Opinion ID: 574972
Heading Depth: 2
Heading Rank: 1

Heading: The Trial of the Validity of the Release

Text: 13
14 The jury was instructed that they could find the release was not supported by adequate consideration if it found a large disparity between the amount of the release and Counts' actual monetary loss. Counsel for Burlington preserved its objection to this instruction for appeal. Counsel specifically objected to the following language in the consideration instruction: A release is not supported by adequate consideration is [sic] there is a large disparity between the amount of the release and the actual monetary loss which the injured party eventually incurred. 15 This instruction does not correctly state FELA law on challenging a release for want of consideration. The Supreme Court has held that adequate consideration exists for a release of FELA claims when there are mutual concessions by the employee and the employer, and if the employee who gives the release receives something of value to which he had no previous right. Maynard v. Durham & S. Ry. Co., 365 U.S. 160, 163, 81 S.Ct. 561, 563, 5 L.Ed.2d 486 (1961). 16 In Maynard, the employee claimed that all he received in exchange for his release was his paycheck, to which he had an absolute right, and nothing more. Id. The Supreme Court held there was a genuine issue of fact concerning the presence of consideration for the release by Maynard. Id. In this case, however, according to Counts' own computations, he received $70,423 in addition to his wage entitlement in exchange for signing the release. Under Maynard, the release in this case was supported by adequate consideration and the issue should not have been submitted to the jury. The instruction stated incorrect law and the error was not harmless. 17 Generally, where there is an error of law in submitting one of a number of theories to the jury, the general jury verdict is tainted because it is impossible for the reviewing court to determine with certainty whether the theory upon which the jury based its verdict is a proper theory. Sunkist Growers, Inc. v. Winckler & Smith Citrus Products Co., 370 U.S. 19, 29-30, 82 S.Ct. 1130, 1136, 8 L.Ed.2d 305 (1962); Kern v. Levolor Lorentzen, Inc., 899 F.2d 772, 777 (9th Cir.1990). However, this court may construe a general verdict as attributable to one of several theories if it was supported by substantial evidence and was submitted to the jury free from error. Kern, 899 F.2d at 777, citing Traver v. Meshriy, 627 F.2d 934, 938 (9th Cir.1980). 18 The factors we must consider in deciding whether to exercise this discretion are: (1) the potential for confusion of the jury; (2) whether the losing party's defenses apply to the count upon which the verdict is being sustained; (3) the strength of the evidence supporting the count relied upon to sustain the verdict; and (4) the extent to which the same disputed issues of fact apply to the various legal theories. 19 Id., citing Traver, 627 F.2d at 938-39. 20 We do not find this an appropriate case for the exercise of discretion to avoid reversing the release phase of the case. Unlike Kern and Traver, the facts used by Counts to support the theories of recovery (lack of consideration, fraud in the inducement, mutual mistake of fact and economic duress) were not largely identical. Unlike Benigni v. City of Hemet, 879 F.2d 473 (9th Cir.1988), the theories in this case are not practically identical. Id. at 478. As was the case in Syufy Enterprises v. American Multicinema, Inc., 793 F.2d 990, 1002 (9th Cir.1986), cert. denied, 479 U.S. 1031, 107 S.Ct. 876, 93 L.Ed.2d 830 and 479 U.S. 1034, 107 S.Ct. 884, 93 L.Ed.2d 838 (1987), this case involves claims sharing common issues of fact, but also involving distinctive legal and factual components. Furthermore, as will be discussed below, of the four theories that were submitted to the jury, only one was submitted to the jury free from error. 21 Contrary to Counts' argument, the failure of Burlington to request a special verdict in this case does not affect the appealability of this issue. This issue involves legal claims rather than factual claims and does not involve the sufficiency of the evidence or calculation of damages. Compare McCord v. Maguire, 873 F.2d 1271, 1274 (9th Cir.), amended, 885 F.2d 650 (9th Cir.1989); Landes Constr. Co. v. Royal Bank of Canada, 833 F.2d 1365, 1373 (9th Cir.1987). 22
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
27 A FELA release may be set aside on the basis of mutual mistake of fact in executing the release. Callen, 332 U.S. at 630, 68 S.Ct. at 298; Graham, 176 F.2d at 823-25. The burden is on the employee to show invalidity based upon mutual mistake. Callen, 332 U.S. at 630, 68 S.Ct. at 298. Burlington argues that there was no mistake as to the job guarantee associated with the potential yard office job and if there was any mistake at all, it was not the type of mistake recognized in FELA case law as requiring invalidation of a release. We disagree. 28 The release signed by Counts stated he was forever and permanently disabled from returning to work for Burlington. The document therefore released not only his personal injury action, but also his right to work for Burlington. The testimony at trial showed that both Maser and Counts were operating under the assumption that Counts would give up his guaranteed status with Burlington if he took the yard job. However, the testimony of Mike Crilly, a general claims manager for Burlington, indicated that this was not necessarily the case. Counts testified that he did not believe he would have signed the release and given up his employment if he knew he could work a guaranteed job in the yard office. 29 Therefore, an issue of fact was raised as to mistake in the execution of the release. While this case does not involve confusion or mistake as to the nature and extent of the claimant's injuries, the mistake here did involve the contents of the release and went to the essence of the employment damages portion of the contract. The release combined the personal injury and employment damages and the jury could consider whether the release was executed under a presently existing mutual mistake of fact. FELA case law does not rule out this type of mutual mistake. See Callen, 332 U.S. at 628-30, 68 S.Ct. at 297-98; Graham, 176 F.2d at 823-26. 30
31 Burlington argues that the issue of economic duress was erroneously submitted to the jury because economic duress has never been recognized as a ground for invalidating a FELA release and, alternatively, because economic duress was not established in this case. Although Burlington offered the jury instructions on this issue, it did so only after the court had denied its motion for a directed verdict, which encompassed this issue. Therefore, Burlington properly preserved this issue for appeal. See City of St. Louis v. Praprotnik, 485 U.S. 112, 119-20, 108 S.Ct. 915, 921-22, 99 L.Ed.2d 107 (1988). 32 The economic duress theory was presumably rooted in the threats by Burlington to cut off Counts' advances at various times during the negotiations between Maser and Counts. The parties discussed at length the elements of economic duress and the evidence in the case. However, our review of the case law demonstrates that this theory is not a separate ground for invalidating a FELA release. 33 FELA releases may be set aside on the grounds of fraud, Maynard, 365 U.S. at 161, 81 S.Ct. at 562; Dice v. Akron, Canton & Youngstown R.R. Co., 342 U.S. 359, 369, 72 S.Ct. 312, 318, 96 L.Ed. 398 (1952); Callen, 332 U.S. at 630, 68 S.Ct. at 298; Graham, 176 F.2d at 824, lack of consideration, Maynard, 365 U.S. at 161, 81 S.Ct. at 562; and mutual mistake, Callen, 332 U.S. at 630, 68 S.Ct. at 298; Graham, 176 F.2d at 824. The Supreme Court has also stated that [u]ntainted by fraud or overreaching, full and fair compromises of FELA claims do not clash with the policy of the Act. South Buffalo Ry. Co., 344 U.S. at 372, 73 S.Ct. at 343. This court has also acknowledged that a release should not be upheld if  'any element of fraud, deceit, oppression, or unconscionable advantage is connected with the transaction.'  Graham, 176 F.2d at 826, citing Kansas City M. & B. Ry. Co. v. Chiles, 86 Miss. 361, 38 So. 498 (1905). However, the fact remains that economic duress has not been recognized as a separate theory for invalidating a FELA release. In the interest of uniform application of FELA law, see Dice, 342 U.S. at 361, 369, 72 S.Ct. at 314, 318; Graham, 176 F.2d at 824, we reject the economic duress theory as a separate ground for invalidating a FELA release. This theory should not have been presented to the jury.