Title: Alabama Farm Bureau Ins. Co. v. Hunt

State: alabama

Issuer: Alabama Supreme Court

Document:

519 So. 2d 480 (1987)
ALABAMA FARM BUREAU INSURANCE COMPANY
v.
Ricky HUNT and Laura Hunt.
Rita W. MOORE, Administratrix of the Estate of Dr. Arthur E. Moore, Deceased
v.
Ricky HUNT and Laura Hunt.
BAPTIST MEDICAL CENTER-CHILTON
v.
Ricky HUNT and Laura Hunt.
86-590, 86-597 and 86-632.

Supreme Court of Alabama.
December 23, 1987.
W.J. McDaniel and William A. Mudd of McDaniel, Hall, Conerly & Lusk, Birmingham, for appellant Ala. Farm Bur. Ins. Co.
Fred W. Tyson of Rushton, Stakely, Johnston & Garrett, Montgomery, for appellant Rita W. Moore, Administratrix, etc.
C. Jeffery Ash of Carpenter & Gidiere, Montgomery, for appellant Baptist Medical Center-Chilton.
John W. Haley and Francis H. Hare, Jr., of Hare, Wynn, Newell & Newton, Birmingham, for appellees.
PER CURIAM.
The defendantsAlabama Farm Bureau Insurance Co. (hereinafter "Farm Bureau"), Rita Moore (hereinafter "Moore"), and Baptist Medical Center-Chilton (hereinafter "Baptist")appeal from a summary judgment for the plaintiffs, Ricky and Laura Hunt. We affirm the judgment reforming a general release, pursuant to Ala. Code 1975, § 8-1-2, to reflect "the true intention of the parties," a pro tanto release.
*481 The Hunts filed a petition for reformation of a general release executed by them on September 17, 1983. The trial court entered an order granting the reformation and converting the general release to a pro tanto release, releasing only Farm Bureau and the insureds, Danny and Frances Gilmore, based upon the trial court's finding of the true intention of the parties. The trial court's order further declared that the pro tanto release entitled other defendants to a credit of $25,000, the amount of consideration expressed in the release, if a judgment were rendered against them.
1. Whether the trial court erred in granting the Hunts' motion for summary judgment to reform the release.
2. Whether the settlement and "general" release of the original tort-feasors, Danny and Frances Gilmore, bar the plaintiffs' wrongful death claim against the admitting hospital and the treating physician for alleged subsequent acts of negligence.
On March 22, 1983, Sonya Nicole Hunt, age 3, fell down a flight of stairs, while she was visiting in the home of her aunt and uncle, Frances and Danny Gilmore. The Gilmores took her to Baptist, where she was X-rayed and examined by Dr. Moore, and then released. Later that night, Sonya went into a coma. The Gilmores called rescue personnel, who called a helicopter. Sonya was transported to University Hospital in Birmingham, where numerous doctors treated her for a skull fracture and a blood clot. Sonya died on March 28, 1983.
The Gilmores, as the insureds under a homeowners' insurance policy with Farm Bureau, reported the accident to the insurer, whose adjuster, Don Hale, conducted an investigation and discussed the accident with the Gilmores. On September 12, 1983, at Hale's request, Mrs. Gilmore went to the Farm Bureau office and picked up a $25,000 check made payable to the Hunts. At that time, Hale advised her that the Hunts had to sign a release in order to cash the check. Hale did not show Mrs. Gilmore the release document, nor did he explain its contents to her.
On September 17, 1983, Mrs. Gilmore and the Hunts went to the Farm Bureau office. Neither Hale nor the Gilmores' agent, Bob Cook, was present. Two Farm Bureau employees, Evelyn Champion and Wanda Hewitt, were in the office when Mrs. Gilmore and the Hunts arrived. Mr. Hunt read the filled-in blanks on the form but did not read the entire form. According to the Hunts, after Mrs. Champion explained to them that the form released the Gilmores and Farm Bureau, they executed the document.
The Hunts petitioned for reformation of contract against the Gilmores and Farm Bureau, alleging that they understood the release to be a pro tanto settlement with the Gilmores and Farm Bureau only, and that the Hunts would have the right to proceed against any other responsible parties. By amendments, the Hunts first added Baptist and Dr. Moore as parties to their petition for reformation and then added a claim for wrongful death based on the alleged negligence of Baptist and Dr. Moore. After Dr. Moore died, his widow and administratrix, Rita Moore, was substituted as a party defendant.
All the defendants appeal from the trial court's order granting the Hunts' motion for summary judgment and reforming the release. (The partial summary judgment as to Baptist and Moore was made final pursuant to Rule 54(b), A.R.Civ.P.)
Appellants rely on Baker v. Ball, 473 So. 2d 1031 (Ala.1985), and Conley v. Harry J. Whelchel Co., 410 So. 2d 14 (Ala.1982), for the following propositions:
Baker, 473 So. 2d  at 1035.
Conley, 410 So. 2d  at 15.
Alternatively, the appellants contend that 1) the testimony of Farm Bureau's claims agent creates a triable factual issue with respect to the "intention of the parties," which precludes disposition by summary judgment on the plaintiffs' claim for reformation of the contract of release; and 2) parol evidence is not admissible to prove "intention of the parties."
Primarily, the Hunts rely on Irvin v. Griffin Corp., 808 F.2d 802 (11th Cir.1987), expressly adopting this Court's dictum in Conley, supra, as the basis for upholding the reformation of a general release. Alternatively, the Hunts contend that, in no event, could the parties to the instant contract have intended to release an independent and unrelated cause of action against other tort-feasors.
Although we reject the Hunts' alternative "independent cause of action" contention as a basis for upholding the trial court's reformation of the release,[1] we accept the holding and rationale of the 11th Circuit's Irvin case, supra, as a correct expression of Alabama law. Except for a collateral "necessary parties" issue in Irvin, which is not in issue here, Irvin and the instant case are virtually identical.[2] Therefore, at the risk of overburdening this opinion, we quote at length from Irvin:
"`All receipts, releases and discharges in writing, whether of debt or record, a contract under seal or otherwise, must have effect, according to the intention of the parties.'
"`When, through fraud, a mutual mistake of the parties or mistake of one party which the other at the time knew or suspected, a written contract does not truly express the intention of the parties, it may be revised by the court on the application of the party aggrieved so as to express that intention, so far as it can be done without prejudice to the rights acquired by third persons in good faith and for value.' (Emphasis added.)
"`[S]uch reservation is not essential, nor need the release take the form of a covenant not to sue. The true inquiry is, did the parties intend to limit the release to the parties named, with no intent that the cause of action be satisfied in full?' [217 Ala. at 108, 115 So.  at 4.]
"`The evidence ... shows that appellant could have attempted to avoid or rescind the entire release on the grounds of mutual mistake, fraud or misrepresentation. Furthermore, the appellant could have requested reformation of the release, pursuant to
*484 Code of 1975, Section 8-1-2, to express the true intention of the parties.'
We reject the appellants' contention that the testimony of Farm Bureau's claims agent was at least self-contradictory on the "intention of the parties" issue so as to make disposition by way of summary judgment improper. We quote the full context of this testimony from the record:
The appellants contend that, notwithstanding agent Hale's initial unequivocal testimony that he did not intend the release to include unnamed third parties, his statement that he "intended for it to release the Gilmores in all thejust what the release says," at the very least, makes a genuine issue of material fact that cannot be resolved on plaintiffs' motion for summary judgment. Obviously, the trial judge, reviewing the whole of the deposition before and after the "just what the release says" clause, found no contradiction in the witness's testimony.
It is readily apparent that this intelligent, articulate, and forthright witness was saying that, as the claims agent who prepared the release, he intended to have the Hunts release only his company and its insureds "in all the" respects set out in the release contract. Indeed, to interpret his testimony otherwise is to impute an intent on his part to misrepresent to the Hunts the nature and scope of the release. The trial court's reformation of the release is in full accordance with the good faith conduct of Farm Bureau's claims agent in his dealings with both the insureds and the Hunts.
Moreover, Ala.Code 1975, § 8-1-2, provides, in addition to "fraud" and "mutual mistake of the parties," that a "mistake of one party which the other at the time knew or suspected" is an alternative ground for reformation of a written contract that "does not truly express the intention of the parties." While in other contexts, the court may resort to the "mistake of one party" ground for reformation, Hale's testimony in the instant case clearly invokes the "mutual mistake" ground and leaves no genuine issue of material fact for further consideration.
Finally, appellants claim the trial court erred in considering parol evidence on the "intention of the parties" issue. We disagree. A good statement of the rule applicable to reformation is found in 66 Am.Jur.2d Reformation of Instruments § 118, p. 644-45 (1973):
Also, the rule and its rationale are stated in Floyd v. Andress, 246 Ala. 301, 20 So. 2d 331 (1944):
246 Ala. at 306, 20 So. 2d  at 334-35. See, also, Hibbett Sporting Goods, Inc. v. Biernbaum, 375 So. 2d 431 (Ala.1979); and Richard Kelley Chevrolet Co. v. Seibold, 363 So. 2d 989 (Ala.Civ.App.1978). For two recent cases upholding pro tanto releases, see Cox v. City of Birmingham, 518 So.2d *486 1262 (Ala.1987); and Daugherty v. M-Earth of Alabama, Inc., 519 So. 2d 467 (Ala.1987).
AFFIRMED.
TORBERT, C.J., and JONES, ALMON, SHORES, BEATTY and ADAMS, JJ., concur.
HOUSTON, J., concurs specially.
HOUSTON, Justice (concurring specially).
Don Hale at one point in his deposition stated: "I don't know that it was an intent on my part [to release Chilton County Hospital]. I intended for it to release the Gilmores in all the just what the release says [emphasis supplied]." Mr. Hale's other testimony is clear that he did not intend for the release to include unnamed third parties. The release is clearly a general release that releases the Gilmores, Alabama Farm Bureau, "and all other persons, firms, or corporations liable, or who might be claimed to be liable, ... from any and all claims, demands, damages, actions, causes of action or suits of any kind or nature whatsoever and particularly on account of all injuries known and unknown, both to person and property, which have resulted or may in the future develop from an accident which occurred on or about the 22nd day of March, 1983 at or near Jemison, Alabama." I have consistently held that a witness's isolated answer to a particular question, removed from the totality of that witness's testimony that explains or qualifies that answer, does not satisfy our scintilla-of-evidence sufficiency standard. See Creel v. Brown, 508 So. 2d 684 (Ala. 1987) (Houston, J., concurring specially); Williams v. Robinson, 512 So. 2d 58 (Ala. 1987) (Houston, J., dissenting, joined by Torbert, C.J., and Steagall, J.); and Wilson v. Alabama Power Co, 518 So. 2d 105 (Ala. 1987) (Houston, J., concurring specially). To allow Mr. Hale's isolated statement, which is explained and qualified by his other deposition testimony, to provide the scintilla of evidence to defeat plaintiffs' summary judgment would be contrary to the position I have previously taken and which I am persuaded is correct. I would affirm.
By voting to affirm, I am not addressing the issue of whether there can be a pro tanto release of joint tort-feasors in wrongful death cases if only punitive damages are recoverable in such cases and if this Court continues to hold that there can be no apportionment of punitive damages against joint tort-feasors, since it is my understanding that such an issue is not raised in this appeal made final pursuant to Rule 54(b), Ala.R.Civ.P.
[1]  Because, under the allegations, the negligence of Baptist and Moore combined and concurred with the original negligence of the Gilmores to cause the death of the Hunt child, the wrongful death claim against Baptist and Moore is based on a "joint tort-feasor" theory; thus, the "individual cause of action" contention must fail. See Ex parte Rudolph, 515 So. 2d 704 (Ala.1987); and Ex parte Jenkins, 510 So. 2d 232 (Ala.1987).
[2]  The dissent in Irvin is directed solely at the "necessary parties" issue: an issue not here presented and on which we express no opinion.