On January 13, 2017, the Maryland Court of Special Appeals
filed an unreported decision in Julie Ward v. Marjorie L. Lassiter upholding
the Circuit Court for Anne Arundel County’s grant of Defendant’s Motion to
Enforce Settlement Agreement against Plaintiff.
This case arises from a settlement agreement reached via
e-mail stemming from a June 21, 2010 auto accident. A three-day jury trial was set to begin on
March 12, 2015 but as trial approached, and after some settlement negotiations,
Plaintiff’s Counsel sent an e-mail confirming that his client would accept
$7,000, if offered. Defense Counsel
responded simply with “[w]e are settled at $ 7,000.00.” The case was removed from the trial docket
but issues arose when Plaintiff’s Counsel e-mailed a proposed settlement
agreement which Defense Counsel declined in favor of her own settlement
agreement. Ultimately, Plaintiff refused
to sign any release or settlement agreement sent by Defense Counsel due to
language that indemnified the Defendant from claims any third party could bring
against her in connection with the injuries the Plaintiff suffered in the
accident at issue.
In response, Defendant filed a Motion to Enforce Settlement
which the circuit court granted after a hearing. Plaintiff appealed the decision. The dispute before the appellate court was
whether the e-mails exchanged between the parties formed an enforceable
settlement agreement and what exact terms did the agreement encompass. Or as the Court of Special Appeals puts it
“[t]he question, then, is what an agreement to settle an auto accident case
involves, and thus, what terms the parties can be understood to have agreed to
when they agreed to settle for $7,000.”
A settlement agreement is a contract which the parties enter
into “for the settlement of a previously existing claim by a substituted
performance,” Consol. Constr. Servs., Inc. v. Simpson, 372 Md. 434, 465 (2002)
(citation omitted), and “settlement agreements are governed by ordinary
principles of contract law.” Nationwide Mut. Ins. Co. v. Voland, 103 Md. App.
225, 231 (1995). The Court found that
the e-mails between the two attorneys demonstrated a “classic
offer-and-acceptance exchange.” The
court further found that, even though there was no mention of releases, a
release is typically needed to settle pending litigation. The Plaintiff did not dispute that a release
was needed but rather, the dispute was over the indemnification of the
Defendant against third party claims that could be asserted against her. Counsel for Plaintiff had included
indemnification language in his release drafts.
The Court simply states “[t]he point of a settlement is to
end the litigation and the uncertainty about the outcome.” The Circuit Court’s grant of the Motion to
Enforce the Settlement was upheld since the dispute over indemnification was a
matter of math, not principle.
Additionally, the Plaintiff’s agreement to settle the case in exchange
for a payment of $7,000 necessarily included agreement to release the Defendant
and to indemnify the Defendant from claims any third party could bring against
her in connection with the injuries the Plaintiff suffered in the accident at
issue
The reliance of e-mails by attorneys and adjusters has
become all too common. Before you send
out that quick “we’re settled” e-mail, it might be a good idea to know what
you’re agreeing to when you click send.
