Settling With An Incapacitated Plaintiff

In a recent reported decision, the New Jersey Supreme Court reversed the trial court approval of a settlement involving an accident victim who had a diminished mental capacity. It also reversed the Appellate Divisions affirmance of that trial court decision

The plaintiff was working at the defendants property when she was struck in the head by a metal plate that had fallen from the buildings doorway. She suffered a traumatic brain injury and was awarded permanent Social Security disability benefits. The plaintiff was diagnosed with cognitive, anxiety and depressive disorders, and an impaired ability to process complex information

The defendant offered the plaintiff $475,000.00 to settle the case which she rejected. Her attorney believed that this decision was not in her best interest and had the court appoint a guardian ad litem for the victim. The court also ordered a forensic examination which showed that the plaintiff had a diminished capacity to fully consider the risks of her decisionmaking in regard to how to proceed with the case

Without scheduling a guardianship hearing, the trial judge gave the guardian the authority to accept or reject

settlement on the plaintiffs behalf. The parties ultimately reached a settlement for $625,000.00 without the plaintiffs consent, which the trial judge approved over her forceful objection

The Supreme Court found that the trial judge had erred in not ordering a guardianship hearing and in not appointing independent counsel for the plaintiff in connection with that hearing. It further held that due to the failure of the trial judge to find by clear and convincing evidence that the plaintiff lacked the mental capacity to decide how to proceed with her case, the trial court lacked the authority to accept the settlement over the plaintiffs objection

Certainly it was unfair for the trial judge to take away the plaintiffs right to decide whether to accept the settlement offer, without finding her to be incapacitated. Also, independent counsel for an allegedly incapacitated person is always appointed in guardianship cases, and goes a long way in protecting that persons interests

This office has extensive experience with personal injury cases and guardianship proceedings. Call us today!

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