Claims Adjuster’s Email Sufficient to Enforce Settlement Agreement

I fondly remember, in Miss Schmidt’s fourth grade class, the pride I felt when I “passed” the cursive writing “test” and was rewarded with a ball point pen. Good times.

In today’s electronic age, cursive writing is less relevant than it has been in the past. One article even suggests, by reference to the Zimmerman trial witness who claimed that she “[doesn’t] read cursive”, that it may be “dead”.

In this vein a recent Appellate Division (2nd Dept.) decision, Forcelli v. Gelco Corp., 2013 Slip Op 05437 (109 A.D.3d 244) (App. Div. 2nd Dept. 2013),confirms that CPLR 2104 (the New York rule of practice that governs Stipulations) does not demand handwritten signatures. It held:

[W]here … 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.

CPLR 2104, titled “Stipulations”, provides:

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. With respect to stipulations of settlement and notwithstanding the form of the stipulation of settlement, the terms of such stipulation shall be filed by the defendant with the county clerk. (Emphasis added.)

In this three-car accident case, plaintiffs attempted to enforce an agreement to settle the matter for $230,000.

On May 3, 2011, Brenda Greene, a claims adjuster with the insurer of the Gelco defendants’ (driver Maller and car owner Gelco Corp.) vehicle, wrote the following email to plaintiff’s counsel (with a copy to the representative of Xerox, the lessee of the car and Maller’s employer):

“Per our phone conversation today, May 3, 2011, you accepted my offer of $230,000 to settle this case. Please have your client executed [sic] the attached Medicare form as no settlement check can be issued without this form.

“You also agreed to prepare the release, please included [sic] the following names: Xerox Corporation, Gelco Corporation, Mitchell G. Maller and Sedgwick CMS. Please forward the release and dismissal for my review. Thanks Brenda Greene.”

On May 10, 2011, the court granted the Gelco defendants’ motion for summary judgment dismissing the complaint and all claims asserted against them.  Their counsel then sought to undo the settlement, on the basis that “there was no settlement consummated under New York CPLR 2104 between the parties” and therefore they “considered this matter dismissed by the court’s decision”.

Plaintiffs moved to dismiss the court’s order and to enforce the settlement agreement as set forth in Greene’s email.  The Supreme Court granted that motion, and the Appellate Division agreed.

The court began by reciting the policy favoring settlement and the basic requirements of CPLR 2104:

Stipulations of settlement are judicially favored, will not lightly be set aside, and are to be enforced with rigor and without a searching examination into their substance as long as they are clear, final and the product of mutual accord.  To be enforceable, stipulations of settlement must conform to the criteria set forth in CPLR 2104. … The plain language of the statute directs that the agreement itself must be in writing, signed by the party (or attorney) to be bound. 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.

The court held that Greene’s email satisfied this requirement, notwithstanding defendants’ argument that neither they nor their counsel entered into it:

Greene’s email message set forth the material terms of the agreement, to wit, the acceptance by the plaintiffs’ counsel of an offer of $230,000 to settle the case in exchange for a release in favor of the defendants, and contained an expression of mutual assent. Significantly, the settlement was not conditioned on any further occurrence, such as the outcome of the motion for summary judgment or the formal execution of the release and stipulation of dismissal by these defendants and related entities.

Furthermore, contrary to the Gelco defendants’ contention, the fact that neither they nor their counsel entered into the agreement did not invalidate the agreement. A party will be bound by the acts of its agent in settlement negotiations and an agreement will be binding where the agent has either actual or apparent authority. Moreover, a liability insurer’s duty to pay is normally coupled with such insurer’s right to control the defense of its insured, a right which corresponds to the recognized right of the insurer to protect its own financial interest. …

Greene, as a representative of the Gelco defendants’ insurer, was clothed with apparent authority to settle the case on behalf of the insured. Indeed, the Gelco defendants did not dispute the assertion by the plaintiffs’ counsel that it was represented to him at the mediation that Greene had authority to settle the case on behalf of these defendants, and they do not dispute this assertion on appeal. Thus, Greene’s email message also satisfied the criteria of CPLR 2104 insofar as it was a writing made by an individual with authority to bind the party to be bound.

The court then turned to the remaining question of whether an email message can be considered to be “subscribed” under CPLR 2104 and therefore enforceable.  It cited many case law examples for the proposition that “[c]ourts have long recognized that traditional correspondence can qualify as an enforceable stipulation of settlement under CPLR 2104.”

The court held that the fact that email messages “cannot be signed in the traditional sense” was irrelevant, and that “lack of ‘subscription’ in the form of a handwritten signature has not prevented other courts from concluding that an email message, which is otherwise valid as a stipulation between parties, can be enforced pursuant to CPLR 2104.”

It observed that “given the now widespread use of email as a form of written communication in both personal and business affairs, it would be unreasonable to conclude that email messages are incapable of conforming to the criteria of CPLR 2104 simply because they cannot be physically signed in a traditional fashion.”

This was supported by the 2002 Electronic Signatures and Records Act (ESRA). ESRA § 302(3) states an ” [e]lectronic signature’ shall mean an electronic sound, symbol, or process, attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the record”, and ESRA § 304(2) states that “an electronic signature may be used by a person in lieu of a signature affixed by hand [and] [t]he use of an electronic signature shall have the same validity and effect as the use of a signature affixed by hand.”


Greene’s email message contained her printed name at the end thereof, as opposed to an “electronic signature” as defined by [ESRA]. Nevertheless, … Greene, in effect, signed the email message. In particular, we note that the subject email message ended with the simple expression, “Thanks Brenda Greene,” which appears at the end of the email text. This indicates that the author purposefully added her name to this particular email message, rather than a situation where the sender’s email software has been programmed to automatically generate the name of the email sender, along with other identifying information, every time an email message is sent.  In addition, the circumstances which preceded Greene’s email message, and in particular, the face-to-face mediation at which settlement was attempted and the subsequent follow-up telephone calls between Greene and the plaintiff’s counsel, support the conclusion that Greene intended to “subscribe” the email settlement for purposes of CPLR 2104.

Therefore, the court affirmed the Supreme court’s decision to enforce the parties’ settlement agreement.

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