Cline v. Homuth – Accident Settlement Language Must be Carefully Examined

While injury lawyers must be fully prepared to take an auto accident lawsuit to trial if necessary, the reality is many — or at least portions pertaining to certain defendants — are settled out-of-court before trial.

Such cases are concluded through what are commonly known as settlement agreements, and they are contractual and binding. They often contain stipulations on release of liability for current and future claims stemming from the accident, and in some cases they will contain confidentiality clauses.

Don’t take these as boilerplate forms. t’s very important for you and your attorney to carefully read these documents before signing. There may be important information regarding inability to collect future payments or pursue litigation against other parties.

That was the unfortunate case for plaintiff in Cline v. Homuth, who was on his motorcycle when he was struck by a teen driver operating his parents vehicle on a provisional license. The provisional license required the teen to have a licensed driver in the vehicle with him. His grandmother was in the passenger seat. Although the teen’s vehicle was struck from behind, investigating authorities determined it was the novice driver who was at fault for the crash.

The motorcyclist, meanwhile, suffered severe injuries, had to be hospitalized and endures ongoing medical treatments.

In this scenario, there were a number of persons and/or entities who were potentially liable. First, there were the vehicle’s owners, which also happened to be the teen’s parents. The teen was insured under his parent’s policy, and the vehicle was too. Plaintiff attorney also noted potential liability of the city, as the crash occurred in a construction zone that was purportedly not marked clearly with confusing signals. Finally, the teen’s grandmother could be potentially liable for negligent supervision, as it was her duty as the licensed driver in a vehicle with a provisionally-licensed driver to provide proper instruction and oversight to her grandson.

Plaintiff’s medical bills exceeded $100,000, which was the policy limit of the parent’s insurance. So when plaintiff demanded recovery of the full policy limit, the insurance agent agreed to the deal. A settlement agreement was extended to plaintiffs, which would release from liability the teen, his parents and “any other person, corporation, association or partnership responsible in any manner or degree for the injuries.”

Plaintiff signed it, not thinking it would curtail his ability to pursue litigation against the grandmother, the city or any other third-party for that matter. After all, those individuals weren’t specifically named in the agreement, and the insurance company wouldn’t have had any authority to extend legal protection to other entities.

Nonetheless, when he then sued grandmother for negligent supervision, she moved for summary judgment on grounds she was a third-party beneficiary of that “any person” language in the earlier agreement plaintiff had signed.

Trial court agreed and appellate court affirmed.

Plaintiff said he would never have signed the agreement had he known he was forfeiting the right to pursue injury litigation against the grandmother. But that’s not what language of the contract, and that’s what the courts had to go by.

Call Allred & Allred P.C. at 334.396.9200 to speak with a Montgomery personal injury lawyer.

Additional Resources:
Cline v. Homuth, March 30, 2015, California Court of Appeals, Third Appellate District
More Blog Entries:
Fewer Alabama Motorists Wearing Seat Belts, March 3, 2015, Montgomery Injury Lawyer Blog

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