Morrison Mahoney partner Joe Desmond and associate Joe Fogarty won an appeal in the Massachusetts Appeals Court. The Appeals Court affirmed a plaintiff’s judgment in a case in which the firm’s nursing home client was the plaintiff.
The firm’s client brought a claim in Massachusetts Superior Court against a resident of the nursing home to recover payment for services provided to the resident. The resident’s son, who was the resident’s conservator, hired counsel who filed a counterclaim. The plaintiff settled the case with counsel for the conservator on January 3, 2019.
At the time the settlement was reached, an appeal of the denial of the resident’s Masshealth benefits was pending. If Masshealth reversed its denial, the resident would obtain benefits retroactive to January 1, 2018. Accordingly, the terms of the settlement were that the resident would pay a fixed daily rate for room & board up to January 1, 2018, and that the payments from January 1, 2018, to December 31, 2018, would be placed in escrow pending the outcome of the Masshealth appeal or would be secured by a surety bond containing commercially reasonable terms. The above settlement agreement was confirmed by email between counsel.
The resident’s son, who became executor of the resident’s estate after she passed away, refused to honor the terms of the settlement agreement. The plaintiff filed a motion to enforce the settlement, which was allowed, followed by a motion to enter judgment, which was also allowed. The Court entered judgment in the amount of $104,051.22 in favor of the firm’s client. The defendant appealed to the Massachusetts Appeals Court and after briefing and oral argument, the Appeals Court affirmed the judgment of the trial court in favor of the firm’s client.
The central issue on appeal was whether the exchange of emails between counsel reflected an enforceable agreement or whether the lack of specificity regarding the form of security rendered the settlement fatally indeterminate. The defendant argued that the terms of the agreement were not sufficiently clear and complete because the parties had not settled on the exact form of security for the payments owed after January 1, 2018.
Although the clear error standard of review is ordinarily applied to determine contemporaneous intent to be bound, the Appeals Court applied the de novo standard of review because the defendant’s argument focused on whether the terms were sufficiently clear. The Appeals Court accepted the plaintiff’s argument that the contract was enforceable because it provided an objective measure for determining the missing term. While the parties had not settled on the exact form of security, the plaintiff did not have unfettered discretion to deny, arbitrarily, any bond arrangement, but had agreed to a commercially reasonable bond. This objective measure allowed the court to fill in the missing terms. The Appeals Court also accepted attorneys Desmond and Fogarty’s argument that the email exchange between counsel satisfied the “writing” requirement under the Statute of Frauds. In addition to arguing that a settlement was not reached, the defendant also unsuccessfully challenged the amount of the judgment entered by the trial court. The Appeals Court affirmed the trial court’s judgment in all respects.
This is Joe Desmond’s second win in the Massachusetts Appeals Court this month for the same client.
The Appeals Court’s decision can be accessed here.