Law Stack Exchange is a question and answer site for legal professionals, students, and others with experience or interest in law. It only takes a minute to sign up.
Sign up to join this community
Suppose Joe is suing Acme Corp for $1000 over damages to his property. After some time, Acme Corp offers a settlement to Joe for $1500, on condition he signs a non-disclosure agreement.
Is Joe allowed to refuse this offer and go to court anyway?
I wonder if this is legal since it may seem as though Joe is not interested in the actual amount but simply is interested in the fight and/or defaming the corporation.
Based on other questions you have posted, I will assume you refer to some jurisdiction in the U.S.
Is Joe allowed to refuse this offer and go to court anyway?
I wonder if this is legal since it may seem as though Joe is not interested in the actual amount but simply is interested in the fight and/or defaming the corporation.
Yes, it is legal, especially if Joe prevails in his claim of damages to his property. For instance, Michigan MCL 600.2591(3)(a)(i) awards attorney fees and other costs to the prevailing party if the primary purpose in the lawsuit is "to harass, embarass, or injure that prevailing party". But with Joe being the prevailing party, MCL 600.2591 is a moot point (that is, devoid of relevance).
Even if Joe did not prevail in the claim, it would be hard for Acme to prove that Joe's primary purpose was to harass or unlawfully injure Acme if Joe's position has some legal merit (see the statute at (3)(a)(ii)).
Acme Corp offers a settlement to Joe for $1500, on condition he signs a non-disclosure agreement.
This portrays that Acme's settlement offer to Joe is not merely devised to make him whole. Instead, Acme is trying to obtain a very different benefit: Joe's silence. As such, Joe is entitled to refuse Acme's bid for non-disclosure, and commence proceedings in court. If Acme removed from its settlement offer the condition of Joe's non-disclosure, Acme would have more merit in arguing that Joe's lawsuit was frivolous.
Lastly, to clarify concepts, the veracity of Joe's claim implies that he is not defaming Acme. And even if Joe's claim were knowingly false, his judicial proceedings in and of themselves cannot lead to a viable defamation lawsuit because judicial proceedings are (unfortunately) protected by absolute privilege.
It should be pointed out that in this case, you Assume that Joe wants monetary damages... if Acme Corp tries to settle, it might not be the point. Joe may want to take the case into a trial to get some sort of legal precident on the specific actions of Acme (let's say selling sub-standard products to coyotes). In Common Law cases (especially in the United States where settlements are the rule, not the exception) case law can put down precedent for judges to rule in a similar manner and settle the issue of poorly worded legislation that Acme may or may not be in violation of. The specific value is window dressing for what Joe really wants, which is the precedent. This is also reason enough to overpay Joe in negotiations... Prededent does not attach unless it is specifically decided in court... but settling out of court can allow both parties to reach a comprimise that they don't want. A ruling against Acme would devistate it's major Coyote Hunting Products line, which is there best selling product in the American Southwest, so it's better in their estimation to pay out, throw a little extra in to sweeten it, and never discuss it again..
