Wash. Court Upholds Settlement Negotiated Through Email

An agreement to settle an asbestos-related lawsuit that was worked out between the parties via e-mail is valid and enforceable even before the parties sign a formal settlement agreement, a Washington appeals court has ruled.

The Facts

Richard Anderson sued several defendants, including Kaiser Gypsum Co., over injuries from alleged exposure to asbestos-containing products.

Following a hearing on Kaiser Gypsum's motion for summary judgment, but before the King County Superior Court ruled, the parties' attorneys began settlement negotiations via e-mail.

LeAnn McDonald of Brayton Purcell in Portland, Ore., represented Anderson, and Christopher Marks of Williams, Kastner & Gibbs in Seattle represented Kaiser Gypsum.

Marks offered to settle the case for $20,000 or enter into a "high-low" settlement, based on the outcome of the summary judgment motion.

"The high-low offer was $10,000 if Kaiser Gypsum won the motion for summary judgment and $35,000 if it lost," according to the Washington Division I Court of Appeals.

McDonald apparently misinterpreted the offer and wrote in an e-mail, "We accept the 20/35K."

Marks responded by reiterating the offer and asked McDonald what her client wanted to do.

McDonald wrote, "We'll take the 20K now."

Marks wrote: "Done and done. 20K for all asbestos claims, past, present and future."

The trial court later denied Kaiser Gypsum's motion for summary judgment. Gil Purcell, a partner in Brayton Purcell, then told Marks there was a mistake and there was no settlement agreement, according to the appeals court.

Kaiser moved to enforce the agreement, and the trial court granted the motion, leading to this appeal.

Informal Writings Can Bind Parties

The Court of Appeals noted that "general principles of contract law govern settlement agreements."

The panel said informal writings can bind parties even when they intend to later formalize the agreement.

The attorneys' informal exchange here satisfied that rule, the appeals court said, affirming the trial court's ruling.

Conclusion

It is important, therefore, to keep the ruling of this case in mind when communicating with opposing counsel regarding settlement discussions. First and foremost, read your email carefully. Second, take some time to think about a response you might send by email, before you send it. It is an incredibly quick and convenient mode of communication, no doubt. But such communications may in fact be binding, as they were found to be in this case. So clarity of language is a must. Finally, if you are not ready to agree to a resolution, then don't. Like this case, an indication that you agree to resolve the case over email may prove to be just as binding as any formal settlement agreement would be. General contract rules still apply, no matter what the method of communications is.