Truck Driver on the Hook for $100,000 Personal Injury Settlement After Employer Files for Bankruptcy

In any personal injury case, there is always a risk that the defendant has insufficient assets to pay any judgment or settlement and will therefore seek bankruptcy protection. In many cases, this means the plaintiff–the victim–is out of luck. What happens if there is a co-defendant who is not bankrupt? Can they be held solely responsible for the plaintiff’s damages?

Meeks v. Newcomb

The Atlanta-based U.S. 11th Circuit Court of Appeals recently addressed such a case. In Meeks v. Newcomb, a man was killed after his vehicle crashed into the back of a tractor-trailer. The victim’s widow subsequently sued both the company that owned the truck as well as the individual driver.

All parties agreed to mediation. A single attorney represented both the trucking company and the driver. Following mediation, the widow agreed to dismiss her lawsuit against both defendants in exchange for $100,000. The final settlement agreement did not specify how the defendants would pay this money–i.e., it did not say whether the company would pay the full amount, the driver would pay half, et cetera.

A few months after signing the settlement agreement, the trucking company filed for bankruptcy. The widow, who had yet to receive anything under the settlement, then asked a Georgia federal court to enforce the settlement solely against the driver. In response, the driver submitted a series of emails exchanged between the trucking company and its lawyer which suggested the agreement only intended to bind the company to pay the settlement.

The trial court accepted this evidence and denied the widow’s motion to enforce the judgment solely against the driver. The 11th Circuit reversed. It held that under Georgia law, the terms of the settlement were “definite and unambiguous” in that they equally bound both the company and the driver to pay the $100,000. Nothing in the language of the actual settlement agreement said anything about the company paying the entire amount.

The 11th Circuit noted that as a general rule, judges are not supposed to look at outside or “extrinsic” evidence to interpret a contract when there is no ambiguity. In other words, the trial court should not have accepted the emails submitted by the driver as proof the settlement agreement meant something other than what it plainly said.

The appeals court further rejected the driver’s claim that the attorney he shared with his employer “lacked even the apparent authority” to approve the settlement agreement on his behalf. First, there was “no evidence” this was actually the case. Second, under Georgia law a client is still bound by his attorney’s decision to settle a case if the other party–i.e., the plaintiff–was unaware of any limitation on that attorney’s authority in this area. Third, the driver was not actually arguing the settlement did not apply to him. Rather, he insisted the widow somehow knew she was agreeing to let the company pay the full amount of the $100,000. But this again would require consideration of external evidence, which the 11th Circuit already rejected as improper. For all these reasons, the driver was on the hook for the full $100,000.

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