Written by attorneys · grounded in primary & secondary sources — see below
A payment made to resolve or compromise a claim, dispute, or obligation. The payment discharges the underlying liability and often follows negotiation or court approval.
Sources & Authorities
How it applies
Common Examples
6
Contingent Fee Calculation After Settlement
Sean Steele retained Sterling Manufacturing's counsel under a written contingent fee agreement. After the firm negotiated a $2 million recovery, the defendant issued a settlement payment. Counsel deducted expenses and applied the agreed percentage to determine the fee remitted to Sean.
Survivorship Overrides Will Devise
Sydney Santos and her husband held their home as tenants by the entirety. While divorce and property settlement proceedings were pending, the husband executed a will leaving his interest to a third party. Upon his death the settlement payment never occurred. Title passed by operation of law to Sydney.
Derivative Recovery Belongs to Company
Put it into practice
Test Yourself
10
Practice Questions5
· 40 primary sources
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Cases
Statutes
Federal Rules
Uniform Acts
Model Codes
A member of Sapphire Technologies brought a derivative action alleging mismanagement. The suit settled for $1.5 million. The settlement payment was wired directly to the company. The plaintiff member received nothing and immediately remitted any proceeds received.
Separation Agreement Resolves Claims
Sarah Sullivan and Spencer Silver executed a written separation agreement during divorce proceedings. The agreement provided for a lump-sum settlement payment from Spencer to Sarah in exchange for waiving maintenance and dividing marital property. The court found the terms binding.
Estate Closing After Claim Settlement
The personal representative of Sylvia Santos's estate made a settlement payment to satisfy the last remaining creditor claim. After distributing the remaining assets and filing the closing statement, the representative terminated the administration under the probate code.
Partnership Derivative Proceeds
A limited partner of Stonehaven Properties sued derivatively. The action settled for a cash payment. The settlement payment belonged to the partnership. The plaintiff partner immediately remitted the funds and sought only court-approved expenses.
Common questions
Frequently Asked
5
Must a contingent fee agreement disclose how the lawyer's percentage applies to a settlement payment?+
Yes. The agreement must state the percentage that accrues to the lawyer in the event of settlement and whether expenses are deducted before or after the fee is calculated.
Supporting sources
Does a pending property settlement in divorce prevent survivorship rights in jointly held property?+
No. Title passes by operation of law to the surviving spouse if the tenancy remains intact at death, even if divorce and property settlement proceedings are underway.
Supporting sources
Who receives the proceeds when a derivative action settles?+
The proceeds belong to the limited liability company or limited partnership, not the plaintiff member or partner, who must remit any funds received.
Supporting sources
When may spouses enter a written separation agreement addressing property division?+
Spouses may enter a written separation agreement to promote amicable settlement of disputes attendant upon separation or dissolution, including provisions for property disposition, maintenance, and child support.
Supporting sources
What must a personal representative show to close an estate by filing a closing statement?+
The representative must show that all claims have been paid or settled, taxes paid, assets distributed, and that any remaining claims are either discharged or subject to agreed liability arrangements with distributees.
Supporting sources
Trusts and Estates Decedents EstatesIntestate succession · Share of ancestors and collateralsUBEIntermediate