Settlement not enforceable until reduced to writing

Abel v. Town Sports International Holdings Inc.
U.S. DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
January 12, 2011
Judge Cote

Abel's Dec. 22, 2009, Title VII action against Town Sports International Holdings Inc. alleged bias and defamation. Settlement negotiations occurred from Aug. 23, 2009, until Abel's lawyer informed Town Sports, on Nov. 10, 2009, that Abel wanted to go to trial. On Oct. 5, the parties had telephonically agreed, in principle, to a $75,000 settlement, to be drafted by Town Sports. The Oct. 22 draft settlement agreement received by Abel's counsel included "new terms" as well as a "complete release and waiver" of Abel's claims. The district court denied Town Sports' Nov. 24, 2010, motion to enforce settlement, finding that three of the four factors articulated in Powell v. Omnicom BBDO/PHP weighed against enforcement. The court determined that Abel did not intend to be bound until settlement was reduced to writing. Despite Abel's Oct. 5, 2009, oral acceptance of an agreement in principle, his Oct. 4 discussion of the need for a formal settlement agreement, and the parties' subsequent negotiations of agreement terms, approached an express reservation of right not to be bound until a written agreement was executed.

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Via: New York Law Journal (NYLJ.com)