Title: Maglin v. Tschannerl

State: vermont

Issuer: Vermont Supreme Court

Document:

Maglin v. Tschannerl (2000-182); 174 Vt. 39; 800 A.2d 486

[Filed 24-May-2002]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal  revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter  of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of 
  any errors in order that corrections may be made before this opinion goes
  to press.


                                No. 2000-182


Beth A. Maglin	                                 Supreme Court

                                                 On Appeal from
     v.	                                         Windham Superior Court


Janaki N. Tschannerl	                         June Term, 2001


Richard W. Norton, J.

Kristen P. Swartwout of Crispe & Crispe, Brattleboro, for Plaintiff-Appellant.

James E. Preston and Richard H. Wadhams, Jr. of Pierson, Wadhams, Quinn & Yates,
  Burlington, for Defendant-Appellee.


PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.


       JOHNSON, J.   Plaintiff Beth Maglin appeals a Windham Superior Court
  order granting  defendant Janakin Tschannerl's motion for summary judgment
  on plaintiff's personal injury claim  for harm suffered in an automobile
  accident. The court held that a release signed by plaintiff after the 
  accident barred her from seeking further relief.  Plaintiff claims that the
  release should be voided  because 1) the release violates the legislative
  remedy for rush releases, 12 V.S.A. § 1076; 2) there  was a mutual mistake
  of fact concerning her injury; and 3) it is unconscionable to enforce the
  release.  We affirm.

 

  Defendant's car hit plaintiff's car from behind in a two-car accident on
  March 12, 1996.  Plaintiff's car did not sustain major damage, but
  plaintiff suffered from whiplash.  Ten days after the  accident, an agent
  from defendant's insurance company, State Farm Insurance, visited plaintiff
  at her  home.  Plaintiff told the insurance agent she incurred "minor
  whiplash" from the accident.  Plaintiff  accepted the insurance agent's
  $500 as compensation for the accident in exchange for her agreeing to 
  release defendant from all possible future claims.  The release stated:

    For the sole consideration of $500.00 the receipt and sufficiency
    is  hereby acknowledged, the undersigned hereby releases and
    forever  discharges [defendant] from any and all claims . . .
    causes of action or  suits of any kind or nature whatsoever, and
    particularly on account of  all injuries, known and unknown, both
    to the person and the property,  which have resulted or may in the
    future develop from an accident  which occurred on or about the
    12th day of March, 1996.

  (Emphasis added).  At the time, plaintiff knew she sustained injury, but
  believed the $500 to be  reasonable compensation for what she viewed as a
  minor accident with minor injuries.  Plaintiff did  not consult a physician
  about her injuries or an attorney about possible claims against defendant.  
  Nevertheless, she signed the release.

       Shortly after signing the release, plaintiff's symptoms worsened.  She
  experienced significant  neck pain, headaches, nausea, pain in her arms,
  numbness in her hands, and she could not stand, sit,  or lie down
  comfortably.  Plaintiff's chiropractor subsequently diagnosed her symptoms
  as stemming  from whiplash.  Her chiropractor explained to her that
  whiplash injuries are commonly  misunderstood and underestimated until
  serious symptoms occur.  Plaintiff incurred medical  expenses in excess of
  $10,000 for treatment for her whiplash injury and other symptoms.  These 
  expenses were incurred through numerous diagnostic imaging techniques
  together with successive  chiropractic, physical, and cranial sacral
  therapy sessions.

 

       Plaintiff filed a complaint for personal injury damages alleging that
  defendant's negligence  resulted in severe personal injuries to plaintiff. 
  Defendant and plaintiff filed cross motions for  summary judgment.  At
  issue was whether the release signed by plaintiff barred defendant's
  liability  for damages.  In granting defendant summary judgment, the court
  concluded that the release is valid  and enforceable.  The court stated
  that plaintiff's mistake as to the future consequences of a known  injury
  is not a mutual mistake of fact that can void the contract.  The court
  therefore barred plaintiff's  claims.  This appeal followed.

       On appeal, plaintiff contends that the release is unenforceable
  because it violates the statutes  designed to provide relief from rushed
  and unfair release agreements, 12 V.S.A. §§ 1076-77.   Plaintiff argues
  that even absent strict compliance with §§ 1076 and 1077, the statutes
  evince the  Legislature's general intent to void these types of releases. 
  She claims that because the statutes are  designed to protect people like
  plaintiff from executing rush releases, this Court should allow her to 
  disavow the release.  Additionally, plaintiff argues that she and defendant
  were mistaken as to a  material fact when they entered into the release. 
  She claims the relevant inquiry should be what her  intent was at the time
  she signed the agreement.  Thus, plaintiff argues, she did not intend to
  release  a claim for the symptoms she later developed, but rather only for
  the "minor whiplash" she believed  she suffered at the time.  Finally,
  plaintiff claims that the release is unconscionable because of the  unequal
  bargaining power between the insurance agent and herself.

       Defendant counters that plaintiff cannot raise an argument based on 12
  V.S.A. §§ 1076-77  because she failed to raise it below.  Even if this
  court considers §§ 1076 and 1077, defendant  contends that plaintiff failed
  to comply with the statute of limitations and other requirements of the 
  statutes, thus, the release is enforceable.  Defendant also maintains that
  there was no mistake of fact 

 

  that should void the release because, at the time the release was executed,
  both parties knew of  plaintiff's whiplash injury and plaintiff
  demonstrated an understanding of the terms of the release.   Finally,
  defendant asserts that the release is not unconscionable because any
  inherent unequal  bargaining power was not used coercively, and plaintiff
  was not subject to any undue pressure or  duress.  

       Before we turn to the specific claims of plaintiff, we note that there
  is a substantial body of  case law with facts similar to those presented
  here, and that plaintiff is correct that the trend is to  avoid releases on
  the various legal grounds plaintiff has raised here.  E.g., Newborn v.
  Hood, 408 N.E.2d 474, 476 (Ill. App. Ct. 1980); see also Annotation,
  Modern Status of Rules as to Avoidance  of Release of Personal Injury Claim
  on Grounds of Mistake as to Nature and Extent of Injuries, 13  A.L.R. 4th
  686, 694 (1982) (citing cases).  Apparently, it is quite common for people
  to enter into  early releases without fully considering the consequences. 
  Because of the unjust results in many of  these cases, courts have
  responded by avoiding releases between injured parties and insurance 
  companies.  Newborn, 408 N.E.2d  at 476 ("facts, when finally known, present
  an unconscionable  result because of the equitable principle of doing
  justice under the circumstances").  An examination  of those numerous
  decisions reveals at least one truth-that the greater the disparity in the
  actual  damages that manifested themselves after the signing of a release,
  and the amount paid in the early  settlement, the more likely it is that
  the court will find some manner of voiding the release.  The  grounds for
  decision vary, but include avoidance of the release on mutual mistake of
  fact, or on what  courts have found to be a more "objective" view of the
  parties' intent, or because the surrounding  circumstances were considered
  unconscionable.  See, e.g., Witt v. Watkins,