Former Miss California Carrie Prejean and The Miss California pageant have decided to drop their lawsuits against each other. It’s unclear whether any settlement was reached or if both parties reached a mutual agreement not to pursue their claims. Prejean sued the pageant in August, alleging religious discrimination following her eventual firing for failing to fulfill her duties. Carrie was of course still focusing on her answer to the gay marriage issue at the Miss Universe pageant this spring in which she said “marriage should be between a man and a woman” despite the evidence that she violated the terms of her contract. Carrie failed to disclose several nude photo shoots against pageant rules, became the spokesperson for another organization also against regulations, and was generally obstinate and unresponsive when it came to showing up for events.

In October, the pageant countersued, and asked her to pay back the $5,200 they paid for her to get her boobs done before the Miss Universe pageant. It’s all over now, though, and Carrie is said to have backed down due to the countersuit:

Former Miss California, Carrie Prejean, and the Miss California Executive Director, Keith Lewis have settled their differences and are ready to move on.

In an official statement released Tuesday both sides said, “Carrie Prejean, Keith Lewis and K2 Productions have dropped their claim against each other and wish each other the best in their future endeavors.”

Back in August Carrie Prejean filed a lawsuit against Miss California USA claiming religious discrimination, pageant officials fired back with their own lawsuit demanding Prejean pay back $5,200 they claim they lent the former beauty queen for breast augmentation.

A source close to the situation tells RadarOnline.com that when Prejean saw the countersuit filed by the pageant she decided she no longer to pursue her case.

Keith Lewis said in his own statement Tuesday, “We are moving forward from the past and looking towards the crowning of two winners and the new look of the upcoming Miss California USA pageant, telecast live on November 22nd.”

[From Radar Online]

Did pageant directors have some dirt on Carrie or did she just realize that there was no way she would win her case? Given her clear violations of the contract, and some of the very rude dismissive e-mails she sent pageant director Keith Lewis, I would guess that her lawyer convinced her she didn’t have a case. She probably realized that she wasn’t going to get a settlement big enough to pay her legal fees, either.