Background
SRM suffered significant injuries when Michael Stuart Lester’s vehicle struck him as he walked his bicycle across a road. Because SRM had no no-fault policy, he sought benefits through the Michigan Assigned Claims Plan, which assigned the claim to Allstate Insurance Company. After earlier payments, $199,145 remained under the applicable $250,000 statutory cap.
During settlement discussions, SRM’s counsel described the proposed resolution as “contingent/tentative” because of a substantial Medicare lien. The parties repeatedly exchanged revised releases, but neither the release nor the proposed dismissal order was signed. Before Medicare approved a lien reduction, Allstate received a demand from federal authorities and revoked its prior settlement offers. The circuit court denied SRM’s motion to enforce the purported settlement and his motion for reconsideration, and SRM appealed after a stipulated dismissal without prejudice.
The Court’s Holding
The Court of Appeals affirmed, holding that the parties never formed an enforceable settlement agreement. SRM’s stated acceptance was conditional on Medicare approving a lien reduction and therefore was not an absolute, unconditional acceptance. Because the supporting Medicare documentation was dated after Allstate unequivocally withdrew its offer, Allstate remained free to revoke the 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 memorialized in a writing that indisputably reflects the parties’ final agreement. Their continued revisions showed that negotiations remained ongoing, and SRM’s counsel never responded to Allstate’s final email requesting approval and a signature. The trial court therefore did not abuse its discretion by refusing to enforce the purported settlement.
Key Takeaways
- A conditional response to a settlement offer is not an unconditional acceptance that immediately binds the parties.
- Either party may withdraw before a condition governing acceptance occurs, and later satisfaction of the condition does not revive a previously revoked offer.
- Negotiation emails satisfy MCR 2.507(G) only when they indisputably reflect a final agreement, not when material terms and release language remain under discussion.
Why It Matters
The decision underscores that counsel cannot rely on a tentative settlement while a lien reduction, agency approval, or another material contingency remains unresolved. If the parties intend to be bound despite an outstanding condition, their written communications should clearly say so and identify the condition’s precise effect.
It also illustrates the importance of promptly documenting final acceptance. Draft releases, requested revisions, and unanswered requests for signatures may demonstrate continuing negotiations rather than an enforceable settlement.