CY Pres – Enforcing an Unsigned Settlement Release (PA)
The Western District of Pennsylvania recently determined that the absence of a signature did not void the underlying settlement agreement in a class action lawsuit. In Abramson, et al. v. Agentra LLC, et al., the District Court granted the plaintiffs’ motion to enforce class action settlement after the parties reached an oral agreement and a Joint Status Report Regarding Class Action Settlement was filed with the District Court.
The lawsuit involved a class action alleging that Agentra LLC (“Agentra”) participated in making pre-recorded telemarketing calls to cellular telephone numbers in order to advertise Agentra’s goods and services. The plaintiffs argued that this was a clear violation of the Telephone Consumer Protection Act (“TCPA”). The plaintiffs and Agentra participated in a private mediation and reached an oral settlement agreement shortly thereafter. Specifically, the oral settlement agreement required Agentra to establish a fund of $275,000.00 from which payments would be made to class members and which would be used to fund other matters including administrative costs, service awards, and attorneys’ fees.
Following the oral negotiation, plaintiffs provided a first draft of a written settlement agreement, as well as documents related to the settlement, to Agentra. The parties exchanged numerous e-mail correspondence thereafter, including an e-mail from Agentra with minor redlines to the written agreement. Agentra also brought up the issue of cy pres and later provided an agent list to plaintiffs. After receiving the agent list, plaintiffs sent the final version of the settlement agreement to Agentra which was never formally executed. Additionally, at this time, the parties filed a Joint Status Report Regarding Class Action Settlement which indicated that “a class action settlement is agreed upon and with their respective clients for signature.”
Ultimately, Agentra failed to sign the settlement agreement and disputed that the parties reached a binding agreement. However, no evidence was presented that Agentra communicated any dispute about the final settlement agreement draft or that any other material matter remained in dispute. Additionally, the issue of Cy Pres appeared to be resolved after the parties exchanged the agent list and Agentra made no further communications surrounding the Cy Pres issue.
The District Court looked to contract law in order to determine whether the settlement agreement was enforceable. Essentially, the District Court determined that the record revealed that there were no material facts in dispute regarding the existence of terms of an agreement to settle. The District Court noted that “the uncontroverted evidence confirms that after reaching an oral agreement, the parties reduced their oral agreement to writing and addressed any remaining material issues.” The District Court also stated that the best evidence that a final agreement was reached was the filing of the Joint Status Report Regarding Class Action Settlement. As such, the Court held that the absence of the signature, alone, did not make the settlement agreement unenforceable and granted plaintiffs’ motion to enforce settlement.
Thanks to Zhanna Dubinsky for this post. Please feel free to contact Vincent Terrasi with any questions or comments.