Langsam Stevens & Silver Newsletter March 2010

Victims of automobile accidents and their relatives are frequently expected to sign numerous documents in the days and months following the accident. But signing things without clearly understanding all the implications can be dangerous. Here's what can happen when you sign settlement papers without getting legal advice.

A Pennsylvania mother lost all of her claims against Ford Motor Company related to the death of her daughter. The daughter died when she was a passenger in a Ford Explorer that rolled over in a fairly minor traffic incident. Following her daughter’s death, the mother sued the driver of the vehicle and promptly settled the case. The mother also promptly settled the daughter’s insurance claims with the insurance company that provided the daughter’s automobile insurance. In settling with the negligent driver and the daughter’s insurance company, the mother signed standard “release” documents that released all claims in exchange for a money damages award.

LSS handles all kinds of serious personal injury cases, including medical malpractice, automobile accidents, slip and fall and product liability

Case Dismissed
The mother next turned to the litigation of claims against Ford Motor Company, alleging that the Ford Explorer was defectively designed because it was prone to rollovers. Ford successfully moved for dismissal of the case, relying on the releases that the mother signed when she settled with the driver and the daughter’s insurance company.

The releases that the mother had signed released all claims against the driver and the insurance company as well as “all other persons, firms or corporations.” The mother insisted that she never intended to release Ford when she signed the releases. Ford maintained that the releases were enforceable according to their plain terms, and that a release of all other persons, firms, or corporations barred any other lawsuits arising out of the accident.

Ford won a dismissal on appeal. The Pennsylvania appeals court noted that, while the intent of the parties who sign a release is important, the “primary source” of the parties’ intent is the language of the release itself. “Embodied in the ordinary meaning of the words of the document itself,” the intent of the parties cannot separately be determined from what either party later claims to have expected from the release. The appeals court noted that Pennsylvania law has long supported comprehensive releases and has for many years recognized that releases can release all liability, even as to individuals and entities who are not named and who did not contribute any money toward the settlement. The Pennsylvania Supreme Court refused to grant the mother's petition to appeal.

Consumers dealing directly with insurance agents are rarely successful in negotiating changes to the “standard” documents and releases that insurance agents produce for signature. Before signing any insurance documents or even endorsing an insurance check, you should consult with an attorney. You should understand all of the claims you have arising out of an accident before signing final settlement documents on any payments.

Have you been in an accident? Avoid problems by getting legal advice. Contact us at 215-732-3255 or hlangsam@langsamstevens.com.

Contractors Have a New Hammer

A recent decision from the Pennsylvania Superior Court gives contractors and subcontractors more leverage when seeking to collect payment for their services. The Contractor and Subcontractor Payment Act of 1994, which applies to all construction contract and subcontracts within the Commonwealth, with the exception of small residential construction projects, provided additional remedies for contractors and subcontractors including specifying how soon payment had to be made, requiring interest of 1% per month for late payments, and a further 1% per month penalty if the contractor has to resort to legal action to get payment (amounts can still be withheld for deficiencies with proper notice to the contractor, if it is done in good faith). The "substantially prevailing party" is also entitled to reasonable attorney's fees and expenses.

Now the Superior Court has ruled that a subcontractor who prevailed on a claim under the Act in arbitration and had to resort to execution to collect, could be entitled to interest and penalties from the time of the award all the way through to the time of the actual collection, rather than just to the time of the judgment, if a court finds that the payment was wrongfully withheld. The subcontractor can also collect reasonable attorney's fees and expenses incurred during the execution proceedings. The prospect of 24% per year in interest and penalties, plus attorney's fees, should substantially increase a contractor's leverage when trying to collect on overdue invoices.

LSS has experience handling large collection matters. Go to the Collections Practice page on our website to find out more.