Case Title: Reynolds v. Merrill

Citation: 23 Utah 2d 155, 460 P.2d 323

Docket Number: 

State: utah

Court: Utah Supreme Court

Date: 1969-10-22T00:00:00Z

Document:
460 P.2d 323 (1969) 23 Utah 2d 155 Darrell H. REYNOLDS, Plaintiff and Appellant, v. Charles S. MERRILL, Defendant and Respondent. No. 11482. Supreme Court of Utah. October 22, 1969. Wilford A. Beesley, Orval C. Harrison, Salt Lake City, for appellant. L.E. Midgley, Salt Lake City, for respondent. ELLETT, Justice: This is an action to recover for personal injuries and property damages arising out of a collision between cars driven by the parties hereto. The accident occurred on Friday, June 3, 1966, when the defendant's automobile ran into the rear of the plaintiff's Volkswagen. Immediately after getting home, the plaintiff called his physician, who prescribed conservative treatment, and made an appointment for the following Tuesday. For some two and a half months thereafter the doctor treated the plaintiff for what was diagnosed as a recurrence of bursitis. On August 22, 1966, at the request of the defendant's insurance adjuster the doctor signed an Attending Physician's Report containing the following information: On September 26, 1966, the insurance adjuster paid plaintiff $655.56 and took from him a release which among other things recited: Plaintiff's shoulder pains grew more severe, and on December 1, 1966, he was hospitalized by his doctor for three days in order that tests might be taken; and upon the expiration of those tests the doctor stated in his Progress Notes that the diagnosis was not definitely determined. The plaintiff was then referred to an orthopedic specialist who diagnosed plaintiff's injury as a herniated disc. A spinal fusion was performed on December 19, 1966, resulting in a permanent partial disability. The trial court believed that the plaintiff had lost all rights against the defendant by reason of the release given, and he entered a summary judgment dismissing the complaint. In doing so, he failed to distinguish between an unknown injury and unknown consequences of a known injury. The former can be the basis of a mutual mistake of fact, while the latter would be only a mistake of opinion. While an injury may be known, its consequences are not matters of existing facts which can be agreed upon or even foreseen exactly. Such consequences will be revealed only in the future and at the present time are merely matters of opinion. The great majority of cases since the turn of the century have recognized this distinction.[1] Utah follows the modern trend as is illustrated by the two following cases: Anderson v. Oregon Short Line R. Co., 47 Utah 614, 155 P. 446 (1916), was a case where plaintiff sought to be released from a settlement made with the defendant and failed in his effort. There he had a known injury and settled his claim therefor. At that time he knew what the injury was but did not know that he would subsequently lose a finger as a result of the injury. The court properly refused to set aside the settlement. The case of Kirchgestner v. Denver & Rio Grande W.R. Co., 118 Utah 20, 218 P.2d 685 (1950), is in point, although it was reversed on rehearing because of an instruction relating to the degree of proof required to set aside the release. At pages 28 and 29 of the Utah Reports, at page 690 of 218 P.2d this court said: Appellant contends that the Kirchgestner case is governed by federal law. We agree as to the liability and defenses involved that the case was governed by federal law, but we cannot see why the state law and the federal law should not be the same so far as contractual rights are concerned. In fact, our own court has spoken on this point. In the case of Anderson v. Oregon Short Line R. Co., supra, at page 620 of the Utah Reports, at page 448 of 155 P. this court said: The respondent relies on the Arizona case of Hoopes v. Lamb, 102 Ariz. 335, 429 P.2d 447. The statement in the preamble to the headnotes shows that Arizona respects the distinction between unknown results of a known injury on the one hand and unknown injuries on the other: The Hoopes case, supra, quotes from the case of Dansby v. Buck, 92 Ariz. 1, 373 P.2d 1 (Ariz. 1962), and that case on page 4 states the law of Arizona to be as follows: *326 The case of Ranta v. Rake, 91 Idaho 376, 421 P.2d 747 (1967), is squarely in point with the instant matter. At page 751 the court said: In the instant case the plaintiff does not contend that he should have the release set aside if it is shown that he actually intended to settle for all injuries. He here is asking for a day in court to establish, if he can, that there was a mutual mistake of fact regarding the injury which actually was in existence but which was unknown to both him and the insurance adjuster. We are not here concerned with the question of when the plaintiff's disc was herniated. He has alleged that it resulted from the accident. If he can prove it, and that at the time of signing the release neither party knew about it, he should have that privilege. The summary judgment granted by the lower court is reversed, and the case is remanded to the lower court for a trial on the issues presented by the pleadings. The appellant is awarded costs. CROCKETT, C.J., and TUCKETT, J., concur. CALLISTER, Justice (dissenting). Plaintiff was injured in an automobile accident on June 3, 1966. He sustained injuries to his neck and upper back for which he sought medical treatment. His physician in a report dated August 22, 1966, stated that plaintiff was still under care for his condition and that the estimated date of termination and cost of further treatment was undetermined. Nevertheless, on September 26, 1966, plaintiff executed a release for $655.56 for "* * * all known and unknown, foreseen and unforeseen bodily and personal injuries and property damage and the consequences thereof resulting or to result from the accident. * * *" In response to certain interrogatories plaintiff stated that the repair bill for his automobile was $76.50 and his original physician's bill was $98. (There is no indication what proportion of the doctor bill was for services rendered prior to the execution of the release.) It thus appears that plaintiff determined to take a calculated risk that the ultimate cost for the treatment of his injuries would not exceed the sum for which he settled. Subsequent events indicate his miscalculation. Plaintiff's original physician in his report diagnosed plaintiff's injuries as 1) traumatic bursitis of the right shoulder, and 2) traumatic myositis of the posterior neck muscles. Subsequent to the date of the release, plaintiff's condition deteriorated, and he consulted other doctors. In mid-December of 1966, an orthopedic surgeon diagnosed plaintiff's injury as a herniated disc for which a spinal fusion was performed. Plaintiff contends that the release he executed is void on the ground that the parties acted under a mutual mistake of fact. He reasons that the insurance adjuster had in his possession the physician's report and that the parties mistakenly believed that he had minor inconsequential injuries, i.e., inflamed neck and shoulder muscles and that the settlement was concluded on this basis. *327 The essential conflict between the majority opinion and this dissent is primarily a matter of semantics. The majority considers the term "injury" as synonymous with a correct diagnosis of the specific anatomical feature claimed injured. The majority assumes that plaintiff's "injury" was "unknown," since plaintiff did not know that he had a herniated disc. This dissent is premised on the consideration that plaintiff knew he had sustained injuries to his neck and upper back for which he had a disputed, unliquidated claim, that he relinquished for a sum certain in a compromise agreement, characterized as a release. The release agreement specifies that the releasor declares and represents "that the injuries sustained are or may be permanent and progressive and that recovery therefrom is uncertain and indefinite" and that the releasor in making the agreement understands and agrees with the releasee that the releasor relies wholly upon his own "judgment, belief and knowledge of the nature, extent, effect and duration" of his injuries and the release is made without reliance upon any statement or representation of the releasee, representatives of the releasee, or by any physician or surgeon employed by the releasee. (Emphasis added.) In the light of the language of the release as well as the facts surrounding its execution, it is difficult to entertain plaintiff's theory that there was a mutual mistake of fact and that the parties intended the release to cover only superficial injuries. The release was executed more than three months after the accident, the releasor was still under his physician's care, and the sum he received was for a greater amount than the expenses he had incurred. This suit, in fact, is premised on plaintiff's error in calculating his projected expenses. The case of Wheeler v. White Rock Bottling Company of Oregon[1] is factually similar to the instant action. Plaintiff's injury, incurred in a motor vehicle collision, was diagnosed by her family physician as back strain. She released defendant from all claims known and unknown resulting from the accident, three months thereafter. The trial court decreed rescission on the ground that plaintiff intended releasing only her claim for sacroiliac and lumbar strain (she had subsequently discovered that she had a herniated disc), and that at the time of execution of the release all parties concerned were mistaken as to the nature and extent of the plaintiff's injuries. On appeal, the court observed that the question was whether an honest release, untainted by unconscionable conduct, can be set aside because it was improvident. The court cited authority and commented that some cases seem to base relief upon real or supposed mutual mistake. In a footnote thereto, it was stated: The court continued: In Casey v. Proctor[3] the court observed: The courts have indulged in various legal fictions, such as, characterizing unilateral mistakes or mistakes in prophecy or opinion as bilateral mistakes, in order to grant relief. Rather than juggling contract concepts, it would be preferable to hold on the ground of public policy that all releases for personal injury are voidable. This is an appropriate area for legislative action, and the States of Maine, North Dakota, and Idaho have responded with legislation thereto.[4] However, the efficacy of releases would be undermined, since the purpose is to resolve a disputed, unliquidated claim by compromise. Until the legislature deems action appropriate to alter the effect of releases, the traditional rule appears preferable. The Utah rule as stated in Anderson v. Oregon Short Line R. Co.[5] is as follows: *330 I cannot agree with the majority opinion that Kirchgestner v. Denver & Rio Grande W.R. Co.[6] is the law of Utah, since the entire opinion was carefully qualified by the following statement: The court then proceeded to cite and discuss federal cases involving mistake and observed: There is a temptation to be swept with the tide of numerical judicial authority, but logic impels this dissent. I fully concur with the reasoning of the Oregon court in Wheeler v. White Rock Bottling Company of Oregon.[7] There is no valid legal ground to rescind a release, untainted by unconscionable conduct, because subsequent events indicate that it was improvident for the releasor to bargain away his claim and assume the burden of risk in exchange for the prompt payment of cash. The judgment of the trial court should be affirmed. HENRIOD, Justice (dissenting). I dissent. The main opinion's thrust is that the trial court "failed to distinguish between an unknown injury and unknown consequences of a known injury." I think the trial court did not have to make any such distinction under the plain language of the release. I think the author of the main opinion, not the trial court, erroneously has made a distinction in the terms of the release which no syllogistic reasoning possibly can justify. It has prevented the parties to the release from indulging their legal privilege to contract as they choose.[1] What does the release say? It releases Merrill from any claims growing out of any or all This language is in the conjunctive and clearly releases claims for injuries and the consequences of either known or unknown injuries, without distinction or reservation whatsoever. But the main opinion volunteers such distinction, made neither by the parties nor the contract. The main opinion makes absolutely no reference whatever to the clear language adverted to above, the very meat of the contract, and nowhere in the opinion is any attempt made to point out where and in what respect such language or any other language in the contract supports the thesis and gratuity of the main opinion. In view of the sharp disagreement in this dissent and that of the main opinion with respect to interpretation of the terms of the release, something should be said about the authorities cited by Mr. Justice Ellett which he claims support his conclusion. He says "The great majority of cases since the turn of the century have recognized this distinction." Not so. The very first case he cites is one of our own Utah *331 cases, Anderson v. O.S.L. Ry.[2] I challenge the author of the main opinion to point out any language in that case that recognizes any such distinction. On the contrary, the law of that case is found in the following language: The Anderson case, decided in 1916, presently is the Utah law on releases. It was a unanimous decision, and for over half a century has not been overruled, modified, or even criticized. It is no authority, in any sense of the word, that supports the proposition erroneously espoused by the main opinion. In truth, as late as 1961 the Utah Law Review, Spring 1961, Vol. 7, No. 3, "Mistake in the Utah Law of Contracts," p. 315, cites the Anderson case as being the law in Utah, saying that "a party executing a release from liability on account of personal injury suffered was not permitted to rescind such release because of mistake as to the extent of the injury." No distinction was suggested in the article between "unknown injury" and "unknown consequences of a known injury." The Anderson case is a case in point that should be controlling here in affirming the trial court. The second case cited by the main opinion is Kirchgestner v. D. & R.G.W.R. Co.[3] That case is strictly a Federal Employers' Liability Act case,[4] and this dissent concedes that it is governed by federal statutory and case law. It is not, however, applicable to this case or any other state case since Anderson v. O.S.L. Ry.[5] Nowhere in the Kirchgestner case is found any "distinction" such as made in the instant case, yet it is cited as one of the "great" majority of cases supporting such "distinction." This seems to be inaccurate reporting, as it was in citing the Anderson case in the main opinion. It is highly significant that the Utah Law Review article did not mention the Kirchgestner case in this respect.[6] It is even more significant that the Law Review article did mention the Anderson case favorably as being the state law. Also, it is interesting to note that the Kirchgestner case at no time mentioned or even discussed the Anderson case. The only quotation of the language of the Kirchgestner case in purported support of the main opinion's so-called "distinction" has no application to the instant case. The main opinion cannot be serious in its quotation, since such quotation necessarily would include unknown consequences of a known injury as being the subject of rescission because of mistake, which the main opinion concedes are barred by a release irrespective of any urgence by plaintiff of mutual mistake. In espousing such language, the main opinion, with complete inconsistency, destroys its argument about distinguishing "unknown" injury from consequences of a "known" injury. It appears that great liberality is extended under the federal act in mistake cases, favoring the voiding of releases based thereon, perhaps because of the liberality of the act itself, what with its provisions eliminating defenses of assumption of risk and contributory negligence, and because of the comparative negligence aspect *332 of its cases which are not applicable in our state and others. But neither these facts, nor the Kirchgestner case can support the main opinion here, since the matter is governed by state, not federal law. The next case cited in the main opinion, Hoopes v. Lamb,[7] involving aggravation of a known injury, did recognize the distinction but certainly reserved the question of unknown injury when it said, "It is unnecessary for us to decide whether the parties * * * intended in fact to cover injuries both known or unknown." Nonetheless it did hold the release to be binding on consequences of a known injury, leaving the other horn of the distinction for future impaling considerations. The only other case cited in the main opinion was Ranta v. Rake,[8] which adheres to a school of thought where the plaintiff may disavow his written contract when it turns out that he made an improvident settlement. It, like the main opinion here, simply flouts the well-established rule in Utah and elsewhere that a person may execute a contract and be bound by its terms, although he made a bad bargain. It simply espouses cases that depart from contract terms on the ground they are sui juris,[9] that the facts show mutual mistake where they are at best unilateral,[10] and other "I don't give a damn for contract principles" cases,[11] all of which reflect empathy for one who makes a bad bargain, with utter disrespect for written word or signature. These cases do not reflect "the great majority of decisions" recognizing the distinction stated and followed by the main opinion. They include cases that relieve from consequences of a known injury or an unknown injury. Eliminate the Anderson case, the Kirchgestner case, the Ranta case, the F.E.L.A. cases and the "I don't give a damn" cases, which do not recognize the distinction to which the main opinion subscribes, and you will find that "the great majority" mentioned may be but a handful of free-pass, give-away fans in the bleachers. It is interesting to note that in Ranta v. Rake, in recognizing the disagreeing Oregon case of Wheeler v. White,[12] but rejecting it, offered an apologia for it by saying, "It will be noted there was a strong dissent to this opinion." The Idaho case did not tender any equivalent cum laude to the two dissents in the 3-2 Ranta squeaker. No doubt this decision will surprise insurance companies and some of the best legal minds on construction of contracts, particularly insurance contracts, and more particularly the standard insurance release, some of whose innards now have been removed in Utah by a legal scalpel of illogic and gratuitous, but unwarranted interpretation of words. If the results called for in written instruments are unpalatable, the legislature might flavor it a bit but it is not our job, absent language in the contract making it clearly against public policy. The main opinion here urges no legislative interdiction or justification for its conclusion, nor any language that taints the release as being offensive to public policy. What the main opinion does is to prevent any effective or lasting settlement for injuries of which the parties are unaware at the time of settlement (even though the written release signed by the releasor says such injuries and the consequences thereof forever are barred), but that a claim for the consequences of a known *333 injury is forever barred, albeit such consequences may reflect an injury worse by a hundredfold than that reflected by the consequences of an unknown injury. Such a result simply is ridiculous, especially where both parties solemnly have put their signatures to a document that clearly releases any claim for any injury or the consequences thereof whether the injury be known or unknown at the time of settlement and release. Aside from what has been said above, it is difficult for this writer to understand why anyone is talking about mutual mistake at all. Plaintiff himself developed the facts through his own physician, who deified them with his signature. Assuming his diagnosis to have been wrong, the insurance company wasn't mistaken about anything. It simply paid an amount which was acceptable to its assured, and conceivably would have paid a different amount if the second-guessing physician had performed the operation before the release had been executed. No one in this case urges that the insurance agent practiced any fraud, deceit, coercion, concealment or double dealing of any kind. Under the facts of this case, and as a matter of law there could be nothing more than a unilateral mistake of fact, probably none at all. It is rather absurd even to cogitate that a nonexpert, lay insurance agent, with no medical background, would be a party to a mutual mistake where he relied on the diagnosis of the releasor's own doctor, unless it is urged that he was guilty of fraud, concealment, coercion and the like, as was not the case here. If one could circumvent the plain, unambiguous terms of a release under the circumstances of the instant case, where there is no hint of fraud, coercion or other ulterior motive, but only a present mutual desire to settle a claim at arm's length between a sort of willing buyer and a willing seller, neither under compulsion, why would it not be as logical, possible, practical, to sanction the same kind of circumvention, if the claim had been reduced to judgment after a fair trial, which would allow, after judgment, another and another trial and judgment ad infinitum on the advent of successively discovered, unanticipated complications? The language and effect of a release, in Utah, has been relegated to the realm of the ridiculous. [1] Some cases go further and grant relief from a settlement when the consequences of a known injury greatly exceed the anticipated results at the time of making the settlement. See Corbin on Contracts, Sec. 1292; see also the annotation in 71 A.L.R.2d at page 105, Sec. 5(b); see also Reedo v. Treat, 62 Ill. App.2d 120, 210 N.E.2d 833 (1965). The dissenting opinion filed herein would have us follow the minority view as expressed in the case of Wheeler v. White Rock Bottling Company, 229 Or. 360, 366 P.2d 527 (1961). In reversing the trial court the Supreme Court at page 529 said: "The trial court followed the numerical weight of authority in other jurisdictions, * * *" [1] 229 Or. 360, 366 P.2d 527, 529-530 (1961). [2] Also see Smith v. Loos, 78 N.M. 339, 431 P.2d 72 (1967); Beaver v. Harris Estate, 67 Wash. 2d 621, 409 P.2d 143 (1965); Pepper v. Evanson, 70 Wash. 2d 309, 422 P.2d 817 (1967). [3] 59 Cal. 2d 97, 28 Cal. Rptr. 307, 315, 378 P.2d 579, 587 (1963). [4] See footnote 5 of Casey v. Proctor, note 3 supra, at p. 588 of 378 P.2d. [5] 47 Utah 614, 618-619, 155 P. 446 (1916). [6] 118 Utah 20, 24, 28, 218 P.2d 685, 690 (1950). [7] Note 1, supra. [1] This court said in Ephraim Theatre Co. v. Hawk, 7 Utah 2d 163, 321 P.2d 221 (1958), as we have said and reiterated dozens of times, that: "Generally speaking, neither of the parties, nor the court, has any right to ignore or modify conditions which are clearly expressed merely because it may subject one of the parties to hardship, but they must be enforced `in accordance with the intention as * * manifested by the language used by the parties to the contract. Murphy v. Salt Lake City, 65 Utah 295, 236 P. 680, 683 (1925).'" See also Restatement Restitution, § 11(1). [2] 47 Utah 614, 155 P. 446 (1916). See 171 A.L.R.2d 100, § 5, citing Anderson v. O.S.L. Ry. [3] 118 Utah 20, 218 P.2d 685 (1950). [4] 45 U.S.C.A. § 51 et seq. (in effect long before the Kirchgestner case). [5] Note 2, supra. [6] Apparently or almost obviously because that case was an F.E.L.A. case subject to federal law and not a state case subject to state law. [7] 102 Ariz. 335, 429 P.2d 447 (1967). [8] 91 Idaho 376, 421 P.2d 747 (1967). [9] 71 A.L.R.2d §§ 2, 3; Clancy v. Pacenti, 15 Ill. App.2d 171, 145 N.E.2d 802 (1957). [10] 71 A.L.R.2d § 4. [11] Id., et seq. [12] 229 Or. 360, 366 P.2d 527 (1961). The dissenting opinion discusses this case at some length, and it needs no discussion here, the author of this dissent agreeing with the observations and decision of the Wheeler case as well as all of the observations and conclusions incorporated in Mr. Justice Callister's dissent.