When plaintiffs in auto accident cases approve an offer for damages from defendants or their insurance companies, they will likely be obligated to accept the terms, even if new information arises. On January 15, the Superior Court of the Virgin Islands issued an opinion stating that the plaintiff in a recent lawsuit cannot challenge a settlement originally agreed upon with the auto insurance provider GEICO.
The case, Castolenia v. Crafa, revolves around an auto accident occurring in November 2011, when a Thrifty rental car driven by David Crafa collided with a vehicle driven by Deborah Castolenia in St. Thomas. Castolenia suffered significant injuries and sought damages from Crafa’s insurer, GEICO, for $50,000 — the liability limit under his policy.
In June 2012, Castolenia’s attorney sent GEICO a settlement package requesting the full $50,000, and the insurer responded by issuing a check for that amount. Six months later, the attorney returned the check, claiming that Castolenia’s injuries exceeded the policy limit. After Crafa filed a motion to enforce this initial settlement, Castolenia objected, claiming that the settlement reached was invalid because there was no meeting of the minds, which is a legal term for when two parties agree to and understand the terms of a contract or settlement. Additionally, the plaintiff argued that her attorney did not have the right to finalize the settlement and that Crafa misrepresented his insurance policy. In its opinion, the Superior Court ruled that the settlement was indeed valid and enforceable, and thereby granted Crafa’s motion. The court has the authority to enforce agreements like this, which work similarly to any other type of binding contract, and agreed with the defendant that all of the parties involved had previously agreed on the terms. Additionally, the court ruled that Castolenia’s lawyer did have the authority to negotiate the settlement, and that Crafa did not misrepresent his insurance coverage in a fraudulent manner. In other words, Castolenia must accept the original settlement of $50,000 from GEICO. This ruling demonstrates the importance for all parties in these types of cases to know what it means to accept a settlement. In this situation, it does not appear that Castolenia was completely aware of what she was agreeing to, but the settlement is enforceable regardless.