Opinion
C.A. No. K10C-01-014 WLW.
Submitted: October 1, 2010.
Decided: December 15, 2010.
Upon Plaintiff's Motion for Declaratory Relief. Granted.
Patrick C. Gallagher, Esquire and Stephen A. Hampton, Esquire of Grady Hampton, LLC, Dover, Delaware; attorneys for the Plaintiff.
Stephen J. Milewski, Esquire of White Williams, LLP, Wilmington, Delaware; attorneys for the Defendants.
ORDER
FACTS
The motion before the Court stems from efforts to settle a personal injury claim that arose when Lillie Kinsey ("Plaintiff") was allegedly injured by a dangerous condition at Lake Forest North Elementary School on October 31, 2008. The parties participated in mediation on August 24, 2010, and they agreed to settle the dispute. The parties agreed that Plaintiff would release any claims she might have against the Defendants in exchange for $45,000. The agreement is memorialized in the release form, which was drafted by the Defendants, and which Plaintiff signed.
However, the current controversy developed when the Defendants subsequently refused to pay the $45,000 until Plaintiff supplied them with a final payment letter from Medicare. The release contains express language concerning Medicare:
[Plaintiff] accepts full and complete responsibility for satisfying any outstanding liens, including but not limited to any Medicare lien, for payment of medical indemnity or other expenses of any kind which resulted from the claims referred to in this release, or that are in any way related to the subject of the above referenced actions, and agree to hold harmless and indemnify RELEASEES against all such claims, suits, or liability brought by any party.
There is no other mention of Medicare in the release. The release also contains a merger clause.
Plaintiff's Argument
Plaintiff filed a motion for declaratory relief, which would provide that the case has been settled and that the Defendants should pay the $45,000 that was agreed in the settlement. Since the argument on the motion on October 1, 2010, a final judgment letter has been received indicating that there will be no lien to be paid out of the proceeds. Plaintiff also requests that the Court order Defendants to make the payment and to pay counsel's costs and legal fees incurred in pursuing this motion. To bolster her case, Plaintiff invokes the legal doctrines of the Parole Evidence Rule and the presumption that a contract is to be construed strictly against its drafter. She argues that the entire agreement was evidenced by the release form, which contains a merger clause, and which was drafted by Defendants.
Defendants' Argument
Defendants' counsel contends that he and Plaintiff's counsel had an oral understanding that tender of the Medicare final payment letter is a condition precedent to Defendants' contractual duty to perform (i.e. to pay the $45,000). He notes his fear that his client could have been exposed to potential claims by Medicare if the case settled before he has received the Medicare final payment letter.
CONCLUSION
The Court concludes that a careful reading of the release encompasses full and complete responsibility for payment of all outstanding liens including any Medicare liens, which fortunately does not need to be paid. It is therefore clear that the settlement should have been paid forthwith as the risk is on the Plaintiff for the Medicare lien.
IT IS ORDERED that:
The settlement of this claim for $45,000 shall be deemed a judgment against Defendants and in favor of Plaintiff as of August 24, 2010;
Defendants shall immediately pay to the Plaintiff the amount of this judgment plus accrued interest at the legal rate for the period beginning August 24, 2010, and continuing until the judgment is paid; and
Defendants shall pay Plaintiff's attorneys' fees in the amount of $500.00 for additional work performed to enforce the settlement.