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LAW001 #5 – Chapter 14 – Capacity Case Problem

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LAW001 #5 – Chapter 14 – Capacity Case Problem

A. Read the case Nationwide Mutual v. Wood (Links to an
external site.). B. Carefully explain in your own words (paraphrase and do
not copy from the case).1. Explain –
“Under Alabama law, is an insurance company bound to a settlement
agreement negotiated on behalf of an injured minor, if that minor dies before
the scheduling of a pro ami hearing which was intended by both sides to obtain
approval of the settlement?” 2. Explain –
“Under the Alabama survival statute, § 6-5-462, Ala.Code 1975, an unfiled
claim sounding in tort will not survive the death of the person with the claim,
Malcolm v. King, 686 So.2d 231 (Ala.1996) (Links to an external site.); Georgia
Cas. & Sur. Co. v. White, 582 So.2d 487 (Ala.1991) (Links to an external
site.). A claim on a contract, on the other hand, survives in favor of a
decedent’s personal representative, regardless of whether the decedent had
filed an action before his death, McCulley v. SouthTrust Bank of Baldwin
County, 575 So.2d 1106 (Ala. (Links to
an external site.)985 (Links to an external site.)*985 (Links to an external
site.) 1991) (Links to an external site.); Benefield v. Aquaslide `N’ Dive
Corp.,406 So.2d 873 (Ala.1981 (Links to an external site.)). (Links to an external
site.)3. Explain – “Thus, it is undisputed that any potential tort claims
D.V.G. held were extinguished when she died; the issue before us is whether she
held any contractual claims at her death that are now enforceable by the
administratrix of her estate, her mother Barbara Walker Wood. Wood argues that
the settlement agreed to by D.V.G.’s attorney Stan Brobston and Nationwide and
State Farm is a valid contract that Wood can now enforce.”4. Explain – “Nationwide and State Farm argue that the
settlement agreement was an executory contract that would not be complete and
binding until it was approved by the Jefferson Circuit Court following a pro
ami hearing. Alternatively, they argue that, even if the settlement agreement
was a binding and enforceable contract, the pro ami hearing was a condition
precedent to the performance of the contract and that hearing is now impossible
as a result of the death of D.V.G.; consequently, they argue, their duty to
perform under the contract is discharged”. 5. Explain – “[i]t is well settled by the authorities
that infants are not liable on any of their contracts, except for necessaries.
With the exception, all other contracts of infants, whether executory or executed,
may be avoided or ratified at the election of the infant.`” H & S
Homes, L.L.C. v. McDonald, 823 So.2d 627, 630 (Ala.2001) (Links to an external
site.)(quoting Harris v. Raughton, 37 Ala.App. 648, 649, 73 So.2d 921, 922
(1954) (Links to an external site.)(emphasis added)). See also Davis v. Turner,
337 So.2d 355, 361 (Ala.Civ.App.1976) (Links to an external site.) (stating
that contracts entered into by minors are “not void, but voidable
only” and “not totally ineffectual, [but] merely unenforceable if
later repudiated”). Thus, at the time the settlement was agreed to, a
contract was formed that was binding upon Nationwide and State Farm but
voidable at D.V.G.’s election.” 6. Explain – “Nationwide and State Farm nevertheless
argue that the fact that no hearing 986 (Links to an external site.)*986 (Links
to an external site.)was held to allow a court to approve the settlement — a
hearing that all parties agree was required to take place — nullifies the
agreed-upon settlement and releases them from their obligations under that
settlement either because the contract was mutually executory or because the
contemplated hearing was a condition precedent to their performance.” 7. Explain – ” It is established law that a decedent’s
contract claims survive his or her death, and, because we have 987 (Links to an
external site.)*987 (Links to an external site.)held that the settlement
agreement was a contract voidable at D.V.G.’s election, we can think of no
reason why a trial court could not make a determination of the fairness of that
contract even after the minor’s death. For these reasons, we answer the
certified question in the affirmative.”
8. Who won and why – state name of actual party who won (not
appellant, etc.) and why



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