Confederate Motors, Inc. v. Terny - 831 F. Supp. 2d 414 (D. Mass. 2011)

Rule:

Settlement agreements, like other agreements, are not valid when there has been no meeting of the minds with regard to the final terms of the agreement. A settlement agreement entered into by an attorney is ineffective if the attorney did not possess actual authority to bind the client. 

Facts:

Defendant invested $450,000 with plaintiff in exchange for 300,000 shares of its company stock. However, the defendant resigned due to disagreements between him and the company chairman. Plaintiff contends that it reached a settlement agreement with the defendant through attorney emails. Defendant denies that a settlement had been reached. The parties have submitted various affidavits, and no one has requested an evidentiary hearing.

Issue:

Is the settlement agreement entered through attorney email binding?

Answer:

No.

Conclusion:

The Court held that there was no meeting of the minds since the language used in the January 24th email was that of negotiation, not of acceptance of an offer creating a binding agreement. The communications made it clear that the defendant’s attorney did not have the authority to make a binding settlement agreement after the Alabama court's ruling. Therefore, the Court denied the Plaintiff's Motion to Enforce Settlement.