July 14th, 2021

What is a Signature? (Does your unsigned email count?)

We lawyers love, love, love our formality, oft times filling pages with pretentious legalese. I’m sure that wax seals and red ribbons were invented by lawyers, to make doubly, triply sure that everything was authentic. And redundant.

And when seals and ribbons went by the wayside, wet ink signatures became the standard-bearer of authenticity.

Last week the Appellate Division (First Department) confronted the formality of signatures regarding a settlement. The court sought to answer a question: If lawyers agree to a settlement via our now ubiquitous email, but use a standard signature block instead of retyping their names, is a settlement valid?

In other words, what kind of seals and red ribbons do we now need?

While at first blush this looks like a small esoteric question of law regarding the informality of email and the courts’ respect for stipulations, it has the potential to carry over to a thousand different aspects of law as now practiced.

The fact pattern of The Matter of Philidelphia Insurance v. Kendall is not too complicated (if you practice personal injury law here in New York), but for the others a short background: The liability insurance you buy for your car is not for your injuries, but for the injuries of others in a collision. Thus, if the other person has only a $25,000 policy, you might be shit out of luck — a technical legal term — if you lost your leg. That’s why you buy Supplementary Uninsured/Underinsured Motorist (SUM) insurance. That part is for you. If the other driver has only $25K in insurance, and you have $1M, you can turn to your own insurer for the $975K difference.

And that’s what happened here. Kendall was clobbered in a collision. The motorcycle that hit her had only the 25K minimum but she had $1M in SUM. She collected the $25K from the other driver and proceeded to arbitration against her own insurer.

According to the decision, this funky fact-pattern popped up regarding the arbitrator’s decision and settlement with the arbitrator awarding the maximum 975K. But Kendall’s lawyer settled for only 400K because he hadn’t see the decision yet:

The arbitrator rendered her decision on September 16, 2019, awarding Kendall $975,000. The same day, the decision was emailed to Kendall’s counsel and faxed to Philadelphia’s counsel. However, neither counsel received the decision and they continued to negotiate. On September 19, 2019, the parties reached an agreement to settle the dispute for $400,000.

How did they shake hands on this deal? Via email:

On that day [Kendall’s] counsel emailed [Philadelphia’s] counsel: “Confirmed -we are settled for 400K.” Below this appeared “Sincerely,” followed by counsel’s name and contact information. Shortly thereafter, [Philadelphia’s] counsel emailed in reply, attaching a general release, styled a “Release and Trust Agreement,” and saying, “Get it signed quickly before any decision comes in, wouldn’t want your client reneging.” [Kendall’s] counsel answered, “Thank you. Will try to get her in asap.” This email concluded with the same valediction, name, and contact information as had [Kendall’s] counsel’s earlier email.

The lawyer for the injured Kendall then learned of the $975K decision and wanted to go back on the $400K agreement, arguing that it was’t “subscribed” as per CPLR 2104 by retyping his name in the email in addition to his prepopulated contact information block.

So, is the email agreement “in writing” as required by statute? If it sounds like a boring one-off kinda issue, you are not thinking of all those emails you send on a daily basis and how those might be viewed by a court.

Now previously, our Court of Appeals had held that a preprogrammed name on a fax transmission did not fulfill the subscription requirement. So email should be the same, right? (Parma Tile Mosaic & Marble Co. v Estate of Short)

The times, they are a changin’. A mid-level appeals court has now held that the old fax decision from New York’s top court is not controlling as the practice of law has changed:

The Parma court wrote in a different era, when paper records were still an important modality, maybe the most important modality, of recording information in law and business. Since that time, the electronic storage of records has become the norm, email has become ubiquitous, and statutes allowing for electronic signatures have become widespread. For these reasons, and those that follow, we find that Parma is not controlling.

While this very same court held in 2013 that “an email in which a party’s or its attorney’s name is prepopulated in the email is not sufficiently subscribed for purposes of CPLR 2104” it has now reversed itself and said “wet ink” signatures are not needed, nor is any retyped signature:

We now hold that this distinction between prepopulated and retyped signatures in emails reflects a needless formality that does not reflect how law is commonly practiced today. It is not the signoff that indicates whether the parties intended to reach a settlement via email, but rather the fact that the email was sent.

In fact, even the signature block doesn’t appear to be needed — it must only be sent from the lawyer’s account, forming a rebuttable presumption that the lawyer sent it:

We find that if an attorney hits “send” with the intent of relaying a settlement offer or acceptance, and their email account is identified in some way as their own, then it is unnecessary for them to type their own signature.

But wait, there’s more: It has been customary over the years for defendants and insurance companies to create ever more complex general releases and settlement agreements. Back in the day, the simple Blumberg form was the gold standard, until those that bill by the hour figured out there may be a bit more gold to be mined by creating ever more complex forms.

The First Department, however, found that the simple email was binding when the sole issue was the amount of the settlement. The digital handshake was good enough, and the formal release wasn’t particularly relevant as it is merely a ministerial condition:

The Release and Trust Agreement was to be further documentation of the binding agreement constituted by the parties’ counsel’s emails agreeing to settle respondent’s claim for $400,000, rather than something on which that binding agreement was contingent. The material term of the parties’ agreement to settle respondent’s claim being the sum of money that petitioner would pay respondent, respondent’s execution of a general release was essentially a ministerial condition precedent to payment (see CPLR 5003-a[a].

So, your emailed agreements will be held up the same as if they had a fancy wax seal and a red ribbon. And probably so too with any other assertion that you make. And those complex general releases that defendants like to waste time with may well be meaningless to a court.

Don’t think twice before hitting send. Think it though three times. Because “send” is your signature.

December 19th, 2017

Cuomo Signs NY’s New Auto Insurance Law

Last night, New York’s Gov. Andrew Cuomo signed legislation that alters New York’s auto insurance law, and it’s a win-win deal for everybody.

While the law sounds uber-wonky, it’s quite important due to a fundamental misunderstanding of how auto insurance works by the general public.

Most folks think that the insurance coverage they choose — let’s say a 250K limit — will protect them if they’re involved in a collision. But it doesn’t. That insurance only covers other people.

You, the injured driver, must pursue the guy that plowed into you at the intersection because he was checking his texts, through the limits of his insurance policy. And if his insurance policy is only, let’s say, the bare minimum 25K because his job is flipping burgers and he doesn’t really have a pot to piss in, then you with your fractured pelvis are, as we say in the law, shit out of luck.

But wait! There is one small hope for you, and that hope lies in your own policy provisions for getting involved in a collision with an uninsured or underinsured driver. That provision is known here in New York as Supplementary Uninsured/Underinsured Motorist (SUM) insurance.

The problem? The default on your policy was the state minimum, just 25K. And you can’t even collect that if have received the 25K from the guy that plowed into you.

Only a savvy person — or one with a conscientious insurance broker that informed him — would know that you could elect more SUM coverage. Most don’t, because most don’t know. My own legislator wasn’t aware of this whenI discussed this bill with her a few years ago, and found out only when her daughter was injured in a collision and got caught in this trap.

That law is the one that has now changed. Now the default choice is your SUM insurance matches the underlying coverage that you picked. So if you have a 250K policy you will have 250K SUM, and get as much protection for yourself as you are giving to others.

The cost is minimal and people can easily opt out. The thing is, those that are picking more than the minimum amount of coverage are the ones who understand that they likely have the most to lose. That’s why they bought the higher coverage in the first place.

When a bill becomes a law that has no losers attached to it, it’s a win-win all the way around.

I wrote about this back in June when it passed in the closing hours of the legislative session. The vote was 62-1 in the Senate and 104-6 in the Assembly.

People complain often about dysfunctional governments. But when they get it right we should take notice with a little golf clap in their direction.

June 23rd, 2017

NY Leg Advances Change to “SUM” Legislation (Updated!)

The last two days I covered action in the New York Legislature to change the medical malpractice statute of limitations and make a modest change in where lawsuits can be brought (both of which still need the signature of the Governor).

Today, I cover a third piece of legislation, which while exceptionally important is virtually unknown to most. These posts come in a flurry because that’s how our Legislature works, passing bills in a frenzy in the closing days of the annual January-June session.

This particular legislation refers to Supplementary Uninsured/Underinsured Motorist (SUM) insurance.

Stop!!! Don’t leave!!! Trust me, while the issue sounds boring, it could be the difference between bankruptcy or not to anyone seriously injured.

In New York, we have particularly crappy minimum levels of insurance, known as 25/50 on non-commercial vehicles. That means that, if you are injured by someone with such minimal insurance, no matter how badly, the most you can obtain from that insurance policy is $25,000. (The 50 refers to the aggregate of all claims from the collision.)

And if badly injured, you can’t work and pay your bills. Which is why bankruptcy is not uncommon amongst those victimized. Unless you protect yourself.

Unbeknownst to most folks, there may be a second policy at play — your own — if you own a car. This is the SUM insurance if the car that plowed into you and broke your back has that minimal insurance.

Now here’s the catch, and the reason I write: The default on the SUM policies is a mere 25K. So even if you are a high earner, bringing home the family bacon, and have a $500K bodily injury policy of your own, it won’t matter if you don’t read the fine print. Because that $500K is only to protect the person that you injure. It isn’t for yourself.

Yeah, it’s in the fine print. Most don’t know about it. Even one legislator I spoke to a couple of years ago was so unaware of it that, when her child was injured, was stuck with that minimal policy. She had no idea.

And, before I get to the legislative fix, one more point. That SUM policy only comes into play if your own policy is larger than the car that hit you. So, in other words, if the car that ran the light and clobbered you had a 25K policy, and you have a 25K SUM policy, you don’t get an extra 25K, because you would only be entitled to the difference between the two.

OK, now on to the fix. The New York Senate passed a bill (S5644A) in the waning hours of the legislative session to change the default from 25K SUM insurance for yourself to be the same as the amount of bodily injury coverage you have selected to protect others.

So if you have a 500K bodily injury policy, your default would be 500K SUM. You can, of course, decline it if you want. But most people who feel the need to buy insurance at higher levels aren’t the types of people who generally would decline.

This bill passed, as had the medical malpractice bill and the venue bill, with wide bipartisan support. And by wide I mean 62 out of 63 votes.

Unfortunately, the legislature adjourned for the session as the Senate passage came too late for the Assembly to vote. It will only come to the Assembly floor if they are called back into session, a possibility given that there is a large, unresolved issue of mayoral control of NYC schools.

Otherwise, it is wait till next year.

In the meantime, if you are renewing your auto policy, look for that part about SUM coverage and make sure you get as much as you can. It is, relatively speaking, dirt cheap, which is why your broker may not even bother to mention it to you. But it can make all the difference in your life if some underinsured car clobbers you.

And one day I’ll come back to discuss our ridiculously low 25/50 auto insurance policies.

Update (6/29/17) – Gov. Cuomo called the Legislature back to Albany for a special session, to deal with the issue of mayoral schools. And any other lingering issues.

So late last night, by a vote of 104-6, the Assembly joined the Senate in passing the SUM bill. It goes now to the Governor for signature.

This is a very big deal, as all too often we see cases of people with decent insurance getting hit by cars with little insurance, and the victims then find out to their own dismay that they could have easily and cheaply covered themselves for this event, but didn’t. Now that coverage will be the default.