Capacity Case Problem

LAW001 Business Law 1

Week 5 Assignment  

Capacity Case Problem

This assignment was locked Oct 30, 2016 at 11:59pm.

A. Read the case Nationwide Mutual v. Wood (Links to an external site.).  

B. Carefully explain in your own words (paraphrase and do not copy from the case).

1.  Explain – “Under Alabama law, is an insurance company bound to a settlement agreement negotiated on behalf of an injured minor, if that minor dies before the scheduling of a pro ami hearing which was intended by both sides to obtain approval of the settlement?”

2.  Explain – “Under the Alabama survival statute, § 6-5-462, Ala.Code 1975, an unfiled claim sounding in tort will not survive the death of the person with the claim, Malcolm v. King, 686 So.2d 231 (Ala.1996) (Links to an external site.); Georgia Cas. & Sur. Co. v. White, 582 So.2d 487 (Ala.1991) (Links to an external site.). A claim on a contract, on the other hand, survives in favor of a decedent’s personal representative, regardless of whether the decedent had filed an action before his death, McCulley v. SouthTrust Bank of Baldwin County, 575 So.2d 1106 (Ala.  (Links to an external site.)985 (Links to an external site.)*985 (Links to an external site.) 1991) (Links to an external site.); Benefield v. Aquaslide `N’ Dive Corp.,406 So.2d 873 (Ala.1981 (Links to an external site.)).

 (Links to an external site.)3. Explain – “Thus, it is undisputed that any potential tort claims D.V.G. held were extinguished when she died; the issue before us is whether she held any contractual claims at her death that are now enforceable by the administratrix of her estate, her mother Barbara Walker Wood. Wood argues that the settlement agreed to by D.V.G.’s attorney Stan Brobston and Nationwide and State Farm is a valid contract that Wood can now enforce.”

4. Explain – “Nationwide and State Farm argue that the settlement agreement was an executory contract that would not be complete and binding until it was approved by the Jefferson Circuit Court following a pro ami hearing. Alternatively, they argue that, even if the settlement agreement was a binding and enforceable contract, the pro ami hearing was a condition precedent to the performance of the contract and that hearing is now impossible as a result of the death of D.V.G.; consequently, they argue, their duty to perform under the contract is discharged”.

5. Explain – “[i]t is well settled by the authorities that infants are not liable on any of their contracts, except for necessaries. With the exception, all other contracts of infants, whether executory or executed, may be avoided or ratified at the election of the infant.'” H & S Homes, L.L.C. v. McDonald, 823 So.2d 627, 630 (Ala.2001) (Links to an external site.)(quoting Harris v. Raughton, 37 Ala.App. 648, 649, 73 So.2d 921, 922 (1954) (Links to an external site.)(emphasis added)). See also Davis v. Turner, 337 So.2d 355, 361 (Ala.Civ.App.1976) (Links to an external site.) (stating that contracts entered into by minors are “not void, but voidable only” and “not totally ineffectual, [but] merely unenforceable if later repudiated”). Thus, at the time the settlement was agreed to, a contract was formed that was binding upon Nationwide and State Farm but voidable at D.V.G.’s election.”

6. Explain – “Nationwide and State Farm nevertheless argue that the fact that no hearing 986 (Links to an external site.)*986 (Links to an external site.)was held to allow a court to approve the settlement — a hearing that all parties agree was required to take place — nullifies the agreed-upon settlement and releases them from their obligations under that settlement either because the contract was mutually executory or because the contemplated hearing was a condition precedent to their performance.”

7. Explain – ” It is established law that a decedent’s contract claims survive his or her death, and, because we have 987 (Links to an external site.)*987 (Links to an external site.)held that the settlement agreement was a contract voidable at D.V.G.’s election, we can think of no reason why a trial court could not make a determination of the fairness of that contract even after the minor’s death. For these reasons, we answer the certified question in the affirmative.”

8. Who won and why – state name of actual party who won (not appellant, etc.) and why