When a Maryland car or truck accident case is settled, there are a host of activities necessary to complete the transaction sucessfully. Contact doctors to make sure the bills are paid so the crash victim isn't sued later or so their credit isn't damaged. Make sure that any liens, assignments or obligations to repay anyone out of settlement are honored. Of course the insurance company always insists that you sign a release. That doesn't seem like a big deal until one examines the content of such a release and understands its legal consequences.
But the release is just an afterthought right? Not by a longshot. Even the most elementary release contains language that has a legally binding impact on the person signing it and receiving money as a result. Sometimes, a release can obligate one to pay out more money than they are receiving! Doesn't seem fair. Lets examine a run of the mill release and discuss the legal import of its language.
First, a release is a contract like a lease or a papers to to buy a car. You are getting something by signing a release (typically Money) but in return you are giving up something, the right to bring a lawsuit or use any other means to further pursue your claim, ever. When you sign a release it is forever and the release makes that abundantly clear. You agree to "hereby release, acquit, and forever discharge" some person or some entity from any further claims you have concerning a particular accident. Any future bills can't be claimed after the release is signed and the money paid. The insurance company assumes no future responsibility unless it is clearly spelled out.
The person who ran the red light and hit you while drunk has no more legal or economic obligation to you once the release is signed. So keep that in mind. If you need future medical care make sure your attorney knows because, we hear many tales of clients who say "gosh I wish I'd known about you five years ago, I was in a bad crash and got very little compensation then I had to have surgery."
So number one, releases are forever. Okay, but surely it doesn't bind my spouse or children right, they aren't signing it? WRONG. Most releases terminate claims of " heirs, executors and assigns, from any liability now accrued or hereafter to accrue on account of any and all claims." One's heirs are the people who inherit from us when we die. Releases are intended to terminate all claims you and your heirs may have now or may "accrue" in the future!
While there are many exceptions to the rule, the basic intent of the insurance companies' release is to completely end any claims you have and if you die, your heirs are stuck with what you agreed to. This generally includes not only injury claims but also damage to poperty as well. there is no going back for the computer in the trunk that was damaged.
The next section of the release concerns claims non-lawyers generally don't think about. Language that deals with "any and all liens, assignments of benefits, assignments of causes of action and or subrogation interests." First of all, what are these things? Liens are legally enforceable interests in property including money, which means your settlement proceeds. Liens can be all manner of things including liens from doctors or hospitals for unpaid medical bills, or health insurers seeking to be repaid for medical costs related to your or even liens unrelated to your case. Assignments of benefits and subrogation interests are legal creatures similar to liens and represent legal claims other enities or people may have in your settlement proceeds.
Thus, it is important that you understand what liens, assignments of benefits, assignments of causes of action and subrogation interests might exist in your case before agreeing that you are legally responsible for them instead of the insurance company. Ask your car accident attorney to spell out the possibilities or you may be sorry later.
Next we turn to indeminfication and hold harmless provisions. To indemnify one agrees to take on the duty of another to pay for some legally cognizable responsibility. Which is to say, when you sign a release with for example, Geico, you are agreeing that if they get sued by some other person or entity associated with your case, you will pay for their lawyers, expenses and any verdict!
A hold harmless provision serves a similar purpose. You think "well who is going to sue Geico if I'm not?" The answer is your health insurer or the federal government if your bills were paid by Medicaid or Medicare and they didn't get repaid out of your settlement. So when you sign a release and agree to "hold harmless and indemnify" the insurance company be aware this could come back on you later if things haven't been handled properly.
Finally, don't expect the release to indicate that the insurance company or its insured is admitting responsibility for your injuries. There is usually an express provision in a release indicating that such a settlement is:"a compromise of a disputed claim and that the payment is not to be construed as an admission on the part of the party or parties hereby."
In summary releases are far more than meets the eye. It is imperative that you consult a lawyer before signing a release or there may be unforseen consequences down the road.
