Wade Clark Mulcahy LLP

<p style="text-align: justify;">Reaching a settlement via email is easier than you think, so be careful. In a recent decision by New York’s First Department, an email reflecting an agreement between attorneys is sufficiently subscribed for purposes of CPLR §2104 even where the attorney does not retype their name above the signature block.</p>
<p style="text-align: justify;">In<em> <a href="https://www.wcmlaw.com/wp-content/uploads/2021/10/Philadelphia-Insurance-Indemnity-Company-v.-Kendall.pdf">Philadelphia Insurance Indemnity Company v. Kendall</a></em>, 197 A.D.3d 75 (1^st Dep’t 2021), an insurer petitioned to enforce a settlement agreement and vacate an arbitration award related to an underinsured motorist claim brought by an employee of the insured. The employee settled a claim with an underinsured third-party and later made a claim under a Supplementary Underinsured Motorist Benefit Provision in their employer’s automobile policy with the insurer. The employee and the insurer proceeded to arbitration where the employee was awarded $975,000. However, despite the arbitration decision being sent the parties’ counsel, neither counsel received the decision and they continued to negotiate a settlement. Consequently, the parties agreed to settle the dispute for $400,000.</p>
<p style="text-align: justify;">After reaching a settlement, the employee’s counsel memorialized the agreement in an email; at the bottom of the email appeared “Sincerely,” followed by counsel’s name and contact information within the signature block. In response, insurer’s counsel replied with an email containing a Release and Trust Agreement to be signed by the employee. Subsequently, the employee’s counsel received the arbitrator’s decision and indicated that they would not proceed with the $400,000 settlement. Instead, they demanded payment of the $975,000 awarded by the arbitrator. Insurer petitioned to enforce the settlement agreement and to vacate the arbitration award. However, the Supreme Court denied the insurer’s petition finding that the employee’s attorney failed to subscribe his email because he did not retype his name to supplement the signature block. The insurer appealed to the Appellate Division.</p>
<p style="text-align: justify;">On appeal, the First Department reversed the Supreme Court’s ruling and held that the settlement agreement was enforceable. Pursuant to CPLR §2104, a stipulation between parties or their attorneys is not binding upon a party unless it is in a writing subscribed by him or his attorney. The First Department explained that the Court of Appeals has not opined on whether emails can satisfy CPLR §2104, and that the issue on appeal was a matter of first impression. The First Department held that the distinction between prepopulated and retyped signatures in emails reflects a needless formality that does not reflect how law is practiced today. Essentially, it is not the signoff that indicates whether the parties intended to reach a settlement via email, but rather the fact that the email was sent. Accordingly, the First Department reversed the Supreme Court’s ruling.</p>
Thanks to Drew Fryhoff for his contribution to this post.  Should you have any questions, please feel free to contact <a href="mailto:tbracken@wcmlaw.com">Thomas Bracken</a>.