SO. 53-108 

IN TI3@ SUPRC;4E COURT OF THE: STATE OF 31ONTAI'JA 

1983 

LARRY RICHARDSON, 

Plaintiff and Appellant, 

SAFECO INSURANCE COMPANY OF AI\/IERICA, 

a Washington Corp. , and ROBERT J. 

PlcCORKLE , 

Defendants and Respondents. 

Apgeal from: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable Charles Luedke, Judge presiding. 

Counsel of Record: 

For Appellant: 

Kelleher Law Office; John S. Koder, Billings, 

Montana 

For Respondents: 

Keefer, Roybal, EIanson, Stacey & Jarussi; J. Dwaine 

Roybal, Billings, Plontana 

Submitted on Briefs: May 26, 1983 

Decided: September 29, 1983 

Filed: SEP 2 9 1983 

Clerk 
Mr. Justice Daniel J. Shea delivered the Opinion of the 

Court. 

Larry A. Richardson appeals an order of the Yellowstone 

County District Court granting summary judgment to defendants 

Safeco Insurance Company of America and Robert J. McCorkle. 

Richardson's claim was for actual and punitive damages. He 

claims he suffered economic loss, as well as mental and 

emotional distress, due to the actions of Safeco Insurance 

Company of America (Safeco) and its agent, Robert J. 

McCorkle, during negotiation and settlement of an accident 

claim. His claim of economic loss is based on attorneys fees 

incurred as a result of filing suit against Safeco to compel 

payment of car repairs. He also claims that he suffered 

mental and emotional distress by Safeco's fraudulent 

misrepresentation of intent to settle the claim, and Safeco's 

breach of good faith in the actual settlement of his claim. 

We affirm. 

When Richardson accepted Safeco's settlement, he 

released the insurance company from all claims arising out of 

the accident. Richardson claims his economic loss (attorneys 

fees) accrued after he signed the release. He also claims it 

was not his intent to release Safeco from liability for bad 

faith actions when he signed the release. 

The trial court found the attorneys fees and the alleged 

mental and emotional distress arose out of the same 

transaction as the car accident, and granted summary judgment 

to Safeco. We agree. 

We first hold that Richardson's duty to pay attorneys 

fees arose when he contracted with his attorney to file suit, 

rather than after Richardson signed the release. Second, we 
hold that Richardson's claim for bad faith was relinquished 

when he signed the release. 

The case arose out of an automobile accident between 

Richardson's son Jeff, driving Richardson's car, and a car 

insured by Safeco. Delays in processing the claim prompted 

Richardson to retain the Kelleher Law Firm on November 16, 

1981. Richardson alleges the Safeco agent, McCorkle, offered 

payment in return for Jeff's statement regarding the 

accident. After receiving the statement, McCorkle offered an 

amount I.ess than the original estimate for repair. 

Richardson rejected this offer and filed an action to recover 

his full damages. In response, Safeco, through McCorkle, 

offered to settle for $950. When he accepted the settlement, 

Richardson signed a release of all claims against Safeco. 

After receiving payment, Richardson brought suit against 

Safeco and its agent, McCorkle. The claim alleged bad faith 

by Safeco in its manner of settlement resulting in 

Richardson's mental and emotional. distress. Richardson also 

alleged economic loss in the form of attorneys fees incurred 

when Richardson brought suit to obtain the full amount of 

repair costs. 

Larry Richardson claims he was damaged in the amount of 

attorneys fees, and this claim arose after he signed a 

release for Safeco. He also claims it was not his intent to 

release Safeco from 1-iability for bad faith when he signed 

the release. 

Whatever claims Richardson may have had against Safeco 

developed before the release was signed. Richardson's 

liability for attorneys fees arose when he contracted with 

the Kelleher Law Firm to pursue the property damage claim. 

Contracts require mutual consideration. Richardson's promise 
to pay attorneys fees was exchanged for his attorney's 

promise to pursue the action. The obligation came into 

existence then, not later. Richardson knew all the facts and 

possible causes of action relating to the accident when he 

signed the release, and retained no right to sue Safeco for 

attorneys fees. Although the actual amount of attorneys fees 

depended on the settlement figure, Richardson's obligation 

and duty to pay the fees arose at the time of filing the 

first suit. 

Richardson concedes that his mental and emotional 

distress arose before the signing of the release, but he 

nonetheless argues that he had no intent to release Safeco 

from a claim of bad faith. Language on the back of the check 

to Richardson specifically released Safeco from all claims 

arising out of the occurrence upon endorsement. Finally, one 

party's intent, unknown to the other, cannot change the 

obvious intent of the agreement. Safeco and McCorkle had no 

reason to know Richardson was not releasing them from all 

claims arising out of the accident. 

All possible claims Richardson might have had against 

Safeco matured before the release was signed. Summary 

judgment was properly granted. The District Court's order is 

affirmed. 
We Concur: 

pd 3.u 

Chief Just%e