Opinion ID: 2602138
Heading Depth: 2
Heading Rank: 1

Heading: applicability of the release to swire

Text: ¶ 9 Under Utah law, Releases are contractual provisions and should be interpreted according to well-developed rules of contract interpretation. Ward v. Intermountain Farmers Ass'n, 907 P.2d 264, 267 (Utah 1995) (citing Simonson v. Travis, 728 P.2d 999, 1001-02 (Utah 1986)); Horgan v. Industrial Design Corp., 657 P.2d 751, 753 (Utah 1982). The underlying purpose in construing or interpreting contractual provisions is to determine the intentions of the parties. See SME Industries, Inc. v. Thompson, Ventulett, Stainback and Associates, Inc., 2001 UT 54, ¶ 14, 28 P.3d 669 (citing Winegar v. Froerer Corp., 813 P.2d 104, 108 (Utah 1991)); John Call Eng'g, Inc. v. Manti City Corp., 743 P.2d 1205, 1207 (Utah 1987). The court may consider extrinsic evidence of the parties' intentions where the contractual provision is ambiguous. See SME Industries, 2001 UT 54 at ¶ 14, 28 P.3d 669. A contract provision is ambiguous if it is capable of more than one reasonable interpretation because of `uncertain meanings of terms, missing terms, or other facial deficiencies.' Winegar, 813 P.2d at 108 (quoting Faulkner v. Farnsworth, 665 P.2d 1292, 1293 (Utah 1983)). ¶ 10 In addition to the general rules of contract construction that apply to releases, there are statutory provisions that govern them. The two relevant statutes are section 78-27-42 of the Liability Reform Act (the LRA release clause) and section 15-4-4 of the Joint Obligations Act (the JOA release clause). The LRA release clause provides: A release given by a person seeking recovery to one or more defendants does not discharge any other defendant unless the release so provides. Utah Code Ann. § 78-27-42 (1996). The JOA release clause provides: [T]he obligee's release or discharge of one or more of several obligors, or of one or more of joint or of joint and several obligors, shall not discharge co-obligors against whom the obligee in writing and as part of the same transaction as the release or discharge expressly reserves his rights; and in the absence of such a reservation of rights shall discharge co-obligors only to the extent provided in Section 15-4-5. Utah Code Ann. § 15-4-4 (1999). Both acts similarly provide that the release of one obligor does not discharge co-obligors against whom the obligee in writing expressly reserves his rights. Nelson v. Corporation of Presiding Bishop of Church of Jesus Christ of Latter-day Saints, 935 P.2d 512, 514 (Utah 1997). The application of the JOA language and the LRA language differs, however, where a release does not contain an express reservation of rights. The LRA release clause has been interpreted as requiring that a release must contain language either naming the defendant or identifying the defendant with some degree of specificity in order to discharge that defendant from liability. Child v. Newsom, 892 P.2d 9, 12 (Utah 1995). The JOA release clause, however, has been interpreted as releasing a joint obligor from liability by the release of other joint obligors unless there is an express reservation in writing by the injured party. See Krukiewicz v. Draper, 725 P.2d 1349, 1350 (Utah 1986). ¶ 11 In determining the reach of these two statutes, this court has previously observed that the LRA is a pro tanto repeal of the JOA as it applies to regular co-defendants, but that the JOA still applies to vicariously liable parties. See Nelson, 935 P.2d at 514 n. 3. In the present case, Peterson is suing Stengel's employer, Swire, under a theory of vicarious liability, so the JOA applies to the interpretation of the release. ¶ 12 We find that the release is unambiguous because it is not capable of more than one reasonable interpretation. Winegar, 813 P.2d at 108. The release specifically states that it releases Stengel, his wife, Nationwide, as well as any and all other persons, firms and corporations, whether herein named or referred to or not. The contract's only express reservation of rights is to allow Peterson to pursue additional recovery from his underinsured motorist carrier, American. Swire is a corporation that clearly falls within the definition of any and all other persons, firms and corporations. Because the JOA release clause required Peterson to expressly reserve his rights against Swire in writing, which he did not do, see Krukiewicz, 725 P.2d at 1350, we find the release is valid as to Swire.