Commercial Division Blog

Posted: June 6, 2022 / Written by: Jeffrey M. Eilender, Samuel L. Butt, Christopher R. Dyess, Joshua Wurtzel, Hillary S. Zilz / Category Commercial Division Justices

Settlement Agreement Valid Without Signatures Where Parties Agreed to Settle By Email

On April 26, 2022, Justice Masley of the New York County Commercial Division issued a decision in DT Net Lease I Reit v. Coughlan, 2022 NY Slip Op 31381(U) holding that a settlement agreement was valid where the parties exchanged a draft settlement agreement and agreed to settle via email despite not having signed the draft agreement, stating:

Plaintiff argues that the settlement is not contained in one writing subscribed by both parties in violation of CPLR 2104. Indeed, plaintiff notes that defendants have never signed the settlement agreement. Also, plaintiff argues that the objective circumstances establish that plaintiff did not intend to be bound to a settlement until the draft settlement agreement was signed by both parties. Plaintiff interprets Behar's January 28, 2022, email to the court as acknowledgment that, as of January 28, no settlement was finalized. (NYSCEF 95, Chmil Aff. ¶ 18; NYSCEF 102, Email Correspondence with Court.) According to plaintiff, it contradicts [*7] defendants' current contention that a settlement was made by email on January 25, 2022. (NYSCEF 95, Chmil Aff ¶18.) The statement that counsel was "awaiting signatures" indicates that defendants intended that signature on the draft settlement agreement was a further occurrence necessary to settlement. (Id., at ¶19.) Despite the statement that defendants were "awaiting" signatures, defendants never tendered its own signature on the draft. (Id.)

The court finds that the email combined with the attached draft settlement agreement satisfy CPLR 2104. These documents contain the entire agreement and counsels' signatures. The execution of releases (or a discontinuance in this case) does not change whether the parties have an enforceable settlement pursuant to CPLR 2104. [**6] (See Phila. Ins. Indem. Co. v Kendall, 197 AD3d 75, 81, 151 N.Y.S.3d 392 [1st Dept 2021]; see also Rawa/d v Dormitory Auth., 199 AD3d 477 [1st Dept 2021].)

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