Court Opinion

ID: 9616075
Source: CourtListenerOpinion
Date Created: 2023-08-22 04:43:26.256902+00
Date Added: 2024-06-11T18:03:12.406245
License: Public Domain

McFADDEN, Chief Justice
(dissenting, with
whom SMITH, J., concurs).
In addition to the factual statement contained in the foregoing opinion certain other facts should be mentioned.
Appellant at the time of execution of the general release by himself and his wife had discussed with his doctor the nature of the injuries he suffered, including his back injuries. He had also discussed with his doctor the execution of the release in question. He stated: “I would have told him [his physician] that when we were healed, when we were released by him that he would sign the release.” His doctor testified that whenever there is a back injury, one always thinks about disc involvement, although in this particular case he made another diagnosis. The doctor also testified that he discussed the question of settlement on more than one occasion with appellant, and was aware that appellant was about to sign a release.
*383A few days following the accident, appellant discussed the question of liability with Mr. Burch, the insurance company adjuster. Appellant testified: “Well, the discussion at that time were the question of liability in this; it was highly doubtful as to who did actually — was liable for this — for the accident, and that the company was willing to settle, and I would be well to accept this settlement as it was because of the question of liability in this case.” Even though that discussion was shortly after the accident, the final release was not executed until almost a month after the discussion, and a month following the accident. It is of further interest to note that appellant contends that there was another release signed before the final release was executed, although the insurance company adjuster disputes this.
The record reflects that appellant previously had back trouble, even during his high school days.
Mr. Burch, the adjuster, testified that at the time the release was executed, he had concluded that the case should be settled if it could be accomplished on a reasonable basis, and that such conclusion was based on the possible liability of his insured. Mr. Burch testified that on the day the release was executed and before appellant and his wife signed it, Mr. Burch and appellant and his wife discussed the effect of execution of the release. He stated: “Well, yes, the effect of the release was discussed, and I pointed out to both Mr. and Mrs. Ranta that no matter what developed, once we had agreed upon a settlement figure and the release was signed and they had accepted payment, that that concluded the matter, no matter what might develop.”
Appellant makes no contention that this release was executed by reason of any misrepresentation or duress on the part of Mr. Burch. Appellant testified that he read the release fully, and that there was nothing he didn’t understand contained on the printed page, and that he fully understood it. Appellant testified:
“A. That is kind of hard to answer. I am inexperienced in accidents. I have no occasion to have any experience in them, as to the question of liability, my wife and I, neither of us felt that we wanted to have an argument over the question of liability, and when Mr. Burch informed us that the liability was questionable, we both felt that since we were all right and no further known injuries that we should sign the release under these circumstances.
“Q. But Mr. Burch didn’t do anything or say anything that compelled you to sign the release at that time? “A. No, sir, I won’t say that — -(Pause) “Q. Now, the release here, that is Defendant’s Exhibit A, does set forth that this releases all known and unknown injuries or any results of any known or unknown injuries. You read that at the time?
“A. Yes, sir, I did.
“Q. You knew that if there was anything wrong with you, it was to be covered in this release?
“A. That is correct.
“Q. The one thing that Mr. Burch told you in advance of your signing was that he would discuss this settlement only when you were satisfied as to the nature and extent of your injuries, is that right?
“A. That’s right.”
Among other things the trial court found:
“That plaintiff intended in executing the release (Exhibit A) to effect a complete release as to any condition of ill being in his back or any other part of his body existing at or prior to the date of the execution of the release or any subsequent development of any condition of ill being.”
*384Based on such finding, the trial court concluded:
“That at the time of the execution of the release, the plaintiff understood the entire terms, covenants and conditions of the release and any mistake as to plaintiff’s condition or health was a unilateral mistake and was not a mutual mistake, as between plaintiff and his releasees.”
That finding, in my opinion was based on substantial evidence then before the trial court.
Even in the cases relied upon by appellant in urging reversal of the trial court it is recognized that the intent of the releasor in executing the release governs as to whether the release was one encompassing the future development of known injuries or if the releasor contemplated releasing all injuries, known or unknown. In Denton v. Utley, 350 Mich. 332, 86 N.W.2d 537 (1957), it is stated:
* * *
“We would not be understood as holding' (and here is exactly where many difficulties arise) that it is not within one’s competence to say T may have serious injuries I know nothing about. As to them I will take my chances.’ This, one may do. He may, if he wishes, release his rights and assume the risk of future disablement for $1 ‘and other good and valuable consideration,’ or $50, or indeed, an old beaver hat. In other words, it is possible that a reasonable, intelligent person, in full possession of all his faculties, and with knowledge that he may have serious injuries, will release a tort-feasor from all liability in return for a trifling sum of money. If such has in truth been the intention and the agreement we will not disturb the parties. Cf. Noble v. Farris, 1 Cir., 221 F.2d 950. But although the judges, as Holmes put it, are ‘apt to be naif, simple-minded men’ (Holmes, Collected Legal Papers, 1920, 295), we will not be foreclosed in our inquiry by any form of release used. We will, in each case where fraud or mistake is alleged, look to the intent of the parties. (This is the orthodox phrasing. Actually as the law of con-’ structive conditions so well illustrates, those who link themselves together by contract assume a certain status with regard to each other, a status with respect to which the law itself imposes certain obligations.) As Williston puts it (Contracts, Rev. ed., § 1551) ‘where a release is given by one injured in an accident and more serious injuries develop than were supposed to exist at the time of the settlement, it is a question of fact whether the parties assumed as a basis the release of the known injuries, or whether the intent was to make a compromise for whatever injuries from the accident might exist whether known or not.”’ (Emphasis added.) 86 N.W.2d 542.
In discussing the case of Denton v. Utley, supra, in 1964 in the case of Ryan v. Alexy, 373 Mich. 50, 127 N.W.2d 845 (1964), in a minority opinion it is stated:
“Did plaintiff say in legal effect: I have injuries the-nature and extent of which I do not know with certainty, but as to them I will take my chances for the consideration you offer, in view of all the circumstances surrounding my injury including your (defendant’s) liability therefor, if any?
“Per contra, did defendant say, in legal effect:. I am not liable legally for any of your injury or damages, whatever they may be, known or not, but I will buy my peace and bar future action against me for this consideration ?
“Under Denton, supra, such an agreement could be legally made, and so made could become legally binding.
“We cannot, nor do we believe, could the able chancellor determine this essential question of fact unless and until the degree to which the question of the extent of the legal liability of the party paying was in the minds of both parties at the time of the execution of the release. This we believe was the reason the Appellate Court of Illinois, in the cited case of *385Thomas v. Hollowell, 20 Ill.App.2d 288, 291, 155 N.E.2d 827, 829, was moved to say under a somewhat similar set of facts:
“ ‘It has always been the policy of the law to favor compromise and settlement, and it is especially important to sustain that principle in this age of voluminous litigation, particularly in traffic cases. It must be remembered that the question of liability, besides the extent of the injuries, may well be in the minds of the parties.’” 127 N.W.2d 848.
Clancy v. Pacenti, 15 Ill.App.2d 171, 145 N.E.2d 802, 71 A.L.R.2d 77 (Ill.1957), decided by the Illinois Appellate Court, First District, First Div., was resolved on the basis of-a factual determination by the lower court. In the case of Thomas v. Hollowell, 20 Ill.App.2d 288, 155 N.E.2d 827 (1959), the same Illinois Appellate Court, First District, First Div., stated, regarding Clancy v. Pacenti:
“In the Clancy case, supra [15 Ill.App. 2d 171, 145 N.E.2d 805], the plaintiff had been examined by his own physician, and also by one representing the defendant, both advised the injuries were in the nature of bruises, neither serious nor permanent. It was later discovered that there were severe injuries to the spine, requiring more than one surgical operation, and with permanent detriment. This is the type of case commonly regarded as a mutual mistake, although the opinion does cite a text writer on the question of unilateral mistake. The opinion also states: ‘It is important to preserve a field of free action within which parties may compromise their differences with substantial assurance that the matter will not arise again.’ ” 155 N.E.2d 828.
Continuing, the court stated:
“It is our conclusion that the attempt to avoid the release on the facts in this case, must be discouraged as a matter of necessary public policy. Accordingly, this court holds that the mere lack of knowledge of some condition on the part of releasor, is not sufficient to avoid the bar of a release which expressly applies to unknown conditions, in the absence of mutual mistake, fraud or overreaching. The trial court ruled correctly and the judgment is affirmed.” 155 N.E.2d 829.
In Casey v. Proctor, 59 Cal.2d 97, 28 Cal.Rptr. 307, 378 P.2d 579 (1963), the California supreme court reversed a judgment on a directed verdict in favor of the defendant-releasee and held that the issue was for the jury as to whether the releasor, who received no compensation for personal injuries and with whom the liability insurer conducted no negotiations leading to settlement, consciously discharged his claim for unknown injuries at the time of executing the release while unaware of existence of any personal injuries. In the opinion, the supreme court of California stated:
“Under the majority rule, however, a release may not ipso facto be avoided upon the ground of later discovered injuries. The essence of the rule is that the wording of the release is not conclusive; it is a question of fact whether the parties to the release actually intended to discharge such liability. * * * Whether a release bars an action for later discovered personal injuries is a question of fact and depends upon whether it was ‘knowingly’ made. (Citations)” 378 P.2d 588.
In Goodman v. Missouri Pacific Railroad Co., 312 S.W.2d 42 (Mo.1958), the court affirmed a judgment entered in favor of a railroad employee for injuries he had sustained. The defense was interposed that the employee had executed a complete release. The supreme court held that the question whether there was a mutual mistake of fact as to permanency of injury when the employee signed the release and settlement was for the jury. Therein the court discussed instructions submitted and held that it was not necessary that the mutual mistake of fact be the sole inducing cause for the execution of the release. The court mentioned the consideration for this release was only $15.00, which was the equivalent of the day’s pay when the plain*386tiff was off work. The same court in the case of Oakley v. Duerbeck Company, 366 S.W.2d 430 (Mo. 1963), affirmed the holding of the lower court which held an executed release barred the plaintiff’s recovery. Therein a tenant claimed damages against his landlord for injuries sustained in a fall down some stairs. A defense was interposed on the basis of an executed release. Therein the court stated:
“Plaintiff’s evidence was that both he and Hickey knew that plaintiff had a fractured hack. What plaintiff and Hickey did not know, and apparently plaintiff’s doctor did not know was whether plaintiff would fully recover from the injury he sustained. Was that mistake of fact such as authorizes the setting aside of a contract, in this case, the release? We find that under the law it is not. Jennings v. Metropolitan Life Ins. Co., Mo. App., 166 S.W.2d 339, is a case in point. We quote what was there said since it is appropriate to the facts now before us, 1. c. 344 (2-5): ‘We recognize the rule, invoked by plaintiff, that a mutual mistake as to the existence of a fact which goes to the essence of a contract will render the contract voidable where it later appears that such fact did not exist. But a mutual mistake in prophecy or opinion may not be taken as a ground for rescission where such mistake becomes evident through the passage of time. What is today only a conjecture, an opinion, or a guess, might by tomorrow, through the exercise of hindsight, be regarded then as an absolute fact.’ See also 17 C.J.S. Contracts § 144, p. 497 [897].” 366 S.W.2d 433.
In the Oakley case the court distinguished the Goodman case, supra, on the basis of the fact that no one knew of the plaintiff’s injury.
Various text writers have discussed the legal issues involved. Corbin on Contracts (1962) discussing the matter of settlements and releases, states:
“If a claim is made for damages for an injury, a compromise settlement is ordinarily not made voidable for mistake because the injury was greater and lasted longer than was expected at the time of the settlement, if the parties knew or had reason to know that the extent of the injury was uncertain and that was the v.ery reason for the compromise. But if the settlement was made in contemplation of one kind of injury, minor in character such as a flesh bruise, when in fact but unknown to the parties, there was a very different injury such as a broken back, the settlement or release may be voidable for mistake. The difference in the one case is a difference in degree; in the next case it is a difference in kind. But a great difference in degree may well be more important than a difference in kind.” 6 Corbin on Contracts, 181 § 1292.
Williston on Contracts (1937) in regard to the question of mistake inherent in the execution of a release, and the effect of mistake, states:
“A release though general in terms will be reformed so as to cover merely the right with regard to which the parties were dealing and exclude rights of which they were ignorant. This principle has sometimes been extended so as to exclude from the operation of a release unknown or unexpected consequences of a known right to which the release applied and was intended to apply. Thus, where a release is given by one injured in an accident and more serious injuries develop than were supposed to exist at the time of the settlement, it is a question of fact whether the parties assumed as a basis of the release the hnown injuries or whether the intent was to make a compromise for whatever injuries from the accident might exist whether known or not." 5 Williston on Contracts (Rev. ed.), 4347 § 155. (Emphasis added.)
See also: 9 Wigmore on Evidence (3rd ed.), p. 55, § 2416. 76 C.J.S. Release § 25, p. 645; 45 Am.Ju.r., Release, §§ 19, 20, pp. 684-686.
*387This court in the case of Heath v. Utah Home Fire Insurance Company, 89 Idaho 490, 406 P.2d 341, held that the evidence supported a finding by the trial court of mutual mistake as to a release given by the plaintiff in connection with damage to roof of his building, where damage to the interior of the building was not known or contemplated by the parties at the time of execution of the release. Therein the finding by the trial court recited:
“Plaintiffs executed a release for payments for the exterior damage, but at the time the release was given a substantial injury existed which was unknown to both parties and not within the contemplation of the parties(Emphasis added.)
Therein, the trial court concluded:
“The release was given under a mutual mistake of a material fact, and the release is therefore avoided and set aside.”
This court, after reviewing the record, determined that the record sustained the finding of fact and upheld the judgment. In that case this court considered the earlier decision of this court in Parish v. Page, 50 Idaho 87, 293 P. 979, as well as the case of Estes v. Magee, 62 Idaho 82, 109 P. 2d 631.
In the Heath case, it is to be pointed out that the consideration paid by the insurance company to the releasor was in settlement of the claim for damages recognized, i. e., in accordance with the requirements of the policy of insurance maintained by the releasor with the defendant insurance company.
Appellant contends that Estes v. Magee, supra, is authority to reverse the trial court’s determination in the instant case. However, in Estes v. Magee, the release which was set aside was obtained for the benefit of the doctor defendant-releasee, who examined the releasor-plaintiff. This court in Estes v. Magee recognized that in part the intent of the releasor at the time of execution of the release presented a factual issue, and affirmed the determination by the trial court. Therein this court states:
“The case thus hinges on a question of fact as to whether respondent was mislead to his disadvantage at the time he signed the release by positive statements of appellant or the withholding of information peculiarly within appellant’s knowledge. Though extremely close and the facts and circumstances do not indicate such over-reaching as in Bennett v. Deaton, 57 Idaho 752, 68 P.2d 895, nevertheless, this court by the opinion in that case is committed to the doctrine that the setting aside of a release as herein, on substantial though conflicting evidence, is a question of fact for the jury or the trier of fact. Adherence to that doctrine justifies the affirmance of the judgment herein, which is accordingly so ordered.” 62 Idaho 95, 109 P.2d 636.
Here the appellant knew that he suffered pain in the back following the accident. His doctor testified that wherever there is pain in the lower back the question of disc involvement is always considered. Appellant previously had suffered from back injuries. He was advised that this was a final settlement of all questions; the consideration paid for the release was more than merely nominal, and included all claimed property loss, all medical expenses incurred for appellant and his wife, also a sum for loss of wages and an additional sum for appellant’s general damages, in the amount asked for by appellant. This release was executed only after appellant had been released by his doctor. Under the record, it is my conclusion that the record fully sustained the findings of the trial court, and the conclusion of law based on these findings was correct.
The judgment should be affirmed.