When settling claims, California lawyers will typically include a waiver of Civil Code Section 1542. That statute generally provides that a general release does not extend to claims not known or suspected to exist at the time of executing the release, which if known must have materially affected the settlement. Last year, Senator Mike Morrell successfully authored a bill, SB 1431, to make purportedly non-substantive changes. As a result, thousands of lawyers will need to update their forms of settlement agreements and releases. If the change was non-substantive, why make it?
The author's explanation was as follows:
"SB 1431 will avoid needless confusion and costly litigation for the self-represented by clarifying that for purposes of the statute (Civil Code Section 1542) governing a general release, 'creditor' includes any 'releasing party' and 'debtor' includes 'released party.' Although this interpretation of the current statutory language has become accepted in the legal community over the years, it is not understood by self-represented parties who expect 'creditor' and 'debtor' to apply only to cases where money is owed. SB 1431 will remove this confusion, and the additional litigation that sometimes results, as well as make the statutory definition consistent with common practice."
Assembly Committee on Judiciary, Bill Analysis (June, 12, 2018).
Directors in their dotage
Yesterday's post discussed a recent academic study concluding "On average, a greater representation of older independent directors on corporate boards is negatively related to firm performance." The authors classify as "older" directors who are at least 65. While the exception doesn't necessarily prove the rule, it is worth noting that William Belichick, head coach of the New England Patriots, is 66.