Opinion ID: 481091
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: 2 On February 5, 1982, the plaintiff was seriously injured in a motorcycle automobile collision in Marshall County, Alabama, while riding as a passenger on a motorcycle being operated by her husband. The driver of the automobile, which collided with the appellant's motorcycle, Z.D. Burgett, and his insurance carrier, Alabama Farm Bureau Insurance Carrier, offered to settle with the appellant. The appellant accepted $10,000 from the insured which was the maximum amount of his $10,000 insurance policy. In so doing, the appellant executed a form which was unmistakably in the form of a general release of liability. The release provided in part: 3 [Mary Irvin] forever discharges Z.D. Burgett and Alabama Farm Bureau Insurance Cos., Inc. heirs, executors, administrators, agents and assigns, and all other persons, firms or corporations liable, or who might be claimed to be liable, none of whom admit any liability to the undersigned but all expressly deny any liability from any and all claims, demands, damages, actions, causes of action or suits or any kind or nature whatsoever and particularly on account of all injuries known and unknown, both to person and property, which have resulted or may in the future develop from an accident which occurred on or about the fifth day of February, 1982 at or near Douglas, Alabama. 4 Undersigned hereby declares that the terms of the settlement have been completely read and are fully understood and voluntarily accepted for the purpose of making a full and final compromise, adjustment and settlement of any and all claims, disputed or otherwise, on account of the injuries and damages abovementioned, and for the express purpose of precluding forever any further or additional claims arising out of the aforesaid accident by the undersigned. 5 This release was witnessed by the appellant's lawyer. 6 After executing the release, the plaintiff then filed a products liability action against the various defendants alleging that the helmet she was wearing at the time of the collision was defective in both design and manufacture. Extensive discovery between the parties subsequently followed. The appellant, then without notice to the named defendants in the products liability action, sought a reformation of the general release by petitioning the circuit court for Marshall County. The petition alleged that the release signed by Mary Sue Engle Irvin was intended as a pro tanto release and not a general release as the form indicated. The Alabama court conducted a hearing on this petition for reformation and entered judgment reforming the release on May 11, 1984 as a pro tanto rather than a general release. The circuit court found that the parties had intended to effect a release only of Z.D. Burgett and his insurer from liability. Neither of the appellees was made a party to the reformation suit or personally appeared to contest the reformation of the release. However, in the products liability action in the district court below, the appellees moved for summary judgment, alleging that the original release executed by the appellant was a general release, which operated as a bar to any further proceedings against any tortfeasors, and secondly, that the reformation was improper because none of the defendants was made a party to or given notice of the reformation proceeding. The district court then refused to give judicial recognition to the Alabama circuit court's reformation of the release before it. It held that the release executed by the plaintiff was unambiguous and would be given effect according to the intentions of the parties to be judged from what appeared within the four corners of the instrument. The court held that the defendants herein were beneficiaries of the general release executed by the plaintiff and for the circuit court to conclude their rights by a judgment of reformation in a suit to which the defendants were not made parties and of which they had no notice was, according to the court, offensive to the notions of equity and good conscience and the reformed release was therefore inadmissible in derogation of the general release. 7 For reasons set forth below, we reverse the judgment of the district court and remand for further proceedings.