In Colorado, court approval of a settlement agreement involving a minor is not required. However, the enforceability of that settlement agreement would be difficult if not impossible without such approval. For example, major issues that could arise with an unapproved agreement with a minor include the fact that a minor lacks the contractual capacity to consent to settlement, the tolling of the statute of limitations on the minor’s claims, and lack of fiduciary authority. Consequently, court approval for all settlement agreements involving the claims of a minor provides the protection needed for such agreements to be enforceable.

Colorado Rule of Probate Procedure (C.R.P.P.) 16 sets out a detailed and specific framework for petitioning the court for approval of a personal injury settlement on behalf of a minor. As stated above, C.R.P.P. 16 does not explicitly require court approval of such a settlement. The court has also published a detailed set of instructions for seeking approval of such an agreement. These instructions focus on C.R.P.P. 16 and C.R.S. §15-14-101 (The Colorado Uniform Guardianship and Protective Proceedings Act), which relate entirely to protective proceedings for minors and incapacitated persons. The court instructions are helpful in that they detail what is required from the parties, whether a conservator will need to be appointed (only required in cases where the agreement amount is over $10,000.00), how to file the petition itself, and how funds should be distributed. Finally, the instructions also state that “The court does not require approval of any settlement and does not go out to seek these cases.” 

However, an agreement with a minor that has not been approved by the court may not be enforceable at all. Possible issues to an unapproved settlement include the following:

Statute of Limitations

A minor’s statute of limitations for a personal injury claim does not begin to accrue until his or her eighteenth birthday, or until the court appoints a legal guardian. C.R.S. §13–81–101(3) defines “person under disability” as “any person who is a minor under eighteen years of age, a mental incompetent, or a person under other legal disability and who does not have a legal guardian.” A person under disability, for whom the court has not appointed a legal representative, is protected by the statute of limitations' tolling provisions. See C.R.S. §13–81–103(1)(c). The statute of limitations begins to run when the minor reaches the age of eighteen or when, if it does, a court appoints a legal representative for the minor. Court appointment of the legal representative averts the minor's legal disability for purposes of litigating the minor's rights, thereby rendering inapplicable the tolling provisions. See C.R.S. §13–81–103(1)(a). The statute defines a “legal representative” as “a guardian, conservator, personal representative, executor, or administrator duly appointed by a court having jurisdiction of any person under disability or his estate.” C.R.S. §13–81–101(2).

It is important to note that a parent is not considered a legal representative appointed by the court. The definition of “legal representative” does not include natural parents or next friends acting on behalf of a minor. Elgin v. Bartlett, 994 P.2d 411, 414 (Colo. 1999). 

Given the above, it must be taken into consideration that although an unapproved agreement may have been reached regarding a minor’s personal injury claim, the statute of limitations for that underlying claim will be tolled until the minor’s eighteenth birthday unless the court appoints a legal representative, which is highly unlikely in the context of an unapproved agreement.

Ability to Contract

A contract or agreement entered into with a minor or infant may be voided upon the his or her eighteenth birthday. As matter of public policy, courts have protected minors from improvident and imprudent contractual commitments by declaring that contract of minor is voidable at election of minor after he attains his majority. Jones v. Dressel, 623 P.2d 370 (Colo. 1981). Minor may disaffirm contract made during his minority within reasonable time after attaining his majority or he may, after becoming of legal age, by acts recognizing contract, ratify it. C.R.S. §13-22-101(1)(a). An infant lacks capacity (except for those contracts authorized by statute) to make a firm and binding contract; in all such contracts lies the inherent weakness and condition that the infant may disaffirm the contract during his minority or within a reasonable time after reaching his majority. Doenges-Long Motors, Inc. v. Gillen, 138 Colo. 31, 35, 328 P.2d 1077, 1079-80 (1958).

Given Colorado’s stance on a contract with a minor, it is entirely possible that the unapproved settlement agreement may be disaffirmed and void upon the minor’s eighteenth birthday.

Fiduciaries Without Proper Authority  

Another issue that may arise out of an unapproved minor settlement could be that that the fiduciary for the minor, whether a next friend or conservator, doesn’t have the proper authority from a court to consent on behalf of the minor. The General Assembly has not vested discretion in parents to remove or waive a minor child's legal disability, which tolls the otherwise applicable statute of limitations in favor of minor child who does not have a court-appointed legal representative, by instituting a next friends suit. Elgin at 415. A parent has no responsibility or discretion to institute a next friend lawsuit that removes or waives the child's legal disability or has the effect of attributing the parent's knowledge and mistakes to the minor. Id.

If there is no court approved conservator or other fiduciary for the minor, issues may arise if a parent or other unapproved fiduciary attempts to release the minor’s rights to his or her claim. Therefore, despite an agreement signed by a parent on behalf of the minor, the minor’s claims may have survived.

In conclusion, Colorado does not mandate court approval for a minor’s agreement to resolve his or her personal injury claim. However, an unapproved agreement does not void the tolling of the statute of limitations for the minor’s claims, and does not contractually bind the minor to the agreement upon his or her reaching eighteen. Further, the agreement may also be voided due to the unbinding actions of the unapproved fiduciary, which could be the minor’s parents. Consequently, an unapproved settlement agreement with a minor has little if any binding effect. Therefore, seeking court approval for settlement agreements involving the claims of a minor provides the legitimacy and enforceability needed.