When is a Settlement Truly a Settlement?

One of the most common ways to settle a lawsuit is for the parties to attend a mediation.    In Lynne Boulanger’s lawsuit against The Great-West Life Assurance Company, the parties did exactly that.  At the end of the mediation, their lawyers drafted a “Settlement Agreement”.

As part of the Settlement Agreement, Ms. Boulanger agreed to sign a release “in a form reasonably satisfactory to counsel for both sides.”  At the mediation, Ms. Boulanger read or had the Settlement Agreement read to her and understood its contents.

About a month after the mediation, Ms. Boulanger asked her lawyer to get Great-West Life to approve the release of settlement funds and the reinstatement of her long-term disability benefits, while the parties worked out other issues in the agreement.  Great-West Life agreed.

Shortly afterward, Ms. Boulanger had a falling out with her lawyer, and went on to represent herself.  She took the position that the claim had not been entirely resolved  and did not sign the release.  Specifically, she alleged that the issues of punitive damages and damages for mental distress still needed to be resolved.

Great-West Life brought a motion for an Order dismissing the lawsuit.

Mr. Justice Maranger noted that the Settlement Agreement stated that “all claims” would be resolved and that there would be a “dismissal of the action.”  He concluded that Ms. Boulanger’s refusal to sign the release was the result of her changing her mind.

Justice Maranger went further.  He held that, even if he accepted that Ms. Boulanger did not understand the agreement, her lawyer was acting with her authority and he considered the matter to be fully settled.  He granted Great-West Life’s motion and dismissed Ms. Boulanger’s claim.

Justice Maranger’s decision is in keeping with a long line of cases that have reached similar conclusions.  It serves as a reminder to all parties involved in settlement discussions to make sure that they clearly understand and are in favour of a settlement before making any agreements.

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