You might think that the settlement of a lawsuit requires the signature of the client. That is not the case under this Michigan Court Rules. A settlement may be enforced if (a) it is agreed to before the Judge in open court on the record by the client or attorney or (b) if there is “written evidence” of the settlement signed by the client or attorney. MCR 2.507(G0.
In Kennedy v Hayduk, the plaintiff’s attorney claimed that a settlement had not been reached. The Michigan Court of Appeals disagreed. The defense attorney sent a letter summarizing the terms of a proposed settlement. There were more detailed settlement documents still to be prepared. The plaintiff’s attorney then signed and returned to the defense attorney a stipulation and order to dismiss the case. The plaintiff later argued that there were terms of the settlement that had not been agreed upon, so there was no binding settlement. The Court of Appeals ruled that: “The signed stipulation was unconditional acceptance of defendants’ offer. … The objective evidence shows that an agreement was reached.”
A lesson from this case: Don’t sign a settlement until all terms have been agreed upon.
Download a PDF of the decision by clicking here.
This article was written by Mark S. Demorest, Managing Member of Demorest Law Firm.
