Wednesday, December 25, 2013

Clark v. Elza case brief

Clark v. Elza case brief summary
406 A.2d 922 (1979)

CASE SYNOPSIS
Defendant settlors sought review of an order of the Court of Special Appeals (Maryland), which held that the trial court's order declining to enforce a settlement agreement was not final and appealable.

CASE FACTS
Plaintiff settlees instituted an action against the settlors arising out of an automobile accident. The settlees and the settlors reached an agreement. However, before executing the release, the settlees notified the settlors that the settlement amount was no longer acceptable. The trial court would not enforce the agreement, and the appeals court held that the trial court's order was not final and appealable. The settlors appealed.

DISCUSSION

  • On appeal, the court held that the trial court's order was a collateral order and, thus, was appealable. 
  • The settlement agreement was an executory accord and not a substitute contract because a "release" was to be executed upon performance of the settlement contract. 
  • If a substitute contract was intended, the underlying tort cause of action would have been released when the agreement was made, notwithstanding the fact that performance had not yet been rendered. 
  • Thus, the trial court should not have permitted the settlees to proceed with the underlying tort action in violation of their settlement agreement.

CONCLUSION
The court reversed the appeals court's order that the trial court's judgment was not appealable. The court reversed the trial court's order that the settlement agreement was not enforceable and remanded the matter to the trial court for further proceedings.

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