Short Answer

In North Carolina, an insurer generally cannot back out once there is a binding, signed settlement agreement (for example, a signed release or a written, signed mediated agreement). Sending a W-9 alone does not make the agreement binding. If key conditions are still open—like signing the release or getting required court approval (for minors or wrongful death)—the insurer may withdraw before the agreement is finalized. If you have a signed agreement, you can seek enforcement.

Understanding the Problem

In North Carolina personal injury cases, you want to know: after we verbally agree on a settlement figure, can the insurer back out once I send the W-9 the adjuster requested to issue payment? The single decision point is whether a binding settlement exists before or after you provide the W-9. Here, both sides agreed to a number and the insurer asked for your W-9 to cut the check.

Apply the Law

Settlements are contracts under North Carolina law. A settlement becomes enforceable when there is clear offer and acceptance on the essential terms and the parties show intent to be bound—most often by signing a release or a written agreement. In court-ordered mediations, a settlement is not enforceable unless reduced to writing and signed by the parties. Some injury settlements require a judge’s approval before they are effective (for example, claims involving minors, incompetents, or wrongful death). Insurers commonly require a W-9 so they have a taxpayer identification number for payment and potential information reporting; the W-9 does not, by itself, create a binding settlement.

Key Requirements

• Signed agreement: A signed release or a written, signed settlement (including a mediated settlement form) is the usual trigger for a binding deal.
• Conditions precedent: If the insurer’s offer is contingent on a signed release, W-9, lien resolutions, or court approval, it can be withdrawn until those conditions are satisfied.
• Court approval when required: Settlements for minors/incompetents and wrongful death typically need a judge’s approval before payment will issue.
• Mediation rule: In a court-ordered mediation, a settlement is enforceable only if written and signed by the parties at the mediation.
• Forum & enforcement: Disputes over enforcement are typically handled in Superior Court (motion to enforce or separate contract action).

What the Statutes Say

• North Carolina Gen. Stat. § 7A-38.1 (Mediated settlement conferences) - Establishes court-ordered mediation in Superior Court; settlements reached there must follow the governing rules.
• North Carolina Gen. Stat. § 1-400 (Compromise of actions by infants) - Court approval mechanism for compromises involving minors.
• North Carolina Gen. Stat. § 28A-13-3(a)(23) (Wrongful death settlements) - Personal representative may compromise wrongful death claims; judge approval often required unless all statutory conditions are met.

Analysis

Apply the Rule to the Facts: You report that both sides agreed to a dollar figure and the insurer asked for your W-9 to issue payment. If you have not yet signed a release or a written settlement, and this was not a written, signed mediated agreement, the insurer may still treat its offer as contingent and could try to withdraw. If you did sign a release or a written settlement memorandum, the insurer generally cannot change the terms unilaterally; you could move to enforce the agreement.

Process & Timing

1. Who files: The injured claimant. Where: Superior Court Civil Division in the appropriate North Carolina county. What: File a motion to enforce settlement in the existing case, or a separate action for breach of contract; if mediated, attach the signed AOC-DRC-15 or AOC-DRC-16 “Mediated Settlement Agreement.” When: Act promptly once the insurer indicates it is backing out.
2. Seek an order enforcing the signed agreement or compelling compliance with its terms. If the settlement involved a minor/incompetent or wrongful death, submit the required petition for court approval before distribution.
3. Upon enforcement or approval, expect issuance of payment per the agreement, typically after providing the signed release, W-9, and any lien/Medicare documentation required by the agreement.

Exceptions & Pitfalls

• If the insurer expressly conditioned the offer on you signing a release or obtaining court approval, it may withdraw until those conditions are met.
• Oral “we have a deal” without a signed writing (or in-court consent) is risky to enforce; get the terms in a signed document.
• Minor, incompetent, or wrongful death settlements usually require judge approval first; payment will not issue until approval is entered.
• Make sure the W-9 matches the payee name on the check; mismatches can delay payment and tax reporting.
• Watch for new terms in the insurer’s release (e.g., indemnities, confidentiality). Material changes can jeopardize enforcement if not agreed.

Talk to a Personal Injury Attorney

If you’re dealing with an insurer wavering after an agreed settlement, our firm can help evaluate whether you have an enforceable agreement and what to file next. Call us today.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.