Reynolds v. Merrill , 23 Utah 2d 155 ( 1969 )

ELLETT, Justice:

This is an action to recover for personal injuries and property damages arising out of a collision between cars driven by the parties hereto. The accident occurred on Friday, June 3, 1966, when the defendant’s automobile ran into the rear of the plaintiff’s Volkswagen. Immediately after getting home, the plaintiff called his physician, who prescribed conservative treatment, and made an appointment for the following Tuesday. For some two and a half months thereafter the doctor treated the plaintiff for what was diagnosed as a recurrence of bursitis. On August 22, 1966, at the request of the defendant’s insurance adjuster the doctor signed an Attending Physician’s Report containing the following information:

(IA) Diagnosis and concurrent conditions—

[Answer] (1) Traumatic bursitis of rt. shoulder.

(2) Traumatic myositis posterior neck muscles.

(IB) Were X-rays taken? [Answer] Yes.

If yes, where? [Answer] Cottonwood Hospital.

(7A) How long was or will patient be constantly disabled (Unable to work) ?

[Answer] Not disabled.

On September 26, 1966, the insurance adjuster paid plaintiff $655.56 and took from him a release which among other things recited:

The undersigned hereby declare(s) and represent(s) that the injuries sustained are or may be permanent and progressive and that recovery therefrom is uncertain and indefinite and in making this Release it is understood and agreed, that the undersigned rely(ies) wholly upon the undersigned’s judgment, belief and knowledge of the nature, extent, effect and duration of said injuries and liability therefor and is made without reliance upon any statement or representation of the party or parties hereby released or their representatives or by any physician or surgeon by them employed.

Plaintiff’s shoulder pains grew more severe, and on December 1, 1966, he was hospitalized by his doctor for three days in order that tests might be taken; and upon the expiration of those tests the doctor stated in his Progress Notes that the diagnosis was not definitely determined. The plaintiff was then referred to an orthopedic specialist who diagnosed plaintiff’s injury as a herniated disc. A spinal fusion was performed on December 19, 1966, resulting in a permanent partial’ disability.

The trial court believed that the plaintiff had lost all rights against the defendant by reason of the release given, and he entered a summary judgment dismissing the complaint. In doing so, he failed to' distinguish between an unknozvn injury and unknozvn consequences of a knozsvn injury. The former can be the basis of a mutual mistake of fact, while the latter would be only a mistake of opinion. While an injury may be known, its consequences are not matters of existing facts which can be agreed upon or even foreseen exactly. Such consequences will be revealed only in the future and at the present time are merely matters of opinion.

The great majority of cases since the turn of the century have recognized this distinction.¹ Utah follows the modern trend as is illustrated by the two following cases:

Anderson v. Oregon Short Line R. Co., 47 Utah 614, 155 P. 446 (1916), was a case where plaintiff sought to be released from a settlement made with the defendant and failed in his effort. There he had a known injury and settled his claim therefor. At that time he knew what the injury was but did not know that he would subsequently lose a finger as a result of the injury. The court properly refused to set aside the settlement.

The case of Kirchgestner v. Denver & Rio Grande W. R. Co., 118 Utah 20, 218 P.2d 685 (1950), is in point, although it was reversed on rehearing because of an instruction relating to the degree of proof required to set aside the release. At pages 28 and 29 of the Utah Reports, at page 690 of 218 P.2d this court said:

The defendant argues that even if the parties were mutually mistaken with respect to the nature and extent of the plaintiff’s injuries, such mistake is immaterial because the plaintiff by the release discharged all claims and causes of action which he then had or might thereafter have or claim on account of any and all personal injuries whether then known or unknown, apparent or unapparent, including complications arising from personal injuries, and that the very basis of the release was that the parties might be wholly mistaken as to the nature and extent of the injuries suffered by the plaintiff. However logical the defendant’s argument may seem, the authorities are to the contrary. Because a release is as all-inclusive in its terms as legal ingenuity can make it and purports to release all possible claims arising out of an accident and is understood as such by the re-leasor, it will nevertheless be set aside when it can be shown that at the time of its execution both parties were laboring under a mutual mistake as to the extent of the injuries suffered by the releasor. [Citations omitted.]

Appellant contends that the Kirchgestner case is governed by federal law. We agree as to the liability and defenses involved that the case was governed by federal law, but we cannot see why the state law and the federal law should not be the same so far as contractual rights are concerned. In fact, our own court has spoken on this point. In the case of Anderson v. Oregon Short Line R. Co., supra, at page 620 of the Utah Reports, at page 448 of 155 P. this court said:

Counsel refers to the federal Employers’ Liability Statute, wherein the foregoing language occurs. ..It will be remembered that in the act just referred to employés, except for certain purposes, are exempt from the defenses of contributory negligence and assumed risk. The act therefore provides that an employé may not be shorn of its benefits in that regard by any “contract, regulation or device.” It would seem that such a result would be implied even though it were not expressed in the act. The mere fact that it is expressed, however, in no way affects its scope or ■effect. The purpose of the foregoing provision was not to prevent the employer and his employé from compromising and settling any matters of difference ■existing between them. In making such a settlement, if it is fair and free from fraud, concealment, etc., no rights of ■either of the parties are frittered away, but, on the contrary, are firmly maintained. The right to make a compromise •and settlement and enter into a release is a right of contract which, in our judgment, cannot be interfered with even by Congress.

The respondent relies on the Arizona case of Hoopes v. Lamb, 102 Ariz. 335, 429 P.2d 447. The statement in the preamble to the headnotes shows that Arizona respects the distinction between unknown results of a known injury on the one hand and unknown injuries on the other:

* * * The Supreme Court, Lockwood, J., held that pedestrian who released motorist, in consideration of $7500, from all known and unknown injuries resulting from the accident could not have the release rescinded when he subsequently developed pseudarthrosis with respect to the mending of his broken legs, since condition of pseudar-throsis was not “unknown injury,” but was merely consequence of known leg injuries.

The Hoopes case, supra, quotes from the case of Dansby v. Buck, 92 Ariz. 1, 373 P.2d 1 (Ariz.1962), and that case on page 4 states the law of Arizona to be as follows :

It is uniformly held that a general release of a claim for personal injuries may, under proper circumstances, be avoided on the ground of mutual mistake as to the nature or seriousness of the injury. Robert Hind, Ltd., v. Silva, 75 F.2d 74 (9th Cir. 1935); annot. 48 A.L.R. 1462, and authorities cited thereunder. See, in particular, pp. 1467-1471. We believe sound logic, as well as the greater weight of authority, supports the rule laid down by those authorities.

The case of Ranta v. Rake, 91 Idaho 376, 421 P.2d 747 (1967), is squarely in point with the instant matter. At page 751 the court said:

The majority and the more modern view, while recognizing the policy of encouraging out-of-court settlements of personal injury claims, permits a re-leasor to avoid a release where unknown injuries existed at the time the release was executed though the release invariably is broad enough to encompass unforeseen injuries and though the release was honestly obtained without fraud, over-reaching or undue influence on the part of the releasee. Some courts have recognized that cases of this type are to some degree sui generis and substantially abandon any attempt to fit these situations within the classic limitations of the law of fraud or mistake and have held that the release may be set aside upon a showing of an inequitable result unless it is established that it was “fairly and knowingly made.” [Citations omitted.]

In the instant case the plaintiff does not contend that he should have the release set aside if it is shown that he actually intended to settle for all injuries. He here is asking for a day in court to establish, if he can, that there was a mutual mistake of fact regarding the injury which actually was in existence but which was unknown to both him and the insurance adjuster.

We are not here concerned with the question of when the plaintiff’s disc was herniated. He has alleged that it resulted from the accident. If he can prove it, and that at the time of signing the release neither party knew about it, he should have that privilege.

The summary judgment granted by the lower court is reversed, and the case is remanded to the lower court for a trial on the issues presented by the pleadings. The appellant is awarded costs.

CROCKETT, C. J., and TUCKETT, J., concur.

1 . Some cases go further and grant relief from a settlement when the consequences of a known injury greatly exceed the anticipated results at the time of making the settlement. See Corbin on Contracts, See. 1292; see also the annotation in 71 A.L.R.2d at page 105, Sec. 5(b) ; see also Reede v. Treat, 62 Ill.App.2d 120, 210 N.E.2d 833 (1965). The dissenting opinion filed herein would have us follow the minority view as expressed in the case of Wheeler v. White Rock Bottling Company, 229 Or. 360, 366 P.2d 527 (1961). In reversing the trial court the Supreme Court at page 529 said: “The trial court followed the numerical weight of authority in other jurisdictions, * * *"