Settlement negotiations can be an important part of resolving a personal injury claim against a negligent driver or insurance company. The Court of Special Appeals of Maryland recently addressed some of the issues surrounding settlement agreements in Ward v. Lassiter (Md. Ct. Spec. App. Jan. 13, 2017). In Ward, the underlying case arose from an automobile accident, in which the plaintiff filed suit against the defendant. The trial date was canceled after the parties orally agreed to settle the case, but another dispute arose when the plaintiff refused to sign a written agreement.
In Ward, the plaintiff agreed to accept $7,000 during the settlement negotiations, although the specific terms of the release or indemnification were not discussed. The defendant’s counsel emailed a proposed settlement agreement, to which the plaintiff’s attorney made several revisions before returning it. In particular, the plaintiff’s attorney deleted a provision that released the defendant from liability for future medical expenses and changed a clause that indemnified the defendant from any cause of action by limiting it to $7,000. The defendant did not agree to the revisions, and the parties remained at an impasse regarding the terms and language of the written settlement.
The trial court found that a settlement agreement existed and dismissed the case, explaining to the plaintiff that she would have to sign a release in order to receive the money. On appeal, the plaintiff argued that the oral agreement covered only the amount that the defendant would pay, rather than the indemnity of the defendant. The question for the appeals court was what an agreement to settle an auto accident case involves, and thus, the terms to which the parties can be understood to have agreed when they agreed to “settle” for $7,000.
In Maryland, when parties settle a case, they give up any meritorious claims or defenses they may have had in order to avoid further litigation. Settlement agreements are treated as any other binding contract would be, as long as the basic requirements to form a contract are present. In reviewing the case, the appeals court reasoned that an agreement to settle pending litigation necessarily includes an agreement to execute mutual releases. The court explained that the point of settling is so that the plaintiff gains the certainty of an agreed-upon payment without the risk of losing at trial, while the defendant resolves the claims against him or her without the risk of losing at trial.
The appeals court recognized that, insofar as Medicare may potentially assert claims upon the settlement proceedings, the plaintiff’s net effect of her settlement may not benefit her as much as she hoped. However, the court also noted that proceeding to trial may be risky. Accordingly, the court held that the plaintiff’s agreement to settle in exchange for $7,000 necessarily included an agreement to release and indemnify the defendant from claims that third parties could bring against her in connection with the plaintiff’s injuries from the accident.
The Maryland injury attorneys at Foran & Foran, P.A. have a deep commitment to assisting victims of negligence in pursuing their legal claims. We have represented individuals in settlement negotiations and cases arising out of car and truck crashes, premises liability accidents, medical negligence, and more. If you have questions regarding your legal recourse after an accident, contact Foran & Foran by phone at (301) 441-2022 or online and schedule a consultation.
More Blog Posts:
Maryland Court Orders Insurance Company to Cover Loss for Wrongful Death Claims Arising Out of Car Accident, Maryland Personal Injury Blog, published August 17, 2016
Maryland Jury Finds Defendant Not Cause of Collision Between Plaintiff and Parked Vehicle, Maryland Personal Injury Blog, published October 12, 2016