Does My Email Communication Constitute a Binding Agreement?

GT Law

In an era where the prevalence of email exchanges in the business arena is almost commonplace, clients and attorneys should be aware that a form of identification which could constitute their signature in an email, attesting to the substance of a negotiated settlement, may be considered a binding and enforceable stipulation of settlement under CPLR 2104.  Last month, a unanimous panel of the Appellate Division, Second Department, held, in Forcelli v. Gelco Corporation, 27584/08, that an agent for a vehicle insurer who sent an email message to plaintiff’s counsel, with her name entered at the bottom of the email, summing up the settlement terms in an automobile accident case, constituted “a writing subscribed by [client] or his attorney” as required under the statute.

The Forcelli case was brought by Mr. Forcelli and his wife for injuries Mr. Forcelli allegedly suffered in connection with a three-car accident on the Saw Mill River Parkway.  One of the cars was driven by the defendant Mitchell Maller who was driving a car owned by defendant Gelco Corporation.  In January 2011, Gelco and Maller (the “Gelco Defendants”) moved for summary judgment seeking dismissal of all claims.  In March 2011, the Gelco Defendants met with plaintiffs and their counsel for mediation.  Ms. Brenda Greene, a claims adjuster with the insurer of the Gelco Defendants’ vehicle, was also present and she informed Plaintiffs that she had authority to settle the case on behalf of her insured.  Although the mediation did not result in an immediate settlement, the parties continued their discussions and on May 3, 2011, Ms. Greene orally offered to settle the case for $230,000.  Plaintiffs’ counsel orally accepted the offer on behalf of the Plaintiffs.  Ms. Greene then sent an email message to Plaintiffs’ counsel memorializing the terms of the settlement.  On May 4, 2011, Plaintiffs signed a release in exchange for receiving the $230,000.  A few days later, on May 10, 2011, the Supreme Court issued an order granting the Gelco Defendants’ motion for summary judgment dismissing all claims against them.  After the Court’s decision, the Gelco Defendants took the position that there was no settlement finalized under CPLR 2104.  Plaintiffs moved to enforce the settlement agreement as set forth in Ms. Greene’s email message.

Writing for the unanimous panel, Judge Sandra Sgroi stated 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.”  Specifically, Judge Sgroi noted that the agent ended the email with the expression “Thanks Brenda Greene,” which “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….”  Judge Sgroi noted that Ms. Greene’s email message set forth the material terms of the settlement agreement and contained an expression of mutual assent.  Importantly, the settlement was not conditioned on any further occurrence and the record clearly demonstrated that Ms. Greene had apparent authority to settle the case on behalf of the insured.

Judge Sgroi cited to both First and Third Department decisions where those Courts came to the same conclusion.  In Williamson v. Delsener, 59 A.D.3d 291 (2009), the Appellate Division, First Department held 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 and entitle plaintiff to judgment.”  The First Department noted that the email communications evidenced that Delsener was aware of and consented to the settlement and there was no indication in the record that counsel was without authority to enter into the settlement.

Likewise, in Newmark & Co. Real Estate Inc. v. 2615 East 17 Street Realty LLC, 80 A.D.3d 476 (2011), which involved payment of a commission under a brokerage agreement, the First Department found that although the defendant did not sign the brokerage agreement sent by the plaintiff, there were several email communications, supported by other documentary evidence, which contained the terms of the brokerage agreement.  The Court stated that “an email sent by a party, under which the sending party’s name is typed, can constitute a writing for the purposes of the statute of frauds.”  The email agreement set forth all relevant terms of the agreement and thus “constituted a meeting of the minds.”

The Appellate Division, Third Department, held in Brighton Investment, LTD. v. Ronen Har-ZVI, 88 A.D.3d 1220 (2011) 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.”  (internal citations omitted.)

While the law in this area is plainly evolving, clients and attorneys should be careful when setting forth terms of a settlement or conducting any sort of negotiations via email.  One simple suggestion that may reduce the risk that emails with typed signatures (or even a signature block) at the bottom may unintentionally create a binding agreement is to include in the email a form of disclaimer that the email is for negotiation purposes only and does not constitute or give rise to a binding legal agreement.  We certainly have not heard the last word on this subject.  It will be up to the Court of Appeals to render a decision that will hopefully give some degree of finality to the issue of whether name identification on an email constitutes the type of signature required for a binding settlement under CPLR 2104.

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No Expectation of Privacy in Emails Sent Over Employer’s Email Account, Massachusetts Court Decides

The National Law Review recently published an article by Martha J. Zackin of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. regarding Employee Emails:

Does an employer invade an employee’s privacy by accessing and reviewing the employee’s email? A recent Massachusetts Superior Court decision, Falmouth Firefighters Union v. Town of Falmouth, answers “no.”

For a two year period, the town of Falmouth, Massachusetts, used Google Gmail for its email.  Falmouth entered into a contract with Google for use of Gmail, and the town purchased the domain names used for the email accounts.  Each town employee was given a Gmail address and was responsible for managing the email sent to his or her address.  Although Falmouth’s system did not save any emails on any computer, server, or disc, it was the administrator of the email accounts.  The Gmail accounts were widely used by Falmouth employees for personal communications.

Falmouth published an email policy stating that the town maintained the ability to access any messages on or transmitted over the email system.  “Because of this fact,” the policy stated, “employees should not assume that such messages are confidential or that access by the employer or its designated representatives will not occur.”  Although there was a dispute over whether this policy was subject to collective bargaining between the town and the union representing Falmouth employees, it was clear that employees were never told that their emails were confidential.

The emails to and from the account of a Falmouth firefighter were reviewed and copied during the course of investigating a charge of sexual harassment brought against the town by a former employee.  Some of these emails contained highly personal, intimate, and embarrassing emails.  The firefighter sued, claiming that Falmouth had invaded his privacy in violation of the Massachusetts Privacy Act, which provides that “[a] person shall have a right against unreasonable, substantial or serious interference with his privacy.”  To prevail, a plaintiff must show an expectation of privacy and an unreasonable and either serious or substantial interference with that privacy.

In a case of first impression, the Court found that the firefighter had no legitimate expectation of privacy in the emails and, therefore, no invasion of privacy.  In a very interesting analysis, the Court did not reach the issue of whether the town’s email policy was properly implemented or even relevant.  Rather, and importantly, the Court found that the firefighter “did not have a reasonable expectation of privacy in the emails he voluntarily sent over the Town’s email system absent any assurances that such communications were private or confidential.”

What does this mean for Massachusetts employers?   We continue to recommend that employers implement electronic communications policies that clearly and unequivocally state that the employer has the right to access and review any and all information sent, received, or maintained on any employer-owned or maintained electronic devices or systems.  However, at least in Massachusetts, the absence of such policies will not restrict the rights of employers to access employee emails.

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