PERSONAL INJURY SETTLEMENT AGREEMENT AND MUTUAL RELEASE

(Maryland – Court-Approved Form)

[// GUIDANCE: This master template is drafted for use in Maryland personal-injury matters. Bracketed items require attorney customization. Delete any provisions that do not apply (e.g., the “Structured Settlement” or “Minor Claimant” Articles) and renumber accordingly.]

DOCUMENT HEADER

This Personal Injury Settlement Agreement and Mutual Release (this “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

1. [CLAIMANT FULL LEGAL NAME], [individual/corporate form], with a principal address at [ADDRESS] (“Releasor” or “Claimant”); and
2. [DEFENDANT FULL LEGAL NAME], [individual/corporate form], with a principal address at [ADDRESS] (“Releasee” or “Defendant”).

(Each a “Party” and, collectively, the “Parties”.)

Recitals

A. On or about [DATE OF INCIDENT], an incident occurred at/near [LOCATION] (the “Incident”).
B. Claimant alleges that the Incident caused personal injuries and related damages (the “Claims”).
C. Defendant denies all liability but desires to settle the Claims to avoid the burden and expense of litigation.
D. The Parties intend for this Agreement to fully and finally compromise, settle, and release all Claims arising from or relating to the Incident, on the terms set forth below.

NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration (the receipt and sufficiency of which are acknowledged), the Parties agree as follows:

TABLE OF CONTENTS

I. Definitions
II. Settlement Payment and Consideration
III. Release and Indemnification
IV. Representations and Warranties
V. Covenants
VI. Structured Settlement (If Applicable)
VII. Minor Claimant Provisions (If Applicable)
VIII. Liens and Medicare Secondary Payer Compliance
IX. Default; Remedies
X. Governing Law; Venue
XI. Miscellaneous
XII. Execution

ARTICLE I – DEFINITIONS

The following terms, when used with initial capital letters, shall have the meanings set forth below. All other capitalized terms have the meanings assigned elsewhere in this Agreement.

“Agreement” has the meaning set forth in the preamble.
“Claim Documents” means all pleadings, correspondence, medical records, and other documents exchanged in connection with the Claims.
“Claims” has the meaning set forth in Recital B.
“Court” means the Circuit Court for [COUNTY], Maryland (or such other Maryland state court that has jurisdiction).
“Effective Date” has the meaning set forth in the Document Header.
“Incident” has the meaning set forth in Recital A.
“Lienholder” means any person or entity asserting a statutory, contractual, or equitable lien related to the Claims, including Medicare, Medicaid, ERISA plans, and health-care providers.
“Minor” means a Claimant who, on the Effective Date, is under eighteen (18) years of age under Maryland law.
“Payment Deadline” has the meaning set forth in Section 2.2.
“Releasee Parties” has the meaning set forth in Section 3.1.
“Releasor Parties” has the meaning set forth in Section 3.2.
“Settlement Amount” has the meaning set forth in Section 2.1.

[// GUIDANCE: Add or remove defined terms to suit the matter.]

ARTICLE II – SETTLEMENT PAYMENT AND CONSIDERATION

2.1 Settlement Amount. Defendant shall pay Claimant the total sum of [US $ SETTLEMENT AMOUNT] (the “Settlement Amount”) in full satisfaction of the Claims, subject to the terms of this Agreement.

2.2 Payment Mechanics.
(a) Time of Payment. Defendant shall deliver the Settlement Amount on or before [NUMBER] days after (i) full execution of this Agreement by all Parties and (ii) receipt of any court approval required under Article VII (the “Payment Deadline”).
(b) Payee; Method. Payment shall be made by [wire transfer / cashier’s check] payable to [PAYEE NAME], [Escrow Agent name, if any], for benefit of Claimant.
(c) Interest. If Defendant fails to deliver payment by the Payment Deadline, interest shall accrue on the unpaid balance at the lesser of (i) six percent (6%) per annum or (ii) the maximum rate permitted by Maryland law, from the Payment Deadline until paid in full.

2.3 Tax Treatment. The Parties intend that the Settlement Amount constitutes damages on account of personal physical injuries within the meaning of Section 104(a)(2) of the Internal Revenue Code. Each Party shall be solely responsible for its own tax obligations arising from this Agreement. No Party makes any representation regarding the tax consequences of this settlement.

2.4 Conditions Precedent. Defendant’s obligation to pay the Settlement Amount is conditioned upon:
(a) Claimant’s execution and delivery of this Agreement;
(b) Receipt of dismissal with prejudice of any filed action, in form acceptable to Defendant; and
(c) Receipt of any court approvals required under Article VII.

ARTICLE III – RELEASE AND INDEMNIFICATION

3.1 Release by Claimant. Upon Defendant’s timely payment of the Settlement Amount, Claimant, on behalf of Claimant and Claimant’s heirs, executors, administrators, agents, successors, assigns, insurers, and all other persons claiming by or through Claimant (collectively, the “Releasor Parties”), irrevocably and unconditionally releases and forever discharges Defendant, Defendant’s parents, subsidiaries, affiliates, predecessors, successors, assigns, insurers, reinsurers, directors, officers, employees, agents, and attorneys (collectively, the “Releasee Parties”) from any and all past, present, or future claims, demands, causes of action, damages, losses, costs, and expenses of every kind, known or unknown, arising from or relating to the Incident or the Claims, including any claim for attorneys’ fees or costs.

3.2 Mutuality of Release. Upon execution of this Agreement, Defendant, for itself and the other Releasee Parties, releases the Releasor Parties from all claims arising from the Incident, excluding claims for breach of this Agreement.

3.3 Covenant Not to Sue. Releasor covenants never to commence or prosecute, or cause to be commenced or prosecuted, against any Releasee Party any action or proceeding based upon any claim released herein.

3.4 Indemnification of Liens. Claimant shall satisfy and obtain releases of all Liens and shall indemnify, defend, and hold harmless each Releasee Party from any liability, cost, or expense (including reasonable attorneys’ fees) arising out of any assertion of a Lien related to the Claims.

3.5 Maryland Release-Enforceability Compliance. The Parties acknowledge and intend that this Article III satisfies Maryland’s requirements for a valid and enforceable release of personal-injury claims, including that (a) the consideration is adequate and expressly stated, (b) the terms are in clear, understandable language, and (c) the release extends only to matters expressly set forth herein.

ARTICLE IV – REPRESENTATIONS AND WARRANTIES

4.1 Mutual Representations. Each Party represents and warrants that:
(a) Authority. It has full power and authority to enter into and perform this Agreement.
(b) No Assignment. It has not assigned or transferred, or purported to assign or transfer, to any person any claim or right released herein.
(c) No Reliance. It is not relying on any representation or statement not expressly set forth in this Agreement.

4.2 Additional Representations of Claimant. Claimant further represents and warrants that:
(a) Medical Condition. Claimant has had the opportunity to consult with medical professionals regarding the nature and extent of Claimant’s injuries.
(b) Legal Counsel. Claimant has been advised of the right to seek independent legal advice and either has done so or knowingly waives such right.
(c) Understanding of Agreement. Claimant has read and fully understands this Agreement and executes it voluntarily.

4.3 Survival. The representations and warranties in this Article IV shall survive the Effective Date and any payment made under this Agreement.

ARTICLE V – COVENANTS

5.1 Confidentiality. Except to the extent disclosure is required by law or court order, the Parties shall keep the terms of this Agreement confidential. Permitted disclosures include communications with counsel, insurers, tax advisors, and immediate family members, each of whom must be informed of and bound by this confidentiality obligation.

5.2 Non-Disparagement. The Parties shall not publish or communicate any statement, oral or written, that disparages the other Party in connection with the Incident or the Claims.

5.3 Cooperation on Dismissal. Within [NUMBER] days of Defendant’s payment of the Settlement Amount, the Parties shall file a joint stipulation dismissing with prejudice any pending action relating to the Claims.

5.4 Further Assurances. The Parties shall execute and deliver such additional documents and take such further actions as may be reasonably necessary to effectuate the purposes of this Agreement.

ARTICLE VI – STRUCTURED SETTLEMENT

(Include only if some or all of the Settlement Amount will be paid through an annuity or periodic payments.)

6.1 Election of Structure. [PORTION] of the Settlement Amount shall be funded through a qualified assignment and annuity meeting the requirements of Sections 104(a)(2) and 130 of the Internal Revenue Code and all applicable Maryland structured-settlement statutes.

6.2 Assignment Company. Defendant shall assign its periodic payment obligation to [ASSIGNMENT COMPANY NAME] (“Assignment Company”). Claimant agrees to such assignment, and the liability of Defendant with respect to periodic payments shall thereafter be entirely discharged.

6.3 Annuity Terms. The annuity shall provide for periodic payments of [AMOUNT] commencing on [DATE], continuing [frequency] for [duration].

6.4 Qualified Settlement Fund (Optional). The Parties may establish a qualified settlement fund under 26 C.F.R. § 1.468B-1 to facilitate the structured settlement.

6.5 No Acceleration or Borrowing. Claimant shall have no right to accelerate, defer, increase, or borrow against the periodic payments, except as permitted by Maryland law.

[// GUIDANCE: Maryland’s Structured Settlement Transfer Act imposes procedural safeguards on any future assignment or sale of periodic payments. Counsel should ensure compliance if such assignment is contemplated.]

ARTICLE VII – MINOR CLAIMANT PROVISIONS

(Include only if any Claimant is a Minor under Maryland law.)

7.1 Court Approval. Because Claimant is a Minor, this Agreement is contingent upon approval by the Court pursuant to applicable Maryland rules governing minor settlements. The Parties shall promptly submit a joint petition seeking such approval.

7.2 Appointment of Guardian. If required, the Court shall appoint a guardian of the property of the Minor to receive and administer the Settlement Amount. Any fees of the guardian shall be paid from the settlement proceeds subject to Court approval.

7.3 Restricted Accounts / Structured Payments. All funds payable to a Minor shall be deposited into a restricted interest-bearing account, structured settlement annuity, or other Court-approved vehicle, and shall remain subject to Court supervision until the Minor attains the age of majority or as otherwise ordered.

7.4 Reversion. If the Court declines to approve this Agreement as written, either Party may terminate this Agreement upon written notice, whereupon the Parties shall be restored to their pre-Agreement positions, and neither shall have any further obligation under this Agreement.

[// GUIDANCE: Maryland Circuit Courts typically require disclosure of attorneys’ fees, costs, and lien resolutions in minor-settlement petitions. Attach the proposed order and any structured-settlement documents when filing.]

ARTICLE VIII – LIENS AND MEDICARE SECONDARY PAYER COMPLIANCE

8.1 Identification of Liens. Claimant represents that the liens listed on Schedule A constitute all known Liens relating to the Claims.

8.2 Satisfaction and Hold-Harmless. Claimant shall (a) satisfy all Liens from the Settlement Amount, and (b) indemnify and hold harmless the Releasee Parties from any claim, penalty, interest, or cost arising from any failure to satisfy such Liens.

8.3 Medicare Reporting. The Parties shall cooperate to ensure compliance with Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 and its implementing regulations, including timely exchange of required data.

8.4 Medicare Set-Aside (If Applicable). If a Medicare set-aside arrangement is reasonably required, the Parties shall establish such arrangement in compliance with Centers for Medicare & Medicaid Services guidance, and associated costs shall be borne [equally / by Claimant / by Defendant].

ARTICLE IX – DEFAULT; REMEDIES

9.1 Events of Default. The following constitute Events of Default:
(a) Failure of Defendant to pay the Settlement Amount by the Payment Deadline;
(b) Failure of Claimant to obtain Court approval required under Article VII within [NUMBER] days after filing;
(c) Breach of any representation, warranty, or covenant contained in this Agreement.

9.2 Notice and Cure. The non-defaulting Party shall give written notice specifying the nature of the default. The defaulting Party shall have [NUMBER] days to cure (the “Cure Period”).

9.3 Remedies. If the default is not cured within the Cure Period, the non-defaulting Party may:
(a) Enforce specific performance of this Agreement;
(b) Recover damages, including reasonable attorneys’ fees and costs; and/or
(c) Obtain such other relief as a Maryland court of competent jurisdiction may deem appropriate.

9.4 No Waiver. A Party’s failure to enforce any provision shall not constitute a waiver of future enforcement of that or any other provision.

ARTICLE X – GOVERNING LAW; VENUE

10.1 Governing Law. This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Maryland, without regard to its conflict-of-laws principles.

10.2 Exclusive Venue. Any action arising out of or relating to this Agreement shall be filed exclusively in the Maryland state courts located in [COUNTY], and each Party irrevocably submits to the personal jurisdiction of such courts.

10.3 WAIVER OF REMOVAL. Defendant irrevocably waives any right to remove any such action to federal court.

[// GUIDANCE: The user specified “state_court” forum and no arbitration or jury waiver, so those clauses are omitted. If client desires arbitration, insert a mutually acceptable ADR provision here.]

ARTICLE XI – MISCELLANEOUS

11.1 Entire Agreement. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior negotiations and agreements, whether oral or written.

11.2 Amendments. No amendment or modification of this Agreement shall be effective unless in a written instrument signed by all Parties.

11.3 Severability. If any provision of this Agreement is held unenforceable, the remaining provisions shall remain in full force, and the unenforceable provision shall be reformed to the minimum extent necessary to be enforceable.

11.4 Successors and Assigns. This Agreement is binding upon and inures to the benefit of the Parties and their respective heirs, executors, administrators, successors, and permitted assigns. No Party may assign this Agreement without the prior written consent of the other Party, except that Defendant may assign its obligations to an Assignment Company under Article VI.

11.5 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which constitutes an original, and all of which together constitute one instrument. Signatures transmitted by facsimile, PDF, or secure electronic signature service (e.g., DocuSign) shall be deemed original signatures.

11.6 Construction. The headings in this Agreement are for convenience only and shall not affect interpretation. The Parties acknowledge that each Party has participated in drafting, and no presumption against the drafter shall apply.

11.7 Notices. Any notice required or permitted under this Agreement shall be in writing and delivered (a) by hand, (b) by nationally recognized overnight courier, or (c) by certified U.S. mail, return receipt requested, to the addresses set forth below (or any updated address designated by notice), and shall be deemed given upon receipt.

11.8 Attorneys’ Fees. In any action to enforce this Agreement, the prevailing Party shall be entitled to recover its reasonable attorneys’ fees and costs.

ARTICLE XII – EXECUTION

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

[// GUIDANCE: Maryland does not generally require notarization for releases, but many practitioners include it for evidentiary certainty, especially in minor settlements. Insert notarization blocks below if desired.]

Notary Acknowledgment (Optional)

State of Maryland
County of [_____]

On this ___ day of ____, 20__, before me, the undersigned Notary Public, personally appeared [NAME], known to me (or satisfactorily proven) to be the person whose name is subscribed to the foregoing instrument, and acknowledged that (s)he executed the same for the purposes therein contained.

Notary Public: ___
My Commission Expires: ______

SCHEDULE A – LIENHOLDERS

[List all known lienholders and claim amounts or attach separate schedule.]

[// GUIDANCE: Review Maryland Rule 2-202 (competency of parties), Rule 2-541 (guardian or next friend of minor), and applicable local rules regarding minor settlements. Confirm that any structured-settlement terms comply with federal tax law and Maryland statutory requirements before finalizing.]