely replied, “Yes, I did.” Counsel for Good
Samaritan also asked Neely if there was “anything in that written agreement that is different from
what was agreed to during mediation.” Neely answered that she did not see anything that was
different but explained that she understood paragraph 9 as giving her a “right” to rescind.

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Jeffrey Walker, corporate counsel for Good Samaritan, also testified. He stated that the
settlement document did not contain anything different from the terms agreed upon during the
mediation. On cross examination, Walker was asked about paragraph 9 and whether it indicated a
right to revoke the agreement. Walker answered that it did offer that right. Walker further testified
that, as drafted, the right to revoke under paragraph 9 was not limited to age discrimination claims.
Neither party testified about the merger clause.
Good Samaritan, in closing remarks, stressed that the parties had agreed to a general release
at mediation and that paragraph 9 was added because that language was required for a valid release
of age claims. Neely argued that “paragraph 9 does not have any limit. . . . To argue after the fact
that this is something out of statute that is required would even be perhaps permissible if, in fact, her
sole claim was an age claim and if there was language basically describing and depicting this age
claim [in paragraph 9].”
The district court noted that both parties agreed to a general release at mediation. The court
asked counsel for both parties, “Since your argument is that the Plaintiff agreed to the settlement and
since the hang-up appears to be this paragraph, would you consider accepting the settlement as
agreed to and not pushing for both a general release and a release specific to age claims?” Good
Samaritan agreed to the compromise. Neely expressed “a slight disagreement.”
Ultimately, the district court concluded that, to its satisfaction, the parties agreed to a general
release at mediation. Further, the magistrate judge had not placed anything on the record indicating
the parties bargained for a revocation clause. The court explained that paragraph 9 added language
to the settlement agreement that was consistent with the specific release of certain claims but was
not typically part of a general release: “Paragraph 9 is something that in this Court’s opinion is not

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standard in a general release. It either ought not to be there or, if it’s there, it ought to indicate the
specific type of claim to which it refers or it should be referenced on the record at the time of the
settlement.” Therefore, in the court’s opinion, enforcing the settlement without the revocation clause
was a fair disposition that gave the parties what they bargained for.
On September 19, 2007, the district court entered an order granting Good Samaritan’s motion
and directing Neely to sign the Settlement Agreement with paragraph 9 excised. Neely timely
appeals from the district court’s judgment.
II. Analysis
A. Standard of Review
Neither party disputes that they reached an agreement to settle at the close of mediation on
March 4, 2005, and that the terms of the settlement were placed into the record in open court. Neely
asserts that the Settlement Agreement and Release, which she executed on March 29, 2005, reflected
what the parties agreed to during the mediation and that she has abided by the terms of the written
settlement agreement in exercising her right to rescind. Good Samaritan argues that the district court
properly excised the revocation clause from the settlement agreement because the settlement reached
on March 4, 2005, was not revocable and the parties had never bargained for the right to rescind,
which Good Samaritan itself included in the writing.
A settlement agreement is a type of contract and is therefore governed by contract law.
Bamerilease Capital Corp. v. Nearburg, 958 F.2d 150, 152 (6th Cir. 1992). “Questions of contract
interpretation are generally considered questions of law subject to de novo review.” Golden v.
Kelsey-Hayes Co., 73 F.3d 648, 653 (6th Cir. 1996). “[W]e review the district court’s decision to
grant a motion to enforce the settlement . . . for abuse of discretion,” after reviewing “for clear error

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the district court’s factual determination that the parties had agreed to settlement terms.” Re/Max
Int’l, Inc. v. Realty One, Inc., 271 F.3d 633, 645 (6th Cir. 2001).
B. Neely Properly Revoked The Settlement Agreement
We believe that resolution of this issue turns on whether the parties contemplated the
“general release” to be effective against only those claims in Neely’s 2002 complaint or against any
and all claims Neely may have had up to the point they agreed to settle the case. If the parties agreed
only to release those claims in Neely’s complaint, then Good Samaritan has the winning argument
because Neely had, in fact, never bargained for the right to revoke and, accordingly, Neely
improperly revoked a valid agreement. If, however, the parties agreed to generally release all claims
Neely may have had, and not just those in her 2002 complaint, then Good Samaritan was required
by federal law to add the revocation clause for the agreement to be effective against an age
discrimination claim, and Neely properly exercised her right to revoke under the written terms of the
agreement.
Our interpretation of the language the magistrate judge placed on the record–that “plaintiff
will execute a general release”–is that Neely would forego any and all claims she may have had–not
just those contained in Neely’s complaint. Our belief is bolstered by Good Samaritan’s position
taken in oral argument, where Good Samaritan explained that it wanted the release to be “as broad
as possible.” Good Samaritan takes the same position throughout its brief to this Court that the
written agreement it drafted, which includes the broad general release language of paragraph 2,
memorialized the terms of settlement agreed to during the mediation and placed on the record in
open court. (See, e.g., Good Sam. Br. 4.) Neely does not argue otherwise. (See, e.g., Neely Br. 4-5.)

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Having established that the parties agreed to a general release of any and all claims Neely
may have had, we now consider whether the terms of the written agreement accurately reflect that
agreement. Neither party argues that the essential terms of the settlement agreement did not mirror
what was discussed at mediation and placed on the record. Neely, for example, contends that the
“true and final settlement agreement” was the written document, which by virtue of its merger
clause, fairly represented and incorporated the terms reached at mediation. (Neely Br. 20.)
Similarly, Good Samaritan asserts that it “drafted a proposed written settlement agreement, which
it believed accurately reflected the terms of the settlement.” (Good Sam. Br. 14.) Therefore, we find
no dispute that the essential terms of the agreement reached at mediation are found in the written
agreement.
We next determine whether the terms of the agreement, and especially the right to revoke in
paragraph 9, were correctly carried out. The plain language of paragraph 2, which Good Samaritan
drafted, unmistakably conveys that the parties agreed to generally release any and all manner of
action or actions, whether known or unknown to Neely, including, inter alia, “the Age
Discrimination in Employment Act” and “the Older Workers Benefits Protections Act.” The only
way for Good Samaritan’s written release to be effective as a general release was if Good Samaritan
included the ADEA’s revocation language. See 29 U.S.C. § 626(f). Contrary to Good Samaritan’s
argument (Good Sam. Br. 7), the right to revoke need not be bargained for. Indeed, it is required by
law. See § 626(f)(2)(a). Because Neely must be given the statutory right to revoke, Neely must also
be given the opportunity to exercise that right. The record demonstrates that she has properly
exercised that right.

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To be sure, under the ADEA, Neely may not waive an age claim in a written agreement2
without a revocation clause as part of the terms. 29 U.S.C. § 626(f). Perhaps a better solution
would have been for the district court to have ordered the enforcement of the settlement
agreement with the revocation clause operable as to only age claims. However, that avenue is
also blocked by Good Samaritan’s decision to include the merger clause in the written
agreement.
When construing contracts, we read the contract so as to give meaning and effect to all3
its provisions. Diversified Energy, Inc. v. Tenn. Valley Auth., 223 F.3d 328, 339 (6th Cir. 2000).
Without paragraph 9, much of the remaining language relating to the general release of all
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Construing the plain language of the parties’ written agreement underscores our conclusion
that Neely validly revoked the agreement. First, the merger clause in paragraph 13 explains that the
representations contained within the written agreement “constitute the entire understanding and
agreement between the parties hereto.” Thus, in executing the settlement agreement, the parties
intended that the essential terms of their agreement were fully represented therein. Indeed, as this
Court has explained,
Merger clauses are routinely incorporated in agreements in order to signal to the
courts that the parties agree that the contract is to be considered completely
integrated. A completely integrated agreement must be interpreted on its face, and
thus the purpose and effect of including a merger clause is to preclude the subsequent
introduction of evidence of preliminary negotiations or of side agreements in a
proceeding in which a court interprets the document.
Security Watch, Inc v. Sentinel Sys., Inc., 176 F.3d 369, 372 (6th Cir. 1999). The district court erred,
then, by stripping the unambiguous revocation language from the settlement agreement based solely
upon Good Samaritan’s argument that the revocation language it drafted was not intended to be
effective.2
Second, as Neely argues in her brief, the district court’s solution is problematic because
without paragraph 9 and its timings provisions, the settlement agreement is ineffective as to age
claims and, accordingly, no longer a general release of all claims. (Neely Br. 11.) Leaving that3

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claims, especially the provision releasing “claims based on . . . the Age Discrimination in
Employment Act” in paragraph 2, is superfluous. The way Good Samaritan has drafted it, the
general release referenced throughout the settlement agreement is only effective when it is
supported by the timing provisions in paragraph 9.
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potential claim open for litigation was never part of the parties’ agreement at the mediation. To the
contrary, as Good Samaritan argues, the whole reason paragraph 9 was added was to avoid having
to defend against an age claim.
Finally, under settled principles of contract interpretation, Good Samaritan is bound by
paragraph 9 and Neely’s rightful revocation. The plain language of paragraph 9 provides that the
“Agreement shall not become effective or enforceable for seven (7) days after [Neely] signs the
Agreement, and during this seven (7) day period[, Neely] may revoke this Agreement at her sole
discretion.” When interpreting contractual language, “a contract is to be construed against the party
who drew it.” Graham v. Drydock Coal Co., 667 N.E.2d 949, 952 (Ohio 1996); Neely v. Miller
Brewing, 25 F. App’x 370, 372 (6th Cir. 2002); Restatement (Second) of Contracts § 206 (1981) (“In
choosing among the reasonable meanings of a promise or agreement or a term thereof, that meaning
is generally preferred which operates against the party who supplies the words or from whom a
writing otherwise proceeds.”). As conveyed in its brief, Good Samaritan “had a legitimate reason”
to contemplate an age claim as part of the “general release” and, therefore, Good Samaritan included
the revocation clause as protection against such a claim. It strains logic, then, for Good Samaritan
to add the unconditional right to revoke into a settlement agreement but to disallow Neely from
exercising that right as promised under the terms of the agreement and as required under the ADEA.
III. Conclusion

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Neely has exercised her valid right to revoke as contained in the written agreement, thereby
voiding the settlement. We therefore REVERSE the decision of the district court with instructions
on REMAND to rescind the settlement agreement.

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