Court Opinion

ID: 5452432
Source: CourtListenerOpinion
Date Created: 2022-01-08 19:16:37.578109+00
Date Added: 2024-06-11T08:32:30.282252
License: Public Domain

BROWN, J., Concurring and Dissenting.
I agree with the majority’s decision to affirm the judgment of the Court of Appeal. But that is the only portion of the majority opinion with which I am in accord. In reaching the correct result, the majority—unable to resist the bureaucratic propensity for intermeddling—improperly and unnecessarily creates an exception to our long-standing rules of contract interpretation for a preprinted compromise and release form used in workers’ compensation cases. Because I believe that generally applicable rules should govern here, I write separately.
I.
Under Civil Code section 1635, “[a]ll contracts, whether public or private, are to be interpreted by the same rules, except as otherwise provided by this Code.” Our courts have consistently applied this maxim to releases and determined the scope of a release using our long-standing rules of contract interpretation. (See, e.g., Hess v. Ford Motor Co. (2002) 27 Cal.4th 516, 524 [117 Cal.Rptr.2d 220, 41 P.3d 46] (Hess); Solis v. Kirkwood Resort Co. (2001) 94 Cal.App.4th 354, 360 [114 Cal.Rptr.2d 265] (Solis).) Indeed, we purportedly applied these rules to preprinted release forms used in workers’ compensation cases just two years ago in Jefferson v. Department of Youth Authority (2002) 28 Cal.4th 299, 304-307 [121 Cal.Rptr.2d 391, 48 P.3d 423] (Jefferson).
These rules provide that a “contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful.” (Civ. Code, § 1636.) “When a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible . . . .” (Civ. Code, § 1639.) But “[w]hen, through fraud, mistake, or accident, a written contract fails to express the real intention of the parties, such intention is to be regarded, and the erroneous parts of the writing disregarded.” (Civ. Code, § 1640.)
“The words of a contract are to be understood in their ordinary and popular sense, rather than according to their strict legal meaning; unless used by the parties in a technical sense, or unless a special meaning is given to them by usage, in which case the latter must be followed.” (Civ. Code, § 1644.) “If the terms of a promise are in any respect ambiguous or uncertain, it must be interpreted in the sense in which the promisor believed, at the time of making it, that the promisee understood it.” (Civ. Code, § 1649.) Moreover, a “contract may be explained by reference to the circumstances under which it *381was made, and the matter to which it relates.” (Civ. Code, § 1647.) Thus, “[a]n ambiguity can be patent, arising from the face of the writing, or latent, based on extrinsic evidence.” (Solis, supra, 94 Cal.App.4th at p. 360.) And, if an ambiguity exists, extrinsic evidence may be admitted in “interpreting the contract.” (Winet v. Price (1992) 4 Cal.App.4th 1159, 1165 [6 Cal.Rptr.2d 554] (Winet).)
Although these rules govern all contracts absent a statutory provision to the contrary (Civ. Code, § 1635), the majority refuses to apply them. First, the majority ignores the language of the release (see Civ. Code, §§ 1639, 1644) and holds that “the standard language of the preprinted form used in settling workers’ compensation claims releases only those claims that are within the scope of the workers’ compensation system, and does not apply to claims asserted in separate civil actions.” (Maj. opn., ante, at p. 376.) Second, it bars consideration of extrinsic evidence “to show that the standard preprinted workers’ compensation release form also applies to claims outside the workers’ compensation system.” (Id. at p. 377.)
The majority, however, identifies no Civil Code or workers’ compensation statute that creates an exception to our long-standing rules of contract interpretation for preprinted release forms used in workers’ compensation cases. Indeed, it provides no statutory basis for its holding, and my review of California law reveals no statutory support for this exception. As such, I see no legitimate ground for creating it. (See Civ. Code, § 1635.)
The majority’s stated grounds for creating such an exception are not compelling. Labor Code former section 4646, subdivision (a), does not support the majority’s proposed exception to our long-standing rules of contract interpretation because there is no statutory basis for the majority’s holding. Rodgers v. Workers’ Comp. Appeals Bd. (1985) 168 Cal.App.3d 567, 575-576 [214 Cal.Rptr. 303], is also inapposite. In Rodgers, the Court of Appeal applied our rules of contract interpretation and found that the language of the preprinted release form, by its terms, did not encompass a workers’ compensation claim predicated on a new injury suffered during rehabilitation services after the claimant signed the release.
Likewise, the Court of Appeal cases cited by the majority—Lopez v. Sikkema (1991) 229 Cal.App.3d 31 [280 Cal.Rptr. 7] (Lopez), Asare v. Hartford Fire Ins. Co. (1991) 1 Cal.App.4th 856 [2 Cal.Rptr.2d 452] (Asare), Delaney v. Superior Fast Freight (1993) 14 Cal.App.4th 590 [18 Cal.Rptr.2d 33] (Delaney), and Mitchell v. Union Central Life Ins. Co. (2004) 118 Cal.App.4th 1331 [13 Cal.Rptr.3d 732] (Mitchell)—are not persuasive. To the extent these cases exempt preprinted release forms used in workers’ compensation cases from our rules of contract interpretation, they provide no *382statutory basis for doing so. Absent such a basis, these cases do not and cannot support the majority’s holding. (See Civ. Code, § 1635.)
Moreover, these cases misread our decision in Sumner v. Workers’ Comp. Appeals Bd. (1983) 33 Cal.3d 965 [191 Cal.Rptr. 811, 663 P.2d 534] (Sumner). In Sumner, an employee executed a preprinted release form containing virtually the same language at issue here. (Id. at pp. 967-969.) Based on this language, the employer contended the employee released his claim for death benefits—a claim that he did not know of at the time he signed the release. (Id. at p. 969.) Because the employee was unsophisticated and executed the release without the benefit of counsel (id. at p. 972), we concluded that the release did not cover the plaintiff’s unknown claim for death benefits. (Id. at pp. 972-973.) We reached this conclusion even though the release included an addendum waiving all unknown claims and eschewing the benefits of Civil Code section 1542. (Sumner, at pp. 972-973.)
In reaching this conclusion, however, we did not create an exception to our long-standing rules of contract interpretation. Specifically, Sumner did not, as suggested by Lopez, Asare, Delaney and Mitchell, place the burden on employers to enumerate the causes of action covered by the preprinted release form even though the form expressly covered all “claims and causes of action.” (See Lopez, supra, 229 Cal.App.3d at pp. 38-39; Asare, supra, 1 Cal.App.4th at p. 864; Delaney, supra, 14 Cal.App.4th at pp. 599-600; Mitchell, supra, 118 Cal.App.4th at pp. 1341-1342.) Instead, Sumner simply applied our rules of contract interpretation and the case law construing these rules. These rules provide that “[a] general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.” (Civ. Code, § 1542, italics added.) Although a releasor may waive all unknown claims despite the protections of Civil Code section 1542, an “oblique reference to ‘all known and unknown’ claims” is not enough. (Winet, supra, 4 Cal.App.4th at p. 1170.) Moreover, any waiver of the benefits of Civil Code section 1542 is invalid if the releasor is unsophisticated and lacks the advice of independent counsel. (See Winet, at p. 1170.) Because the plaintiff in Sumner was unsophisticated and lacked independent counsel, we applied these rules to hold that the preprinted release form and addendum did not bar the plaintiff’s unknown claim for death benefits.1 (See Casey v. Proctor (1963) 59 Cal.2d 97, 109 [28 Cal.Rptr. 307, 378 P.2d 579].) Thus, Sumner followed our rules of contract interpretation and did not create an exception to these rules for preprinted release forms used in workers’ compensation settlements.
*383In any event, as the majority observes, our Courts of Appeal have uniformly “extended the use of extrinsic evidence to show whether the parties intended the release to include claims outside the workers’ compensation system.” (Maj. opn., ante, at p. 377.) As such, the cited cases do not support the majority’s decision to prohibit the consideration of extrinsic evidence, in direct contravention of our rules of contract interpretation. (See, e.g., Civ. Code, § 1647; Hess, supra, 27 Cal.4th at p. 527.)
Finally, the special nature of the workers’ compensation system does not dictate a contrary result. As the majority correctly notes, we must construe the preprinted release form in light of “the public policy of protecting the injured worker against the unintentional loss of workers’ rights.” (Maj. opn., ante, at p. 378.) But the majority conveniently forgets that “[w]e have been particularly rigorous about strictly enforcing broad release language in workers’ compensation settlements, because, in that context, [Workers’ Compensation Appeals Board (WCAB)] oversight helps to ensure fairness.” (Jefferson, supra, 28 Cal.4th at pp. 303-304.) Indeed, workers and their attorneys—and not employers—are in the best position to know what claims they plan to pursue as a result of a work-related injury. I therefore see no statutory or policy grounds for giving workers settling a workers’ compensation claim greater protection than litigants settling any other claim. Accordingly, our long-standing rules of contract interpretation should govern our interpretation of preprinted release forms used in workers’ compensation cases.
n.
As described above, our rules of contract interpretation provide, in relevant part, that a “release of ‘ “[a]ll claims” ’ [citations] covers claims that are not expressly enumerated in the release” absent “fraud, deception or similar abuse.” (Jefferson, supra, 28 Cal.4th at p. 305.) Extrinsic evidence may, however, establish “that the release refers only to all claims of a particular type, and consideration of extrinsic evidence would be appropriate where . . . the parties know of a particular claim but do not refer to it expressly in their release. [Citation.]” (Ibid.) If no extrinsic evidence of a narrower construction exists, however, the release of “all claims and causes of action” must be given comprehensive scope. Otherwise, “it [would be] virtually impossible to create a general release that . . . actually achieve[d] its literal purpose.” (Winet, supra, 4 Cal.App.4th at pp. 1172-1173.)
In this case, plaintiff Carolyn Claxton did not claim fraud, deception, or similar abuse. Thus, under our rules of contract interpretation, the ordinary and popular meaning of the language of the preprinted release form governs absent an ambiguity. (See Civ. Code, §§ 1639, 1644, 1649.) This language, by its terms, bars claims that are not expressly enumerated in the release— *384including claims that fall outside the workers’ compensation system. Indeed, by expressly barring both “claims and causes of action,” the release necessarily encompasses more than just “claims” within the scope of the workers’ compensation system. Otherwise, the release could have just barred “claims”—and not “causes of action.”
Nonetheless, the extrinsic evidence establishes an ambiguity as to the scope of the release in this particular context. At the time plaintiff signed the release, both plaintiff and defendants knew of plaintiff’s claim of sexual harassment in violation of the Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.). Thus, the failure of the release to mention the FEHA claim creates a latent ambiguity (see Solis, supra, 94 Cal.App.4th at p. 360), and leaves unresolved the issue of whether the parties intended to release plaintiff’s FEHA claim (see Hess, supra, 27 Cal.4th at p. 527 [holding that the failure of a release to mention an outstanding claim known to the parties establishes an ambiguity as to the scope of that release]). Absent extrinsic evidence establishing that the parties did not intend for the release to cover the FEHA claim, however, the ordinary and popular meaning of the language of the release controls and bars the claim. (See Civ. Code, §§ 1639, 1644.) Thus, to avoid summary judgment, plaintiff had to introduce extrinsic evidence demonstrating that the parties did not intend for the release to cover the FEHA claim. (See Hess, supra, 27 Cal.4th at p. 527; see also Civ. Code, § 1647.)
And plaintiff did so. First, the release describes plaintiff’s injuries as “Psyche, left Lower Extremity.” In doing so, the release apparently refers only to plaintiff’s workers’ compensation claim predicated on her knee injury and the injury to her psyche caused by that injury, and implicitly excludes the injury to her psyche caused by the alleged sexual harassment. Second, the release contains a waiver of prospective rehabilitation services with the requisite finding by the workers’ compensation judge. (See Lab. Code, former § 4646.) The presence of this waiver suggests that the parties contemplated the possibility of additional damages not covered by the workers’ compensation scheme and specifically chose to exclude plaintiff’s FEHA claim from the scope of the release. Third, the release only covers claims against defendant Pacific Maritime Association, plaintiff’s employer, and does not include claims against the alleged harasser Ray Waters—a named defendant in the FEHA action. The release’s failure to mention one of the named defendants in the FEHA action suggests that the parties did not intend for the release to cover the FEHA claim. Finally, the WCAB order approving the settlement states that it was only “settling this case.” By expressly limiting the settlement to “this case,” the order suggests that the release covered only *385plaintiff’s workers’ compensation cases and no other cases in existence at that time—such as plaintiff’s FEHA action already filed in state court. Viewed in its totality, this evidence establishes a triable issue as to whether the parties intended for the release to encompass plaintiff’s FEHA cause of action. Accordingly, I join the majority in affirming the judgment of the Court of Appeal, reversing summary judgment in favor of defendants.
On September 15, 2004, the opinion was modified to read as printed above.

 Sumner does not control here because plaintiff knew about the statutory cause of action at issue here and had the benefit of independent counsel at the time she signed the release.