Title: Hicks v. Sparks

State: delaware

Issuer: Delaware Supreme Court

Document:

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
PATRICIA J. HICKS and  
FRANK L. HICKS,  
§ 
 
 
§ 
No. 522, 2013  
 
 
 
Plaintiffs Below- 
§ 
 
Appellants, 
§ 
Court Below:  Superior Court  
 
 
§ 
of the State of Delaware in and 
v.   
 
§  
for New Castle County 
 
§  
DEBRA SPARKS, 
§  
No.  N13C-02-131  
 
 
§ 
 
Defendant Below- 
§  
Appellee. 
§ 
 
 
 
§ 
 
 
 
 
Submitted:  March 05, 2014 
Decided:  March 25, 2014 
 
 
Before BERGER, JACOBS, and RIDGELY, Justices.  
 
O R D E R 
On this 25th day of March 2014, it appears to the Court that:  
(1)  Plaintiffs-Below/Appellants Patricia J. Hicks and her husband, Frank L. 
Hicks, appeal from a Superior Court’s grant of a Motion for Summary Judgment in 
favor of Defendant-Below/Appellee Debra Sparks.  The Hicks raise one claim on 
appeal.  They contend that the Superior Court erred because there was a mutual 
mistake of fact between the parties that should have allowed for rescission of an 
insurance release.  We find no error and affirm.  
(2)  This case arises from a motor vehicle accident that occurred in March 
2011.  Patricia Hicks was a passenger in a motor vehicle operated by her husband 
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that was rear-ended by Sparks.  Hicks, who was seventy-two years old at the time 
of the accident, went to the Emergency Room and followed up with her family 
physician a few days later with complaints of neck pain and headaches.  She 
received medical treatment and physical therapy for headaches and neck pain for 
approximately fifteen visits. 
(3)  In April 2011, Hicks presented her claim to Progressive Northern 
Insurance Company, Sparks’ liability carrier.  The adjuster handling the claim was 
Sharon O’Connell.  Hicks spoke with O’Connell, explaining that she had stopped 
physical therapy.  Hicks also told O’Connell that she was still having some 
problems but was happy with her progress and ready to negotiate a settlement.  
O’Connell initially offered Hicks $2,000 for the full and final resolution of the 
claim.  Hicks did not accept. 
(4)  In May 2011, Hicks spoke with O’Connell a second time and told her 
that she was still having headaches.  Hicks then made a demand of $7,000, 
indicating that she had spoken to an attorney regarding her injuries and their 
approximate costs.  O’Connell countered with a $2,500 offer as full and final 
resolution.  Hicks stated that she wanted more time to consider the counteroffer.  
(5)  More than three months after the accident, Hicks contacted O’Connell 
again.  Hicks issued a settlement demand for $5,000, explaining that she had 
spoken to two attorneys about the case.  She further stated that the attorneys 
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advised her to wait at least a year before settling to ensure that her injuries were 
resolved.  O’Connell explained that she respected Hicks’ right to wait for 
settlement but offered her $3,000. 
(6)  Finally in October 2011, Hicks reiterated her demand of $5,000.  In 
response, O’Connell offered $4,000.  Hicks accepted the $4,000 settlement offer.  
She and her husband later went to the Progressive office, obtained a settlement 
check, and executed a full and final release (the “Release”).  After executing the 
Release and nearly a year after the accident, Hicks began to experience pain in 
both of her arms and tingling and numbness in her hands.  An MRI revealed a 
cervical disc herniation.  Thereafter, Hicks received disc surgery. 
(7)  In 2013, Hicks filed suit in the Superior Court alleging that it was 
Sparks’ negligence that caused her injuries.  After discovery, Sparks filed a Motion 
for Summary Judgment.  The Superior Court heard arguments and granted Sparks’ 
Motion for Summary Judgment.1  This appeal followed.  
(8)  Hicks contends that the Superior Court erred by granting Sparks’ 
Motion for Summary Judgment because Hicks’ post-Release injuries are materially 
different than those contemplated in the Release, amounting to a mistake of fact 
and because Hicks did not assume the risk of mistake.  We review the Superior 
Court’s grant of summary judgment de novo “to determine whether, viewing the 
                                          
 
1 Hicks v. Sparks, 2013 WL 5788403 (Del. Super. Ct. Sept. 25, 2013). 
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facts in the light most favorable to the nonmoving party, the moving party has 
demonstrated that there are no material issues of fact in dispute and that the 
moving party is entitled to judgment as a matter of law.”2   
(9)  A release is a device by which parties seek to control the risk of the 
potential outcomes of litigation.3  Releases are executed to resolve the claims the 
parties know about as well as those that are unknown or uncertain.4  Because 
litigation is inherently risky, a general release avoids the uncertainty, expenses, and 
delay of a potential trial.  Delaware courts will generally uphold a release and will 
only set aside a clear and unambiguous release where it was the product of fraud, 
duress, coercion, or mutual mistake.5   
(10)  To establish a mutual mistake of fact, the plaintiff must show by clear 
and convincing evidence that (1) both parties were mistaken as to a basic 
assumption, (2) the mistake materially affects the agreed-upon exchange of 
performances, and (3) the party adversely affected did not assume the risk of the 
                                          
 
2 State Farm Mut. Auto. Ins. Co. v. Patterson, 7 A.3d 454, 456 (Del. 2010) (quoting Brown v. 
United Water Del., Inc., 3 A.3d 272, 275 (Del. 2010)). 
3 See E.I. DuPont de Nemours & Co. v. Fla. Evergreen Foliage, 744 A.2d 457, 462 (Del. 1999) 
(“A release is a form of contract with the consideration typically being the surrender of a claim 
or cause of action in exchange for the payment of funds or surrender or an offsetting claim.”). 
4 See Hob Tea Room v. Miller, 89 A.2d 851, 856 (Del. 1952) (“[A] general release . . . is 
intended to cover everything—what the parties presently have in mind, as well as what they do 
not have in mind, but what may, nevertheless, arise.”). 
5 Alston v. Alexander, 49 A.3d 1192, 2012 WL 3030178, at *3 (Del. 2012); Deuley v. DynCorp 
Int’l, Inc., 8 A.3d 1156, 1163 (Del. 2010); Hob Tea Room, 89 A.2d at 856.  
5 
mistake.6  Under principles of contract law, a contract is voidable, inter alia, on the 
grounds of mutual mistake existing at the time of contract formation.7  But the 
mutual mistake “must relate to a past or present fact material to the contract and 
not to an opinion respecting future conditions as a result of present facts.”8  
Nevertheless, mutuality of mistake in the insurance context can “exist[] only where 
neither the claimant nor the insurance carrier is aware of the existence of personal 
injuries.”9 
(11)  A release will bar suit for a plaintiff’s subsequently discovered injuries 
unless the injuries are materially different from the parties’ expectations at the time 
the release was signed.10  Mutual mistake will invalidate the release where both 
parties are mistaken as to the presence or extent of the plaintiff’s injuries at the 
time they executed the release.11  If the plaintiff knew that “an indicia of injuries 
                                          
 
6 See Cerberus Int’l v. Apollo Mgmt., 794 A.2d 1141, 1151–52 (Del. 2002); Am. Bottling Co. v. 
Crescent/Mach I Partners, L.P., 2009 WL 3290729, at *2 (Del. Super. Ct. Sept. 30, 2009); 
Restatement (Second) of Contracts § 152 (1981). 
7 Tatman v. Phila., Balt. & Washington R.R. Co., 85 A. 716, 721 (Del. Ch. 1913). 
8 Alvarez v. Castellon, 55 A.3d 353, 354 (Del. 2012) (quoting Tatman, 85 A. at 718). 
9 Id. at 356 (quoting Hicks v. Doremus, 1990 WL 9542, at *2 (Del. Super. Ct. Jan. 8, 1990)). 
10 See, e.g., Alvarez, 55 A.3d at 356–57 (holding that there was no mutual mistake where 
plaintiff’s later-discovered herniated disc following an accident because it was not a new injury 
or unrelated to the original trauma caused by the car accident); McLarthy v. Hopkins, 26 A.3d 
214, 2011 WL 3055252, at *2 (Del. 2011) (finding no mutual mistake for later-discovered 
injuries where both the plaintiff and the insurance adjuster knew that the plaintiff continued to 
experience pain at the time the release was signed a week following the accident). 
11 See, e.g., Reason v. Lewis, 260 A.2d 708, 709 (Del. 1969) (invalidating a release on mutual 
mistake where both parties erroneously believed at the time of the release that the plaintiff would 
not require any medical treatment but plaintiff later developed a nerve injury). But see Hicks, 
1990 WL 9542, at *4 (rejecting a mutual mistake claim where the plaintiff, who experienced 
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exist[ed] at the time [she] signed the release,” the release will bar suit and a court 
will not invalidate it by mutual mistake.12  Even though the plaintiff might be 
unaware of “the exact degree of injuries with medical certainty,” knowledge of the 
existence of an injury will preclude a finding of mutual mistake.13   
(12)  Finally, mutual mistake does not exist if the party adversely affected 
assumed the risk of the mistake.  As the Restatement (Second) of Contracts 
explains, a party assumes the risk of a mistake where the contract assigns the risk 
to the party or where the mistaken party consciously performed under a contract 
aware of his or her limited knowledge with respect to the facts to which the 
mistake relates.14   
(13)  Hicks argues that the Release is voidable by mutual mistake because 
her injuries are materially different from the injuries that both parties believed she 
sustained at the time the Release was signed.  Hicks explains that she and 
O’Connell were aware that Hicks suffered a cervical sprain requiring treatment 
before signing the Release. Hicks contends that surgery for a herniated disc is 
materially different from the minor head and neck injuries contemplated at the time 
of release.  Hicks further argues that this mistake adversely affected the parties’ 
                                                                                                                                        
some pain at the time of the release but believed it to be innocuous and later was diagnosed with 
a herniated disc requiring surgery fifteen months after the settlement). 
12 Hicks, 1990 WL 9542, at *2.  
13 Id.  
14 Restatement (Second) of Contracts § 154(a)–(b). 
7 
agreed-upon performance because the herniated disc was a new, undiscovered 
injury for which Hicks did not assume the risk of mistake.  
(14)  The record shows that Hicks has failed to demonstrate a mutual 
mistake of fact held by both parties at the time of the release.  Hicks concedes that 
she told O’Connell that she had not made a full recovery and continued to 
experience headaches and neck pain.  Although Hicks may have been mistaken as 
to the future effect of her injury, both parties were aware that Hicks injured her 
neck in the accident.  This can reasonably be considered an “indicia of injuries” 
existing at the time of the Release.  Hicks had ample opportunity to consult 
additional physicians and obtain further diagnoses to discover the herniated disc.  
Her later diagnosis is not a materially different fact but an injury of which Hicks 
and O’Connell had some awareness.  Therefore, there was no mutual mistake.  
(15)  The record also shows that Hicks assumed the risk of mistake.  She 
executed a clear and unambiguous Release in exchange for a settlement payment.  
This release specifically provided that Hicks “declares and represents that the 
injuries are or may be permanent and that recovery therefrom is uncertain and 
indefinite.”15  Hicks assumed the risk of mistake when she signed the Release 
without obtaining a more thorough medical examination to fully discover the 
extent of her injuries related to her neck pain.  Hicks assumed the risk that her 
                                          
 
15 Appellant’s Op. Br. Appendix at A15.  
8 
injuries were more serious than she believed and that her symptoms could worsen 
and require further treatment.  Because she assumed this risk, she cannot now 
claim mutual mistake.   
NOW, THEREFORE, IT IS ORDERED that the judgment of the Superior 
Court is AFFIRMED.  
 
BY THE COURT: 
 
 
 
 
 
 
/s/ Henry duPont Ridgely 
 
 
 
 
 
 
Justice