The First Appellate District of the California Court of Appeal published, then depublished (California Rule of Court 8.1105), then certified for publication a decision holding that a printed name and address at the end of an e-mail allegedly confirming the terms of a settlement do NOT constitute an enforceable settlement agreement.

In J.B.B. Investment Partners, Ltd. et al. v. R. Thomas Fair (Case No. A140232, A141228, issued on December 30, 2014), (JBB Investment.pdf ) Defendant Fair and several entities (collectively “Fair”) appealed from a trial court’s order enforcing a settlement in response to a motion to enforce the settlement pursuant to California Code of Civil Procedure section 664.6. The trial court held that Defendant Fair’s printed name at the end of an e-mail in which he agreed to the terms of a settlement, constituted an enforceable contract. The appellate court disagreed and reversed.

It seems that Defendant Fair, an inactive member of the California State Bar, formed some limited liability companies that owned apartment units in Arizona. Plaintiff JBB Investment Partners, Ltd. is a limited partnership of which Jonathan Buckheit is the general partner. Silvester Rabic, another plaintiff, is an individual. Both invested in one of the entities formed by Fair.

Subsequently, the plaintiffs (Rabic and JBB Investment Partners, Ltd.) allegedly discovered that Fair had made various fraudulent representations and omissions so they attempted to settle with Fair. Their attorney sent an e-mail to Fair on July 4, 2013 outlining the terms of a settlement. When Fair responded ambiguously, plaintiffs’ counsel sought clarification, and getting none, sent another e-mail to Fair on July 5, 2013 attaching the proposed complaint and ex parte application for expedited discovery. Within 40 minutes, Fair e-mailed back stating “I said I agree” and also left a voicemail making it clear that he accepted the terms of the proposed settlement in the July 4, 2013 e-mail.

On July 11, 2013, Plaintiffs’ counsel sent Fair a draft of the settlement agreement. After a few days and not hearing from Fair, counsel e-mailed Fair about the status. Shortly thereafter, Fair advised he would not sign the agreement.

So, Plaintiffs moved to enforce the e-mail exchange as an enforceable settlement agreement.

While the trial court agreed that the exchange constituted a settlement, the appellate court viewed the matter differently. First, it noted that the trial court failed to determine if each of the plaintiffs had actually signed the settlement agreement as required by Code of Civil Procedure Section 664.6. However, as Fair did not raise this issue in the trial court, the appellate court, after discussing the case law on this point, declined to rule on this issue.

The appellate court then addressed the issue of whether a printed signature at the end of an e-mail constitutes a “signature” for purposes of California’s Uniform Electronic Transactions Act (Civil Code Sections 1633.1 et seq.). The appellate court found that both the trial court and plaintiff’s counsel “… simplistically assumed” that Fair’s signature at the end of his email was sufficient (Id. at 14-15.), noting:

The trial court’s analysis was incomplete. Attributing the name on an e-mail to aparticular person and determining that the printed name is “[t]he act of [this] person” is a necessary prerequisite but is insufficient, by itself, to establish that it is an “electronic signature.” (§ 1633.9, subd. (a).) As counsel and the court seemed unaware, UETA defines the term “electronic signature.” Subdivision (h) of section 1633.2 states that “[e]lectronic signature” means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record.” (Italics added. See also Cal. Civ. Jury Inst. No. 380 [party suing to enforce an agreement formalized by electronic means must prove “based on the context and surrounding circumstances, including the conduct of the parties, that the parties agreed to use [e.g., e-mail) to formalize their agreement”].)

We have independently reviewed the record and conclude, as a matter of law, thatit does not show that Fair printed his name at the end of his e-mail with any intent to formalize an electronic transaction. Indeed, substantial evidence in the record refutes such a finding. ( Id. at 15-16.)

Next, the appellate court addressed whether Fair’s printed name at the end of an e-mail constituted a “signature” under general contract law. It noted that “…a typed name at the end of an e-mail is not, by itself, a signature under case law.” (Id. at 19.) While noting that courts have held that in certain instances, a typed name at the end of a telegram may satisfy the statute of frauds, no case has addressed the issue of whether a typed name is sufficient to constitute an enforceable settlement under Code of Civil Procedure section 664.6 (Id.). Moreover, the court notes that the real issue is one of intent: Did Fair intend to formalize a settlement?:

Even if a printed name can satisfy the signature requirements of Code of CivilProcedure section 664.6, a printed name is not a signature under contract law simply because the person deliberately printed his or her name. “[I]t is a universal requirement that the statute of frauds is not satisfied unless it is proved that the name relied upon as a signature was placed on the document or adopted by the party to be charged with the intention of authenticating the writing.” (Marks v. Walter G. McCarty Corp., supra, 33Cal.3d at p. 820, italics added.) The evidence must also demonstrate that the person printing his or her name intended to execute the document. Here, as already discussed, the record is devoid of any evidence demonstrating that Fair intended to execute a settlement agreement by electronic means when he printed his name at the end of his e-mail. (Id. at 20.) (Emphasis in the original.)

Consequently, the court found that the e-mail exchange did not even constitute a contract under general principles of contract law.

The obvious moral of this opinion is to be careful about settling by e-mail. A printed signature or one not complying with the strict requirements of the Uniform Electronic Transactions Act, the statute of frauds or general principles of contract law will leave wiggle room for a party to later recant!

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By Phyllis G. Pollack

Phyllis G. Pollack is a full time neutral in Los Angeles where, as President of PGP Mediation, she focuses on business, real estate, contract and “lemon law” disputes. She may be reached at Phone: 213-630-8810 / phyllis@pgpmediation.com / Website: www.pgpmediation.com