Background
SRM suffered significant injuries when Michael Stuart Lester struck him with a vehicle as SRM walked his bicycle across a road. SRM became legally incapacitated and required continuous care. Because he lacked no-fault coverage, he sought benefits through the Michigan Assigned Claims Plan, which assigned his claim to Allstate Insurance Company. After prior payments, $199,145 remained under the applicable $250,000 statutory cap.
During settlement negotiations, SRM’s counsel described the proposed resolution as “contingent/tentative” because of a substantial Medicare lien. The parties exchanged multiple drafts and proposed revisions to a release, but neither the release nor the proposed dismissal order was signed. After Medicare demanded payment from Allstate, Allstate revoked its prior settlement offers on July 25, 2023. SRM moved to enforce the purported settlement, relying in part on Medicare documentation dated August 10, 2023. The circuit court denied enforcement and reconsideration, and SRM appealed from a later stipulated dismissal without prejudice.
The Court’s Holding
The Michigan Court of Appeals affirmed, holding that the parties never formed an enforceable settlement agreement. SRM’s stated acceptance was contingent on Medicare approving a lien reduction and therefore was not an absolute, unconditional acceptance. Because the evidence of Medicare approval postdated Allstate’s withdrawal, Allstate remained free to revoke its offer before the contingency occurred.
The court also held that the parties’ emails did not satisfy MCR 2.507(G), which requires a settlement to be reflected in a writing that indisputably shows the parties’ final agreement. Their continued revisions to the release, counsel’s failure to respond to Allstate’s June 29 request for confirmation and a signature, and the absence of signed settlement documents showed continuing negotiations rather than a final agreement.
Key Takeaways
- A conditional response to a settlement offer is not an unconditional acceptance that immediately binds the parties.
- An offer may be withdrawn before a condition attached to the proposed acceptance occurs.
- Negotiation emails can satisfy MCR 2.507(G) only when they indisputably reflect a final agreement and meet the rule’s subscription requirement.
Why It Matters
The decision underscores that parties negotiating settlements through email must clearly document unconditional acceptance and final terms. Describing a resolution as tentative or contingent, continuing to revise release language, and leaving the operative documents unsigned may prevent enforcement.
The opinion also highlights the practical effect of unresolved Medicare liens: when settlement acceptance depends on lien approval or reduction, the parties may remain unbound until that contingency occurs, leaving an outstanding offer subject to withdrawal.