Title: Mitzel v. Schatz

State: north-dakota

Issuer: North Dakota Supreme Court

Document:

175 N.W.2d 659 (1970) Simon MITZEL, Plaintiff and Respondent, v. Kasper SCHATZ, Defendant and Appellant. No. 8587. Supreme Court of North Dakota. March 21, 1970. *661 Nilles, Oehlert, Hansen, Selbo & Magill, Fargo, for appellant. Vogel, Bair & Graff, Mandan, for respondent, and Robert Chesrown, Linton. ERICKSTAD, Judge. This is the second time this case has been before this court. On the first occasion, procedural questions were determined by decision rendered December 10, 1968, 167 N.W.2d 519. By summons and complaint dated February 22, 1967, Simon Mitzel initiated an action against Kasper Schatz in which he sought to recover for personal injuries allegedly suffered in an intersectional accident which occurred on November 15, 1965, on a county road 1 1/2 miles east of Zeeland in McIntosh County. The complaint asserted that Mr. Mitzel's injuries were the result of the negligent operation of a motor vehicle by Mr. Schatz. Mr. Schatz responded by answer dated March 17, 1967, and amended answer dated November 15, 1967. He admitted that a two-car accident occurred on the date and at the place alleged in the complaint but specifically denied that he was in any way negligent in the operation of his automobile. He further alleged that the accident was caused wholly by the negligence of Simon Mitzel and his son Richard. For a separate defense he alleged that on November 18, 1965, for valuable consideration Simon Mitzel released him and others from "any and all known and unknown actions, causes of action, claims, demands, damages, costs, loss of services, expenses, compensation, rights of contribution and all consequent damages on account or in any way growing out of any and all known and unknown personal injuries and property damage and death resulting or to result from an accident that occurred on or about the 15th day of November, 1965, near Zeeland, North Dakota;" and that by virtue of said release, Simon Mitzel no longer had a cause of action against him. Mr. Mitzel anticipated this defense by including in his complaint an allegation that the release given was in settlement only of the property damage to his automobile. He further asserted: "That if the defendant alleges, or if it is hereafter established, that any part of said settlement was for personal injuries received in said accident, the plaintiff hereby rescinds said settlement upon the ground that said release was given by mistake in that the plaintiff was not aware that he had suffered any serious personal injury in said accident and was specifically not aware that he had suffered brain damage as a result of said accident, and further that said release was obtained by fraud, and the plaintiff hereby offers to restore any and all things of value received from defendant as fully and completely as if said release had never been given." Following a hearing on a motion to sever the issue of whether the release given precluded Simon Mitzel from recovering from Mr. Schatz for his personal injuries, the court granted said motion and set that issue down for separate trial to the court without a jury. Following that trial the court concluded that the release which was executed by Mr. Mitzel on November 18, 1965, was executed under a mistake of fact in respect to the personal injuries that Mr. Mitzel had sustained as a result of the automobile accident. It held that Mr. Mitzel was entitled to have judgment rescinding the release in respect to the settlement of the personal injury claim and that the release was not a bar to the instant action for damages for personal injuries. Pursuant to the findings of fact, conclusions of law, and order for judgment dated March 5, 1968, judgment dated March 13, 1968, was entered. *662 By notice dated April 17, 1968, Mr. Schatz appealed. Following the service of this notice upon him, Mr. Mitzel made a motion in this court for a dismissal of the appeal on the following grounds: (1) The judgment of the district court is interlocutory in nature and does not adjudicate all of the rights and claims of the parties in the pending action; and (2) The judgment does not comply with the provisions of N.D.R.Civ.P. 54(b). Following service of this motion upon him, Mr. Schatz moved the court ex parte, citing N.D.R.Civ.P. 60, for an order nunc pro tunc correcting the conclusions of law, order for judgment, and judgment dated March 13, 1968, to provide, pursuant to N.D.R.Civ.P. 54(b), that there was no just reason for delay and to expressly direct the entry of judgment. The court granted this motion, and in its order of September 28, 1968, expressly determined that there was no just reason for delay and directed the entry of judgment to be effective as of the date of the original judgment. A document entitled "Judgment on Separate Trial" identical to the original judgment was thereafter executed on September 30, 1968, by the Clerk of the District Court of McIntosh County. We held the first Mitzel appeal was premature, it having been taken before the determination and direction required by Rule 54(b) were made. The instant appeal arises out of a notice of appeal dated March 31, 1969, from the amended judgment of the district court dated September 30, 1968. A trial de novo is demanded in this court. In this appeal Mr. Schatz has asserted numerous specifications of error, which we shall consider in the order in which he has stated them in his brief. Specification of error No. 1: "The trial court erred in refusing to allow the defendant to go into the issue of liability and to prove settlement based on a disputed, extremely doubtful claim because the facts without dispute tended to show a collision between two vehicles coming at right angles together in the center of a wide-open, unobstructed intersection with the plaintiff's driver's negligence imputable to the plaintiff so that plaintiff was chargeable with contributory negligence as a matter of law." Mr. Schatz asserts that the locus in quo was a level, wide-open, unobstructed rural intersection with each vehicle converging upon the other at a right angle, that there were no distracting circumstances or weather or atmospheric conditions contributing to the collision, and that under such circumstances both drivers were negligent as a matter of law. In support thereof he cites Knudsen v. Arendt, 79 N.D. 316, 56 N.W.2d 340 (1952); Johnson v. Sebens, 86 N.W.2d 386, 391 (N.D.1957); and Thompson v. Nettum, 163 N.W.2d 91 (N.D.1968). He further asserts that the evidence which the trial court refused to consider would have imputed to Mr. Mitzel his son's negligence as the driver. To support this contention, Mr. Schatz merely refers us to parts of the transcript, including that part containing the offer of proof. He refers us to no statutes or decisions in support of his position that, under the facts as asserted in the offer of proof and otherwise, the negligence of the son must be imputed to the father. The decisions cited in contending negligence of both drivers are distinguishable from this case on facts. In Knudsen, the litigation arose out of a collision between a car driven by the plaintiff's decedent and one driven by the defendant, both drivers being alone in their cars at the time of the collision. The plaintiff's decedent died as the result of injuries he suffered in the collision, and the defendant testified that as a result of the injuries he suffered from the collision he had no recollection of the collision or of the events immediately preceding it. There were no other witnesses to the collision. In Johnson, the supreme court held that *663 the trial court committed error in granting the defendant's motion for a directed verdict, but found the error to be without prejudice for the reason that there was no material conflict in the testimony of the parties. In Thompson, both drivers involved in an intersectional collision suffered from retrograde amnesia and there were no other eyewitnesses to the collision. After analyzing the transcript references, including that part relating to the offer of proof, we are of the opinion that the trial court was correct in declining to decide the issue of liability at that time, since, as a result of the defendant's own motion, the issue of liability had been severed from the issue of the effect of the release. Pertinent to this is Rule 50(a) of North Dakota Rules of Civil Procedure, which reads: Our view is supported by the general rule which we have stated countless times: questions of negligence, proximate cause, contributory negligence, and assumption of risk are ordinarily questions of fact for the jury. It is only when the evidence is such that reasonable men can draw but one conclusion therefrom that they become questions of law for the court. In 1967 we applied that general rule to an intersectional collision where the drivers were able to see 300 to 350 feet in the pertinent directions. In Gleson, the plaintiff's decedent driver was killed instantly leaving no witness to the collision other than the defendant driver of the other vehicle. Gleson v. Thompson, 154 N.W.2d 780, 786, 787 (N.D.1967). As the issue of liability was not litigated, Mr. Mitzel did not offer evidence to support his position, but we note from what evidence was submitted that Mr. Schatz's vehicle entered the intersection to the left of the plaintiff's vehicle and that at the time of the collision two dogs were riding in the cab of Mr. Schatz's pickup. It is conceivable that the dogs may have obstructed Mr. Schatz's view to his right. In this case, the three witnesses are still alive and none is suffering from amnesia. Accordingly, the liability, if any, should be determined by a jury. Although for reasons previously stated we find no error in the trial court's refusal to determine liability at the separate trial of the issue of the legality of the release, we further emphasis that Mr. Schatz did not in his brief or during oral argument make clear the legal theory by which the negligence of the driver-son is imputed to the father-passenger-owner. If the contended liability is on the theory of the existence of a joint enterprise between the son and the father, it is significant that whether they were engaged in a joint enterprise is normally a question for the jury. Prosser Torts 3rd Ed. HB, Section 71 Joint Enterprise, p. 488. Without deciding whether a joint enterprise exists in this case we think what Professor Prosser has to say on this subject is timely. Other bases for imputing the negligence of one party to another are stated in Restatement of the Law 2d, Torts, Sections 485 and 486, but for reasons heretofore explained we find it unnecessary to determine that issue at this time. It should be noted that the family purpose doctrine has no application to this case. See Michaelsohn v. Smith, 113 N.W.2d 571 (N.D.1962). Both sides of this controversy rely for the most part on old decisions of courts of other states. Having read the various authorities cited us by both parties and without discussing all the citations in detail herein, we conclude that the reasoning employed in a 1928 decision of the supreme court of New Hampshire is the most convincing. In that case, as in this case, the defendant argued that it had bought its peace and that therefore it was immaterial that there may have been a mutual mistake of fact. We quote a part of the court's decision: In the instant case, the estimate of the cost of the repair of Mr. Mitzel's automobile obtained by Mr. Peter Mueller, the adjuster for Mr. Schatz's insurance company, came to $1,584.64. The high book value of Mr. Mitzel's 1963 Chevrolet was a little over $1,700. It was brought out on cross-examination of Mr. Mueller that Mr. Mitzel had informed him that as of the date of the settlement, which was the third day following the collision, Mr. Mitzel's doctor bills were a little over $40. On the face of the check given Mr. Mitzel by Mr. Schatz's insurance company in settlement, Mr. Mueller apportioned the $1,900 as follows: BI $100, PD $1,800. It was brought out at the trial that BI refers to bodily injury and that PD refers to property damage. Mr. Mueller explained away those notations, however, as being merely bookkeeping entries for the benefit of the home office, inasmuch as the salvage of the automobile brought a return to the insurance company of $500. Although Mr. Mueller had not received any medical report from Mr. Mitzel's doctor, he had Mr. Mitzel's statement that the X rays showed no broken bones. He personally observed the black eye. From all of these facts, we think it is quite clear that the settlement made in this case was a settlement based upon compensation rather than upon merely avoiding litigation. Relative to the contention made by Mr. Schatz that the language of the release indicates that what the parties intended was the elimination of any possible litigation, we think what was said in a 1936 decision of the Court of Chancery of New Jersey is pertinent. Describing the release in Spangler, the New Jersey court said: It appears quite clear that although Mr. Mitzel suffered almost continuously from a headache following his accident to the time of his surgery some eight weeks later (all the while continuing to drive an automobile and keeping his social commitments), he thought he was merely suffering from a big black eye and so did *666 his local doctor and other doctors, as well as the insurance adjuster, until he was referred to a Bismarck doctor who referred him to a specialist in Fargo who performed surgery to correct a condition caused by a subdural hematoma. In light of these facts, it is obvious that the release was signed under a mutual mistake of fact as to the nature and extent of injuries from which Mr. Mitzel suffered. In sustaining the trial court in setting aside a release upon the ground of mutual mistake of fact, the New Hampshire court in Poti said: In light of what we have said herein we conclude that the trial court was correct in its holding as to this issue and move on to specification of error No. 2, which Mr. Schatz has designated as follows: "The court erred in accepting plaintiff's partial tender." In support of this position, Mr. Schatz argues that by tendering only $100 of the total consideration received for the release and doing so after six months from the time of the injury, Mr. Mitzel did not comply with section 9-08-09 of the North Dakota Century Code, which he asserts is controlling in this case. Section 9-08-09 N.D.C.C. reads as follows: It is his position that section 9-08-09 indicates that while the consideration received need not be returned if the release is rescinded within six months of the injury (the time specified in section 9-08-08 N.D.C.C.), such consideration must be returned if the action is brought after that time. In the instant case, Mr. Mitzel took *667 no action to rescind the release until 15 months following the date of the injury. It is therefore Mr. Schatz's position that if rescission is to be allowed at all, Mr. Mitzel should have tendered the full consideration as a condition precedent to maintaining his suit. He refers us to the general law of rescission, as follows: North Dakota Century Code. The trial court was of the opinion that the release was divisible and could be rescinded in part and affirmed in part. Mr. Schatz cites 76 C.J.S. Release § 37, as requiring a full restoration of the consideration. He further refers us to a 1918 decision of this court, the pertinent part of which he asserts as follows: We think it is important to note, however, that in Swan, the case relied on by Mr. Schatz, the court cited exceptions to the general rule that in seeking to rescind one must restore the other party to his original position. The pertinent part of that reference follows: In American Jurisprudence we note the following: In the instant case, we are of the opinion that the claim for property damage is severable from the claim for personal injury and we do this despite the fact that Mr. Mueller, the adjuster for the insurance company, testified that it was the policy of the insurance company never to settle a property damage claim without simultaneously settling the bodily injury claim. Although such a policy may be recommended for its expediency, we do not think it is one that should be encouraged by the courts. The third specification of error is that the trial court erred in denying the defendant's motion to dismiss on grounds of the statute of limitations. In support of this contention Mr. Schatz cites sections 9-08-08 and 9-08-09 of the North Dakota Century Code. The provisions of 9-08-09 N.D.C.C. are set forth earlier in this opinion. It is Mr. Schatz's contention that by those statutes a contract of settlement is voidable for a period of six months, but after that time the contract is to be regarded as final and no longer voidable. He urges that the intent of the Legislature is clearly shown by the wording of section 9-08-09 to the effect that: "Whenever an action shall be commenced within the period of time herein limited [six months following the date of the injury] to recover such damages, the amount received by the injured person, * * * in any such settlement * * * shall not be a bar to the prosecution of the action * * *" He asserts that by implication the statute provides that if the action is not brought within six months, the amount received by the releasor in the settlement is a bar to the action. In other words, he contends that the Legislature has provided a statute of limitations within the statute creating the right of action to avoid contracts of settlement. In support of his position, he refers us to a 1938 Texas decision in which the Commission of Appeals Court quoted from Bement v. Grand Rapids and I. Ry. Co., 194 Mich. 64, 160 N.W. 424, 425, L.R.A.1917E, 322 (1916) as follows: Mr. Mitzel contends, however, that the contract of settlement is governed by section 28-01-16 of the North Dakota Century Code, which provides for a six-year limitation. The pertinent parts of that section follow: Further in support of his position, Mr. Schatz refers us to the following taken from a 1932 decision of our court: An analysis of Peterson indicates that the quotation as it relates to the effect of a release subsequent to the six months' period is purely dictum, as the facts disclose that the case involves a release which was obtained from the plaintiff by the defendant within thirty days after a collision between the plaintiff's truck and an automobile driven by the defendant and that the plaintiff elected within six months of the collision, out of which his injuries arose, to avoid the release. We think that another part of that opinion, however, is very pertinent, and that is the part which discusses the legislative purpose in enacting the statute which was the forerunner of the statutes now under consideration. Incidentally, it is Mr. Schatz's contention that the intent of the Legislature was that a six months' period was adequate to determine whether a contract of settlement was improvidently made and that if action weren't taken within that period of time, the contract is final. Judge Christianson, in explaining the legislative intent of the Act and speaking for the entire court in Peterson, said: It is obvious from what we have herein quoted from Judge Christianson that the entire court of the State as early as 1932 considered the predecessor of our present sections 9-08-08 and 9-08-09 N.D.C.C. as an additional remedy rather than an exclusive remedy. This is consistent with the view expressed not long ago in Adams v. Little Missouri Minerals Association, 143 N.W.2d 659 (N.D.1966). In Little Missouri Minerals there was a similar attempt on the part of the defendant corporation to construe a provision of the Securities Act so as to make inapplicable subsections 1 and 6 of section 28-01-16 N.D.C.C. It was asserted that any action brought on either fraud or contract or both was limited to the three- and one-year period provided for under subsection 1 of 10-04-17 N.D.C.C. Notwithstanding that contention, this court found, in effect, that subsection 1 of 10-04-17 N.D.C.C. was an additional remedy. In arriving at that conclusion, we said: The fourth specification of error is that the trial court erred in ruling as inadmissible testimony that the parties had a right to enter into a contract of release, settlement and compromise with respect to unknown injuries, and that the court further erred in this regard in confining the evidence to a mutual mistake of fact. Section 9-13-02 of the North Dakota Century Code reads: Mr. Schatz asserts that the trial court, perhaps on the basis of the foregoing statute, was of the opinion that a release could not be executed to cover both known and unknown claims. He further asserts that this error was apparently realized at the conclusion of the trial, since in its memorandum opinion at page 14 the court stated: Mr. Schatz contends that the court recognized its error too late and that the damage to him had already been done, in that he no longer had the opportunity to introduce evidence to the effect that it was within the contemplation of the parties to settle for all injuries, known and unknown. We have reviewed the entire transcript and find the assertion by Mr. Mueller, the adjuster, that it was his understanding that the release covered both personal injury and property damage, but we find no testimony on his part or on anyone else's part that the release was intended to cover unknown injuries. Mr. Mueller did state on cross-examination that the only injury he knew of at the time of this settlement was the big black eye. Mr. Mitzel asserts that the facts in this case justify rescission as a classic case of mutual mistake of fact as to the nature and extent of injuries. He summarizes the pertinent facts as follows: In arguing this specification of error, Mr. Schatz placed especial emphasis on the fact that the language of the release itself covers unknown as well as known injuries. The leading case which he cites in support of his position is that of Smith v. Loos, 78 N.M. 339, 431 P.2d 72 (1967), certiorari denied August 25, 1967. Both the release and the injuries in that case are remarkably similar to the release and injuries in the instant case. In refusing to set aside the release as a mutual mistake, the New Mexico court said: Mr. Schatz has also referred to us other decisions of similar portent. Page v. Means, 192 F. Supp. 475 (N.D.W.Va.1961); Pepper v. Evanson, 70 Wash. 2d 309, 422 P.2d 817 (1967), and others. Notwithstanding the recency and sincerity of those decisions, we are of the opinion that they run contrary to the trend of decisions across the country and that the contrary position of the other decisions represents not only the majority view, but the better view. The contrary view is perhaps best expressed in Clancy v. Pacenti, 15 Ill.App.2d 171, 145 N.E.2d 802, 71 A.L.R.2d 77 (1957). In Pacenti the plaintiff claimed that the release was based on a mutual mistake of fact with respect to the nature and extent of injuries. The defendant claimed that the terms of the release were clear and certain and that by it the plaintiff released the defendant from all actions, damages, or demands arisen, arising, or growing out of any and all accidents or matters and especially the accident complained of. The facts in Pacenti were that at the time of the accident the plaintiff did not appear to be seriously injured and her doctor advised her that a muscle in her back was sprained. Although in Pacenti there was an additional fact not present in the instant case, that being that the defendant's doctor examined the plaintiff and it was his prognosis that the plaintiff would make a complete and satisfactory recovery, we do not believe that this fact materially affects the issue here under consideration. In Pacenti the settlement was negotiated on the basis of $90 to $100 property damage to the plaintiff's automobile and $50 to $60 representing injuries to the plaintiff. The accident occurred on December 22, 1950, and a release was obtained on March 1, 1951. Following the release, the plaintiff continued to have headaches and pain, saw various doctors, went to a hospital for two days, and remained in bed for a period of time, but was unable to get relief from increasing pain. She finally went to an orthopedic surgeon in July 1951. He examined her, took X rays, and diagnosed her condition as that of a herniated or ruptured intervertebral disc in the lower lumbar region. Following two operations, one on August 3, 1951, and one on September 29, 1951, she was finally discharged from the hospital November 3, 1951. The trial court set aside the release as one based on mutual mistake of fact and in affirming the trial court's action, the appellate court said: As the court in Pacenti was concerned about preserving a field of free action within which parties may compromise their differences with substantial assurance that the matter will not arise again, so are we so concerned. We take special cognizance in this case that a release covering personal injuries was taken by an insurance adjuster within three days of a collision under such circumstances as would make it difficult for anyone to know the nature and extent of the injury. In such a situation the risk of mutual mistake runs high. Any settlement of a personal injury claim within 30 days, if not within six months, of a collision between motor vehicles resulting in a totaling out of one of the vehicles and serious damage to the other might more likely than not involve mutual mistake as to the nature and extent of injuries. Because of the numerous decisions holding pro and con on the issue of rescission of a release under such circumstances and the variations which the decisions involve, we shall not attempt to discuss those decisions and variations in detail, but we do think it is pertinent to note what the writer of the annotation of which Pacenti is the leading case has to say on the subject generally. Following the Pacenti reasoning, we hold that the trial court was correct in its view that a mutual mistake of a material fact may justify rescission even of a release *674 which by its terms covers unknown injuries. The final specification of error is that the trial court erred in failing to dismiss for the reason that the plaintiff was estopped, waived the voidable contract, and was negligent. As we previously stated, we have studied the transcript of the trial carefully and although the transcript discloses in more minute detail the facts leading up to the cashing of the check, we think that the facts as stated by Mr. Mitzel in his brief in response to this specification of error make sufficiently clear why the specification of error must be found to be unsupported by the evidence. The facts as so summarized and analyzed by Mr. Mitzel follow: Mr. Schatz, in support of his position that in cashing the draft Mr. Mitzel unequivocally ratified the contract of settlement, refers us to 76 C.J.S. Release § 32, as follows: We draw attention to a part of what Mr. Schatz deleted from § 32. 76 C.J.S. Release § 32 (1952). Under the facts of this case we find no estoppel, no waiver, no ratification, and no negligence. The judgment is affirmed. TEIGEN, C. J., and PAULSON, KNUDSON and STRUTZ, JJ., concur.