Title: Boles v. Blackstock
Citation: 484 So. 2d 1077
Docket Number: N/A
State: Alabama
Issuer: Alabama Supreme Court
Date: February 7, 1986

484 So. 2d 1077 (1986)
Earl BOLES and Mary Boles
v.
Tommy BLACKSTOCK and State Farm Mutual Automobile Insurance Company, Inc., a Corporation.
84-823.

Supreme Court of Alabama.
February 7, 1986.
*1078 B. Stephen Sansom, Florala, for appellants.
Ab Powell, III for Powell, Powell &amp; Pearson, Andalusia, for appellees.
BEATTY, Justice.
This is an appeal by the plaintiffs, Earl Boles and Mary Boles, from an order granting the defendants' motion to dismiss. We affirm.
On November 16, 1983, Earl Boles was injured in a motor vehicle accident involving the truck driven by Boles and an automobile driven by defendant Tommy Blackstock. Blackstock's automobile was insured by State Farm Mutual Automobile Insurance Company, Inc. (State Farm), also a defendant herein. Pursuant to settlement negotiations conducted with the Boleses by James Kyzer, a claims adjuster for State Farm, the plaintiffs, along with Hinton Boles, the owner of the truck driven by Earl Boles, executed a release in favor of Tommy and Gayle Blackstock on January 18, 1984. The consideration stated for the release was $4,500.
Some eleven months after executing the release, the plaintiffs filed this action against Blackstock, claiming damages for injuries resulting from Blackstock's alleged negligent operation of his automobile on November 16, 1983. In his answer to the complaint, Blackstock denied that the plaintiffs are entitled to recover damages and alleged that their claims had been "paid and satisfied." Simultaneously with his answer, Blackstock filed a motion for summary judgment, which stated in part that "[t]hese plaintiffs have been paid in full and have executed a valid release, the terms of which release this defendant from any liability to these plaintiffs arising out of an accident that occurred on November 16, 1983." A copy of the release was attached as an exhibit to the motion for summary judgment. This motion was scheduled to be heard at 11:00 a.m. on February 11, 1985; however, on that date, but prior to the hearing, the plaintiffs amended their complaint, adding State Farm as an additional defendant and seeking a rescission of the release based on fraud and mutual mistake. The plaintiffs also sought damages against State Farm for its alleged fraudulent misrepresentations in negotiating the release. This amendment was accompanied by the affidavits of Earl and Mary Boles. A hearing was never held on Blackstock's motion for summary judgment.
On February 20, 1985, defendants Blackstock and State Farm filed a motion to dismiss plaintiffs' amended complaint on the grounds that it (1) failed to state a claim upon which relief could be granted; (2) failed to state sufficient facts to constitute mutual mistake sufficient to set aside *1079 a release; (3) failed to state a claim for fraud upon which relief could be granted; (4) failed to set out sufficient facts with required specificity to state a claim for fraud upon which relief could be granted; and (5) showed affirmatively that the plaintiffs' claims had been paid and satisfied. Defendants' motion to dismiss was granted on March 4, 1985. This appeal followed.
At the outset, it is necessary to determine the standard of review applicable in this case. Plaintiffs state in their brief the standard applicable to motions to dismiss, namely, that "a plaintiff's complaint should not be dismissed on a motion to dismiss unless it appears beyond all doubt that the plaintiff can prove no facts in support of his claim which would entitle him to relief under some legally cognizable theory," citing Roberts v. Meeks, 397 So. 2d 111 (Ala. 1981). However, where matters outside the pleadings are considered on a motion to dismiss, the motion is converted into a motion for summary judgment as provided in Rule 12(c), A.R.Civ.P., regardless of its denomination and treatment by the trial court. Sims v. Lewis, 374 So. 2d 298 (Ala. 1979); Papastefan v. B &amp; L Construction Co., 356 So. 2d 158 (Ala.1978); Thorne v. Odom, 349 So. 2d 1126 (Ala.1977). Once matters outside the pleadings are considered, the requirements of Rule 56, A.R. Civ.P., become operable and the "moving party's burden changes and he is obliged to demonstrate that there exists no genuine issue as to any material fact and that he is entitled to a judgment as a matter of law." C. Wright &amp; A. Miller, Federal Practice &amp; Procedure, Civil, § 1366 at 681 (1969).
In the present case, the trial court did not draft a separate order granting the defendants' motion to dismiss; rather, the motion itself was stamped "Granted" and was signed and dated by the trial court. Thus, there is nothing in the record that expressly indicates which material the trial court considered in ruling on the motion. Nevertheless, the plaintiffs' amendment to their complaint was accompanied by their own affidavits, and the amendment itself makes reference to the "Release dated January 18, 1984," a copy of which was attached to defendant Blackstock's motion for summary judgment that had been previously filed. Thus, it would appear that, in ruling on the defendants' motion to dismiss, the trial court necessarily considered matters outside the pleadings, thereby converting the motion to dismiss into a motion for judgment on the pleadings or for summary judgment. See Green v. Bradley Construction Co., 431 So. 2d 1226 (Ala. 1983); Rhett v. Southland Broilers, Inc., 421 So. 2d 126 (Ala.Civ.App.1982); cf. Sims v. Lewis, supra. Furthermore, plaintiffs have included the previously filed material in the record on appeal, and specifically refer to and quote from this material in their brief on appeal (e.g., "In addition to the release in the case now before the Court being limited to `... all claims, ... which have resulted or may in the future develop from [the] accident'"). (Emphasis added.) Therefore, we must determine on review whether there existed a genuine issue as to any material fact and whether defendants were entitled to judgment as a matter of law. In so doing, we must view the record before us in the light most favorable to the parties opposing the motion. Papastefan v. B &amp; L Construction Co., supra.
Were defendants entitled to judgment as a matter of law on plaintiffs' claim for rescission on the grounds of mutual mistake?
The facts alleged to have constituted the mutual mistake are set forth in pertinent part in paragraphs 12 through 15 of Count IV of plaintiffs' amended complaint:
These allegations were further supported by the affidavits of Earl and Mary Boles, which, as mentioned above, accompanied the amended complaint.
Because the language of the release executed by the plaintiffs is relevant to our analysis of the issue presented, it is set out in its entirety below:
In Miles v. Barrett, 223 Ala. 293, 134 So. 661 (1931), a case quite similar to the present case, the Court affirmed a verdict in favor of the defendants where the plaintiffs sought to avoid a release on the grounds of mutual mistake. In so holding, the Court explained:
The language of the release in question is also clear and unambiguous in its inclusion of "all injuries, known and unknown," and in characterizing the release as "a full and final compromise adjustment and settlement of any and all claims, disputed or otherwise, on account of the injuries and damages above mentioned, and for the express purpose of precluding forever any further or additional claims arising out of the aforesaid accident." For that reason, parol evidence, in the form of affidavits or otherwise, to "explain" the parties' reliance on the prognosis of Earl Boles's doctor, would be inadmissible to vary the terms of the release or avoid it in its entirety. See Finley v. Liberty Mutual Ins. Co., 456 So. 2d 1065 (Ala.1984); Cohorst v. United States Steel Corp., 439 So. 2d 23 (Ala.1983); Jehle-Slauson Construction Co. v. Hood-Rich Architects &amp; Consulting Engineers, 435 So. 2d 716 (Ala. 1983); Conley v. Harry J. Whelchel Co., 410 So. 2d 14 (Ala.1982). Compare Central of Georgia Railway Co. v. Ramsey, 275 Ala. 7, 151 So. 2d 725 (1962), in which the Court, without discussion of the ambiguity or unambiguity of the releases in question, held that, in the absence of a motion for new trial, judgment for defendant would not be disturbed when there was a scintilla of evidence on the question of whether plaintiff's physician misrepresented his condition to him.[1]
Furthermore, the complaint, as amended, along with plaintiffs' affidavits, alleges *1082 that the parties relied on the belief or opinion of Boles's doctor that Boles would recover within a certain period of time (viz., five months). The Restatement (Second) of Contracts, § 151 (1979), defines "mistake" as "a belief that is not in accord with the facts." However, the comment to § 151 specifically states that "the erroneous belief must relate to the facts as they exist at the time of the making of the contract." That comment goes on to explain that "[a] party's prediction or judgment as to events to occur in the future, even if erroneous, is not a `mistake' as that word is defined here." That definition is applicable in this case.
There is no question that the statement by Earl Boles's doctor, to the effect that Boles "would be back to normal within five (5) months of the date of said accident," was a prediction about future events and not an existing fact. In Louisville &amp; Nashville Railroad Co. v. Solchenberger, 270 Ala. 536, 544-45, 120 So. 2d 704, 711 (1960), this Court drew the distinction between that case, where the mistake was as to the plaintiff's condition at the time of the execution of the release, and the situations such as in present case, where the mistake was as to plaintiff's future condition:
As we point out in footnote 1, the Court in Solchenberger, supra, goes on to distinguish that case from Miles v. Barrett, supra:
We, therefore, further conclude that, as a matter of law, reliance on a prediction as to future events will not support a claim for rescission of a release based on a claim of mutual mistake of fact, and summary judgment was proper as to plaintiffs' claim of mutual mistake.
Were defendants entitled to judgment as a matter of law on plaintiffs' claim for rescission on the grounds of fraud?
The defendants argue that, because the plaintiffs have failed to meet a condition *1083 precedent to maintaining their claim for rescission based on fraud, their claim is waived. That condition precedent is the timely return of or tender of return of the consideration received by the plaintiffs for the execution of the release. In Jehle-Slauson Construction Co. v. Hood-Rich Architects &amp; Consulting Engineers, supra, at 719, this Court held that
See also, Edmondson v. Dressman, 469 So. 2d 571 (Ala.1985).
In the present case, there is nothing in the record indicating that the plaintiffs have returned or offered to return the $4,500 they received as consideration for the release. The plaintiffs, however, contend that "Plaintiffs' demand for rescission necessarily embraced and constituted a tender of the return of the money," and they do not argue that they, in any other manner, returned or offered to return the $4,500 consideration they received for the release. Plaintiffs merely assert:
In other words, plaintiffs contend that the claim for rescission was also a "tender by implication." We cannot agree with this contention.
In Louisville &amp; Nashville Railroad Co. v. Spurgeon, 272 Ala. 197, 199, 129 So. 2d 682, 684 (1961), this Court explained:
While Spurgeon clearly stands for the proposition that a tender is timely if made along with or contemporaneous to a claim for rescission, that decision cannot be reasonably read to also mean that the mere claim for rescission, standing alone, also operates as a tender with nothing more to be done by the plaintiff. Such a conclusion is without merit.
The plaintiffs, having failed to show that they returned or even tendered a return of the consideration received, are not entitled to proceed with their claim, and, in effect, have waived their right to assert fraud as grounds for rescission of the release. Jehle-Slauson Construction Co., supra. We conclude that the defendants were entitled to judgment as a matter of law, and, therefore, the judgment of the trial court is due to be, and it is hereby, affirmed.
AFFIRMED.
FAULKNER, ALMON, ADAMS and HOUSTON, JJ., concur.
[1]  We do not think Central of Georgia Railway Co. v. Ramsey, supra, stands for the proposition that the Court of Civil Appeals, in Sager v. Royce Kershaw Co., 359 So. 2d 398, 400 (Ala.Civ.App. 1978), concluded it does:

"Defendant has relied on the law of settlement and release espoused by the cases of Alabama By-Products Corp. v. Kennedy, 228 Ala. 410, 153 So. 862 (1934), and Miles v. Barrett, 223 Ala. 293, 134 So. 661 (1931). We believe the case of Central of Ga. Ry. v. Ramsey, 275 Ala. 7, 151 So. 2d 725 (1962) effectively overrules the principle of those cases and establishes the general rule in Alabama that a mutual mistake of material fact at the time of signing of a release is ground for rescission...." (Emphasis added.)
It is only when the release in question is found to be ambiguous that parol evidence may be introduced to show the existence of a mutual mistake of fact when the release was signed as grounds for a rescission of that release. See also Louisville &amp; Nashville Railroad Co. v. Solchenberger, 270 Ala. 536, 120 So. 2d 704 (1960), in which the Court distinguishes Miles v. Barrett, 223 Ala. 293, 134 So. 661 (1931), from the facts of that case.