'Standard' Provisions Not Implied Into Settlement Agreement
Settlement and Compromise columnist Thomas E.L. Dewey writes: A recent Southern District of New York case offers the lesson that a writing other than a formal settlement agreement may constitute an enforceable agreement—even if one of the parties expects that additional "standard" provisions will be added to the agreement.
July 28, 2017 at 02:02 PM
14 minute read
We have often cautioned practitioners that under certain circumstances an oral agreement may constitute an enforceable settlement agreement. A recent Southern District of New York case offers the additional lesson that a writing other than a formal settlement agreement may constitute an enforceable agreement—even if one of the parties expects that additional “standard” provisions will be added to the agreement. Put another way, a party's expectation that “standard” provisions, such as a general release, will be included in a settlement agreement will not necessarily prohibit enforcement of a settlement; such provisions will not be “implied” in the agreement if they are not contemplated by the parties' writing.
In Scheinmann v. Dykstra, 16 Civ. 5446 (S.D.N.Y. April 21, 2017), plaintiff Noah Scheinmann had sued former baseball player Leonard Dykstra for (among other claims) breach of contract based on an agreement for Scheinmann to serve as a ghostwriter on Dykstra's social media accounts. Complaint, No. 16-cv-05446-AT, Dkt. #1. Dykstra counterclaimed for breaches of contract and of the implied covenant of good faith and fair dealing. Counterclaims to Plaintiff's Complaint, No. 16-cv-05446-AT, Dkt. #37. In March 2017, the parties' respective counsel exchanged emails regarding the settlement of the litigation. Scheinmann v. Dykstra, No. 16-cv-05446, slip op. at 1-2 (S.D.N.Y. April 21, 2017). Plaintiff's counsel sent his adversary an email stating
I propose settling this matter on the following terms:
• Mr. Dykstra agrees to an up-front payment of some amount. I realize that he has significant financial difficulties and I am not talking about a larger number. You tell me what he can come up with.
• Mr. Dykstra consents to a judgment being taken in favor of Mr. Scheinmann in the amount of $15,000 less the amount of the up-front payment, and
• Mr. Dykstra dismisses his counterclaim with prejudice.
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