01-1831 Hakim v. Payco-General American Credits, Inc.

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“[T]he day before the parties agreed to the terms of the settlement and unbeknownst to either party, the district court determined that OSI knowingly and intentionally coerced fraudulent statements and testimony from Malone, and entered default judgment against OSI in favor of all four plaintiffs, including Hakim. When the parties learned of this judgment on May 19, Hakim, through Burt, attempted to withdraw his offer to settle.”

“Hakim cannot avoid the settlement agreement by contending that OSI acted fraudulently or in bad faith by coercing false testimony of a witness. Hakim did not show that he relied on OSI’s false statements or bad faith conduct in entering into the settlement agreement. In fact, as the district court explained, Hakim requested and witnessed the evidentiary hearing on the issue of OSI’s coercion of Malone. He pursued the settlement notwithstanding his belief that OSI acted in bad faith, and with full knowledge that, if he did not settle, the court had the authority toenter a default judgment in his favor. Again, the district court’s decision was reasonable.”

Affirmed.

Appeal from the United States District Court for the Northern District of Illinois, Castillo, J., Flaum, J.