This is usually caused by an address that is not an internet mail address and not on your local network.
That's not real clear so for example:
I send a message to Jim & Joe. Jim is outside my local network with the address of Jim@xyz.com. Joe is in on my local network and the mail goes through some non-internet service such as MS Mail. Now, if Jim replys 'to all' he will get that error because his computer has no idea how to contact Joe.
So, when you get this error, check the properties of all the email recipients - you will find at least one without a real internet address.