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Law School Case Brief

Spaulding v. Zimmerman - 263 Minn. 346, 116 N.W.2d 704 (1962)

Rule:

The principles applicable to the court's authority to vacate settlements that are made on behalf of minors and that are approved by it are well established. The court in its discretion may vacate such a settlement, even though it is not induced by fraud or bad faith, where it is shown that in the accident the minor has sustained separate and distinct injuries which were not known or considered by the court at the time settlement was approved, and even though the releases purport to cover both known and unknown injuries from the accident. The court may vacate such a settlement for mistake even though the mistake is not mutual in the sense that both parties are similarly mistaken as to the nature and extent of the minor's injuries, but where it is shown that one of the parties had additional knowledge with respect thereto and was aware that neither the court nor the adversary party possessed such knowledge when the settlement was approved. 

Facts:

Plaintiff Theodore Spaulding, as father and natural guardian of David Spaulding, filed suit for injuries sustained by David in an automobile accident, arising out of a collision which occurred August 24, 1956, between an automobile driven by defendant John Zimmerman, in which David was a passenger, and one owned by defendant John Ledermann and driven by defendant Florian Ledermann. The minor's injuries were diagnosed as a severe crushing chest injury, a cerebral concussion, and bilateral fractures of the clavicles. The defense's expert, who also examined the minor, reported that the minor had an aorta aneurysm, which may have been caused by the accident. At settlement negotiations, however, the minor's parents were not aware of the report received by the defense. The parties settled, and the trial court approved the settlement. Upon learning of the report, the minor filed a motion to vacate the settlement. The trial court set aside its prior order approving the settlement and the releases executed by the minor and his parents. The drivers appealed, arguing that the trial court was without jurisdiction to vacate the settlement because no mutual mistake of fact was involved, because there was no duty to disclose, because insurance limitations formed the basis for the settlement, and because the motion to vacate the order for settlement and to set aside the releases was barred by Minn. R. Civ. P. 60.02

Issue:

In a lawsuit against defendant drivers for a minor's injuries sustained in a car accident and the parties settled before the minor's parents learned of the defense's medical report, did the trial court have jurisdiction to set aside the settlement?

Answer:

Yes

Conclusion:

The Supreme Court of Minnesota found that the trial court correctly granted the motion to vacate and set aside the settlement. It held that the fact that the settlement did not contemplate the aorta aneurysm gave the trial court reason to exercise its discretion in vacating the settlement under Rule 60.02. Affirming, the Court further found that there was no evidence that the defense had disclosed either to plaintiff's counsel or the trial court that insurance limitations were involved in the settlement.

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