Anytime personal injury lawsuits are settled, there may be terms and conditions that must be read carefully. There are some situations wherein the language could prohibit any and all future claims against other potential defendants – and that may not be a scenario you want, depending on the circumstances.
In a recent appellate case out of California, the language of an earlier settlement agreement became an issue in a subsequent personal injury lawsuit filed by a mechanic against a property owner. The question before the appellate court was whether plaintiff’s claim against these entities was barred because of a settlement with one defendant
Here’s what happened: In 2011, plaintiff, a mechanic, was hired by the auto sales company to figure out why a vehicle owned by the sales firm wouldn’t start. Unbeknownst to plaintiff, the towing company had recently towed the vehicle to the site and disconnected the transmission shift linkage when it did this. However, the towing company employee did not reconnect the shift linkage. Plaintiff said he put the vehicle in park and climbed underneath to troubleshoot. When he went to test the electrical connection to the starter, the vehicle ran over him and dragged him through the parking lot.
Plaintiff’s spine was crushed.
Plaintiff and previous defendants – the auto sales company and its owner – reached a settlement agreement wherein he was paid the insurance policy limit of $1 million.
Pursuant to the settlement agreement, plaintiff dismissed the action with prejudice against the auto sales company and its owner. That settlement agreement contained language that released defendants as well as “affiliates” and “all other persons, firms or corporations with whom any of the former may have been, now or may hereafter be affiliated.”
Soon thereafter, plaintiff filed an injury lawsuit against the owner of the property where the incident occurred. At the time of the accident, the auto sales company leased that property from defendant property owner. The property owner used to operate a used car dealership on site, but after leasing property to the auto sales company, the two parties reached an agreement that the auto sales company would sell a handful of vehicles on site for the property owner on a consignment basis. The vehicle involved in this incident was one of those consignment sale vehicles.
Plaintiff’s claim against defendant property owner, though, was rooted in the legal theory of premises liability.
Defendant countered with a motion for summary judgment, citing the earlier settlement agreement and arguing that he was an “affiliate,” and as such, could not be liable for any claim arising out of the accident. Plaintiff opposed that motion, arguing the release of liability language in the settlement was ambiguous and there were genuine issues of material fact as to the intention of the release. Further, plaintiff’s injury lawyer argued he was never aware of the property owner’s potential liability or that the property owner and the auto sales company were “affiliated” because this relationship was never disclosed in the previous proceedings. Prior defendants also failed to disclose that defendant property owner maintained a $1 million insurance policy – and that that policy was kept with the same insurer that covered the auto sales company.
Although trial court granted summary judgment, the California Court of Appeal for the Third Appellate District reversed. Justices ruled defendant was not protected as an “affiliate” as a matter of law, and that therefore defendant could potentially be held liable for plaintiff’s injuries.
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Additional Resources:
Iqbal v. Ziadeh, March 24, 2017, California Court of Appeal for the Third Appellate District
More Blog Entries:
Loss of Chance Doctrine in Florida Medical Malpractice Claims, March 11, 2017, Orlando Personal Injury Attorney Blog