Can a Settlement Agreement Preclude Future Lawsuits? Not Always: A Case Study

interview_paperwork_quill_law-1024x768When you sign a settlement agreement and release, it is easy to assume you waived all rights to sue over the incident that led to the agreement. However, there are certain circumstances where you should have been provided with relevant information at the time of signing. Therefore, it is crucial to understand your rights and the terms of any agreement. Consulting with a qualified attorney can ensure you are fully informed before signing.

Russell Charles was driving a vehicle while pulling a trailer on I-10 in Iberville Parish, Louisiana. A Dodge Ram truck driven by Mark Moore hit Charles from behind. Moore owned the Dodge Ram truck through his company, Moore Leasing, LLC, which State Farm insured. After the accident, Moore signed an affidavit stating that he was not working at the time of the accident and that only the State Farm insurance policy would provide coverage to Charles. In addition, Charles and his wife, Consandra, signed a release against all persons, firms, or corporations who were or might be liable for the accident in exchange for $50,000. 

Later, the Charleses filed a lawsuit against three companies owned by Moore and his wife, claiming that Moore had been working at the time of the accident, which would make the corporations vicariously liable. The company’s insurer was later added as a defendant. The defendants filed a motion for summary judgment, arguing that Moore had not been working at the time of the accident and that the previous release prevented this lawsuit. The trial court granted the motion and dismissed Charleses’ claims, but they appealed the decision.

The appellate court reviewed the trial court’s grant of the defendant’s motion for summary judgment using the same criteria as the trial court used in determining whether or not to grant summary judgment. Summary judgment is only appropriate if there is no genuine issue of material fact. L.A. C.C.P. art. 966

The appellate court pointed to evidence the Charleses had submitted in opposition to the defendant’s summary judgment motion, including an affidavit Moore had signed before them signing the release where he stated he had no other insurance that could provide benefits and had not been working at the time of the accident. This contrasted with other statements he made that he had been working for Moore Leasing at the time of the accident. Given these contrasting statements, the Charleses argued that summary judgment was inappropriate. The Charleses argued, and the appellate court agreed, that fraud only needed to be proved by a preponderance of the evidence and could include circumstantial evidence. La. C.C. art. 1957

The appellate court agreed that Moore had provided different explanations regarding the accident, which raised factual issues about whether the Moores had withheld information from the Charleses when they signed the release. The appellate court, therefore, reversed the trial court’s grant of the defendant’s summary judgment and dismissal of Charleses’ claims.

If you find yourself in a situation where you are being offered a settlement agreement and release, it is vital to seek legal advice from a trusted attorney. Such contracts often contain complex legal language and could have long-term consequences. An experienced attorney can help you understand the terms of the agreement and provide guidance on whether it is in your best interest to sign. Additionally, they can assist in identifying any potential hidden risks or withheld information that may impact your decision. As a result, you can make an informed decision and protect your legal rights by consulting with an attorney.

Additional Sources: Russell Charles and Consandra Charles v. Moore Petroleum, Inc., Power Petroleum, Inc., and Moore Properties LLC

Additional Berniard Law Firm Article on Fraud and Settlements: Injuries Realized After Settlement Fail to Receive Compensation

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