Cengage Advantage Books: Law for Business 18th Edition by John Ashcroft ,Janet Ashcroft

Exercise 18

Star Valley Ranch Association managed a subdivision. When Vince Zimmer resigned as general manager, he requested payment for unpaid overtime. The board of the association denied the request. The board later discovered that through clerical error, Zimmer had been overpaid and demanded he repay $1,380. Zimmer responded by demanding $2,483 for unpaid overtime. Because the legal costs of pursuing collection were not worth the amount in dispute, Zimmer and the association signed a settlement mutually releasing each other from the claims. Ronald Mueller owned a lot in the subdivision and sued, alleging that Zimmer's claim for overtime was without merit so that by settling the former directors and general managers deprived the association of funds to which it was entitled. Was the settlement agreement valid?