Court Opinion

ID: 9636464
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:29:52.392327+00
Date Added: 2024-06-11T18:09:46.267534
License: Public Domain

Morse, J.,
dissenting. Because of the overwhelming disparity of power between insurance companies and the individual, the difficulty of anticipating the long-term effects of human-tissue injuries and the potential for substantial hardship resulting from hasty settlements, our law provides that agreements for compensation entered into within fifteen days of injury “may be disavowed ... within three years after making the agreement.” 12 V.S.A. § 1076; see generally Annot., Modem Status of Rules as to Avoidance of Release of Personal Injury Claim on Ground of Mistake as to Nature and Extent of Injuries, 13 A.L.R.4th 686, 691-98 (1982) (noting competing interests underlying rescission rules). “When an agreement is disavowed,” the law further requires that the claimant “tender any consideration received to the person who paid or delivered the same.” 12 V.S.A. § 1077.
Significantly, however, the law is silent on the means required for communicating a decision to “disavow” such an agreement, as well as on the definitive moment required for “tendering” the compensation paid. Although the statute provides for tender “when an agreement is disavowed,” “when” is a notoriously imprecise modifier. See Webster’s New Int’l Dictionary 2910 (2d ed. 1955) (“when” includes “[a]t the time that, during, or after the time that”). Must the claimant “tender” payment at precisely the same moment as the disavowal? May tender be accomplished a day later? A month? A year?
Despite the statutory silence, the Court holds that strict compliance with the statutes is required to invoke their protection. This holding is doubly puzzling. First, despite its holding, the Court provides no guidance as to how to comply with the notice requirements of a statute that contains no notice requirements, or how to timely tender the “consideration received” in the absence of clear time constraints. The Court would appear to require something like a written letter to the insurer, stating as follows: “I hereby disavow the agreement entered on such and such a date under the authority of 12 V.S.A. § 1077; tender of payment previously received is hereby enclosed.” But the fact of the matter is that the statute does not say this; it simply says that the agreement “may be disavowed” and that “when an agreement is disavowed” the payment shall be tendered.
The puzzle is compounded by the Court’s rejection out of hand of the seemingly reasonable statutory construction that would find the *48agreement to have been “disavowed” when the insurer is put on notice that the plaintiff has determined to set aside the settlement and seek additional compensation. To disavow is to “deny responsibility for,” “to disclaim,” “to disown.” See Webster’s, supra, at 741. Why is it not reasonable to conclude that plaintiff in this case put defendant on notice that she was disavowing or disowning the settlement when she filed a lawsuit — well within the three-year time period — seeking damages from the accident totaling $100,000? Is there any doubt that defendant, at that moment, became fully aware that plaintiff was seeking to disavow the agreement? Defendant immediately invoked the agreement in its answer to the complaint, and subsequently relied on its terms in moving for summary judgment. In her opposition to the motion, moreover, plaintiff explicitly argued that the agreement should be “set aside.”
All of this activity occurred well within the required three-year period of the statute. Why, then, was it insufficient to put defendant on notice that plaintiff was seeking to disavow the agreement? The Court’s only answer is that plaintiff had not actually “invoked the statute” in her pleadings. 174 Vt. at 44, 800 A.2d at 489. For plaintiff to be required to intone the precise title and section of the statute substitutes ritual for effect in communication. Defendant knew exactly what plaintiff intended.
Nor does the Court indicate when precisely the tender of-compensation must be received, noting only that plaintiff failed to return it “as required.” Id. Presumably the purpose of returning the money is to prevent the plaintiff from benefitting under an agreement that she has rescinded. See, e.g., Watson v. Bugg, 280 S.W.2d 67, 70 (Mo. 1955) (“It is just that a plaintiff should not appropriate the benefits of a contract of settlement and deny its obligations.”). Here, unless the insurer argues and proves that plaintiff incurred less than $500 in damages (the amount of the settlement), no such enrichment has occurred. Since the only means of determining plaintiff’s actual damages is at trial, it would appear to be reasonable, for purposes of the statute, to allow tender of compensation at that time.
Although reason and common sense appear to support these alternative readings of the statutes, we need not rely exclusively on such reasoning. In the face of statutory silence or uncertainty, we may consult the common law, of which there is a substantial body addressing the rescission of such agreements. See Swett v. Haig’s, Inc., 164 Vt. 1, 5, 663 A.2d 930, 932 (1995) (statutory language of uncertain meaning will not be construed to abrogate common law *49principles). Thus, we find that the issues before us were thoughtfully and comprehensively explored by the California Supreme Court in the case of Casey v. Proctor, 378 P.2d 579 (Cal. 1963), which concluded as follows:
The courts, therefore, have been very liberal in allowing the releaser to meet any requirement of notice of rescission or of timely tender back of the consideration. It is generally held that bringing suit for the later discovered injuries is sufficient notice and that a tender even after the action has been filed is timely, although it is usually stated that it must be prior to trial. It has been recognized, and rightly so, that the important question is whether the releasee has been prejudiced by any delay.
Id. at 589 (emphasis added); see also H. Havighurst, Problems Concerning Settlement Agreements, 53 Nw. U. L. Rev. 283, 311-13 (1958) (noting that numerous courts have allowed plaintiffs to return compensation paid under settlement agreements at or during trial).
This Court has consistently held that remedial statutes should be liberally construed in favor of those who are intended to benefit from the legislation. See, e.g., Muzzy v. Chevrolet Div., General Motors Corp., 153 Vt. 179, 187, 571 A.2d 609, 614 (1989) (remedial statutes “are entitled to a liberal construction in favor of those who are intended to benefit from the legislation”); Viskup v. Viskup, 150 Vt. 208, 211, 552 A.2d 400, 402 (1988) (remedial purpose of legislation “requires a liberal construction so as to give full force and effect to the intentions of the Legislature”). Today’s holding represents a sharp departure from this salutary principle, for reasons that are not apparent from the Court’s opinion or the law. Accordingly, I respectfully dissent.