United States Court of Appeals

FOR THE EIGHTH CIRCUIT

 

No. 97-2180

 

Bryce Hepper, *

*

Appellant, *

* Appeal from the United

States

v. * District Court for the

* District of North Dakota.

Adams County, ND, *

*

 Appellee. *

 

Submitted: November 21, 1997

 Filed:

January 14, 1998

 

Before LOKEN, HEANEY, and BRIGHT, Circuit Judges.

 

HEANEY, Circuit Judge.

Bryce Hepper appeals the district court’s grant of

summary judgment in favor of Adams County, North Dakota

(“the County”), on Hepper’s claim of negligence related

to an automobile accident in which Hepper was injured.

We affirm.

I.

The facts of the case are undisputed. On July 25,

1993, Hepper was a passenger in an automobile driven by
2

Mera Merz. After Merz lost control of the vehicle, it

left
 The road had an “s-curve,” which was marked by a road sign indicating the first 1

curve but not the second, which curved back in the opposite direction. There was no

painted center line, nor did the road have a “fog line” or a “barrier stripe.”

3

the road and rolled over, injuring Hepper. Hepper’s

injuries required substantial medical treatment and will

require ongoing medical care in the future. Leo

Ehrmantraut, the claims adjuster for Merz’s automobile

insurance company, American Family Mutual Insurance

(“American Family”), represented Merz and American Family

in negotiating a settlement with Hepper, which included

a general release. The release provided that Hepper:

[H]ereby fully and forever release[s] and

discharge[s] Harvey Merz and Mera Merz[,] their

heirs, administrators, executors, successors and

assigns, and all other persons and organizations

who are or might be liable . . . . By executing

this release, we intend and agree that this

release applies to all of our claims . . .

arising from said accident, present and future,

including, but not limited to, damage to or

destruction of property; claims for known or

unknown injuries, developments, consequences and

permanency of those injuries; and there is no

misunderstanding in this regard.

Appellee’s Brief at 5. 

After reaching the settlement with American Family,

Hepper sued the County, claiming that the County was

negligent in the signing and striping of the road on

which the accident occurred. The County moved for

1

summary judgment on Hepper’s claim of negligence,

asserting that the general release signed by Hepper

released all parties who might be liable and that the
4

County enjoys discretionary immunity. Supported by

Ehrmantraut’s testimony, Hepper responded that the

release was not intended to act in accordance with its

specific language. Hepper further asserted that the

County did not enjoy immunity because its actions

constituted negligent execution rather than discretionary

judgment.
Hepper’s motion cited Rule 60(b)(6) of the Federal Rules of Civil Procedure, 2

which provides that “the court may relieve a party . . . from a final judgment [or] order”

for any reason “justifying relief from the operation of the judgment.” Fed. R. Civ. P.

60(b)(6).

5

The district court granted the County’s motion for

summary judgment because the language of the release was

unambiguous, parole evidence of intent was therefore

inadmissible, and consequently, the agreement’s clear

language released “all other persons who are or might be

liable.” Following the court’s grant of summary

judgment, Hepper moved for relief from the judgment under

Rule 60(b), requesting reconsideration of the judgment

2

and permission to amend his complaint to add a claim for

contract reformation. The district court denied Hepper’s

motion. Hepper appeals the district court’s grant of

summary judgment and its denial of his motion for relief

from the judgment.

II.

We review a grant of summary judgment de novo,

affirming the grant only if the record shows no issue of

material fact and the prevailing party is entitled to a

judgment as a matter of law. Treleven v. University of

Minnesota, 73 F.3d 816, 817 (8th Cir. 1996) (citations

omitted). Under North Dakota law, whether a contract is

ambiguous is a question of law to be decided by the

court. Pamida, Inc. v. Meide, 526 N.W.2d 487, 490 (N.D.

1995). Where a contract is clear and unambiguous, the
6

court is not permitted to examine parole evidence to

contradict the terms of the agreement. Id. at 490.
Section 32-38-04 provides in pertinent part: 3

32-38-04. Release or covenant not to sue. When a release or a

covenant not to sue or not to enforce judgment is given in good faith to

one of two or more persons liable in tort for the same injury or the same

wrongful death:

1. It does not discharge any of the other tort-feasors from liability

for the injury or wrongful death unless its terms so provide . . . .

N.D. Cent. Code § 32-38-04 (1997).

7

Under North Dakota law, the release of one’s right to

sue where multiple tortfeasors might be involved is

governed by N.D. Cent. Code § 32-38-04. North Dakota’s 3

Supreme Court has not yet interpreted § 32-38-04 to

determine whether the terms of a general release such as

the one signed by Hepper “so provide” for the release of

all potential tortfeasors. Where the question remains

open, North Dakota law allows a court to “seek

interpretive guidance from other states that [have]

adopted uniform laws” in interpreting the release

statute. Estate of Zimbleman, 539 N.W.2d 67, 72 (N.D.

1995) (citations omitted).

Our court has addressed the question of whether

potentially-liable parties may rely on a general release

of liability where they were neither named nor a party to

the agreement. In Douglas v. United States Tobacco Co.,

670 F.2d 791, 794-95 (8th Cir. 1982), for example, we

determined that a general release executed in Arkansas

released third parties from liability. We recently

affirmed that interpretation in a similar case in South

Dakota. Enos v. Key Pharm., Inc., 106 F.3d 838, 839-40
8

(8th Cir. 1997) (a party executing a broad general

release in a malpractice action released third parties

from liability in the matter). 

Hepper cites a number of cases favorable to his

argument in which states have answered the question

whether a party is required to be specifically named by

the
9

release to enjoy its effects. See Noonan v. Williams,

686 A.2d 237, 244-46 (D.C. 1996); Russ v. General Motors

Corp., 906 P.2d 718, 723 (Nev. 1995); Moss v. Oklahoma

City, 897 P.2d 280, 288-89 (Okla. 1995). Although Hepper

makes strong equitable arguments for adopting such a

rule, under North Dakota’s statutory language we are

bound by our previous determinations that the language of

a general release, such as that executed by Hepper,

releases third parties, such as the County, from

liability. See Brown v. First Nat’l Bank in Lenox, 844

F.2d 580, 582 (8th Cir. 1988) (one panel of the Circuit

may not reverse a decision of another panel).

We review a grant or denial of relief under Rule

60(b) of the Federal Rules of Civil Procedure for an

abuse of discretion. Sheng v. Starkey Labs., Inc., 117

F.3d 1081, 1083 (8th Cir. 1997) (citation omitted). Rule

60(b) provides for extraordinary relief which we properly

grant only where the movant has shown exceptional

circumstances. Mitchell v. Shalala, 48 F.3d 1039, 1041

(8th Cir. 1995) (citation omitted). Although Hepper’s

argument that the agreement with American Family should

have been reformed might have merit, Hepper has failed to

demonstrate that exceptional circumstances prevented him

from seeking reformation of the contract prior to

bringing his claim against the County. We therefore

conclude that the district court did not abuse its

discretion by denying Hepper’s motion. 

III.

For the foregoing reasons, the district court’s grant

of summary judgment is affirmed.
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BRIGHT, Circuit Judge, dissenting.

I dissent.
For example, the agreement among the three injured parties to divide the

4

accident vehicle's insurance proceeds clearly shows that the parties had not received

anything close to full compensation for their injuries. The vehicle in the accident had

minimal insurance coverage, providing $25,000 of coverage per person with a $50,000

maximum limit per occurrence. At the time of the agreement, the three individuals,

Hepper, Rhett Peterson, and David Knutson had incurred medical costs of $16,083.78,

$41,246.07, and $15,552.26, respectively. The $50,000 was prorated among the

claimants based on their respective medical expenses. Since Peterson's medical costs

were over 50% of the total costs incurred by all three parties, Peterson received the

maximum under the policy of $25,000 per person. Hepper's costs in relationship to

Knutson's costs represented 50.84% of the remaining $25,000 in coverage. Therefore,

Hepper received only $12,710.

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It is clear from all of the documents filed in this 4

case that Bryce Hepper did not intend a general release

of liability. When Hepper settled his case against the

insurance company that provided coverage for the vehicle

in the accident, he unwittingly executed a general

release of liability. Hepper's counsel may not have been

aware of this problem. Adams County seeks and has been

given the benefit of the general release form. It has

received an unintended benefit without payment of

consideration.

This case is an extraordinary one that may call for

equitable relief. I, therefore, would remand this case

to the district court to permit Hepper to amend his

complaint in order to seek reformation of the release

agreement to show the true intent of the parties.
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A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH

CIRCUIT.