Opinion ID: 574972
Heading Depth: 3
Heading Rank: 2

Heading: The Fraud Theory for Invalidating the Release

Text: 23 FELA cases permit invalidation of a release on the ground of fraud in the inducement. Callen v. Pennsylvania R.R. Co., 332 U.S. 625, 630, 68 S.Ct. 296, 298, 92 L.Ed. 242 (1948); see also South Buffalo Ry. Co. v. Ahern, 344 U.S. 367, 372, 73 S.Ct. 340, 342, 97 L.Ed. 395 (1953); Graham v. Atchison, T. & S.F. Ry. Co., 176 F.2d 819, 826 (9th Cir.1949). The employee in a FELA case bears the burden of showing a release is invalid on the ground of fraud. Callen, 332 U.S. at 630, 68 S.Ct. at 298. 24 The jury was instructed in this case on the five elements of fraud and that it could find the release invalid if Counts was induced to sign the release by deliberately false and material statements of the railroad. The jury was also instructed it could find the release invalid based upon fraud if its execution was materially induced by Burlington's failure to explain to Counts the full scope of FELA rights and benefits. This second, alternative instruction on fraud was based upon Apitsch v. Patapsco & Back Rivers R.R. Co., 385 F.Supp. 495, 505-07 (D.Md.1974), a case involving a railroad that was systematically soliciting defective releases by giving deceptive descriptions of FELA rights versus worker's compensation rights. 25 While there is evidence of fraud and overreaching in this case, it was error to instruct the jury that Counts could show fraud either by proving the elements of fraud or by simply showing failure to fully explain his FELA rights. The second fraud instruction relieved Counts of his burden to prove the elements of fraud. Apitsch is not binding on this court and is factually distinct from this case. A failure to fully explain FELA rights to an employee is a consideration in the fraud determination, but does not automatically constitute fraud. The Apitsch  instruction relieved Counts of the burden of establishing fraud in this case and this error was not harmless. 26