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Friday, August 02, 2013

An email message is capable of conforming to the criteria of CPLR 2104 with respect to “stipulating settlement” of the matter in dispute

An email message is capable of conforming to the criteria of CPLR 2104 with respect to “stipulating settlement” of the matter in dispute
Forcelli v Gelco Corp., 2013 NY Slip Op 05437, Appellate Division, Second Department

In this action, which involved the settlement of litigation resulting from an automobile accident, the Appellate Division concluded that an email message can satisfy the criteria of CPLR 2104 so as to constitute a binding and enforceable stipulation of settlement. The court explained that stipulations of settlement are judicially favored and 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. Where the settlement was not made in open court, CPLR 2104 provides: "An agreement between parties or their attorneys relating to any matter in an action . . . is not binding upon a party unless it is in a writing subscribed by him or his attorney."

Here, said the court, an email message set forth the material terms of the agreement -- “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, said the court, 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. “

Courts have long recognized that traditional correspondence can qualify as an enforceable stipulation of settlement under CPLR 2104 as a letter can be considered "subscribed," since letters are usually signed at the end by the author thereof. However, email messages cannot be signed in the traditional sense.

Nevertheless, said the court, this 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.

In Williamson v Delsener (59 AD3d 291, 291), the Appellate Division, First Department, stated that "emails exchanged between counsel, which contained their printed names at the end, constitute signed writings (CPLR 2104) within the meaning of the statute of frauds." Similarly, in Brighton Inv., Ltd. v Har-Zvi (88 AD3d 1220, 1222), the Appellate Division, Third Department, ruled that "an exchange of emails may constitute an enforceable contract, even if a party subsequently fails to sign implementing documents, when the communications are sufficiently clear and concrete to establish such an intent."

The court’s rationale: “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.”

As the email message contained the attorney’s printed name at the end thereof, in contrast to an "electronic signature" as defined by the Electronic Signatures and Records Act, the court decided that the record supports the conclusion that the attorney, in effect, signed the email message.

Accordingly, the Appellate Division ruled that 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.”

The decision is posted on the Internet at:


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