Court Opinion

ID: 9845168
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:16:08.108067+00
Date Added: 2024-06-11T09:15:53.403391
License: Public Domain

ROSSMAN, J.,
dissenting.
The majority, relying on Wheeler v. White Rock Bottling Co., 229 Or 360, 366 P2d 527 (1961), holds the release valid despite the “precipitous actions of the adjuster,” 120 Or App at 456, and, in so doing, places its stamp of approval on the adjuster’s questionable tactics in securing the release. The majority is absolutely correct that, in Oregon, a release is not rendered invalid on the basis of the parties’ mutual mistake regarding the nature and extent of the releasor’s personal injuries. 120 Or App at 455; see Wheeler v. White Rock Bottling Co., supra. Mutual mistake, however, is not the only basis on which a release may be invalidated. Where, as here, the parties have not dealt at arm’s length, a release will *458be closely scrutinized before declaring its validity. Peluck v. Pac. Machine & Blacksmith Co., 134 Or 171, 178, 293 P 417 (1930). An intimate and thorough examination of this record exposes a material issue of fact as to whether plaintiff knowingly assented to the terms of the release. Consequently, I would hold that the trial court erred in granting summary judgment for defendant on plaintiffs claim and on defendant’s counterclaim.
The first step in the analysis is to determine whether the parties bargained at arm’s length. Oregon courts have examined a variety of factors in deciding whether parties to a release agreement have dealt on an equal footing. In Peluck v. Pac. Machine & Blacksmith Co., supra, the Supreme Court held that the parties did not deal at arm’s length, because the releasor “did not have the benefit of independent advice and he was not in the physical or mental condition to determine matters vitally affecting his welfare.” 134 Or at 178. Other cases have also stressed the importance of the releasor having independent advice before entering into the release agreement. See Broad v. Kelly’s Olympian Co., 156 Or 216, 232, 66 P2d 485 (1937); Wood v. Young, 127 Or 235, 243, 271 P 734 (1928); Nielson v. Portland Gas & Coke Co., 76 Or 505, 512-13, 147 P 554 (1915).
In Kim v. Allstate Ins. Co., 102 Or App 529, 795 P2d 582, rev den 310 Or 475 (1990), the plaintiff argued that she was induced to sign a release because of the defendant’s alleged misrepresentations of fact concerning the amount that the plaintiff could expect to receive if the matter proceeded to trial. The defendant insurance company contended that the statements made by its claims adjuster were only opinions and, as such, not actionable. We held that statements of opinion “regarding quality, value or the like, may be considered as misrepresentations of fact * * * where the parties are not on an equal footing * * 102 Or App at 534. (Emphasis supplied.) We noted that the plaintiff, unlike the claims adjuster, had no prior experience or knowledge of soft tissue injuries or the claims settlement process. Based solely on the disparity in experience, we held that the parties “were clearly not on an equal footing.” 102 Or App at 529.1
*459Here, plaintiff, a 21-year-old, had never been in an automobile accident before and, like the plaintiff in Kim v. Allstate Ins. Co., supra, had no prior experience with soft tissue injuries or the claims settlement process. The record also discloses that plaintiff did not have the benefit of any independent advice, legal or otherwise, before agreeing to the terms of the release. I believe that, as a matter of law, the parties were not negotiating at arm’s length. See Kim v. Allstate Ins. Co., supra; Peluck v. Pac. Machine & Blacksmith Co., supra, 134 Or at 178. Consequently, the release and the circumstances attending its formation should be closely examined before proclaiming it valid. Peluck v. Pac. Machine & Blacksmith Co., supra.
The record reveals that the insurance agent sought out plaintiff only four days after the accident, at a time when plaintiff claims she was “still in shock from the accident. ’’These “rush releases” or “day after the accident settlements” are disfavored by the courts and, when revealed as overly intrusive, should be severely condemned. See Love v. Home Transp. Co., Inc., 131 Ariz 394, 641 P2d 882, 888 (1981); McGregor v. Mills, 280 SW2d 161, 162 (Ky 1955); Toppas v. Perkins’ Adm’x, 268 Ky 186, 104 SW2d 423, 431 (1937); Wise v. Prescott, 244 La 157, 151 So 2d 356, 361 (1963). The record further discloses that the terms of the release were communicated to plaintiff over the telephone and were never reduced to writing, making it reasonable to infer that it was difficult for plaintiff to fully evaluate the settlement offer. Bearing in mind that the adjuster did not inform plaintiff as to the legal ramifications of the terms “settlement” or “release,” her deposition testimony concerning her understanding of the telephone conversation is elucidating:
*460“Q: Did you understand what was being said to you?
“A: Yes and no. I understood what the words [the agent] was saying to me were, but I didn’t understand what I was doing.
íí* iji * * *
“Q: You don’t feel that you have entered into this agreement, at this point in time, I take it?
“A: No.
“Q: Why?
£ 1 A: Because I think that I was unsure of what was going on * * *.”
After closely examining the circumstances surrounding the formation of this release, I conclude that there exists a material issue of fact as to whether plaintiff knowingly gave her assent to release defendant from liability for all injuries arising out of the accident. See Peluck v. Pac. Machine & Blacksmith Co., supra. Accordingly, I would hold that the trial court erred in granting summary judgment for defendant on plaintiffs claim and on defendant’s counterclaim.
The majority criticizes my position as an unsanctioned means to reach a “compassionate” result and charges that I am ££ignor[ing] the law and that the Supreme Court carefully considered the competing policies before determining that release agreements should be upheld.” 120 Or App at 456. What the majority fails to realize is that the policy considerations behind the Wheeler court’s rejection of mutual mistake as a theory for invalidating release agreements do not reflect an overriding policy to uphold releases regardless of any other infirmities. In other words, the concerns articulated by the Supreme Court in Wheeler are relevant only when the legal premise on which the releasor relies to rescind the release is mutual mistake. Here, however, that is not the case. Based on the rule enunciated by the Supreme Court in Peluck v. Pac. Machine & Blacksmith Co., supra, it is my contention that the parties did not negotiate at arm’s length and that the circumstances surrounding the formation of the release are such that it should not be sustained without further factual findings. That position does not in any way conflict with the “competing policies” expounded by the *461Wheeler court and reflects a proper application of the relevant legal principles pertaining to the validity of release agreements. It is the majority, not I, that chooses to ignore the law.
I also note, merely for the purpose of comparison, that the facts of Wheeler v. White Rock Bottling Co., supra, are far from the facts of this case. In Wheeler, the release was in writing, signed and inspected by the plaintiff and procured by the adjuster a full three months after the accident. The plaintiff even “admitted that she read [the document] and fully understood what she was signing * * *.” 229 Or at 363. As a result, she could not have claimed that she was incognizant of the consequences of her actions or that she had not knowingly agreed to the terms of the release. The only plausible theory on which she could have relied to invalidate the release was mutual mistake. That is not the case here.
I dissent.2
Leeson, J., joins in this dissent.

 The majority seeks to distinguish Kim v. Allstate Ins. Co., supra, on the basis that, there, a material issue of fact existed as to whether the adjuster’s statements *459were factual representations that could support an allegation of fraud, whereas here, plaintiff does not allege fraud. That distinction, however, is impertinent. I do not cite Kim for the proposition that this release should be declared void because it is tainted by a misrepresentation. I rely on Kim only for authority that the parties in this case were not dealing at arm’s length during the course of their negotiations. Indeed, the majority essentially concedes that the difference in experience between the plaintiff and the adjuster in Kim is directly analogous to the difference in experience between the adjuster and plaintiff in this case. As stated in the text, the disparity in experience was the sole fact on which we relied in Kim to hold that the parties were not dealing at arm’s length. Thus, our holding in Kim that the adjuster’s statements may have supported an action for fraud has absolutely no effect on my determination that the parties in this case were not on an equal footing and does not in any way reduce Kim’s precedential value.

 I would, however, commend the majority for its display of a twinge of conscience in refusing to award defendant attorney fees.