When is a Settlement a Settlement?

Female hand signing contract.

Martina Beverly sued Abbott Laboratories (Abbott), her former employer based on a claim of employment discrimination related to her German nationality and retaliation.  After an early furtive attempt by Abbott to dismiss the case, the parties agreed to mediate the dispute in a single day over the span of 14 hours at which time both parties were represented by counsel.  Near the end of the mediation, Beverly signed a handwritten agreement stating that she would accept $210,000 and the costs of mediation from Abbott in exchange for dismissing her lawsuit (the demand to remain open for 5 days).  The following day, Abbott accepted Beverly’s demand and circulated a more formal settlement proposal based on a template Abbott supplied the day before mediation.  Beverly refused to sign. Abbott sought to enforce the original handwritten settlement proposal.  The trial court agreed with Abbott that Beverly signed a valid and binding agreement.

Beverly claimed on appeal that the handwritten agreement omitted material terms and that it was only a preliminary document expressing intent to sign a binding agreement in the future.  In other words, that the settlement terms were still in formation and not yet binding.  The appellate court rejected Beverly’s arguments and stated that a settlement agreement is enforceable when there is a “meeting of the minds” or mutual assent.  Material terms are sufficiently stated when a trial court is able to ascertain what the parties agreed to do.  Here, Beverly unequivocally (if inartfully) stated she would dismiss her lawsuit if Abbott paid her $210,000 and the costs of mediation.  In this context, no other terms were deemed material to making a binding agreement according to the appellate court.

Courts resolve disputes over the existence of agreements with great frequency.  Here another valuable lesson is learned about how the formation of contracts must be undertaken with great care and attention to detail.  Make sure you employ effective counsel in making your agreement(s).  It will be worth the expense of good, professional legal assistance.  Beverly v. Abbott Laboratories, No. 15-1098 (March 16, 2016) N.D. Ill., E. Div. Affirmed

 

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