Officially released on April 5, 2021
Key Points: Plaintiff, who had signed a release against a defendant driver, was barred from arguing a 93A violation against an insurance company based on exploitation of mental incapacity after the trial court had already found against him when he tried to bring a negligence action against the driver for the same reason.
Plaintiff was injured in a motor vehicle accident in December of 2011. The accident was caused by the defendant driver. The Plaintiff had a $43,000 worker compensation lien as a result of the accident.
In November 2013, Plaintiff signed a petition under M.G.L. c. 152, s. 15 for approval of a third-party settlement. The petition stated that the total amount of the settlement would be $25,000 with $12,500 going to the worker compensation insurer to satisfy its lien and the other $12,500 going to the Plaintiff.
The petition was approved in February of 2014 and the Plaintiff signed a release and settlement agreement in March 2014. The release agreement stated that in exchange for $25,000, the Plaintiff waived any and all claims against the defendant driver and the Defendant Insurance Company. The Defendant Insurance Company issued payment in accordance with the section 15 petition – $12,500 to the Plaintiff and $12,500 to the worker compensation insurer.
Some time later, Plaintiff brought a negligence action against the defendant driver arguing that due to his injuries and brain surgeries, he lacked the necessary mental capacity to sign the section 15 petition and the release. The trial court judge granted summary judgment for the defendant driver, concluding that there was no evidence the settlement was unreasonable or that a reasonably competent person would not have entered into it. Finally, the trial court found that the Plaintiff had failed to produce the necessary evidence to establish he lacked the capacity to contract.
The Plaintiff then brought the subject action against the Defendant arguing that it violated M.G.L. c. 93A in the settlement of his claim. The trial court again found against the Plaintiff and granted summary judgment for the Defendant. The Plaintiff then appealed.
The Appellate Court affirmed, stating the following:
- Plaintiff failed to cite any relevant authority for his position that collateral estoppel did not apply and as such, his argument failed to rise to the level of appellate argument. However, the Appellate Court stated that even if they did consider his argument, they would still find against him since all four conditions for collateral estoppel, also known as issue preclusion, were met. His negligence claim against the defendant driver a) did have a final judgment on the merits; b) the Plaintiff was a party to that action; c) the issue as to his competence was identical; and d) his competence was essential to the prior decision. As such, the Plaintiff was precluded from relitigating the enforceability of the release and settlement based on his competency.
- The Plaintiff’s argument that the release was fraudulent and deceptive since it required that the Defendant pay the Plaintiff $25,000 was unavailing. The Appellate court stated that the Plaintiff was aware when he signed the section 15 petition that $12,500 was going to the worker compensation insurance company. The doctrine of incorporation by reference allows the drafter to incorporate the terms of a prior document by specifically referring to them; it does not require that an agreement specifically refer to all collateral conditions.