August 7, 2026
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seva firm
SRM v. Lester: Court of Appeals Holds That a Conditional Settlement Agreement Is Not Enforceable When the Condition Has Not Been Met Before Revocation
By Pratheep Sevanthinathan, Esq. The Seva Law Firm
Case: SRM v. Michael Stuart Lester, No. 375093 (Mich. Ct. App. August 7, 2026) (Unpublished)
Court: Michigan Court of Appeals
Panel: Ackerman, P.J., and Bazzi and Lievense, JJ.
Decision: Affirmed — Per Curiam
Lower Court: Oakland Circuit Court, Case No. 2021-189992-NI
- Introduction
The Michigan Court of Appeals has affirmed an Oakland Circuit Court decision refusing to enforce a purported settlement agreement in a no-fault case involving the Michigan Assigned Claims Plan (MACP). In SRM v. Lester, the Court held that where a plaintiff’s acceptance of a settlement offer is expressly contingent on a future event — here, the reduction of a Medicare lien — the acceptance is conditional, and the opposing party remains free to revoke the offer before that condition is satisfied. The decision also reaffirms the strict requirements of MCR 2.507(G), which demands that any settlement of pending litigation be memorialized in a writing that “indisputably reflects a final agreement of the parties.”
- Facts
On October 29, 2020, the plaintiff, SRM, sustained significant injuries when he was struck by a vehicle driven by defendant Michael Lester while walking his bicycle across a road in Southfield, Michigan. As a result of the collision, SRM required an extended hospital stay and multiple surgeries. He is now legally incapacitated and requires around-the-clock monitoring and care. His daughter, Dayna Swift, serves as his guardian and conservator.
At the time of the accident, SRM did not have coverage under a no-fault insurance policy. He applied to the Michigan Assigned Claims Plan (MACP) for no-fault benefits, and the MACP assigned his claim to Allstate Insurance Company. SRM filed suit in September 2021, seeking personal protection insurance (PIP) benefits from Allstate, which had refused to pay. Under MCL 500.3172(7)(a), PIP benefits payable by an insurer assigned through the MACP are capped at $250,000. After Allstate paid $50,000 to a medical provider and $855 for guardianship services, a total potential liability of $199,145 remained.
The parties then engaged in settlement negotiations. In a March 10, 2023 email, plaintiff’s counsel described the proposed resolution as a “contingent/tentative settlement,” explicitly noting that it was made contingent “due to the massive Medicare lien.” Plaintiff’s counsel stated he would begin the lien reduction process with Medicare and file a motion for court approval of the distribution.
Over the following months, the parties exchanged multiple drafts of a proposed release. Allstate prepared a release setting the payment at $199,145, and plaintiff’s counsel requested several modifications, including provisions addressing the MACP statutory cap, provider payment responsibilities, and lien indemnification. On June 29, 2023, Allstate sent a revised release incorporating plaintiff’s changes and requested a signature. Plaintiff’s counsel never responded.
On July 14, 2023, the Centers for Medicare & Medicaid Services (CMS) sent Allstate a notice demanding payment of $257,031.25 — an outstanding debt related to SRM as a Medicare beneficiary — threatening referral to the Department of Treasury. On July 25, 2023, Allstate notified plaintiff’s counsel that Medicare was requiring direct payment from Allstate of all remaining funds under the statutory cap, and revoked all previous settlement offers.
SRM then moved to enforce the purported settlement under MCR 2.507(G), arguing that the email exchanges reflected a meeting of the minds. SRM also submitted CMS documentation dated August 10, 2023 — after Allstate’s revocation — to show that Medicare had approved a lien reduction. The trial court denied the motion and denied reconsideration.
- Issues
The central question was whether the parties reached an enforceable settlement agreement through their email exchanges, despite the fact that: (1) the plaintiff expressly characterized the agreement as “contingent/tentative” due to the Medicare lien; (2) the release was never signed; (3) plaintiff’s counsel never responded to the final version of the release; and (4) the condition precedent — Medicare’s approval of a lien reduction — was not satisfied before Allstate revoked its offer.
- Holding
The Court of Appeals affirmed the trial court on two independent grounds.
First, there was no unconditional acceptance of the settlement offer. The Court found that plaintiff’s counsel expressly conditioned the settlement on the resolution of the Medicare lien. Under well-established Michigan contract law, an acceptance that attaches conditions is not a valid acceptance — it is, at best, a counteroffer. Citing Harper Building Co v. Kaplan, 332 Mich 651 (1952), the Court emphasized that “the acceptance must be absolute and unconditional.” The Court characterized plaintiff’s conditional acceptance as what contract law treatises call an “acceptance in escrow,” under which “neither party is bound and either may withdraw” before the contingency occurs. Because plaintiff’s own documentation of Medicare’s lien approval was dated August 10, 2023 — more than two weeks after Allstate unequivocally withdrew its offer on July 25, 2023 — Allstate was free to revoke, and the trial court properly found no enforceable agreement.
Second, the settlement did not satisfy MCR 2.507(G). The court rule requires that a settlement agreement be memorialized in a writing that “indisputably reflects a final agreement of the parties.” The ongoing exchange of proposed release language — with multiple rounds of edits, additions, and unresolved terms — demonstrated that the parties had not finalized their agreement. Plaintiff’s counsel never responded to Allstate’s June 29, 2023 email, never returned a signed release, and never signed the proposed stipulated order of dismissal. Without a writing that “indisputably reflects a final agreement,” the negotiation emails could not be enforced as a settlement under MCR 2.507(G).
- Conclusion
The Court of Appeals affirmed the trial court’s denial of plaintiff’s motion to enforce the settlement and for reconsideration. The purported settlement was never finalized: the acceptance was conditional, the condition was not met before the offer was revoked, and the emails did not constitute the kind of indisputable written agreement required under MCR 2.507(G).
- What Does This Mean for Our Clients?
This case contains critical lessons for anyone involved in a no-fault claim — particularly claims involving the Michigan Assigned Claims Plan, Medicare liens, or complex settlement negotiations.
If you are negotiating a settlement, be cautious about calling it “contingent” or “tentative.” In this case, the plaintiff’s own email language was used against him. By describing the settlement as “contingent/tentative,” plaintiff’s counsel gave Allstate the legal basis to argue — successfully — that there was never an unconditional acceptance. If you have a deal, treat it as a deal. If conditions remain, understand that the other side can walk away at any time before those conditions are met.
Medicare liens can derail a settlement at the worst possible time. This case is a cautionary tale about the intersection of Michigan no-fault benefits and federal Medicare obligations. CMS’s demand letter to Allstate — seeking over $257,000 — fundamentally changed the economics of the case and gave Allstate a reason to revoke its offer. Anyone settling a no-fault claim where the injured person is a Medicare beneficiary must address the lien issue early and aggressively.
Get the agreement in writing and signed — quickly. Under MCR 2.507(G), a settlement of pending litigation is not enforceable unless it is in writing and signed by the party against whom it is offered, or made on the record in open court. Email negotiations, even detailed ones with multiple drafts of a release, are not enough if the final terms are never signed. The takeaway is simple: when you reach a deal, get signatures immediately. Do not let weeks pass with unresolved drafts.
MACP claims have unique risks. The $250,000 statutory cap under MCL 500.3172(7)(a) means there is a finite pool of money available in assigned claims cases. When Medicare asserts a lien that exceeds the remaining cap, the situation can become untenable for all parties. If you are pursuing an MACP claim, it is essential to have experienced counsel who understands these dynamics.
If you have been injured in a motor vehicle accident and are dealing with a no-fault insurance claim, a Medicare lien, or a dispute over a settlement agreement, contact The Seva Law Firm. We have the experience to navigate these complex issues and protect your rights.
Pratheep Sevanthinathan is the owner and managing attorney of The Seva Law Firm, located at 100 W. Big Beaver Rd, Suite 500, Troy, MI 48084. He can be reached at (248) 385-5704.
This article is for informational purposes only and does not constitute legal advice. Every case is different, and past results do not guarantee future outcomes.