August 07, 2013

Email Signatures Can Be Binding: Forcelli v. Gelco

A New York appellate court has confirmed what many people may already presume: that an email can sometimes carry the same clout as a formal, signed document. The decision reinforces the point that email correspondence in the context of negotiations must be undertaken with care.

As reported last week in the New York Law Journal, the appellate judges in Forcelli v. Gelco Corporation unanimously ruled that a signed email attesting to a negotiated agreement – and signed by email signature -- is just as binding as a signature on the agreement itself.

New York statues, like Maryland’s, instruct that an agreement must be “signed” by the parties or their attorneys in order to be valid. However, in the decision handled down by New York’s Appellate Division, Second Department, Justice Sandra Sgroi wrote, “Given the 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…simply because they cannot be physically signed in a traditional fashion.”

In Forcelli, the dispute focused on the enforceability of an email that summed up the terms of a settlement over a car accident. Plaintiff John Forcelli had sued Gelco Corporation for injuries sustained when another vehicle collided with his. Gelco owned the vehicle that hit Mr. Forcelli’s car.

The email in question was sent to all parties involved and was “e-signed” by the claims adjuster representing Gelco’s insurer, reflecting that all parties had agreed orally that Mr. Forcelli would be paid a settlement of $230,000. The email attached a Medicare document for signature; at the bottom of the email the adjuster typed, “Thanks Brenda Greene” (her name).

Mr. Forcelli signed his copy agreeing to the terms, had it notarized and then his attorney filed a motion to release the other parties from all further court action. He did so under the presumption that the documents would actually be signed and returned per the agreement and that he would receive his settlement money.

Once the court accepted Mr. Forcelli’s motion to release the other parties and vacated the matter, Gelco’s attorney faxed a letter to Mr. Forcelli’s counsel telling him that the settlement was “not consummated” under New York law and that the motion to vacate now relieved Gelco of the $230,000 settlement terms. The court disagreed.

As the attorney for Mr. Forcelli said following the verdict, “This confirms what all reasonable minds would have expected, that mutually agreed to settlements -- where confirmed via email or fax, and followed up by transmittal of settlement documents -- constitutes a binding settlement.”