Facts
- Sherri R. Mitchell was 17 years old and married to Michael J. Mitchell.
- On October 14, 1995, Sherri was injured while riding as a passenger in an automobile owned by her father, Donnie Fee, and driven by her husband, Michael.
- On October 26, 1995—twelve days after the accident—Sherri executed a settlement agreement and release of her bodily-injury claim in exchange for $2,500.
- At the time Sherri signed the settlement and release, no conservator had been appointed for her.
- Sherri later sought declaratory relief in the trial court, alleging that because she was a minor when she signed the release, the agreement was invalid.
- Michael Mitchell and State Farm Mutual Automobile Insurance Company argued that Sherri’s marriage emancipated her and removed any contractual disability, making the release binding.
- The trial court agreed with the defendants and concluded that Sherri’s marriage gave her capacity to contract, including capacity to execute a tort-claim release.
- Sherri appealed.
Issues
- Whether a married minor in Kentucky has capacity to execute a binding release and settlement agreement arising from a personal-injury claim.
- If the minor may avoid the release, whether the minor must return the settlement consideration as a condition of repudiation.
Decision
- The Kentucky Court of Appeals reversed the trial court.
- The court held that although marriage emancipates a minor, it does not make the minor sui juris and does not eliminate the minor’s privilege to avoid contracts made during minority.
- Because the settlement and release were executed while Sherri was a minor, the agreement was voidable at her election.
- The court recognized that if the minor repudiates the settlement, the consideration received must be returned.
Legal Principles
- Under KRS 387.010, a minor is a person under 18 years of age.
- A minor generally has capacity to enter contracts, but retains the privilege to avoid (disaffirm) contracts made during minority unless the contract is affirmed after reaching majority. (Wright v. Stanley Motor Co.)
- Exceptions exist (such as contracts for necessities), but a personal-injury settlement and release is not treated as a necessities contract on these facts. (Williams v. Buckler)
- A settlement agreement and release of a tort claim executed by a minor is voidable by the minor. (Interstate Coal Co. v. Trivett)
- Repudiation of a minor’s settlement agreement requires return of the consideration paid under the agreement. (Bensinger’s Coex’rs v. West)
- Marriage emancipates a minor for some purposes, but emancipation does not make the minor sui juris and does not, by itself, remove the common-law protection allowing minors to avoid contracts.
- The policy for allowing avoidance is to protect minors from bargains that may reduce their estates when dealing with adults who are presumed to have greater maturity and experience. (Davis’ Committee v. Loney)
Conclusion
Mitchell v. Mitchell holds that in Kentucky, a minor’s marriage may emancipate the minor but does not confer full adult contractual status; therefore, a married 17-year-old could avoid a personal-injury settlement release she signed during minority, subject to returning the $2,500 consideration if she repudiates the agreement.