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CY Pres - Enforcing an Unsigned Settlement Release (PA)

August 28, 2020

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<p style="text-align: justify;">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. <span> </span>In <em><a href="https://www.wcmlaw.com/wp-content/uploads/2020/08/Abramson-et-al.-v.-Agentra-LLC-et-al..pdf">Abramson, et al. v. Agentra LLC, et al.</a>,</em> 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.</p>
<p style="text-align: justify;">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.<span>  </span>The plaintiffs argued that this was a clear violation of the Telephone Consumer Protection Act (“TCPA”).<span>  </span>The plaintiffs and Agentra participated in a private mediation and reached an oral settlement agreement shortly thereafter.<span>  </span>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.</p>
<p style="text-align: justify;">Following the oral negotiation, plaintiffs provided a first draft of a written settlement agreement, as well as documents related to the settlement, to Agentra.<span>  </span>The parties exchanged numerous e-mail correspondence thereafter, including an e-mail from Agentra with minor redlines to the written agreement.<span>  </span>Agentra also brought up the issue of cy pres and later provided an agent list to plaintiffs.<span>  </span>After receiving the agent list, plaintiffs sent the final version of the settlement agreement to Agentra which was never formally executed.<span>  </span>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.”</p>
<p style="text-align: justify;">Ultimately, Agentra failed to sign the settlement agreement and disputed that the parties reached a binding agreement.<span>  </span>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.<span>  </span>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.</p>
<p style="text-align: justify;">The District Court looked to contract law in order to determine whether the settlement agreement was enforceable.<span>  </span>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.<span>  </span>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.”<span>  </span>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.<span>  </span>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.</p>
<p style="text-align: justify;">Thanks to Zhanna Dubinsky for this post.  Please feel free to contact <a href="mailto:vterrasi@wcmlaw.com">Vincent Terrasi</a> with any questions or comments.</p>

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