There is much discussion nationally about “tort reform,” and this idea that it’s somehow quite easy to take home millions of dollars for a frivolous filing. This isn’t true, and the reason we tend to hear so much about lawsuits with multi-million-dollar verdicts is they are rare.
Truth is, most successful lawsuits are settled out-of-court before they ever make it to the trial phase. They also don’t tend to be multi-million-dollar payments with inclusion of punitive damages, but rather adequate sums that help to compensate the victim for substantial losses.
When a plaintiff signs off on a settlement, he or she must be very cautious in reading the language contained therein. They need to make sure they aren’t signing away important rights to which they may have wanted to avail themselves at a later time.
A good example of this was seen recently in the case of Gores v. Miller, before the South Dakota Supreme Court.
Plaintiff is mother to a 15-year-old girl who was in the passenger seat of a van driven by another teen. The driver lost control of the van (which belonged to his mother) and crashed in a single-vehicle traffic accident.
His passenger sustained serious injuries as a result of the accident, and had to be transported to the hospital. There, she underwent a skin graft for the serious lacerations she suffered on her arm.
It took many months for those wounds to heal.
Her mother later took legal action on her behalf against the van driver and his mother, looking to recover damages for medical bills and pain and suffering. The van owner’s insurer agreed to pay the full coverage amount, or $25,000. This didn’t totally cover all damages – plaintiff still had to seek benefits through her own underinsured motorist coverage – but it was an acceptable resolution to the case against the driver.
In executing that settlement agreement, plaintiff signed off on a release indicating she would not pursue further damage against the defendant driver, his mother or his insurer. But, it also released anyone else against whom she might have had a claim for this action.
The language of the release was extremely broad. It indicated plaintiff would release and forever discharge not just the named defendants, but “all other persons, firms or corporations liable or who might be claimed to be liable… from any and all actions… which may have resulted or may in the future develop from an incident that occurred on (date of the crash).”
Plaintiff subsequently filed a lawsuit against the hospital and doctor who had treated her daughter for her injuries, alleging medical malpractice. She asserted the doctor breached the applicable standard of care and her daughter’s injuries were more painful and took longer to heal as a result.
The physician and hospital moved for summary judgment, citing the release plaintiff signed in the car accident settlement. Plaintiff pointed out physician was never named in that release and she was an independent tortfeasor who caused distinct injuries and these were not causally related to the crash.
Trial court disagreed, finding the injuries were causally related to the crash and the language of the release was both broad and unambiguous. That decision was recently affirmed by the South Dakota Supreme Court.
The case is a reminder of why such settlement agreements may need to be redrafted if the language is overly broad.
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Gores v. Miller, Feb. 3, 2016, South Dakota Supreme Court
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