It has been a while since Minnesota Litigator’s last installment of TAAFOMFT (“These are a few of my favorite things….”) (earlier posts are here).
I suppose this is a good sign because my TAAFOMFT posts are tongue-in-cheek (if not bile-in-throat). The infrequency of TAAFOMFT posts might correlate to my having a better, more positive attitude about my work?
Having said that, a recently noted ruling setting out the tortured process of finalizing a settlement (that is, getting the money) got my belly sympathetically churning.
Twin Cities personal injury lawyer, Stuart Goldenberg, negotiated a $150,000 settlement on behalf of his client, Mathiam Verwey in November, 2013. As is often the case in settlements, the focus in settlement is the dollar amount and the TIMING of payment, in comparison, was an afterthought.
This is commonplace. We all understand that instantaneous payment is generally impossible and we all understand that payment several months later is generally unacceptable — so there is a basic norm and consensus that payment will be made over maybe 2-4 weeks after a settlement is reached. This is not generally a disputed matter, so it is not a negotiated matter, so it is often not an express term, particularly in relatively small cases.
But because this detail is often not spelled out, sometimes the lack of specificity spells trouble. (I note in the linked decision at footnote 1 a reference to Minn. Stat. 72A.201, Subd. 5 regulating insurers and defining “unfair settlement practices,” including a five business day deadline for payment of settlements.)
In Mr. Verwey’s case, Mr. Verwey, tragically, was not able to get the settlement proceeds in time to be able to afford to visit with his ailing mother in South Africa before she died this past December. Payment to the plaintiff was delayed for over a month after the settlement was reached.
Reading U.S. District Court Judge John R. Tunheim’s (D. Minn.) denial of Plaintiff’s motion for sanctions against the defendant for the delay in payment, one can imagine the relentless and urgent calls to Plaintiff’s counsel. One can imagine the impatience when a defendant has admitted a financial obligation and days drag on without payment being made.
The “practice pointer” is clear: try to incorporate specific language as to the timing of payment when negotiating a settlement. Unfortunately, this pointer is easier said than done. Often the decision-maker as to the dollar amount is not the person (or even in the department) responsible for cutting the check/disbursing the money. Therefore, the decision-maker at the settlement table will not be in a position to guaranty a precise payment deadline.
Quite often, there is no easy answer, which is why this is “one of my favorite things” about the lives and the livelihoods of civil litigators…