First Department Enforces Settlement Reached via Emails After Plaintiff Attempted to Renege (NY)
By and large, most personal injury lawsuits settle. Following discovery and as the liability picture becomes clearer the parties can engage in good faith settlement discussions and equitably resolve the matter. An essential element of good faith negotiations is that the attorneys have the authority to negotiate and settle. Plaintiff attorneys must be in sync with their clients during this phase, since settlement is ultimately a plaintiff client decision. Once terms are agreed, the attorneys, clients, and carriers reasonably believe the matter is resolved and all that remains is the final paperwork and draft.
Unfortunately, there are occasions when a party either gets cold feet or blatantly reneges on an agreement. Frustration, consternation, and, in matter of Jimenez v Yanne, motion practice and appeals to enforce settlement follows. In Jimenez The First Department Appellate Division, reversed the trial court’s decision and granted the defendants’ motion to enforce a settlement agreement.
CPLR Section 2104 states: “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…” The trial court rejected the defendants’ argument that a series of emails negotiating and agreeing to the settlement was enforceable. Defendants’ attorney wrote, “Ok, we can agree to settle this matter for $13,000 to Jimenez and $17,000 to Morales. Please confirm. Thanks.” The trial court note that defendants’’ attorney’s name was not typed at the end of her email. Plaintiff attorney replied, “All good. The power of email.” In a following email on the same day, plaintiffs’ attorney emailed, “Are you doing releases?” Plaintiffs’ attorney’s name was not printed at the end of either email. The court found that as plaintiffs’ attorney did not type is name and the end of his email that confirmed the settlement; the emails do not qualify as signed writings pursuant the N.Y. General Obligations Law or the case law. Therefore the settlement agreement was not binding upon plaintiff Morales, who changed her mind regarding the settlement. (Plaintiff Jimenez provided a Stipulation of Discontinuance and a General Release).
In reversing, the appellate division found that the email communications between the plaintiffs’ counsel and defendants’’ counsel sufficiently set forth an enforceable agreement to settle the claims, including that of Morales. The appellate division noted that plaintiff counsel typed his name at the end of the email accepting defendants’ office, which satisfied the CPLR requirement that settlement agreements be in a “writing subscribed by him or his attorney” in order to be enforceable.
This case highlights potential pitfalls of the negotiating process and the old Yogi Berra adage, “It ain’t over till it’s over.” Professional ethics dictate that an agreement is an agreement. Professional practice, however, illustrates that that is not always the case. The attorneys signing their names to an email took on added significance, which resulted in appellate practice — and added litigation costs — over a relatively modest settlement. Thanks to Justin Pomerantz for his contribution to this post. Please email Brian Gibbons with any questions.