Current through Register Vol. 54, No. 48, November 30, 2024
Rule 229.1 - Settlement Funds. Failure to Deliver Sanctions(a) As used in this rule, "defendant" means a party released from a claim of liability pursuant to an agreement of settlement;
"plaintiff" means a party who, by execution of a release pursuant to an agreement of settlement, has agreed to forego a claim of liability against a defendant. The term includes a defendant who asserts a counterclaim;
"settlement funds" means any form of monetary exchange to a plaintiff pursuant to an agreement of settlement, but not including the annuity or future installment portion of a structured settlement.
(b) The parties may agree in writing to modify or waive any of the provisions of this rule.(c) If a plaintiff and a defendant have entered into an agreement of settlement, the defendant shall deliver the settlement funds to the attorney for the plaintiff, or to the plaintiff if unrepresented, within twenty calendar days from receipt of an executed release.(d) If settlement funds are not delivered to the plaintiff within the time required by subdivision (c), the plaintiff may seek to(1) invalidate the agreement of settlement as permitted by law, or(2) impose sanctions on the defendant as provided in subdivision (e) of this rule.(e) A plaintiff seeking to impose sanctions on the defendant shall file an affidavit with the court attesting to non-payment. The affidavit shall be executed by the plaintiff's attorney and be accompanied by(1) a copy of any document evidencing the terms of the settlement agreement,(2) a copy of the executed release,(3) a copy of a receipt reflecting delivery of the executed release more than twenty days prior to the date of filing of the affidavit,(4) a certification by the attorney of the applicable interest rate,(5) the form of order prescribed by subdivision (h), and(6) a certification by the attorney that the affidavit and accompanying documents have been served on the attorneys for all interested parties.(f) Upon receipt of the affidavit and supporting documentation required by subdivision (e), the defendant shall have twenty days to file a response.(g) If the court finds that the defendant violated subdivision (c) of this rule and that there is no material dispute as to the terms of the settlement or the terms of the release, the court shall impose sanctions in the form of interest calculated at the rate equal to the prime rate as listed in the first edition of the Wall Street Journal published for each calendar year for which the interest is awarded, plus one percent, not compounded, running from the twenty-first day to the date of delivery of the settlement funds, together with reasonable attorneys' fees incurred in the preparation of the affidavit.(h) The affidavit shall be accompanied by an order in substantially the following form: (Caption)
ORDER
AND NOW, ____________, upon consideration of the affidavit of ____________, attorney for ____________, and the
(Plaintiff)
exhibits thereto, and upon a finding that payment was not made within twenty days of receipt of the executed release in the above captioned action, it is ORDERED that, in addition to the settlement funds of $ ___ ,___ pay forthwith interest at the rate of ____________ %
(Defendant)
on the aforementioned settlement funds from the twenty-first day to the date of delivery of the settlement funds, together with $ ___ in attorneys' fees.
____________
Judge
The provisions of this Rule 229.1 adopted June 7, 2004, effective July 1, 34 Pa.B. 3103.