PERSONAL INJURY SETTLEMENT AGREEMENT AND MUTUAL RELEASE
(Minnesota – Governed by State Tort Law)
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
3.1 Settlement Payment & Consideration
3.2 Conditions Precedent
3.3 Structured Settlement (Optional)
3.4 Minor Settlement Approval (If Applicable) - Representations & Warranties
- Covenants
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
This Personal Injury Settlement Agreement and Mutual Release (the “Agreement”) is made and entered into as of [Effective Date] (the “Effective Date”) by and between:
A. [Claimant Full Legal Name], [Claimant Address] (“Claimant”); and
B. [Defendant Full Legal Name], [Defendant Address] (“Defendant”).
Claimant and Defendant are referred to individually as a “Party” and collectively as the “Parties.”
Recitals
WHEREAS, Claimant alleges that on or about [Date of Incident] Claimant sustained personal injuries and damages arising out of [Brief Description of Incident] (the “Incident”);
WHEREAS, Defendant denies all liability with respect to the Incident;
WHEREAS, the Parties desire to fully and finally compromise, settle, release, and discharge all claims arising out of or relating to the Incident upon the terms set forth herein, thereby avoiding the expense and uncertainty of litigation;
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
2. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings set forth below:
“Action” means any lawsuit, arbitration, administrative action, or other proceeding arising from or related to the Incident.
“Claims” means any and all past, present, or future claims, demands, causes of action, damages, losses, liabilities, liens, costs, expenses, and rights of whatever kind or nature, known or unknown, suspected or unsuspected, contingent or absolute, in law or equity.
“Court” means a state court of competent jurisdiction located in the State of Minnesota.
“Effective Date” has the meaning set forth in the Document Header.
“Incident” has the meaning set forth in the Recitals.
“Minor” means any individual who is under eighteen (18) years of age or otherwise lacks legal capacity.
“Parties” and “Party” have the meanings set forth in the Document Header.
“Releasees” means Defendant, its past, present, and future parents, subsidiaries, affiliates, insurers, reinsurers, shareholders, officers, directors, employees, agents, representatives, successors, and assigns.
“Settlement Amount” means the total consideration payable under Section 3.1.
[// GUIDANCE: Add additional defined terms as needed to correspond with unique deal points.]
3. OPERATIVE PROVISIONS
3.1 Settlement Payment & Consideration
3.1.1 Settlement Amount. In full, final, and complete satisfaction of all Claims, Defendant shall pay or cause to be paid to Claimant the total sum of $[Settlement Amount Numeric] ([Settlement Amount Words] U.S. Dollars) (the “Settlement Amount”).
3.1.2 Form of Payment. Payment shall be made by [wire transfer / cashier’s check / settlement draft] payable to [Payee] within [___] days after (i) execution of this Agreement by all Parties, and (ii) receipt by Defendant of all required dismissal documents and court approvals referenced herein.
3.1.3 Tax Allocation. The Parties agree that the Settlement Amount is paid on account of personal physical injuries or physical sickness within the meaning of Section 104(a)(2) of the Internal Revenue Code. Each Party shall be solely responsible for any tax obligations arising from payments received hereunder.
3.1.4 No Admission of Liability. Payment of the Settlement Amount constitutes a compromise of disputed claims and shall not be construed as an admission of liability by Defendant or any Releasee.
3.2 Conditions Precedent
(a) Execution and delivery of this Agreement by all Parties;
(b) If Claimant is a Minor, entry of an Order of the Court approving the settlement pursuant to applicable Minnesota law and Rule 145 of the Minnesota General Rules of Practice;
(c) Delivery to Defendant of a properly executed Stipulation of Dismissal with prejudice and without costs, suitable for filing with the Court.
3.3 Structured Settlement (Optional)
[Insert this subsection only if a structured annuity is contemplated.]
3.3.1 Structure Terms. A portion of the Settlement Amount equal to $[Structured Portion] shall be used to purchase an annuity contract from [Qualified Assignment Company] providing periodic payments to Claimant as set forth in Schedule A (the “Periodic Payments”).
3.3.2 Qualified Assignment. The Parties intend that any assignment of periodic payment obligations shall qualify under 26 U.S.C. § 130, and any subsequent factoring transaction shall comply with 26 U.S.C. § 5891 and Minnesota’s Structured Settlement Protection Act.
3.3.3 Security for Payments. The sole security for the Periodic Payments shall be the general assets of the Qualified Assignment Company or the annuity issuer; no Party shall have recourse against Defendant or any Releasee in the event of default by the annuity issuer.
[// GUIDANCE: Delete Section 3.3 in its entirety if the settlement is paid as a single lump sum.]
3.4 Minor Settlement Approval (If Applicable)
3.4.1 Court Approval. Where Claimant is a Minor, this Agreement is contingent upon and shall become effective only upon entry of a final, non-appealable order by the Court approving the settlement terms and authorizing the disposition of the Settlement Amount.
3.4.2 Fiduciary Responsibilities. Upon approval, the Settlement Amount shall be deposited into [Restricted Account / Trust] for the sole benefit of the Minor, subject to withdrawal only by court order.
3.4.3 Guardians ad Litem / Conservators. [Name of Guardian/Conservator] represents and warrants that he/she/they is duly appointed and authorized to execute this Agreement on behalf of the Minor.
4. REPRESENTATIONS & WARRANTIES
4.1 Mutual Authority. Each Party represents and warrants that it has full capacity, power, and authority to enter into and perform this Agreement.
4.2 Claims Ownership. Claimant represents and warrants that (a) Claimant is the sole owner of the Claims; (b) no Claims have been assigned, pledged, or encumbered; and (c) Claimant has not filed for bankruptcy protection.
4.3 Medicare/Medicaid Compliance. Claimant represents that Claimant has made full disclosure of any Medicare, Medicaid, or other governmental interest and will cooperate in satisfying any conditional payments or reimbursement claims.
4.4 Survival. All representations and warranties set forth in this Agreement shall survive the Effective Date and the consummation of the settlement contemplated herein.
5. COVENANTS
5.1 Mutual Release. Effective upon satisfaction of the Conditions Precedent and receipt of the Settlement Amount, Claimant, on behalf of himself/herself and all Releasors, irrevocably and unconditionally releases and forever discharges the Releasees from all Claims.
5.2 Dismissal With Prejudice. Within [___] business days of receipt of the Settlement Amount, Claimant shall file a Stipulation of Dismissal with prejudice, each Party to bear its own costs and attorney fees.
5.3 No Further Claims. Claimant covenants not to commence or prosecute any Action based on any Released Claim.
5.4 Confidentiality (Optional). [If applicable] The terms and existence of this Agreement are confidential and shall not be disclosed except as required by law or court order.
6. DEFAULT & REMEDIES
6.1 Events of Default. Any of the following constitute an “Event of Default”:
(a) Defendant fails to pay the Settlement Amount when due;
(b) Claimant fails to deliver dismissal documents or obtain required approvals;
(c) Breach of any representation, warranty, or covenant contained herein.
6.2 Notice & Cure. The non-defaulting Party shall provide written notice specifying the default. The defaulting Party shall have [10] business days to cure.
6.3 Remedies. If the default is not timely cured, the non-defaulting Party may:
(a) Seek specific performance;
(b) Rescind this Agreement; and/or
(c) Pursue any other remedy available at law or equity, including attorney fees and costs.
7. RISK ALLOCATION
7.1 Indemnification by Claimant. Claimant shall indemnify, defend, and hold harmless the Releasees from any claims by Medicare, Medicaid, ERISA plans, medical lienholders, or other third parties asserting subrogation or reimbursement rights arising out of payments made on Claimant’s behalf.
7.2 Indemnification by Defendant. Defendant shall indemnify and hold harmless Claimant from any claim that Defendant failed to procure settlement authority or misrepresented insurance coverage.
7.3 Limitation of Liability. Notwithstanding anything herein, the maximum aggregate liability of Defendant and all Releasees under or in connection with this Agreement shall not exceed the Settlement Amount.
7.4 Force Majeure. No Party shall be liable for failure or delay in performance due to acts of God, war, terrorism, pandemic, or other events beyond the Party’s reasonable control, provided that the impacted Party provides prompt notice and uses commercially reasonable efforts to mitigate the delay.
8. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Minnesota, without giving effect to its conflict-of-laws principles.
8.2 Forum Selection. Any Action arising out of or relating to this Agreement shall be commenced and maintained exclusively in a state court of competent jurisdiction located in [County], Minnesota, and the Parties hereby consent to personal jurisdiction and venue therein.
8.3 Waiver of Jury Trial. Intentionally Omitted.
8.4 Arbitration. Intentionally Omitted.
8.5 Attorneys’ Fees. In any Action to enforce this Agreement, the prevailing Party shall be entitled to recover its reasonable attorneys’ fees, costs, and expenses.
9. GENERAL PROVISIONS
9.1 Entire Agreement. This Agreement constitutes the entire understanding between the Parties and supersedes all prior negotiations and agreements, whether oral or written, relating to the subject matter hereof.
9.2 Amendments & Waivers. No amendment or waiver of any provision shall be effective unless in writing and signed by all Parties. Waiver of any breach shall not constitute waiver of any subsequent breach.
9.3 Assignment. No Party may assign or delegate any rights or obligations under this Agreement without the prior written consent of the other Party, except that Defendant may assign its obligations to its insurer or a qualified assignment company in connection with a structured settlement.
9.4 Severability. If any provision is held invalid or unenforceable, such provision shall be reformed to the minimum extent necessary, and the remaining provisions shall remain in full force and effect.
9.5 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures transmitted electronically (e.g., via PDF or DocuSign) shall be deemed original signatures for all purposes.
9.6 Successors & Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, personal representatives, successors, and permitted assigns.
9.7 Headings. Section headings are for convenience only and shall not affect the interpretation of this Agreement.
9.8 Drafting. The Parties acknowledge that they have jointly negotiated and drafted this Agreement; therefore, no presumption shall arise favoring either Party by virtue of authorship.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
CLAIMANT
Signature: ______
Name: [Claimant Name]
Date: _____
DEFENDANT
Signature: ______
Name: [Authorized Signatory]
Title: [Title]
Date: _____
NOTARY ACKNOWLEDGMENT (add if required)
[Insert Minnesota statutory notary block]
[// GUIDANCE:
1. Attach Schedule A (periodic payment schedule) if Section 3.3 is used.
2. When minors are involved, circulate this draft, proposed petition, and supporting affidavits to the Court for preliminary review prior to final execution.
3. Confirm Medicare conditional payment status and obtain final demand prior to funding.
4. Verify lien resolution service compliance to mitigate indemnification exposure.
5. Adapt confidentiality language to conform with Minnesota’s public-records law if any Party is a governmental entity.]