You might think that your trials and tribulations will end after securing a settlement from a defendant or insurance company for a personal injury claim in Minnesota. After all, you’ve gone through the litigation process and secured an award to compensate you for your accident-related damages. Unfortunately, securing a case settlement isn’t always synonymous with the end of your legal battle. As the state of Minnesota recently discovered in a conflict with ITG Brands, sometimes defendants don’t pay up. Luckily, you have rights in these frustrating situations.
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While it is the case that when you settle in an accident claim, you sign a written agreement that states you can and will not pursue any further liability with the at-fault paety. In short, yes. If either party violates the terms of the settlement, either both not upholding to their payment agreements, not paying the full amount or failing to uphold their end of the agreement that the party being harmed is able to take the case back to court. The courts agree that it is your responsibility to carefully review the contract and terms of the settlement agreement before you sign, which is why its critical to obtain legal advice from an experienced personal injury attorney prior to signing any settlement agreement. Even if you learn at a later time that the case settlement was worth more than what you agreed to, you cannot pursue a later claim due to this release agreement.
However, there are exceptions. For example, if the at-fault party violated the terms of the settlement agreement then the other party is within their legal right to pursue legal action. Another case would be if it was discovered that either part entered the agreement in bad faith or acted in a fraudulent, coercive manner.
Twenty years ago, the state of Minnesota won one of the largest civil cases in Minnesota’s history. In 1998, the state and Blue Cross Blue Shield of Minnesota settled a lawsuit against several tobacco bigwigs for $6.5 billion. Three different types of settlement agreements arose out of the deal: annual payments, one-time payments, and court-administered payments. The terms of the settlement required the tobacco companies to make annual payments to the state from 1999 and “each year thereafter into perpetuity.”
The problem today is that the tobacco companies stopped paying a few years ago. The state of Minnesota claims that big tobacco companies owe it hundreds of millions of dollars based on the terms of the settlement, which started payments at $110.7 million per year and increases according to inflation. Part of the issue is that some of the defendants in the original lawsuit have changed hands over the years. Tobacco companies have switched owners over the last 20 years – mainly coming under the umbrella company ITG Brands. ITG Brands acquired many major tobacco companies, including Kool, Maverick, Salem, and Winston in 2015.
Now, Minnesota State Attorney General Lori Swanson is filing a lawsuit against ITG Brands for failing to pay the settlement. The state is within its rights to bring a claim against ITG Brands (in which the state is demanding $7 billion in damages) for failing to make its annual payments. It is within most plaintiff’s rights to seek reimbursement for unpaid settlements through legal actions, as breaching a settlement contract is against the law. Not all cases, however, grant this right to plaintiffs.
Your first step in the face of a defendant who refuses to pay your settlement is to revisit the exact contract you made upon resolution of your claim – the Release. The settlement contract you signed may have released the defendant from any further legal action regarding the accident in exchange for giving you money to settle the case. Release contracts most often bar the plaintiff from pursuing further compensation from the defendant for the same accident.
Releases do not, however, bar the plaintiff from legal action to force the defendant to pay a settlement. Filing a claim against the defendant for negligently failing to pay a settlement is an entirely separate legal action than the original personal injury claim. This is the route the state of Minnesota decided to take in an effort to force ITG Brands to pay, but another lawsuit might not be your only option. Other legal actions could force the defendant to pay, as long as he or she has the means.
Take your case back to the court that resolved it if the defendant has not paid your settlement within the allotted amount of time. You might have grounds to request a judgment against the defendant for an action such as wage garnishment, liens, or other collections tactics. These judgments can force a defendant to pay and get you your money by taking it straight from the defendant’s paychecks, bank accounts, or other assets. Taking your claim to collections will generally work as long as the person or business has not declared bankruptcy. Talk to a lawyer to discuss all your rights after a settlement in Minnesota.
If you or a loved one is in need of a personal injury attorney, call (507) 344-8888 today for a free evaluation of your case with one of our dedicated and experienced attorneys at Knutson + Casey.