Did You Unintentionally Enter Into A Settlement Agreement By Email?
Print Article- Posted on: Oct 20 2023
This Blog has previously addressed the question of whether a binding settlement can be reached through a series of emails as opposed to a fully integrated and formal written settlement agreement. See, e.g., [here], [here], [here], [here], [here] and [here]. These important issues bear repeating to avoid being bound to a settlement that one of the parties did not intend to make.
Settlement is an efficient and cost-effective way to resolve disputes and is favored by courts. See, e.g., Forcelli v. Gelco Corp., 109 A.D.3d 244, 247-48 (2nd Dep’t 2013). Section 2104 of the CPLR, which governs “stipulations,” including settlement agreements, provides:
An agreement between parties or their attorneys relating to any matter in an action, other than one made between counsel in open court, is not binding upon a party unless it is in a writing subscribed by him or his attorney or reduced to the form of an order and entered. With respect to stipulations of settlement and notwithstanding the form of the stipulation of settlement, the terms of such stipulation shall be filed by the defendant with the county clerk.
“To be enforceable, a settlement agreement must set forth all material terms, and there must be clear mutual accord between the parties.” Vlastakis v. Mannix Family Market @ Veteran’s Road, LLC, 2023 WL 6854105, *1 (2nd Dep’t 2023) (citation and internal quotation marks omitted); see also Teixeira v. Woodhaven Center of Care, 173 A.D.3d 1108, 1109 (2nd Dep’t 2019). This is because “settlement agreements are subject to the principles of contract law.” Forcelli, 109 A.D.3d at 248. “An email that merely confirms a purported settlement is not necessarily sufficient to bring the purported settlement into the scope of CPLR 2104.” Teixeira, 173 A.D.3d at 1109 (citation omitted).
Two recent cases from the Appellate Division, Second Department, address these issues.
Teixeira v. Woodhaven Center of Care
Teixeira was decided on October 18, 2023, and involved the purported settlement of a personal injury matter. The defendant in Teixeira moved pursuant to CPLR 2104 to enforce a settlement agreement it alleged was reached by the parties and “memorialized in an email message.” The motion court determined that “there was no meeting of the minds or the creation of a settlement that is legally enforceable” and denied the motion. Defendant appealed.
In affirming the motion court, the Second Department stated:
Here, contrary to the defendant’s contention, an email exchange between counsel did not evidence a clear mutual accord. The email dated October 7, 2020, purportedly confirming the settlement agreement, stated that it was memorializing the “tentative resolution” of the case and was sent by counsel for the defendant, which is the party seeking to enforce the agreement. There is no email subscribed by the plaintiff, who is the party to be charged, or by her attorney confirming the agreement (see Kataldo v Atlantic Chevrolet Cadillac, 161 AD3d 1059, 1060 [2nd Dep’t 1018]).
Alessina v. El Gauchito II, Corp.
Alessina was decided on October 4, 2023, by the Appellate Division, Second Department, and involved the settlement of an employment dispute. The plaintiffs in Alessina were employees of the defendant restaurant. Plaintiff’s counsel alleged that:
the parties agreed to a settlement of an employment dispute during a mediation. Shortly thereafter, the plaintiffs’ attorney emailed the defendants’ former attorney … asking him “to confirm the terms of the settlement we reached” earlier that day and setting forth the specific terms, which included the defendants’ agreement to pay $325,000 to the plaintiffs by May 3, 2021. [defendant’s former attorney] replied, “Yes, confirmed.”
Thereafter, however, defendant’s former attorney advised plaintiff’s counsel that the settlement sum would not be paid by the defendant.
Plaintiff commenced an action “to recover on an instrument for the payment of money only by motion for summary judgment in lieu of complaint pursuant to CPLR 3213.” [Eds Note: this Blog has addressed CPLR 3213 [here], [here], [here], [here], [here], [here], [here],[here] and [here].] The motion court granted the motion over defendant’s opposition and the instant appeal followed. In affirming the motion court, the Second Department stated:
Here, the material terms of the settlement were set forth in an email by the plaintiffs’ counsel, and accepted in a response subscribed by the defendants’ former attorney, who had apparent authority to settle the case on their behalf. The exchange of email correspondence between the attorneys for the parties setting forth all the material terms of the settlement and a manifestation of mutual assent was sufficient to constitute an enforceable settlement agreement between the parties. Contrary to the defendants’ contention, the agreement was not conditioned on the parties’ execution of a formal settlement and release, or any other further occurrences.
The plaintiffs established, prima facie, that the defendants failed to make the payment required by the settlement agreement, which was an “instrument for the payment of money only” within the meaning of CPLR 3213. In opposition, the defendants failed to raise a triable issue of fact. Accordingly, the Supreme Court properly granted the plaintiffs’ motion for summary judgment in lieu of complaint. [Citations omitted.]
Jonathan H. Freiberger is a partner and co-founder of Freiberger Haber LLP.
This article is for informational purposes and is not intended to be and should not be taken as legal advice.
