Question

D.v.g. (a minor) was injured in a one-car auto accident in hoover, alabama. the vehicle was covered by an insurance policy issued by nationwide mutual insurance co. stan brobston,
d.v.g.'s attorney, accepted nationwide's offer of $50,000 on


d.v.g.'s behalf. before the settlement could be submitted to an alabama state court for approval,


d.v.g. died from injuries received in a second, unrelated auto accident. nationwide argued that it was not bound to the settlement because a minor lacks the capacity to contract and cannot enter into a binding settlement without court approval. should nationwide be bound to the settlement? why or why not?

Answer 1

Answer:

Yes, the court ruled in favor of D.V.G.'s mother, because of the principle that contracts entered by minors are not void, but voidable, and that they do have an effect on the parties, but if voided, they cannot be enforced.

In this case, the minor died before the contract was ratified by the court, but the minor hadn't voided the contract, so it was still good at the moment of his death. The minor had the chance of either approving or rejecting the contract while still living, and decided not to revoke it.

Explanation:

NATIONWIDE MUTUAL INSURANCE COMPANY and State Farm Mutual Automobile Insurance Company v. Barbara Walker WOOD, as administratrix of the estate of D.V.G., a minor, deceased, and K.C.T., a minor, by and through Earnest T., his father and next friend.  1111486. Decided: February 22, 2013

As this Court has stated, “ ‘[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.’ ”

The final ruling was:

"Under Alabama law, an insurance company is bound to a settlement agreement negotiated on behalf of an injured minor, even if that minor dies before the scheduling of the court hearing that all parties agreed was necessary to obtain approval of the settlement agreement. In accordance with the parties' understanding, such a hearing is still required, and the minor's death does not render that hearing impossible. We thus answer in the affirmative the question certified to this Court."