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Second Department Reaffirms That E-mails Between Counsel Can Be Sufficient to Satisfy The Writing And signature Requirement For Stipulations Pursuant To CPLR 2104

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  • Posted on: Jun 17 2019

Lawyers should be mindful that the signed writing aspect of CPLR 2104 can be satisfied by e-mails exchanged between counsel.  CPLR 2104 provides, in relevant part that:

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.

One of the first cases in New York to thoroughly analyze whether e-mails could satisfy the requirements of CPLR 2104 was Forcelli v. Gelco Corp., 109 A.D.3d 244 (2nd Dep’t 2013).  The Forcelli plaintiff sued defendant for damages after an auto accident.  After discovery, plaintiff moved for summary judgment and defendant cross-moved for summary judgment dismissing the Complaint.  On the same day as the motions were submitted, the parties appeared for mediation.  While a settlement was not reached at mediation, the discussions continued between plaintiff’s counsel and the adjuster for defendant’s insurance carrier.  In a phone conversation, plaintiff’s counsel orally agreed to accept a settlement offer made by the adjuster.  In a subsequent e-mail to plaintiff’s counsel, the adjuster memorialized the settlement, which required the insurer to make a payment of $230,000 in exchange for a release from plaintiff prepared by plaintiff’s counsel.  At the end of her e-mail the adjuster wrote “Thanks Brenda Greene.”

On May 4, 2011, the Forcelli plaintiff executed a release.  On May 11, 2011, supreme court granted defendant’s cross-motion to dismiss the complaint.  The same day, defendant’s counsel served on plaintiff the order with notice of entry and plaintiff’s counsel, by fax and certified mail, sent defendant’s counsel the release and a signed stipulation of discontinuance.  The adjuster received the “settlement documents” and forwarded them to defendant’s counsel, who promptly “rejected” the release and stipulation of discontinuance.  Counsel asserted that a “settlement [was never] consummated under CPLR 2104 between the parties” and that defendant considered the matter dismissed by [supreme] court’s order resolving the cross-motion.

The Forcelli plaintiff moved to vacate the order dismissing the case arguing that the adjuster’s e-mail “constituted a binding written settlement agreement pursuant to CPLR 2104,” Forcelli, 109 A.D.3d at 247, and, in opposition, defendant argued that it did not.  The Forcelli defendant appealed from supreme court’s granting of plaintiff’s motion.

In affirming the Forcelli supreme court, the Second Department noted that “[s]tipulations of settlement are judicially favored, will not lightly be set aside and are enforced with rigor and without a searching examination into their substance as long as they are clear, final and the product of mutual accord.”  Forcelli, 109 A.D.3d at 247-48 (citations and internal quotation marks omitted).  The Court then recognized that the settlement “must conform to the criteria set forth in CPLR 2104” and, since it was not made in open court, the settlement “must be in writing, signed by the party (or attorney) to be bound.”  Forcelli, 109 A.D.3d at 248 (citations and internal quotation marks omitted).  In addition, the Forcelli Court noted that “settlement agreements are subject to the principles of contract law [and, therefore] for an enforceable agreement to exist, all material terms must be set forth and there must be a manifestation of mutual assent.” Forcelli, 109 A.D.3d at 248 (citations and internal quotation marks omitted).

With that in mind, the Forcelli Court found that the adjuster’s e-mail set forth the material terms of the parties’ settlement.  The Forcelli Court, in rejecting defendant’s argument that the settlement agreement was invalid because neither defendant nor its counsel executed same, held that the adjuster was an agent with apparent authority to settle the case.  “A party will be bound by the acts of its agent in settlement negotiations and an agreement will be binding where the agent has either actual or apparent authority.  Forcelli, 109 A.D.3d at 248 (citations omitted).

As to the “subscription” requirement, the Forcelli Court noted that while e-mails cannot be signed in the traditional sense, “the lack of ‘subscription’ in the form of a handwritten signature has not prevented other courts from concluding that an e-mail message, which is otherwise valid as a stipulation between parties, can be enforced pursuant to CPLR 2104.”  Forcelli, 109 A.D.3d at 248.  In reaching its decision, the Forcelli Court also recognized the “widespread use of e-mail” and how “unreasonable” it would be to determine that, due to the absence of a traditional signature, an e-mail could not conform to CPLR 2104.  The Court also noted that the adjuster purposely added her name at the end of the e-mail and that it was not automatically generated by the e-mail software.  Forcelli, 109 A.D.3d at 251.

On May 29, 2019, the Second Department decided Herz v. Transamerica Life Ins. Co., a case in which the Court enforced a settlement agreement based on e-mail exchanges between counsel.  Plaintiff in Herz brought an action against the insurance company that insured her late husband’s life.  After several months of negotiations, plaintiff’s counsel accepted an offer to settle the case for $12,500.  Plaintiff was to sign a stipulation prepared by her counsel and defendant was to prepare a release.  Plaintiff’s counsel, after some modifications, approved the release.  The following day, however, plaintiff’s counsel emailed defendant’s counsel and requested additional changes to the release that were not acceptable to defendant.

Thereafter, the Herz plaintiff obtained new counsel, who advised defendant’s counsel that plaintiff would not execute a release and stipulation of discontinuance.  In opposition to defendant’s motion to enforce the settlement, plaintiff’s new counsel argued that there was no settlement between the parties.  The Herz Court affirmed supreme court’s finding that “the settlement, made via email exchanges entered into by [the insurer’s] counsel and the plaintiff’s prior counsel, was valid and enforceable” as was the direction “to execute the release exchanged between counsel and file a stipulation of discontinuance.”

The Herz Court, relying largely on Forcelli found that:

Here, the emails were subscribed by counsel, set forth the material terms of the agreement—the acceptance by the plaintiff’s counsel of an offer in the sum of $12,500 to settle the case in exchange for a release in favor of Transamerica—and contained an expression of mutual assent. Contrary to the plaintiff’s contention, the settlement was not conditioned on any further occurrence, such as the formal execution of the release and settlement. Therefore, the plaintiff’s subsequent refusal to execute the release did not invalidate the agreement.  (Citations omitted.)


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