Pennington v. American Telephone & Telegraph Co.

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 06a0786n.06
Filed: October 23, 2006
No. 04-6057
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
JAMES PENNINGTON, ADMINISTRATOR FOR )
THE ESTATE OF ARLIS G. PENNINGTON, )
) ON APPEAL FROM THE
Plaintiff-Appellant, ) UNITED STATES DISTRICT
) COURT FOR THE EASTERN
v. ) DISTRICT OF KENTUCKY
)
AMERICAN TELEPHONE & TELEGRAPH )
COMPANY, )
)
Defendant-Appellee. )
___________________________________________
BEFORE: MERRITT, SUTTON, and GRIFFIN, Circuit Judges.
GRIFFIN, Circuit Judge.
In this wrongful death action based on diversity jurisdiction, plaintiff-appellant James
Pennington, Administrator for the Estate of Arlis Pennington (“the Estate”), appeals the orders of
the district court granting summary judgment in favor of defendant-appellee American Telephone
and Telegraph Company (“AT & T”). Dismissal of the suit was premised upon the Estate’s
execution of a document entitled “Release of All Claims” (the “Release”), whereby the Estate
agreed, in exchange for payment of approximately $95,000, to release and forever discharge from
potential liability two named parties and “all other persons, firms or corporations liable, or who
might be claimed to be liable, of and from any and all actions, causes of action, [or] claims” arising
No. 04-6057
Pennington v. American Telephone & Telegraph Co.
from plaintiff’s decedent’s fatal accident. The Estate subsequently filed this action against AT & T,
claiming that AT & T’s negligence contributed to the accident. AT & T was not one of the parties
expressly covered by the Release. Applying Kentucky law, the district court nonetheless concluded
that the plain, unambiguous language of the Release included AT & T within its scope and thus
dismissed the Estate’s suit against AT & T.
The Estate now appeals the grant of summary judgment in favor of AT & T, arguing that the
release of persons and their potential liabilities other than the two named parties in the Release was
not intended by the Estate, and that genuine issues of material fact remain regarding the intent of the
parties. We affirm.
I.
On February 2, 2001, Arlis G. Pennington was seriously injured, and died several days later,
after his automobile collided with two horses that escaped from Jeff Link’s property and wandered
onto Kentucky Highway 22 near Dry Ridge in Grant County, Kentucky. The horses allegedly broke
free from their enclosure by way of a poorly maintained fence which was located on an easement
owned by AT & T.
On March 29, 2001, the Estate entered into a settlement with Jeff and Vivian Link and their
insurer, Kentucky Farm Bureau Mutual Insurance Company (“KFB”). Pursuant to this settlement,
the Estate executed the Release, which provides in pertinent part:
RELEASE OF ALL CLAIMS
FOR AND IN CONSIDERATION of the payment to me/us, JAMES
PENNINGTON, AS ADMINISTRATOR OF THE ESTATE OF ARLIS
-2-
No. 04-6057
Pennington v. American Telephone & Telegraph Co.
PENNINGTON at this time of the sum of NINETY-FIVE THOUSAND NINE
HUNDRED THIRTY-FIVE DOLLARS AND 50/100 Dollars ($95,935.50) the
receipt of which is hereby acknowledged, I/we, being of lawful age do hereby release,
acquit and forever discharge both JEFFREY & VIVIAN LINK and KENTUCKY
FARM BUREAU MUTUAL INSURANCE COMPANY or THE FB INSURANCE
COMPANY, their heirs, executors, administrators, agents and assigns, and all other
persons, firms or corporations liable, or who might be claimed to be liable, of and
from any and all actions, causes of action, claims, demands, costs, loss of services,
expenses and compensation, or suits at law or in equity, of whatsoever kind or
nature, arising out of any and all known and unknown injuries and damages resulting
or to result from an accident that occurred on or about the 3RD day of FEBRUARY
of 2001 at or near HWY 22 IN DRY RIDGE, KY.
***
Furthermore, I/we do hereby agree that in consideration of all aforesaid payments to
further indemnify and forever hold harmless all persons released by this agreement,
their successors, employees, agents, or principals for loss from any and all claims that
may hereafter be made seeking compensation for the events described herein,
specifically agreeing that I/we will pay any and all court costs, attorney’s fees, and
any other legal expenses in connection with the processing of such claims against all
released parties.
***
This release contains the ENTIRE AGREEMENT between the parties hereto, and all
prior representations are hereby merged into this agreement.
I/we further state that I/we have carefully read the foregoing release and know the
contents thereof, and I/we sign the same as my/our free act.
***
CAUTION! THIS IS A RELEASE AND YOU ARE MAKING A FINAL
SETTLEMENT. READ CAREFULLY BEFORE SIGNING!!!!
(Emphasis added).
-3-
No. 04-6057
Pennington v. American Telephone & Telegraph Co.
On October 31, 2001, the Estate and Jeff Link filed a joint complaint against AT & T in the
Kentucky circuit court. The Estate’s wrongful death action alleged that, because AT & T did not
properly maintain the fences and gates on their easement on the Link property, the horses were able
to escape and enter the roadway.1 Some years earlier, AT & T had obtained the easement across the
Link property for purposes of operating and maintaining communication lines.
AT & T removed the action to federal court based upon diversity jurisdiction. Thereafter,
AT & T was granted leave to file a third-party complaint and to add as third-party defendants
Cannon Construction, the company which constructed and repaired the fence for AT & T, Cannon’s
successor First South Utility Construction Company, and Cannon’s insurer, One Beacon Insurance
Company.2 AT & T also filed a counterclaim against Jeff Link for indemnification and/or
contribution.
The defendants filed motions for summary judgment, arguing that the Release entered into
by the Estate barred any claims against them arising out of the accident. The Links and the Estate
argued that the Release was valid only for potential claims regarding the Links’ and KFB’s liability.
In an opinion and order dated March 31, 2004, the district court granted summary judgment in favor
1
Jeff Link asserted a claim for the loss of his two horses, which had to be euthanized
following the accident.
2
AT & T acknowledged that in 1961 it entered into a written easement agreement with a
predecessor in the Links’ chain of title. In 1996, AT & T purportedly determined that it no longer
needed the communications cable over the Link property and contracted with Cannon to remove it.
Cannon did so, and Link allegedly executed a release in connection with the cable’s removal.
AT & T claims that no AT & T corporate agents or representatives have physically entered the Link
property since at least 1997.
-4-
No. 04-6057
Pennington v. American Telephone & Telegraph Co.
of all defendants, including the third-party defendants, as to all claims by the Estate. The court
determined that, under Kentucky law, the Release was not limited only to those parties identified by
name in light of the express language of the document releasing “all other persons, firms and
corporations.” The district court further held that Kentucky law did not require the examination of
extrinsic evidence regarding the Estate’s intent when it executed the Release because the Release
was unambiguous on its face.
On May 20, 2004, the district court entered an order denying the Estate’s subsequently filed
motion for reconsideration. On July 28, 2004, another order was issued, disposing of the remaining
third-party claims and counterclaims. The district court entered a final judgment dismissing the
entire case on September 3, 2004.
The present timely appeal was taken by the Estate only as to the summary judgment granted
in favor of AT & T.3 In its sole appellate issue, the Estate argues that the purpose of the Release was
to settle potential liability issues between the Estate and the Links and KFB, not AT & T. The Estate
argues that AT & T was not a party to the settlement negotiations and that the Release clearly did
not discharge any other party other than those specifically named, i.e., the Links and KFB. The
parties waived oral argument.
II.
3
As stated in its Notice of Appeal, the Estate is appealing all four of the district court’s
orders. However, the issue raised in this appeal was decided in the March 31, 2004, order.
-5-
No. 04-6057
Pennington v. American Telephone & Telegraph Co.
This court reviews a district court’s grant of summary judgment de novo. Cont’l Ins. Co. v.
Adams, 438 F.3d 538, 540 (6th Cir. 2006). Summary judgment is appropriate “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.” FED . R. CIV . P. 56(c). A dispute over
a material fact is genuine if a reasonable jury could return a verdict for the nonmoving party.
Himmel v. Ford Motor Co., 342 F.3d 593, 598 (6th Cir. 2003). In deciding the propriety of a motion
for summary judgment, this court views all evidence in the light most favorable to the nonmoving
party. Id. “To survive a motion for summary judgment, the non-moving party must present evidence
creating more than a ‘metaphysical doubt as to the material facts.’” Liberty Mut. Fire Ins. Co. v.
Massarone, 326 F.3d 813, 815 (6th Cir. 2003) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986)). Summary judgment may therefore be granted when “‘a party who
has the burden of proof at trial fails to make a showing sufficient to establish the existence of an
element that is essential to that party’s case.’” Id. (quoting Howard v. City of Beavercreek, 276 F.3d
802, 805 (6th Cir. 2002)).
Because this case is in federal court pursuant to the diversity statute, 28 U.S.C. § 1332, this
court applies the law of the forum state. Himmel, 342 F.3d at 598. Thus, the substantive law of
Kentucky governs this case. In diversity cases, this court applies state law in accordance with the
controlling decisions of the state supreme court, and, if that court has not yet addressed the relevant
issue, this court must predict how the court would rule by looking at all the available data. Allstate
Ins. Co. v. Thrifty Rent-A-Car Systems, Inc., 249 F.3d 450, 454 (6th Cir. 2001). “‘Relevant data
-6-
No. 04-6057
Pennington v. American Telephone & Telegraph Co.
include decisions of the state appellate courts, and those decisions should not be disregarded unless
we are presented with persuasive data that the [state supreme court] would decide otherwise.’” Id.
(quoting Kingsley Assoc. v. Moll PlastiCrafters, Inc., 65 F.3d 498, 507 (6th Cir. 1995)).
III.
Until 1983, the Kentucky courts followed the rule set forth in Kingins v. Hurt, 344 S.W.2d
811 (Ky. 1961), that the release of one party releases all unless the right to make further claims is
expressly reserved. Id. at 812 (“[T]he written instrument should be construed to mean what it says,
and unless on its face it can fairly be interpreted as reserving the claimant’s rights against other
tortfeasors it will be treated as an unconditional release.”). In so holding, the Kingins court adopted
the position taken in the first edition of the RESTATEMENT OF TORTS § 885(1), to the effect that the
release of one joint tortfeasor discharges all, unless it is otherwise stated in the agreement.
However, in Richardson v. Eastland, Inc., 660 S.W.2d 7 (Ky. 1983), the Kentucky Supreme
Court expressly overruled Kingins, noting that, in 1977, the American Law Institute redrafted
§ 885(1) and modified the former rule because it frequently resulted in the unintended discharge of
a tortfeasor and was not consistent with the “modern” view of the scope of releases. 660 S.W.2d at
9. The RESTATEMENT (SECOND ) OF TORTS § 885(1) (1977) now provides that “[a] valid release of
one tortfeasor from liability for a harm, given by the injured person, does not discharge others liable
for the same harm, unless it is agreed that it will discharge them.” Id. The Richardson court, noting
the contractual nature of a release and the need to interpret the intent of the parties where a contract
is silent, id. at 8, concluded that the new Restatement rule better accommodates the intentions of the
-7-
No. 04-6057
Pennington v. American Telephone & Telegraph Co.
parties to a release. The Richardson court thus adopted the revised § 885(1) “as the rule of the
Commonwealth [of Kentucky]” and held that:
Unless the release shows on its face that others not mentioned in the release are also
released or that the claimant has been fully compensated for all damages and the
release constitutes payment in satisfaction of all claims, the release shall not be
interpreted as providing a defense to a third party not expressly covered.
Id. at 9.
In Richardson, the plaintiff, a passenger in her daughter’s car, was injured in an automobile
collision that occurred on the premises of a shopping center. Id. at 8. The plaintiff signed a release
in favor of her daughter, but subsequently brought suit against the shopping center owner, alleging
that the owner negligently failed to maintain suitable traffic controls and warning devices on the
premises. Id. The release in Richardson operated to “release and forever discharge . . . [the
daughter] of and from all claims, damages, actions, causes of action, known or unknown, or suits
at law or in equity, of whatsoever kind or nature, for or because of any matter or thing done, omitted
or suffered to be done” by the daughter. Id. The Kentucky Supreme Court reversed the summary
judgment granted in favor of the defendant on the basis of the release. Id. at 9. The Richardson
court noted, on the one hand, that the release was not a general release; it neither specified that the
plaintiff had been fully compensated for her injury nor purported to operate in favor of other
unnamed persons. Id. at 8. On the other hand, the release did not expressly reserve the right to make
further claims against unnamed, potentially liable, parties. Id. Under the circumstances, the
Richardson court concluded that reversal and remand was warranted pursuant to the revised version
of § 885(1). Id. at 9.
-8-
No. 04-6057
Pennington v. American Telephone & Telegraph Co.
In 1988, the holding of Richardson was codified by the Kentucky General Assembly at KY .
REV . STAT . ANN § 411.182(4), which provides in pertinent part:
A release, covenant not to sue, or similar agreement entered into by a claimant and
a person liable, shall discharge that person from all liability for contribution, but it
shall not be considered to discharge any other persons liable upon the same claim
unless it so provides.
While the Estate and AT & T agree that the general rule in Richardson, as codified in
§ 411.182(4), governs this case, they disagree as to whether an alleged tortfeasor may be released
under that section when it is not specifically identified by name in the release. The Estate and
AT & T also disagree as to whether the intent of the releasor can be evidenced from the face of the
release alone or whether the intent of the releasor must be demonstrated through extrinsic evidence.
The Estate argues that the enactment of KY . REV . STAT . ANN § 411.182(4) demonstrates that
Kentucky has a strong presumption against the release of parties not identified in a release document.
However, § 411.182(4) does not specifically state that a party must be identified by name to be
covered by the release, and cases interpreting Richardson and the statute subsequent to its enactment
have not imposed such a requirement.
In Ellington v. Brown Bros., Inc., 940 F.2d 659, 1991 WL 153068 (6th Cir. 1991)
(unpublished table decision), this court addressed the effect of two identical releases executed in
Kentucky in settlement of a wrongful death action. The general releases discharged the named
tortfeasor, as well as “his heirs, executors, administrators, agents and assigns, and all other persons,
firms or corporations liable or, who might be claimed to be liable, none of whom admit any liability
to the undersigned. . . .” Ellington, 1991 WL 153068 at *1. The releases further provided that the
-9-
No. 04-6057
Pennington v. American Telephone & Telegraph Co.
terms of the settlement constituted “a full and final compromise adjustment and settlement of any
and all claims, disputed or otherwise, on account of the injuries and damages above mentioned, and
for the express purpose of precluding forever any further or additional claims arising out of the
aforesaid accident.” Id. This court, acknowledging § 411.182(4) and the Richardson decision,
affirmed summary judgment in favor of two parties sued by the plaintiff for wrongful death, but not
explicitly named or discharged by the releases. We stated:
We find the district court correctly interpreted KY . REV . STAT . ANN . § 411.182(4) to
be a codification of Richardson, and therefore hold that because the releases signed
by [the plaintiff] are on their face unambiguous as to the fact that she “has been fully
compensated for all damages and the release[s] constitute[] payment in satisfaction
of all claims,” under Kentucky law her claims are barred, Richardson, 660 S.W.2d
at 9, particularly in light of [the plaintiff’s] acknowledgment that the releases
discharged not only [the named tortfeasor], but “all other persons, firms, or
corporations [who are] liable or, who might be claimed to be liable. . . .” [The
plaintiff’s] attempt to introduce evidence as to the subjective intent of the parties
contradicts the unequivocal language of the releases and therefore is parole evidence
which cannot be considered.
Ellington, 1991 WL 153068 at *2.
In Conner v. Greathouse, 28 F.App’x 492 (6th Cir. 2002) (unpublished), this court again
applied Kentucky law in holding that a general release barred the plaintiff’s personal injury claims
against the defendant, not named in the release. In an abbreviated opinion, we affirmed judgment
in favor of the defendant, stating:
In this personal injury case brought as a result of an auto accident . . . the plaintiff
. . . signed a document entitled “Release of All Claims” acknowledging receipt of
$100,000 in exchange for releasing “all actions, claims and demands whatsoever, that
now exist, or may hereafter accrue” against three named parties and their “agents.”
The Release then continues and releases “any other person, corporation, association
or partnership charged with responsibility for injuries to the person and property” of
- 10 -
No. 04-6057
Pennington v. American Telephone & Telegraph Co.
the plaintiff arising from the accident. Six months later, plaintiff sued the defendant
in this case for his injuries arising from the same accident.
We agree with the District Court that the . . . release bars this action under Kentucky
law. Kentucky Revised Statutes 411.182(4) and Richardson . . . make it clear that
when such a release bars actions that may “now exist” or “hereafter accrue” against
named parties and “any other person . . . charged with responsibility” for the injury,
the release is not limited to the named parties.
Conner, 28 Fed. App’x at 493.
In the most recent decision on this topic, issued after the district court rendered its opinion
in the instant case, the Kentucky Court of Appeals, in Abney v. Nationwide Mut. Ins. Co., No. 2003-
CA-002013-MR, 2004 WL 2260323 (Ky. Ct. App., Oct. 8, 2004) (unpublished), review granted
(Aug. 17, 2005), held that the plaintiff’s execution of a general release concerning one driver
involved in an auto accident operated as a bar to a subsequent claim for damages against the
defendants, the owner and operator of the other vehicle. The release at issue discharged the named
tortfeasor and her insurance company, and “all other persons, firms or corporations liable, or who
might be claimed to be liable, of and from any and all actions, causes of action [and] claims” arising
out of the accident. Id. at *1. Despite the plaintiff’s claim of mutual mistake, the trial court granted
summary judgment in favor of the defendants, finding that any mistake was unilateral and, pursuant
to Richardson, the signing of the general release relieved the defendants from any liability to the
plaintiff. Id. The Kentucky Court of Appeals affirmed, stating:
We view this release as falling within the criteria established in [Richardson] as
clearly “show[ing] on its face that others not mentioned in the release are also
released. . . .” Contrary to appellant’s contention, nothing in the language of KRS
411.182(4) alters this result. The statute merely codifies [Richardson’s] requirement
that in order to discharge unnamed persons and entities from liability, the release
- 11 -
No. 04-6057
Pennington v. American Telephone & Telegraph Co.
must clearly evidence intent to do so. A review of the plain terms of the document
reveals that it fully comports with both the statutory and caselaw requirements
concerning discharge of unnamed parties. We are thus in complete agreement with
the trial court that appellant is bound by the terms of his agreement unless he can
demonstrate that its terms should be modified on the basis of mutual mistake [of
fact]. And, as specifically found by the trial court, appellant cannot meet that burden.
Id. at *2 (footnotes omitted).4
We are cognizant of the fact that the Kentucky Supreme Court has granted discretionary
review in Abney, which is currently pending before the court. However, the time frame for the
release of the court’s decision in that case and, obviously, the substance of that decision, is
uncertain.5 We therefore must predict how the court would rule by looking at all the available data,
including the decisions of the state appellate courts. Allstate Ins. Co., 249 F.3d at 454. Such
decisions should not be disregarded unless this court is presented with persuasive data that the state
supreme court would decide otherwise. Id. We review de novo the district court’s determinations
of state law. Rawe v. Liberty Mut. Fire Ins. Co., 462 F.3d 521, 526 (6th Cir. 2006) (citing Salve
Regina Coll. v. Russell, 499 U.S. 225, 231 (1991)).
4
One judge on the Abney panel dissented, maintaining that when read together, Richardson
and the statute clearly disfavor the conclusion that a general release executed as part of a settlement
with one party operates as a release of all liable parties, named or unnamed. Abney, 2004 WL
2260323 at *3. The judge “would go further, holding that a general release of one party can only
operate as a release of all parties if it names the parties being released or if it clearly explains the
extent of the rights being released.” Id. Because the release in question did not name the defendants
or specify that the settlement was in full satisfaction of any and all claims, the dissenting judge
opined that the release therefore did not operate to benefit the defendants.
5
We note that neither party in the instant case has sought certification to the Kentucky
Supreme Court.
- 12 -
No. 04-6057
Pennington v. American Telephone & Telegraph Co.
Here, the district court acknowledged that courts of other jurisdictions, when faced with the
present issue, have reached differing conclusions.6 The district court nonetheless concluded, based
on its review of available precedent, including Richardson, Conner, Ellington, and also KY . REV .
STAT . ANN . § 411.182(4), that Kentucky law does not require that a third party or other tortfeasor
actually be identified by name in a general release in order to be discharged from liability and that
the Estate’s Release effectively discharged AT & T:
[T]he two unreported Sixth Circuit decisions [Conner and Ellington] are the closest
reasoning on point, given that there has been no Kentucky Supreme Court decision
on this specific issue. The Estate has not pointed to any authority requiring that the
subjective intent of the contracting parties must be explored in the circumstances
here, where the particular excerpt of the release is not ambiguous. Therefore,
exploring any factual issues in this regard is unnecessary. Without any ambiguity,
the Court is restricted to looking to the four corners of the document only. The
language within those four corners provides for a release of “all other persons, firms
or corporations liable, or who might be claimed to be liable,” which would include
AT & T.
6
The district court took note of a relevant annotation surveying the case law on this issue
compiled by Anne M. Payne, Annotation, Release of One Joint Tortfeasor as Discharging Liability
of Others Under Uniform Contribution Among Tortfeasors Act and Other Statutes Expressly
Governing Effect of Release, 6 A.L.R. 5th 883 (1992). The annotation suggests that there are three
main schools of thought that have emerged in the courts regarding the scope of general releases: (1)
the “absolute” view, whereby the release of one joint tortfeasor constitutes a release of all; (2) the
“intent” rule, whereby a boilerplate discharge does not have the effect of automatically releasing
unnamed tortfeasors; instead, the release will be so interpreted only if and to the extent that the
parties so intended; and, (3) the “specific identity” approach, whereby the release of one tortfeasor
does not discharge other tortfeasors unless the latter are named in the release or are otherwise
specifically identifiable from the face of the instrument. See Moore v. Missouri Pac. R.R., 773
S.W.2d 78, 80 (Ark. 1989) (discussing these three views).
- 13 -
No. 04-6057
Pennington v. American Telephone & Telegraph Co.
We agree. As noted by the district court, Kentucky has adhered to a longstanding rule that
parol or extrinsic evidence of intent is not admissible unless an ambiguity is found in the document.
The Kentucky Supreme Court summarized this rule in Island Creek Coal Co. v. Wells, 113 S.W.3d
100, 104 (Ky. 2003):
[W]e must first determine whether the terms of the parties’ settlement agreement are
ambiguous because our resolution of the ambiguity question will dictate how our
interpretive analysis will proceed. If an ambiguity exists, “the court will gather, if
possible, the intention of the parties from the contract as a whole, and in doing so
will consider the subject matter of the contract, the situation of the parties and the
conditions under which the contract was written,” by examining extrinsic evidence
as to the parties’ intentions. However, “[i]n the absence of an ambiguity a written
instrument will be enforced strictly according to its terms,” and a court will interpret
the contract’s terms by assigning language its ordinary meaning and without resort
to extrinsic evidence.
113 S.W.3d at 104 (quoting Frear v. PTA Industries, Inc., 103 S.W.3d 99, 105-06 (Ky. 2003)).
Thus, “[a]bsent an ambiguity in the contract, the parties’ intentions must be discerned from
the four corners of the instrument without resort to extrinsic evidence.” Cantrell Supply, Inc. v.
Liberty Mut. Ins. Co., 94 S.W.3d 381, 385 (Ky. Ct. App. 2002). See also Ellington, 1991 WL
153068 at *2 (“[The plaintiff’s] attempt to introduce evidence as to the subjective intent of the
parties contradicts the unequivocal language of the releases and therefore is parole[sic] evidence
which cannot be considered”). “The criterion in determining the intention of the parties is not what
did the parties mean to say, but rather the criterion is what did the parties mean by what they said.
An ambiguous contract is one capable of more than one different, reasonable interpretation.”
Central Bank & Trust Co. v. Kincaid, 617 S.W.2d 32, 33 (Ky. 1981).
- 14 -
No. 04-6057
Pennington v. American Telephone & Telegraph Co.
Applying these principles, the district court appropriately rejected the Estate’s efforts to
require the consideration of extrinsic evidence of the parties’ intent in entering into the Release.7
Further, the court properly determined that the Release is, on its face, unambiguous and unequivocal
in its discharge of all claims, including those against AT & T.
Unlike the partial release in Richardson, which was limited to a specified person and did not
purport to operate in favor of other unnamed persons, the Release executed by the Estate is a general
“RELEASE OF ALL CLAIMS,” which by its express terms clearly and unequivocally releases the
Links and KFB, as well as “their heirs, executors, administrators, agents and assigns, and all other
persons, firms, or corporations liable, or who might be claimed to be liable” from all claims arising
7
As noted previously, Richardson directs the courts to consider what the release “shows on
its face” to determine whether a party is subject to the release. Richardson, 660 S.W.2d at 9. The
Estate maintains that Ohio Cas. Ins. Co. v. Ruschell, 834 S.W.2d 166 (Ky. 1992), modifies
Richardson and now requires that the intent of the parties be shown through extrinsic evidence. In
Ruschell, the Kentucky Supreme Court held that “a tort release will not release a no-fault claim
unless there is a specific designation of the no-fault claim in the tort release[.]” Id. at 169. The
Ruschell court took note of the Richardson decision, commenting upon the rule change with regard
to releases effected by Richardson and observing that “now a release of one does not discharge
others unless that intention is clearly expressed by the document and the circumstances in which it
was executed.” Id. at 168. The Estate seizes upon this language, arguing that the circumstances
surrounding the execution of a release must be examined before a determination can be made as to
whether the release discharges unnamed parties.
We agree with the district court, however, that when reviewed in the context of the rest of
the Ruschell decision, this language does not alter the holding in Richardson. The district court
pointed out that Ruschell addressed a different, narrow issue – whether a no-fault insurance claim
was barred by a release which addressed only tort claims – and thus is distinguishable because it
focused on the type of claim to be released rather than which parties were released, as was the case
in Richardson. Consequently, the Ruschell court’s commentary on Richardson was merely dicta
which did not modify the holding in Richardson.
- 15 -
No. 04-6057
Pennington v. American Telephone & Telegraph Co.
from the accident at issue. AT & T plainly falls within the category of “other persons, firms or
corporations liable, or who might be claimed to be liable” and thus is discharged from liability. We
agree with the district court that the Estate’s argument, that the language “other persons, firms or
corporations liable, or claimed to be liable” could be interpreted as a catch-all category covering any
entity connected with the Links or KFB, is not a reasonable interpretation of the Release, particularly
given the use of the word “and” preceding this phrase. Moreover, the Release cautions, in bold type,
that “THIS IS A RELEASE AND YOU ARE MAKING A FINAL SETTLEMENT. READ
CAREFULLY BEFORE SIGNING!!!!”
The district court aptly noted that the arguments posed by the Estate suggest not so much that
the language of the Release is ambiguous, but rather that it simply was not intended. “The fact that
one party may have intended different results, however, is insufficient to construe a contract at
variance with its plain and unambiguous terms.” Cantrell Supply, Inc., 94 S.W.3d at 385. See also
Abney, 2004 WL 2260323 at *2 (“[T]he fact that [the releasor] was under the mistaken impression
that the release did not affect his claim against the [defendant] flies in the face of the clear terms of
the agreement he signed and . . . represents a unilateral mistake of law,” which constitutes an
insufficient basis for reformation of the document to include terms contrary to the parties’
agreement).
Because the analogous general releases in Conner, Ellington, and now Abney, have been held
by the courts to effect the release of unnamed parties, the district court herein reasonably interpreted
existing precedent and did not err in granting summary judgment in favor of AT & T. The Release
- 16 -
No. 04-6057
Pennington v. American Telephone & Telegraph Co.
comports with the requirement of Richardson that a releasee be “expressly covered,” i.e., the release
must “show[] on its face that others not mentioned in the release are also released or that the
claimant has been fully compensated for all damages and the release constitutes payment in
satisfaction of all claims[.]” Richardson, 660 S.W.2d at 9. The Release likewise satisfies the
statutory mandate of KY . REV . STAT . ANN . § 411.182(4) that a release “shall not be considered to
discharge any other persons liable upon the same claim unless it so provides.” In so holding, we
reiterate that neither Richardson nor the statute expressly requires that a party must be identified by
name to be covered by the release. Although such a requirement could be judicially grafted onto
Richardson and the statute by the Kentucky Supreme Court, it has, to date, shown no inclination to
do so.
We therefore affirm the orders of the district court granting summary judgment in favor of
AT & T.
- 17 -