Court Opinion

ID: 2743019
Source: CourtListenerOpinion
Date Created: 2014-10-16 15:06:21.464319+00
Date Added: 2024-06-11T09:55:35.425777
License: Public Domain

State of New York
                    Supreme Court, Appellate Division
                       Third Judicial Department
Decided and Entered: October 16, 2014                    517621
________________________________

JUSTIN W. FORD,
                     Appellant,
     v                                       MEMORANDUM AND ORDER

RYEN D. PHILLIPS et al.,
                    Respondents.
________________________________

Calendar Date:    September 4, 2014

Before:   Peters, P.J., Stein, Garry, Lynch and Devine, JJ.

                              __________

      Horigan, Horigan & Lombardo, PC, Amsterdam (Peter M.
Califano of counsel), for appellant.

      Law Offices of Theresa J. Puleo, Albany (Norah M. Murphy of
counsel), for respondents.

                              __________

Garry, J.

      Appeal from an order of the Supreme Court (Clark, J.),
entered July 23, 2013 in Washington County, which granted
defendants' motion to dismiss the complaint.

      In June 2012, plaintiff was operating a vehicle in the Town
of Argyle, Washington County, when he was involved in an accident
with a vehicle owned by defendant Paula E. Phillips, operated by
defendant Ryen D. Phillips, and insured by Travelers Insurance
Company. Shortly after the accident, plaintiff met with a
Travelers claims representative and executed a general release of
all claims in favor of defendants and Travelers, in exchange for
                              -2-                517621

a payment of $750.1 Six months later, plaintiff commenced this
negligence action against defendants seeking damages for serious
injuries allegedly caused by the accident. Prior to joinder of
issue, defendants moved to dismiss the complaint based upon the
release (see CPLR 3211 [a] [5]). Supreme Court granted the
motion, and plaintiff appeals.

      Defendants met their initial burden of establishing that
they had been released from plaintiff's claims by submitting the
signed release. Contrary to plaintiff's contention, no
affirmation from a party with personal knowledge was required to
authenticate the release; plaintiff admits that he signed the
document, and its facially valid terms establish that he released
all personal injury claims against defendants arising out of the
June 2012 accident. Accordingly, the burden shifted to plaintiff
to establish the existence of issues of fact as to whether the
release bars this action (see Centro Empresarial Cempresa S.A. v
America Movil, S.A.B. de C.V., 17 NY3d 269, 276 [2011]; Nelson v
Lattner Enters. of N.Y., 108 AD3d 970, 972 [2013]). Notably,
plaintiff has not moved to set the release aside and does not yet
request such relief as a matter of law; instead, he merely seeks
to avoid pre-answer dismissal of the complaint and to defer the
determination whether the release bars the action until after the
factual record pertaining to his claims of fraud and mutual
mistake has been developed through discovery.

      Plaintiff submitted an affidavit asserting that a claims
representative for Travelers contacted him shortly after the
accident to arrange a meeting at plaintiff's home. During this
meeting, the representative allegedly induced plaintiff to sign
the release by assuring him that he had suffered only "soft
tissue injuries" that would heal over time and that Travelers
would "take care of [plaintiff]" if his injuries turned out to be
"something serious." Plaintiff asserts that the representative
stated that Travelers was an "up-and-up company" that "doesn't
play games," that New York law required the company to take care

    1
        Travelers made a separate property damage payment to the
nonparty owner of the vehicle that plaintiff was operating, which
was assessed as a total loss.
                              -3-                517621

of "any permanent injury," and that Travelers had recently paid
$20,000 to another injured party who had undergone surgery after
signing a release. Finally, plaintiff claims that the
representative told him that the $750 payment represented interim
reimbursement for time and fuel expenses related to medical
appointments, rather than a final settlement. Plaintiff asserts
that he read the release but did not understand its significance
because he had never been involved in a personal injury
automobile accident before, and that he relied upon the
representative's alleged statements in executing the release. He
further asserts that he suffered herniated disks as a result of
the accident, and is now advised that surgical correction is
required.

      In reply, defendants submitted an affidavit from the claims
representative, denying that he represented to plaintiff that the
$750 payment represented anything other than a full settlement of
his claims, or that the settlement could be altered after the
release was signed. The representative described two telephone
conversations and one face-to-face meeting with plaintiff in
which the only injuries that plaintiff reported were "soreness in
his arms" and "muscle pain in his forearms," for which he was
being treated by his primary care physician. The representative
further averred that when plaintiff met with him to sign the
release, he stated "that his arms were feeling better" and that
he had returned to work. The affidavit includes no claim that
plaintiff mentioned that he had suffered injury to his neck or
back, nor does it state that the parties intended the release to
cover other injuries.

      In resolving a motion for dismissal pursuant to CPLR 3211
(a) (5), the plaintiff's allegations are to be treated as true,
all inferences that reasonably flow therefrom are to be resolved
in his or her favor, and where, as here, the plaintiff has
submitted an affidavit in opposition to the motion, it is to be
construed in the same favorable light (see Cron v Hargro Fabrics,
91 NY2d 362, 366 [1998]; Enock v National Westminster Bankcorp,
                              -4-                517621

226 AD2d 235, 236 [1996]).2 The signing of a clear and
unambiguous release is a significant legal act that ordinarily
binds the parties (see e.g. Booth v 3669 Delaware, 92 NY2d 934,
935 [1998]). Nevertheless, a release must be "'fairly and
knowingly made'" and thus, like any other contract, may be set
aside on the basis of fraud or mutual mistake (Mangini v McClurg,
24 NY2d 556, 566 [1969], quoting Farrington v Harlem Sav. Bank,
280 NY 1, 4 [1939]; see Centro Empresarial Cempresa S.A. v
America Movil, S.A.B. de C.V., 17 NY3d at 276; Lodhi v Stewart's
Shops Corp., 52 AD3d 1084, 1085 [2008]). In the context of
mistakes pertaining to personal injuries, a sharp distinction is
drawn between unknown injuries and mistakes as to the
consequences of known injuries; a release may be invalidated if
the parties mistakenly believed that an injury did not exist when
the release was executed, but will not be set aside for a mistake
pertaining to the "future course[] or sequelae of a known injury"
(Mangini v McClurg, 24 NY2d at 564; see Hayes v Lipinski, 239
AD2d 835, 835 [1997]; Carola v NKO Contr. Corp., 205 AD2d 931,
932 [1994]). Treating plaintiff's claims as true and allowing
him the benefit of every favorable inference, this record does
not establish as a matter of law that either party knew of
plaintiff's cervical injury or alleged herniated disks when he
signed the release. It is quite unclear whether there was a
mutual mistake as to the true nature of plaintiff's injuries at
the time of the execution of the release, and what injuries the
release was to cover; resolution of this issue as a matter of law
and dismissal of the complaint was thus premature (see Matter of
Walker, 117 AD3d 838, 839 [2014]; Integrated Book Tech. v T/R
Sys., 2 AD3d 1193, 1195 [2003]; compare Haynes v Garez, 304 AD2d
714, 715-716 [2003]; Pressley v Rochester City School Dist., 234
AD2d 998, 998 [1996]; Horn v Timmons, 180 AD2d 717, 718 [1992]).

    2
        Defendants assert on appeal that plaintiff's affidavit
constitutes inadmissible hearsay and that, in the absence of
independent medical proof, he has not proven that he sustained
herniated disks or any other injury to his back or neck. These
arguments, however, are based upon burdens of proof and
evidentiary standards applicable to motions for summary judgment
that do not pertain to this CPLR 3211 motion.
                              -5-                517621

      As to the fraudulent inducement claim, a motion to dismiss
a complaint based solely upon a release should be denied when the
plaintiff alleges fraud or duress in the release's procurement
(see Newin Corp. v Hartford Acc. & Indem. Co., 37 NY2d 211, 217
[1975]; Steen v Bump, 233 AD2d 583, 584 [1996], lv denied 89 NY2d
808 [1997]; see also Warmhold v Zagarino, 106 AD3d 994, 995
[2013]; Bloss v Va'ad Harabonim of Riverdale, 203 AD2d 36, 37
[1994]). Although defendants contend that plaintiff – who
acknowledged that he read the release – will ultimately be unable
to prove his claim that he justifiably relied upon the
representative's alleged statements, "[t]he question of what
constitutes reasonable reliance is always nettlesome because it
is so fact-intensive" (DDJ Mgt., LLC v Rhone Group L.L.C., 15
NY3d 147, 155 [2010] [internal quotation marks and citation
omitted]). Plaintiff's claims – which, as previously noted, are
treated as true for the purpose of this motion – are sufficiently
detailed and specific to allege the elements of fraud (see Centro
Empresarial Cempresa S.A. v America Movil, S.A.B. de C.V., 17
NY3d at 276). As they support a possible finding that the
release was obtained "under circumstances which indicate
unfairness," the complaint should not have been dismissed at this
juncture (Gibli v Kadosh, 279 AD2d 35, 41 [2000] [internal
quotation marks and citation omitted]; see Steen v Bump, 233 AD2d
at 584; Anger v Ford Motor Co., Dealer Dev., 80 AD2d 736, 736
[1981]).

     Peters, P.J., Stein, Lynch and Devine, JJ., concur.
                              -6-                  517621

      ORDERED that the order is reversed, on the law, with costs,
motion denied, and matter remitted to the Supreme Court to permit
defendants to serve an answer within 20 days of the date of this
Court's decision.

                             ENTER:

                             Robert D. Mayberger
                             Clerk of the Court