Kussler v. Burlington Northern, Inc. , 186 Mont. 82 ( 1980 )

No. 14851
IN THE SUPREME COURT OF THE STATE OF MONTANA
1979
GLORIA KUSSLER et al.,
Plaintiffs and Appellants,
VS.
BURLINGTON NORTHERN, INC., a
corporation, and THE STATE OF
MONTANA,
Defendants and Respondents.
Appeal from: District Court of the Sixteenth Judicial District,
Honorable A. B. Martin, Judge presiding.
Counsel of Record:
For Appellants:
Allen Beck argued, Billings, Montana
For Respondents:
Kurt W. Kroschel argued, Billings, Montana
P. Keith Keller argued, Helena, Montana
Submitted: December 14, 1979
Decided: FEB 1 1 1980
Filed: FEEj 11
-
Mr. Chief Justice Frank I. Haswell delivered the Opinion of
the Court.
The District Court granted the defendants' motion for
summary judgment. From this judgment the plaintiff appeals.
The plaintiff's husband was killed on June 12, 1975, at
a railroad crossing when the van in which he was riding as a
passenger collided with a Burlington Northern coal train. The
van was owned by William 0 Penn, but was being driven by Jerry
.
Dewey, with the permission of Penn.
On June 2, 1978, the plaintiff filed a wrongful death
and survivorship action against the Burlington Northern and the
State of Montana, alleging that the railroad crossing was extra-
hazardous by reason of the negligence of said defendants.
Penn had insured the van with State Farm Insurance. The
policy provided that if the insured vehicle was driven by a third
party with the permission of Penn, the third party would also be
insured, which in this case was Dewey.
State Farm settled the plaintiff's case against Penn for
$25,000. In consideration thereof the plaintiff executed a docu-
ment which was denominated a "General Release." The release, in
pertinent part, states:
"KNOW THAT I, GLORIA KUSSLER, being over the age
of 21 years and residing at P. 0 Box 1102,
.
Westwood, California, idividually [sic] and as
Administratrix of the Estate of Martin J. Kussler,
Jr., as RELEASOR, in consideration of the sum of
TWENTY FIVE THOUSAND ($25,000.00) DOLLARS received
from WILLIAM PENN, as RELEASEE, receipt whereof is
hereby acknowledged, releases and discharges
WILLIAM PENN, the RELEASEE, RELEASEE'S heirs,
executors, administrators, successors and assigns
from all actions, causes of action, debts, dues,
sums of money, accounts, reckoning, bonds, bills,
specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, dam-
ages, judgments, extents, executions, claims, and
demands whatsoever, in law, admiralty or equity,
which against the RELEASEE, the RELEASOR, RELEASOR'S
heirs, executors, administrators, successors and
assigns hereafter can, shall or may, have for, upon,
or by reason of any matter, cause or thing whatso-
ever from the beginning of the world to the date
of this RELEASE."
At the time of making the claim against Penn, plaintiff
was a resident of the State of New York and represented by a
New York attorney. The release was signed by the plaintiff
in California.
Based upon the general release and Montana law the
District Court granted the defendant's motion for summary judg-
ment.
This case presents the following two issues:
(1) Whether Montana law applies to the facts of this
case.
(2) Whether the general release of one named joint
tortfeasor releases other unnamed tortfeasors.
Section 28-3-102, MCA, states:
"A contract is to be interpreted according to
the law and usage of the place where it is to
be performed or, if it does not indicate a place
of performance, according to the law and usage of
the place where it is made."
This statute throws into question which law applies to
a contract involving a Montana accident and a New York resident
which was signed in California. However, when there is a release
of a tortfeasor involved, the law is clear.
"It has been generally held that the law of the
place of the wrong governs the question whether
the release of one tortfeasor operates to release
all joint tortfeasors. In a few cases the law of
the place of contracting has been held controll-
ing. But in all these cases it appears that the
place of contracting was also the place of the
wrong." 66 Am Jur 2d, Release, 845, p. 727.
The rationale for this rule of law was stated in Western 1
Newspaper Union v. Woodward (W.D. Mo. 1955), 133 F. Supp. 17, at I
23, as follows:
"The first question then is: What law governs,
first, the tort, and, second the contract of re-
lease? Inasmuch as the claimed bar of this action
rests entirely upon the release, it would not be
necessary presently to determine what law governs
the tort were it not for the fact that the cases
hold that a contract of release, absent, as here,
express designation of other laws to control it,
is presumed to have been made in contemplation of,
and, hence, to be governed by, the laws of the
state that created or gave rise to the right
thereby released, but because of that fact it is
necessary to determine what law governs the tort,
and so doing will also determine the law that
governs the contract of release."
Montana law created the right to sue for the tort com-
mitted. This right gave rise to the release which the plain-
tiff signed. There is no question that Montana courts have
jurisdiction to try a case which involves the underlying tort.
Consequently, it is only logical that Montana law applies to the
release, where the release does not specify which law applies.
We now turn to the question of whether the summary judg-
ment was properly granted. The law governing summary judgments
is found in Rule 56, M.R.Civ.P. A motion for summary judgment
is properly granted if:
" ... the pleadings, depositions, answers to
interrogatories, and admissions on file, together
with the affidavits, if any, show that there is
no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a
matter of law."
In the present case the plaintiff is contending that the
intent of the parties at the time the release was negotiated was
an issue and that this intent is a material fact. The District
Court's order states at pages 2 and 3:
"Granting that plaintiff did not intend to release
the defendants, the law is clear that a general
release in the absence of a covenant not to sue or
a reservation of right to sue, releases all joint
tortfeasors. Reading the release in the light of
the law as declared in cited Supreme Court cases,
there is no ambisuitv in the release that would
entitle plaintiff to-present parole evidence ta explain
her intent."
As the following discussion will show, the only material
fact was the existence of the release and the language it employed.
There is no genuine issue presented by this document. The only
question to be resolved is the application of Montana law to this
document .
In the last 50 years there have been four Montana cases
which have dealt with similar fact situations. Black v. Martin
(1930), 88 Mont. 256, 292 P. 577; Lisoski v. Anderson (1941),
112 Mont. 112, 112 P.2d 1055; Beedle v. Carolan (1944), 115
Mont. 587, 148 P.2d 559, and McCloskey v. Porter (1973), 161
Mont. 307, 506 P.2d 845.
In Black this Court held that a plaintiff may release a
joint tortfeasor and still preserve a cause of action against
another joint tortfeasor if there is language to this effect in
the written release. In Lisoski, the Court held that a plaintiff
may not sue a joint tortfeasor where a written release has been
executed with another joint tortfeasor which specifically re-
leases "all other persons, firms or corporations from all claims
The Beedle case is factually similar to the present case.
The plaintiff was put in jail by Sheriff Burns at the instance
of defendant Carolan who was the county attorney. Plaintiff
brought suit against Burns for false imprisonment. This suit
was settled and a written release was signed by plaintiff. The
release only mentioned Burns and a surety company as being the
parties released. his Court found that the release, therefore,
was a bar to the plaintiff's action and said:
"The words . ..mean that plaintiff has been
fully compensated for any injuries arising out
of the transaction; having been fully compensated
he has no further cause of action. Nothing in
the release in any way hints at a reservation of
the right to sue the county attorney or anyone else
because of the false arrest and, as we have said,
that reservation must appear on the face of the
instrument." 115 Mont. at 590.
The rule was again stated in the McCloskey case, supra:
"In Montana, the rule has long been established
that the release of one joint tortfeasor releases
the others, unless there are clear provisions in
the release to the contrary." 161 Mont. at 311-12.
In the present case, the release has no provisions which
reserved a right to sue any other party. Because the law in the
state is clear on this point, the District Court is affirmed.
This, however, does not end our discussions. We are
compelled to make the following observations concerning this
rule. The rule was adopted from the English common law and it
has been criticized by many authorities. In Black v. Martin,
supra, this Court quoted from Dean Wigmore that the rule was a
"'surviving relic of the Cokian period of metaphysics.'" 88
Mont. at 269.
The theory underlying the rule has been stated:
" .. . the essential unity of the injury, and the
fact that the injured party is entitled to but one
compensation therefor, make it impossible for the
injured person to settle with one tortfeasor with-
out discharging the other." 66 Am Jur 2d, Release,
537, p. 716.
The case of Breen v. Peck (1958), 28 N.J. 351, 146 A.2d
665, contains a history of the rule. The first instance of the
rule cited is Cocke v. Jennor, Hob 66, 80 Eng.Rep. 214 (K.B.1614),
wherein a plaintiff had released one joint tortfeasor. The court
held that the other tortfeasor could not then be sued because
the release was a "satisfaction in law" despite the fact that
there may have been no intention to absolve the other tortfeasor.
In Duck v. Mayen (1892) 2Q.B.511(C1A.) the Cocke case was cited
for the proposition that English law was well settled that the
release of one joint tortfeasor releases the others. The reason
given for the rule was ". . . that the cause of action, which
is one and indivisible, having been released, all persons other-
wise liable thereto are consequently released . . ."
The Breen case gave a summary of the criticisms of this
rule. 146 A.2d at 668. As a consequence, the New Jersey Supreme
Court changed the rule in New Jersey. They said that the court
has the " . . . power to remould the English common-law rule . . ."
In Adarns v. Dion (1973), 109 Ariz. 308, 509 P.2d 201, the
plaintiff was injured in a car wreck which involved joint tort-
feasors. One of the tortfeasors was released. The other was
the defendant in the case. The law in Arizona had been that
a release of one released all. The court listed several reasons
for overruling the common law rule. They said that the rule is
a trap for the unwary, it stifles the desire of the victim to
compromise, and it leads to results not intended by the parties.
As a result, the court adopted the rule "that the release of one
joint tortfeasor is not a release of any other joint tortfeasor
unless the document is intended to release the other tortfeasors,
or the payment is full compensation, or the release expressly so
provides." 509 P.2d at 203.
This rule was adopted from the Restatement (Second) of
Torts S885. The United States Supreme Court also adopted the
rule in antitrust litigation in Zenith Radio Corp. v. Hazeltine
Research (1971), 401 U.S. 321, 344, 28 L. Ed. 2d 77, 95, 91 S. Ct.
795, 809.
From the date of this decision the law of Montana on this
subject will follow the position of the Restatement which is quoted
in the Adams case, supra. Unless a release specifically states
otherwise, a finder of fact may consider the intent of the parties
in making a release. Whether the parties intended to release
other parties or whether the release was full compensation may
be shown by par01 evidence because the opposing party was not a
party to the release.
Upon sound authority we make the force of this ruling
prospective only. In Montana Horse Products Co. v. Great Northern
Ry. Co. (1932), 91 Mont. 194, 7 P.2d 919, this Court construed
a statute dealing with the freight rates charged by the defendant.
The rates being contested had been previously authorized by the
Railroad Commission, but the Commission had later decided that
the rates were excessive and ordered that the excessive amounts
be returned to the shippers. This Court held that the rates had
been properly charged even if they were excessive and that the
Commission's order should not have been made retroactive. How-
ever, in making the retroactive ruling the shippers and the
Commission had relied on a former Montana case which had affirmed
this procedure. (This former case was overruled by the Horse
Products case.) This Court said:
"It would be manifestly unjust and improper to
deprive the shipper of its legal right to recover
the excessive amount of tariff exacted by the
railway company as pronounced by this Court simply
because of the later opinion expressed by this
court repudiating its former decision. (Citation
omitted.) The decisions of this court are controll-
ing until reversed or modified by this Court."
91 Mont. at 211.
In denial of a motion for a rehearing in the Horse Pro-
ducts case, this Court said:
"The construction given to a statute, although
erroneous, before its reversal or modification,
becomes a part of it as much as though written
into it; and the change made in construction
will affect only contracts made thereafter."
91 Mont. at 215.
This logic applies with even more force to the instant
case where we are changing the common law. It would be manifest-
ly unfair to change a law which has been relied upon in this juris-
diction. Consequently, the new rule adopted will only apply to
releases executed after the date of this decision. To all others,
the old rule will apply.
The United States Supreme Court has expressly stated that
a state may make the application of a new rule prospective only.
In Great Northern Ry. v. Sunburst Co. (1932), 287 U.S. 358, 77
L.Ed 360, 53 S. Ct. 145, the Court considered a companion case of
the Horse Products case. They said that a state court "may make
a choice for itself between the principle of forward operation
and that of relation backward" when a precedent is overruled.
287 U.S. at 364. They also said that "[tlhe alternative is the
same whether the subject of the new decision is common law
(Citation omitted.) or statute." 287 U.S. at 365.
The District Court is affirmed.
Chief Justice
We concur:
...................................
Justices
Mr. Justice John C. Sheehy, deeming himself disqualified,
did not participate in the decision or opinion in this case.
Mr. Justice Daniel J. Shea concurring in part and dissenting
in part:
I would permit the plaintiff here to put on proof that
she did not intend to release the Burlington Northern. The
majority perceives the unjustness of the law that it is over-
throwing prospectively today, but commits an unjust result
in the process by not permitting the plaintiff to put on her
own proof that Burlington Northern was not an intended beneficiary
of her release. It is manifestly unjust not to give the plaintiff
here the benefit of such ruling.