969 F. Supp. 2d 116
D. Mass.2013Background
- D’Agostino sued Federal Insurance ("Federal"/"Chubb") after a 2008 fire, seeking unpaid insurance proceeds and Chapter 93A/176D claims; Bank of America was not initially a party.
- On Jan 17, 2013 plaintiff (Goren) emailed a settlement offer: $1.15M payable at closing, release of Federal, and an express reservation of plaintiff’s right to continue litigation against Bank of America; offer deadline was Jan 21.
- Parties continued negotiations and Plaintiff repeatedly kept the offer open beyond Jan 21 while awaiting Federal’s response; counsel communicated about settlement and discovery scheduling.
- On Feb 6, 2013 Federal emailed a seven‑page draft “Confidential Release and Settlement Agreement” providing $1.15M and release of Federal but adding substantive terms (broad confidentiality with liquidated‑damages forfeiture, an indemnity clause, dismissal with prejudice language, and other provisions).
- Plaintiff’s counsel acknowledged receipt, sought confirmation that plaintiff’s reservation to pursue the Bank remained, and later informed Federal the draft Release was unacceptable; negotiations then broke down, discovery resumed, and plaintiff moved for default after Federal did not timely respond to an amended complaint.
- The magistrate judge recommended denying Federal’s emergency motion to enforce settlement, denying Federal’s protective orders, and denying both sides’ sanction requests; the district judge adopted that recommendation and denied Federal’s motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a binding settlement was formed | D’Agostino: no enforceable agreement; her Jan 17 proposal was not an indefinite offer and she reserved rights to sue Bank; she never accepted Federal’s Feb 6 draft | Federal: sending the Feb 6 Release that paid $1.15M and named Federal sole releasee accepted the Jan 17 offer and created a binding settlement | Court: Jan 17 was a valid offer; Federal’s Feb 6 Release was a counteroffer containing additional material terms (confidentiality, indemnity); no meeting of minds and no binding settlement was formed |
| Whether Federal’s Feb 6 response was timely to accept the Jan 17 offer | D’Agostino: original deadline (Jan 21) lapsed so answer on Feb 6 could not accept | Federal: plaintiff waived/extended the deadline by continuing negotiations; Feb 6 was within a reasonable time | Court: Plaintiff repeatedly kept the offer open; Federal’s Feb 6 response was timely, but it was a counteroffer rather than an acceptance |
| Whether additional terms in the Release were merely subsidiary or material | D’Agostino: additional indemnity, confidentiality/forfeiture, dismissal-with-prejudice and affiliates language were material and inconsistent with reservation to sue Bank | Federal: only the two price/release terms were material; other terms were subsidiary and for final formality | Court: confidentiality (with liquidated‑damages) and indemnity were material and essential — not subsidiary — so the Release was a counteroffer |
| Whether sanctions were warranted (both Rule 11 and discovery sanctions) | D’Agostino: Federal improperly withheld discovery and failed to confer; seeks fees and sanctions | Federal: plaintiff’s default application was improper while settlement motion pending; seeks Rule 11 sanctions | Held: sanctions denied for both sides — court found good‑faith positions and no basis to impose fees/sanctions at this stage |
Key Cases Cited
- Dankese v. Defense Logistics Agency, 693 F.2d 13 (1st Cir. 1982) (court has inherent power to supervise and enforce settlement agreements)
- Fidelity & Guaranty Ins. Co. v. Star Equipment Corp., 541 F.3d 1 (1st Cir. 2008) (party may seek enforcement of settlement entered in litigation)
- Moore v. La‑Z‑Boy, Inc., 639 F. Supp. 2d 136 (D. Mass. 2009) (whether purported contract has enforceable elements is a question of law)
- McGurn v. Bell Microproducts, Inc., 284 F.3d 86 (1st Cir. 2002) (an altered acceptance that adds conditions constitutes a counteroffer)
- Ismert & Associates, Inc. v. New England Mutual Life Ins. Co., 801 F.2d 536 (1st Cir. 1986) (transmission of a substituted release with a request for signature rejects the prior offer and creates a counteroffer)
- Quint v. A.E. Staley Manufacturing Co., 246 F.3d 11 (1st Cir. 2001) (absence of a written document does not preclude enforcement if parties agreed on material terms)
- Fecteau Benefits Group, Inc. v. Knox, 72 Mass. App. Ct. 204 (Mass. App. Ct. 2008) (email exchange can form binding settlement where all material terms are present and acceptance is unequivocal)