Cline v. Homuth

Filed 2/27/15 Certified for publication 3/30/15 (order attached)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Calaveras)
----
RONALD LEE CLINE, C073999
Plaintiff and Appellant, (Super. Ct. No. CV35615)
v.
BERNIECE DELORES HOMUTH,
Defendant and Respondent.
Plaintiff Ronald Lee Cline was severely injured when his motorcycle collided with
a turning car driven by a teenager with a provisional license. He settled with the driver
and the driver’s parents for their $100,000 insurance policy limit. Cline executed a
release that released the driver and his parents “and any other person, corporation,
association, or partnership responsible in any manner or degree” for the accident.
Cline subsequently sued defendant Berniece Delores Homuth, the driver’s
grandmother and the sole adult in the car with him at the time of the collision, for
negligent supervision. Homuth raised the release as an affirmative defense. She moved
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for summary judgment; the trial court denied the motion. A court trial followed,
centering on the validity of the release and whether Homuth was an intended third party
beneficiary of the release. Relying on Rodriguez v. Oto (2013) 212 Cal.App.4th 1020(Rodriguez), the trial court found the release “unambiguously expresses a mutual intent to
benefit a class of persons of which [Homuth] is a member” and that Homuth was entitled
to enforce it.
Cline appeals from the judgment in favor of Homuth. He contends the extrinsic
evidence demonstrates that Homuth is not an intended beneficiary of the release. As we
explain, Cline failed to provide sufficient evidence to counter Homuth’s showing that she
was an intended beneficiary of the release. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
The Accident
On April 9, 2007, Colby Homuth (Colby), who had a provisional driver’s license
requiring immediate supervision by an adult (Veh. Code, § 12814.6), was driving his
parents’ car on O’Byrnes Ferry Road. Homuth, his grandmother, was the sole passenger
in the car. As Colby turned left onto Pheasant Run Drive, Cline’s motorcycle approached
and struck the back of the car. The traffic collision report concluded Colby caused the
accident. Cline was severely injured, suffering numerous broken bones.
Settlement and Release
Colby’s parents, Wade and Leslie Homuth, had automobile insurance with
California State Automobile Association (CSAA). The policy’s limit for bodily injury
claims was $100,000 per person. Cline’s attorney, Gerald Emanuel, made a demand to
Angelo Rodriguez, CSAA’s claims representative, for the policy limit.
Rodriguez knew Cline’s medical expenses exceeded the policy limits and believed
payment of the policy limit was appropriate. On March 26, 2008, Cline signed a
settlement agreement with CSAA. The “Release of All Claims” was a printed form with
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blanks for the name of the party signing and the parties released, as well as the amount of
compensation and the date and location of the accident. The portions filled in were in all
capitals. The release stated in part: “To be executed by RONALD CLINE. The
undersigned do(es) hereby acknowledge acceptance of ONE HUNDRED THOUSAND
DOLLARS ($100,000.00) Payable to RONALD CLINE & GERALD E. EMANUEL AS
ATTORNEY AND MEDICARE which payment is accepted in full compromise
settlement and satisfaction of and as sole consideration for the final release and discharge
of all actions, claims and demands whatsoever, that now exist, or may hereafter accrue
against LESLIE & WADE HOMUTH; COLBY HOMUTH and any other person,
corporation, association or partnership responsible in any manner or degree for injuries to
the person and property of the undersigned, and the treatment thereof, and the
consequences flowing therefrom, as a result of an accident, casualty or event which
occurred on or about the 9TH day of APRIL 2007 at or near STR: O’BYRNES FAIRY
[sic] RD CITY, COUNTY: COPPEROPOLIS, CALAVERAS ST: CA and for which
the undersigned claims the above named persons or parties are legally liable in damages
which legal liability and damages are disputed and denied . . . .” Cline also waived the
provisions of Civil Code section 1542 relating to unknown claims.
The Lawsuit
Cline filed a lawsuit against Homuth for damages based on negligent supervision.
She moved for summary judgment, contending she was released from all claims by the
unambiguous “any other person” language of the release.
The trial court denied the motion, finding a triable issue of fact as to whether the
release was intended to benefit Homuth. The court found Cline had submitted evidence
showing he had no such intent. This evidence included declarations from Cline and his
attorney stating that he would not have signed the release if it had named Homuth as a
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releasee, that neither Cline nor his counsel intended to release Homuth, and that although
Homuth was known by the parties to the settlement, she was not named in the release.
Homuth moved to have the trial court determine the legal effect of the release.
The court granted that motion.
The Trial
Portions of Rodriguez’s deposition were admitted at trial, as he was unavailable.
Rodriguez testified he needed management approval to change the terms of the release; in
13 years working in claims, he had seen changes to the form only once or twice. He had
completed the blanks on the release form and chose to include only the named and
covered insureds, Wade, Leslie and Colby Homuth. He described the form release: “In
the context of the language that’s used in the industry we are releasing the world, if you
will.” He also described the language as “pretty self-explanatory.” Rodriguez explained
he did not consider adding Homuth’s name to the release because she was not a named or
covered insured. His duty was only to the insureds and he had authority to settle only as
to them. There was no discussion, negotiation, or consideration of an intention to release
others or to add Homuth’s name to the release. Rodriguez was aware that Homuth was in
the car at the time of the accident.
Emanuel--Cline’s attorney at the time of the release--testified that about 90
percent of the personal injury cases he handled were resolved by a release and dismissal.
He had altered the language of a release only when the numbers were wrong. There was
no written communication about excluding Homuth from the release and Emanuel never
told anyone representing Colby of the intent to exclude Homuth. Emanuel had no
experience in attempting to negotiate the language of a boilerplate release and he had
never heard of anyone negotiating a boilerplate release.
Emanuel testified he investigated a possible claim against the state or county for
the road construction and intended to investigate Homuth. He never expressed an
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intention to release Homuth, but Cline would not have signed the release if Homuth had
been named. Emanuel did not believe the boilerplate release applied to Homuth. He was
aware of her potential liability when the release was signed.
Cline testified he signed the release while on heavy medication and did not really
understand it. He intended to sue Homuth, the city, and the construction site. He had
discussed the release with a friend and believed he could still pursue others. He told his
attorney other people were responsible for the accident, and did not intend to release
those not named. He would not have signed the release if it had named Homuth. Cline
had no documents showing his intent to sue others.
Clinton Miller testified as an expert on insurance claims. He testified “almost
everything” in insurance companies is boilerplate, and that a claimant could not modify a
release; it was offered on a take-it-or-leave-it basis. Miller attempted to testify that the
industry standard was that only those persons specifically named in the release were
actually released, but the trial court sustained Homuth’s objections to this testimony.
The trial court, relying on Rodriguez, supra, 212 Cal.App.4th 1020, found the
language of the release “unambiguously expresses a mutual intent to benefit a class of
persons of which [Homuth] is a member”; thus Homuth was entitled to enforce the
release. The court granted Homuth’s motion to strike the parol evidence which was
admitted to show the intent of Cline, Emanuel and Rodriguez and entered judgment in
favor of Homuth.
DISCUSSION
I
The Law
A. Third Party Beneficiaries and Contract Interpretation
A release given in good faith to a tortfeasor does “not discharge any other such
party from liability unless its terms so provide.” (Code Civ. Proc., § 877, subd. (a).) To
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determine whether the “terms so provide,” we apply the rules governing contract
interpretation. (Hess v. Ford Motor Company (2002) 27 Cal.4th 516, 524 (Hess).)
A third party may enforce a contract that is expressly made for his benefit. (Civ.
Code, § 1559.) The third party need not be named in the contract, but he has the burden
to show the contracting parties intended to benefit him. (Garcia v. Truck Ins. Exchange
(1984) 36 Cal.3d 426, 436.) Determining this intent is a question of contract
interpretation. (Ibid.) “In determining the meaning of a written contract allegedly made,
in part, for the benefit of a third party, evidence of the circumstances and negotiations of
the parties in making the contract is both relevant and admissible. And, ‘[i]n the absence
of grounds for estoppel, the contracting parties should be allowed to testify as to their
actual intention . . . .’ [Citations.]” (Id. at p. 437.)
A contract must be interpreted to give effect to the mutual intention of the parties
at the time of contracting. (Civ. Code, § 1636.) The intention of the parties to a written
contract is to be determined from the writing alone, if possible; subject, however, to other
statutory rules of contract interpretation. (Id., § 1639.) These rules include the
following. “A contract may be explained by reference to the circumstances under which
it was made, and the matter to which it relates.” (Id., § 1647.) “However broad may be
the terms of a contract, it extends only to those things concerning which it appears that
the parties intended to contract.” (Id., § 1648.) The written provisions of the contract
prevail over printed portions. (Id., § 1651.)
“As has been recognized by our Supreme Court, it is often impossible for the
parties to be precise in expressing their intent in a written document. Therefore, even if
the trial court personally finds the document not to be ambiguous, it should preliminarily
consider all credible evidence to ascertain the intent of the parties. ‘The test of whether
parol evidence is admissible to construe an ambiguity is not whether the language
appears to the court to be unambiguous, but whether the evidence presented is relevant to
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prove a meaning to which the language is “reasonably susceptible.” ’ [Citation.]”
(Appleton v. Waessil (1994) 27 Cal.App.4th 551, 555 (Appleton).)
B. Third Party Beneficiaries of a General Release--Case Law
Many releases, such as the one involved here, are general releases and have broad
language purporting to release every person or entity. As Witkin has noted, “The courts
have differed regarding the effect of a general release.” (5 Witkin, Summary of Cal. Law
(10th ed. 2005) Torts, § 73, p. 146.)
In General Motors Corp. v. Superior Court (1993) 12 Cal.App.4th 435 (General
Motors), the release in a personal injury case following an automobile accident released
the other driver and “ ‘any and all person, firms and corporations, whether herein named
or referred to or not.’ ” (Id. at p. 439.) The court held the clear, unambiguous language
was sufficient to release General Motors, the manufacturer of the car, where there was no
competent evidence to suggest any other possible meaning of the language. (Id. at
p. 441.) The surrounding circumstances also supported the intention to release General
Motors as the parties were aware of a potential claim against the manufacturer and the
other driver had an incentive to release all other potential tortfeasors to “avoid being
dragged into any lawsuits.” (Id. at pp. 442-443.)
In another personal injury case arising from an automobile accident, a general
release applied to the driver’s employer. (Lama v. Comcast Cablevision (1993) 14
Cal.App.4th 59 (Lama).) The release stated it released the driver and the owner of the car
“ ‘and any other person, corporation, association or partnership charged with
responsibility for injuries to the person or property of the Undersigned . . . as a result of
the accident . . . .’ ” (Id. at p. 61.) After executing the release, plaintiff dismissed his
entire complaint with prejudice and subsequently, with new counsel, filed suit against the
employer of the other driver, alleging that driver was driving in the course and scope of
employment. (Id. at pp. 61-62.) Plaintiff’s first attorney had conducted no discovery as
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to whether the other driver was acting in the course and scope of employment and the
evidence showed the insurance company had no such knowledge. (Id. at pp. 62-63.) The
appellate court found any mistake as to the scope of the release was the unilateral mistake
of plaintiff’s first counsel; the insurance company intended to obtain a full release to
protect the insured. (Id. at p. 63.)
In Appleton, supra, 27 Cal.App.4th 551, plaintiff filed a personal injury action
against the other driver in the accident, the owner of the other car, and a broker who
allegedly arranged for the car to be loaned to an organization affiliated with the other
driver. The plaintiff settled with the owner and agreed to dismiss the broker, and signed a
general release in favor of the owner, the broker, and “ ‘all other persons, firms,
associations and corporations.’ ” (Id. at p. 554.) The trial court determined the
settlement was in good faith, and the plaintiff dismissed the owner and the broker from
the action. He then served the other driver, who successfully moved for summary
judgment based on the broad terms of the release. (Id. at pp. 553-554.) The appellate
court reversed, finding both General Motors and Lama distinguishable because the
plaintiff had advised the settling parties he intended to proceed against the driver, he did
not dismiss the entire action, and he provided extrinsic evidence to show there was no
intent to release the driver. (Appleton, supra, at pp. 556-557.)
The issue of the scope of a general release where an injured party settles with an
alleged tortfeasor’s insurer, signing a release that ostensibly releases everyone, and then
proceeds against another alleged tortfeasor who raises the general release as a defense
arose again in Neverkovec v. Fredericks (1999) 74 Cal.App.4th 337 (Neverkovec). The
Neverkovec court concluded “that principles of contract law governing the rights of third
party beneficiaries, and related rules of evidence, provide the best approach for resolving
such cases.” (Id. at p. 341.) Under the law of third party beneficiaries to a contract, the
third party had the burden of proving he was an intended beneficiary. “The circumstance
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that a literal contract interpretation would result in a benefit to the third party is not
enough to entitle that party to demand enforcement. The contracting party must have
intended to confer a benefit on the third party.” (Id. at p. 348.) “Because the court must
consider the circumstances of the contracting parties’ negotiations to determine whether a
third party not named in the release was an intended beneficiary, it will seldom be
sufficient for the third party simply to rely on a literal application of the terms of the
release.” (Id. at p. 349.) The court reversed summary judgment, finding Fredericks did
not bear his burden to show he was an intended beneficiary. It found that even if the
general release was sufficient to shift the burden, the extrinsic evidence before the court
created a triable issue regarding the parties’ intent to release Fredericks. (Id. at p. 344.)
Although the Neverkovec court spoke of extrinsic evidence, the major piece of
evidence that created a doubt as to the parties’ intention, and thus a triable issue of fact,
was another provision of the release. That provision required the plaintiff to repay any
amounts that anyone chargeable with liability for the plaintiff’s injuries might be
compelled to pay in the future. (Neverkovec, supra, 74 Cal.App.4th at p. 352.) The court
found this provision “curious” and that it created an ambiguity as to the parties’
intentions. “If the release was to be operative against anyone liable for [the plaintiff’s]
injuries, [the plaintiff] could not be expected to recover further amounts from which to
make repayments.” (Ibid.)
Our Supreme Court considered whether a general release with broad language
ostensibly releasing all potential tortfeasors bars the plaintiff’s claims against a tortfeasor
who was not a party to the release in Hess, supra, 27 Cal.4th 516. In Hess, the plaintiff
was riding in a Ford truck when the truck was struck by another driver; the truck rolled
over and Hess suffered serious injuries rendering him a paraplegic. In exchange for the
policy limit of $15,000, Hess signed a release that named the other driver, his insurance
company, the underwriters adjusting company, all agents, employees, successors “and all
9
other persons, firms, corporations, associations or partnerships” from all claims due to the
accident. Several months later, Hess sued Ford and others, who successfully sought
summary judgment based on the release. (Id. at p. 521; see also id. at pp. 520-521.) In a
separate lawsuit against the other driver and his insurer, Hess succeeded in reforming the
release to strike the “all other persons, firms, corporations, associations or partnerships”
language due to mutual mistake. He then moved for a new trial in his action against
Ford. The trial court denied the motion, but the Court of Appeal reversed, and a trial was
held. At that trial, Ford presented only the release as evidence. Hess presented testimony
that he, his first attorney, and the claims adjuster did not intend to release Ford; they had
discussed Hess’s intention to sue Ford; his attorney bought the truck to use as evidence in
a trial against Ford; and Hess would not have settled if the release had released Ford. (Id.
at pp. 521-522.) The jury returned a large verdict for Hess. (Id. at p. 523.)
The Hess court found Hess offered no reasonable alternative construction of the
broad language of the release and failed to allege any ambiguity so his only defense to
Ford’s claim was mutual mistake. (Hess, supra, 27 Cal.4th at p. 525.) The court found,
however, the uncontroverted extrinsic evidence established a mutual mistake as all the
parties to the release did not intend to release Ford. (Id. at pp. 526-527.) The court
further noted the language of the release was “hardly conclusive because it supports a
finding that the contracting parties did not intend to release Ford from liability.” (Id. at
p. 527.) The court noted the small settlement despite the severity of Hess’s injuries and
the failure to name Ford despite everyone’s awareness of Hess’s claims against Ford
arguably supported a finding that the contracting parties did not intend to release Ford.
(Ibid.) The court also found its conclusion was consistent with other cases. It noted the
lack of extrinsic evidence that the parties did not intend to release other tortfeasors in
General Motors and Lama, and the reversal of summary judgment for the defendant in
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Neverkovec and Appleton where there was such extrinsic evidence. (Hess, supra, at
pp. 529-530.)
Justice Kennard’s concurring opinion, joined by two other justices, offered a
different analysis, but reached the same result. It found that Ford failed to carry its
burden to show it was a third party beneficiary of the release. (Hess, supra, 27 Cal.4th at
p. 534, conc. opn. of Kennard, J.) “That burden cannot be discharged by sole reliance on
the literal reading of the language in the contract.” (Id. at p. 535.) The concurring
opinion did not rely solely on Ford’s failure to carry its burden. “Moreover, even if we
were to consider the release as evidence supporting Ford’s claim to be a third party
beneficiary, the properly admitted evidence overwhelmingly refutes its claim.” (Ibid.)
Although the same result was reached by either analysis in this case, the concurrence
noted that may not always be the case as the difference in whether the party claiming to
be a third party beneficiary or the party claiming a mutual mistake bears the burden of
proof “could be decisive in another case.” (Id. at p. 536.)
“[T]he question of how much evidence a defendant must present to establish a
right to summary judgment under a global release by the plaintiff of ‘all persons’ exposed
to liability for his personal injuries” was addressed again recently in Rodriquez, supra,
212 Cal.App.4th at page 1023, the case on which the trial court relied here. The
Rodriguez court disagreed with Neverkovec to the extent that Neverkovec (1) always
required consideration of the circumstances of the negotiations of parties to a general
release, and (2) held that a third party could not rely solely on the language of a general
release to carry its prima facie burden to show it was an intended third party beneficiary
of the general release. (Rodriguez, supra, 212 Cal.App.4th at p. 1030.) In so doing, the
Rodriguez court disagreed with portions of the Neverkovec opinion that were cited or
quoted with approval by our Supreme Court in Hess, supra, 27 Cal.4th at page 524. The
Rodriguez court, however, did not hold the “all persons” language of the general release
11
was always sufficient to establish an intent to benefit any third party. Rather, it held that
such language was sufficient to show a prima facie case and was sufficient to prevail “in
the absence of countervailing evidence.” (Rodriguez, supra, at p. 1027.) The only
evidence the plaintiff offered to counter the language of the release was “his own
subjective intent, and even that evidence was strikingly vague at best.” (Id. at p. 1034.)
The third party seeking to enforce the release was the employer of the other driver in the
accident. (Id. at p. 1025.) The court found the omission of the employer from the release
was probably because the insurance adjuster who prepared the release was unaware of the
employment relationship; further, the adjuster had an incentive to extend the release to
the employer because the employer had paid for the insurance. (Id. at p. 1035.)
As we have described ante, the cases vary as to their approach in determining the
scope of a general release and what evidence is necessary to obtain or defeat summary
judgment on the basis that the general release bars a claim against another tortfeasor. It is
consistently clear, however, that the law permits a plaintiff who opposes enforcement of a
general release by a third party to offer extrinsic evidence as to the circumstances
surrounding negotiation and signing of the release to attempt to show that releasing “any
other person,” meaning everyone, does not comport with the parties’ intent.1 Such
evidence was lacking in General Motors, Lama, and Rodriguez. Such evidence was
present in Appleton, Neverkovec (where the language of the release was ambiguous as
1 Here, after hearing all the extrinsic evidence, the trial court found the release was
unambiguous and granted Homuth’s motion to strike the extrinsic evidence. The trial
court nevertheless summarized this evidence in its decision. Therefore, we presume the
trial court determined Cline failed to present sufficient evidence to overcome Homuth’s
evidence that the parties intended the release to benefit Homuth as a member of the class
of “all other persons.” Because we conclude the trial court was correct in its ultimate
determination, we need not address Cline’s argument that it erred in striking the extrinsic
evidence.
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well), and Hess. The issue here is once Homuth presented evidence to show she was an
intended beneficiary of the release, whether Cline offered competent evidence of the
parties’ intent and, if so, whether this evidence was sufficient to show the parties to the
release did not intend to benefit Homuth, but rather to exclude her from the protection of
the release, despite its plain language which extended to the “world.”
II
Analysis
Unlike General Motors, Appleton, Neverkovec, and Rodriguez, this case comes to
us not after a motion for summary judgment, but after a court trial at which extrinsic
evidence was heard (although later “stricken”). Unlike in Rodriguez, Homuth did not
rely solely on the language of the release, but also offered excerpts of the deposition of
Rodriguez in which he stated he understood the release to cover “the world,” the
language was “self-explanatory,” and that there was no discussion, negotiation, or
consideration as to whether the release applied to Homuth. We need not take sides in the
dispute between the Rodriguez and Neverkovec courts (and the Hess majority and
concurring opinions) and decide whether the language of a general release is sufficient
alone to establish a prima facie case for enforcement of the release by a third party.
Here, as we explained ante, Homuth offered additional evidence which was properly
heard. Therefore, we consider it, in addition to the general release.
Cline contends the release itself was ambiguous as to both its temporal and
geographic scope. The release refers to any “accident, casualty or event which occurred
on or about the 9TH day of APRIL 2007 at or near STR: O’BYRNES FAIRY [sic] RD
CITY, COUNTY: COPPEROPOLIS, CALAVERAS ST: CA.” Cline contends the “on
or about” language makes the release uncertain as to whether it covers a subsequent act
of medical malpractice on Cline and using the name (misspelled) of the road rather than
the intersection at which the collision occurred makes the release uncertain. Whatever
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merit Cline’s argument may have as to the ambiguity of these particular portions of the
release is beside the point as neither portion is at issue here. Any uncertainty as to the
temporal or geographic scope of the release is immaterial as to the question before us--
whether the release applies to bar Cline’s action against Homuth. There is no dispute as
to what event--the accident at the intersection of O’Byrnes Ferry Road and Pheasant Run
Drive on April 9, 2007--triggered Homuth’s potential liability.
Cline contends the language of the release shows it was intended to affect the
liability of only those specifically named. After specifying the time and place of the
accident, the release states: “for which the undersigned claims the above named persons
or parties are legally liable in damages which legal liability and damages are disputed and
denied . . . .” Cline reads that language to mean the release covers only the named
parties. We disagree with Cline’s reading. This language merely provides additional
details about the covered event; it does not narrow or limit its coverage.
Cline contends the deposition testimony of Rodriguez as to releasing the world is
ambiguous and confusing because he conceded the release may not apply if an
ambulance taking Cline to the hospital was involved in an accident, because that event
would be a separate occurrence. Again, we disagree. Rodriguez’s concession that the
release may not apply to an accident involving the ambulance speaks to what events the
release covers, not what persons it covers.
Cline next contends the release is ambiguous because Homuth’s name was not
written directly into the form release with the other three members of her family. Relying
on Appleton, supra, 27 Cal.App.4th 551, Cline argues Homuth was known to both parties
and she was not “just a peripheral actor,” so that she was not named created an apparent
ambiguity. In Appleton, however, the unnamed tortfeasor was a named party defendant
in the personal injury action and the cause of the accident; thus plaintiff’s intent to pursue
him for damages was known to all parties to the release. (Id. at p. 555.) Here, although
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Rodriguez knew Homuth was in the car, there was no evidence he knew Cline considered
her a potential defendant at the time of the release’s preparation. Emanuel never
communicated his intent to exclude Homuth from the release.
Cline points to Rodriguez’s testimony that Homuth was not named in the release
because he had a duty to protect only named and covered insureds. Cline interprets this
testimony as showing that Rodriguez intended to release only Colby, Wade and Leslie
Homuth. Rodriguez, however, also testified he understood the “pretty self-explanatory”
language of the release to cover “the world.” Rodriguez’s deposition testimony
established that he was concerned only about releasing Colby and his parents, but it does
not show he intended Homuth to be excluded from the broad coverage of the release,
merely that he intended the three persons he did name to be included.
Cline also relies on the disparity between the amount of the settlement, $100,000,
and the amount of his damages. In Hess, our Supreme Court opined a small settlement of
$15,000 for an accident that rendered Hess a paraplegic arguably suggested the release
was not intended to cover Ford. (Hess, supra, 27 Cal.4th at p. 527.) Cline claims his
medical expenses were over $1 million, but he offered no evidence to support this
assertion. His attorney testified the potential value of Cline’s pain and suffering was in
seven figures. This factor was not as strong as in Hess, where the settlement was much
smaller and the potential defendant (Ford) was a large corporation. Here, the settlement
was not insignificant; it was sufficient to extinguish the Medicare lien. Given the
absence of any evidence Rodriguez intended to exclude Homuth from the release, the
claimed difference between the settlement and the amount of Cline’s damages does not
trump the broad language of the release.
The remaining evidence that Cline offers is his testimony and that of his attorney
that they did not intend to release Homuth and that Cline would not have signed the
release had he understood it to release her. Neither Cline nor his attorney, however,
15
disclosed their subjective intent regarding Homuth and the scope of the release to
Rodriguez or anyone else representing Colby or otherwise involved in the release. This
evidence of undisclosed subjective intent of Cline and his attorney is insufficient to
establish that the parties intended that Homuth be excluded from the release.
In Neverkovec, supra, 74 Cal.App.4th 337, in opposition to a summary judgment
motion, the plaintiff offered declarations as to the intentions of the parties to the release.
She understood the release to apply only to named parties, counsel declared an intention
to proceed against an unnamed party, and the insurer’s representative declared the
settlements were intended to settle all claims against the named parties. The appellate
court held that statements revealing only the declarants’ undisclosed intent would be
insufficient alone to establish a triable issue as to the intent to release third parties. (Id. at
p. 353.) In Neverkovec, however, there was additional evidence, especially the ambiguity
of the release itself which included the “curious” repayment provision, sufficient to create
a triable issue of material fact. (Ibid.) In Rodriguez, supra, 212 Cal.App.4th at
page 1035, the court found the failure to name a known third party in the release and
deposition testimony about the plaintiff’s subjective understanding of the release were
insufficient to raise a triable issue of fact about the mutual intention of the parties. Here,
Cline needed to do more than merely raise a triable issue of fact; he had to overcome
Homuth’s evidence that the parties intended the release to benefit Homuth as a member
of the class of “all other persons.” He has failed to do so.
In the alternative, Cline argues there was a mutual mistake as to the scope of the
release, as in Hess. As we have explained, Cline has failed to show a mistake on the part
of Rodriguez, CSAA, or Colby and his parents. The only mistake Cline has shown is the
unilateral mistake of Cline and his attorney. Since that mistake was neither known nor
suspected by the other parties to the release, it is insufficient to obtain reformation of a
16
contract. (Civ. Code, § 3399; Cedars-Sinai Medical Center v. Shewry (2006) 137
Cal.App.4th 964, 985.)
DISPOSITION
The judgment is affirmed. Homuth shall recover costs on appeal. (Cal. Rules of
Court, rule 8.278(a)(1), (2).)
DUARTE , J.
We concur:
NICHOLSON , Acting P. J.
HOCH , J.
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DUARTE, J., Concurring.
Although unnecessary to our disposition here, I feel compelled to echo the
concerns expressed by my colleagues in other districts regarding the use of “overly broad,
loose terms in release agreements.” (Neverkovec v. Fredericks (1999) 74 Cal.App.4th
337, 354, quoted in Hess v. Ford Motor Company (2002) 27 Cal.4th 516, 530.)
The widespread use of global “all other persons” releases raises policy concerns as
to fairness. (Rodriguez v. Oto (2013) 212 Cal.App.4th 1020, 1031.) As we see here, the
language of the release may not be given much attention; by signing, a plaintiff (such as
Cline) may give up rights he did not mean to give up, with resulting unfortunate
consequences. “A stranger to the release may receive a windfall, i.e., an excuse from
liability the law would otherwise require him to bear; the plaintiff may be deprived of a
recovery to which he would otherwise be entitled, and which is necessary to make him
whole; and this loss in turn may force the plaintiff to pursue--and the courts to entertain--
the less certain and more burdensome remedy of a malpractice action against the
attorney.” (Id. at p. 1032.)
As others have written, counsel should “study the language of the release carefully
to ascertain whether it may impair claims the plaintiff should reserve for further
prosecution” (Rodriguez v. Oto, supra, 212 Cal.App.4th at p. 1032) and “advise their
clients not to sign releases that appear to bar claims the client does not intend to give up.”
(Neverkovec v. Fredericks, supra, 74 Cal.App.4th at p. 355.)
DUARTE , J.
1
Filed 3/30/15
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Calaveras)
----
RONALD LEE CLINE, C073999
Plaintiff and Appellant, (Super. Ct. No. CV35615)
v. ORDER CERTIFYING
OPINION FOR
BERNIECE DELORES HOMUTH, PUBLICATION
Defendant and Respondent.
THE COURT:
The opinion in the above-entitled matter filed February 27, 2015, was not certified
for publication in the Official Reports. For good cause it appears now that the opinion
should be published in the Official Reports and it is so ordered.
BY THE COURT:
NICHOLSON , Acting P. J.
DUARTE , J.
HOCH , J.
1
EDITORIAL LISTING
APPEAL from a judgment of the Superior Court of Calaveras County, Thomas A.
Smith, Judge. Affirmed.
Hinkle, Jachimowicz, Pointer & Emanuel and Joel P. Waelty for Plaintiff and
Appellant.
Mayall Hurley, Vladimir F. Kozina, and Jenny D. Dennis for Defendant and
Respondent.
2