Attorney's Response to Email Agreeing to Settle Case Sufficient to Form a Valid Enforceable Settlement Agreement

On July 16, 2021, the Fourth Department issued a decision in Field v. Pet Haven, Inc., (2021 NY Slip Op 04450), holding that an attorney’s acceptance of an offer to settle a dispute via email was sufficient to form a valid enforceable settlement agreement even when the attorney later refuses to sign a formal agreement, explaining:

"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" (CPLR 2104). CPLR 2104 applies to settlement agreements (see Eastman v. Steinhoff, 48 AD3d 738, 739 [2d Dept 2008]), and an email constitutes a writing for purposes of that provision (see Williamson v. Delsener, 59 AD3d 291, 291 [1st Dept 2009]). "In addition, since settlement agreements are subject to the principles of contract law, 'for an enforceable agreement to exist, all material terms must be set forth and there must be a manifestation of mutual assent' " (Forcelli v. Gelco Corp., 109 AD3d 244, 248 [2d Dept 2013]). Thus, where "an email message contains all material terms of a settlement and a manifestation of mutual accord, and the party to be charged, or his or her agent, types his or her name under circumstances manifesting an intent that the name be treated as a signature, such an email message may be deemed a subscribed writing within the meaning of CPLR 2104 so as to constitute an enforceable agreement" (id. at 251).

As defendant correctly contends, the requirements for a valid and enforceable settlement agreement are satisfied here. The email from plaintiff's lawyer to defendant's lawyer contained the only two material terms of the agreement, i.e., defendant's payment of $32,500 to plaintiff in exchange for plaintiff's release of defendant from further liability; the email plainly manifested the parties' mutual accord, i.e., "[plaintiff] has informed me that he would like to accept the $32,500 settlement [offered by defendant]"; and the lawyer representing the party to be bound, i.e., plaintiff, explicitly typed his name at the end of the email in a manner akin to a hand-signed letter. Nothing more was required, and plaintiff's "subsequent refusal to execute form releases and a stipulation of discontinuance did not invalidate the agreement" (Williamson, 59 AD3d at 292). To the contrary, plaintiff's subsequent refusal to execute the necessary releases and [*2]stipulation constituted a breach of the parties' valid settlement agreement. The court thus erred in denying defendant's cross motion to enforce the settlement agreement (see Jimenez v. Yanne, 152 AD3d 434, 434 [1st Dept 2017]; Williamson, 59 AD3d at 291-292).

The attorneys at Schlam Stone & Dolan frequently litigate the enforceability of settlement agreements. Contact our attorneys at commercialdivisionblog@schlamstone.com if you or a client have questions regarding the enforceability of a settlement agreement.