Court Opinion

ID: 9529215
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:48:52.266885+00
Date Added: 2024-06-11T13:27:42.564888
License: Public Domain

CONCURRING OPINION OF
BURNS, J.,
WITH WHOM
HEEN, J., JOINS
We concur with the result.
The current state of the relevant law across the nation has been succinctly outlined as follows:-
Cases addressing the problem of mistake in the settlement of personal injury claims reflect a tension stemming, on the one hand, from the general need for finality in the contractual settlements of actual or potential lawsuits and, on the other hand, from a recognized need to alleviate the distorting and unintended effects which human error can impose on a transaction. [Citations omitted.] Although the approaches are not totally discrete, they do lean in different directions. One approach denies rescission even though the injuries were not known or suspected at the time of the settlement. [Citation omitted.] Under this view the releasor assumes the risk that the nature and extent of known injuries might be more severe than was believed at settlement. Another approach allows rescission based on any mistake as to the condition of the injured claimant, whether the mistake relates to the nature of the injuries or to their further *429consequences. [Citations omitted.] Midway between these approaches is the view that rescission is available for mistakes relating to the nature of known injuries but not for mistakes as to the future course and effects of those injuries. [Citations omitted.] The assumption here is that rescission must be based on mistake, and mistake for legal purposes must relate to a past or present fact •rather than an opinion or prophecy about the future. [Citation omitted.]
Gleason v. Guzman, 623 P.2d 378, 383 (Colo. 1981).
Silva v. Robert Hind, Ltd., 32 Haw. 936, 939-940 (1934), aff'd, 75 F.2d 74 (9th Cir. 1935), subscribed to the third or “midway” approach. It stated:
There can be no doubt of the jurisdiction of courts of equity to cancel contracts which are executed under mutual mistake. This jurisdiction is as well established as is the jurisdiction to cancel contracts secured by fraud. (Citation omitted.) It is equally clear that equitable relief by cancellation on the ground of mutual mistake is as readily granted in the case of a compromise as in the case of any other contract. (Citation omitted.) In cases such as that at bar an important inquiry is whether the mistake relied upon in aid of a cancellation related to a past or a present fact or related purely to a surmise or opinion as to the future development of a known and existing illness or injury. If the mistake relates clearly to a past or a present fact the remedy of cancellation will be awarded. [Citation omitted.]
Silva decided that a mistaken understanding that a back injury was cured and the sufferings had ended was a mistake relating to a past or present fact rather than an opinion or prophecy about the future. The result in Silva was probably right but Silva’s application of the “midway” approach was probably wrong. As noted in *430the Gleason v. Guzman quote above, the “midway” approach makes rescission “available for mistakes relating to the nature of known injuries but not for mistakes as to the future course and effects of those injuries.” The facts in Silva are sketchy but it appears that the mistake in Silva related to the nature of the back injury. The fact that when the nature of the back injury is changed, the future course and effects of the back injury also change, is consequential and not determinitive. In other words, the parties in Silva thought that the injury was a back strain that had been cured whereas subsequent information revealed that the injury was much more serious than a back strain. Such a mistake is a mistake relating to the nature of the injury, a mistake of diagnosis, a mistake as to a past or present fact. An understanding that the injury is cured is not an understanding relating to the nature of the injury that was cured. It is an understanding that there will be no continuation of the injury and no further expenses, pain and suffering from the continuation of the injury. Such an understanding is not based on a past or present fact. It is a prognosis based upon an opinion or prophecy about the future.
Viewing the record most favorably to the Gossingers, their settlement was calculated on the basis of a back strain that would take a long time to heal whereas subsequent information revealed that the settlement should have been calculated on the basis of a herniated disc. In other words, the Gossingers settled on the basis of an erroneous diagnosis, a mistake relating to the nature of the injury, i.e., a back strain versus a herniated disc. Theirs was a mistake relating to a past or present fact. The majority opinion modifies Silva in part as follows:
In any event, we hold that a mistake, whether mutual or unilateral, as to the nature or extent of an injury is not a proper basis for rescinding a release when the party seeking rescission has initiated and urged settlement of his or her personal injury claims (or has not otherwise *431been improperly induced into settlement by an unfair claim settlement practice) and has signed the release knowing that he or she is not completely cured and is aware that the injury may require future treatment.
... [Wjhile public policy favors securing fair and just compensation for actionably inflicted injuries, public policy also favors the finality of negotiated settlements that avoid the costs and uncertainties of protracted litigation. [Citation omitted.] By adopting a rule precluding parties who, in the absence of an unfair claim settlement practice, initiate and finalize settlement of their personal injury claims from rescinding releases based on a “mistake” as to the extent or nature of their injuries, we seek to support both policies by not doing violence to one at the expense of the other. To hold otherwise would effectively render releases useless as a means of achieving finality in the settlement of personal injury claims.
Majority Opinion, at 11-13 (footnotes omitted).
We recognize that the majority’s statement of what is not a proper basis for rescinding a release should not be construed as stating any more than that. Specifically, it should not be read as authority that the opposite is true, i.e., that what is not mentioned is a proper basis for rescinding a release. Even with such a restrictive interpretation, however, we disagree that
a mistake, ... , as to the nature ... of an injury is not a proper basis for rescinding a release when the party seeking rescission has initiated and urged settlement of his or her personal injury claims (or has not otherwise been improperly induced into settlement by an unfair claim settlement practice) and has signed the release knowing that he or she is not completely cured and is aware that the injury may require future treatment.
Majority Opinion at 11-12 (footnote omitted).
*432In our view, (1) absent an unfair claim settlement practice, the question of who initiated and urged settlement is not material; (2) the majority’s answer to the question of whether the injured party’s unilateral mistake is sometimes and/or always sufficient is unnecessary obiter dicta; and (3) after the injured party has been advised by a medical expert reasonably qualified to diagnose the nature of the injured party’s injury that the nature of the injured party’s injury has been diagnosed to a reasonable degree of medical probability, it is not unreasonable for an injured party to settle knowing that he or she is not completely cured and that the injiiry will require future treatment. Therefore, we offer the following holding, which in reality is a proviso to the third “midway” approach:
The injured party’s mistake as to the nature of the injured party’s injury is not a proper basis for the injured party’s rescission of the injured party’s release where the release was issued before the injured party was advised by a medical expert reasonably qualified to diagnose the nature of injured party’s injury that the nature of the injured party’s injury had been diagnosed to a reasonable degree of medical probability.
Under the “midway” approach as modified, the Gossingers do not qualify for rescission.