Gores v. Miller

#27438, #27446-a-SLZ
2016 S.D. 9IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
****
DAWN GORES, individually and
as conservator of HALEY GORES,
and HALEY GORES individually, Plaintiffs and Appellants,
v.
LISA A. MILLER, M.D., and YANKTON
SURGICAL ASSOCIATES, P.C., Defendants and Appellees.
****
APPEAL FROM THE CIRCUIT COURT OF
THE FIRST JUDICIAL CIRCUIT
YANKTON COUNTY, SOUTH DAKOTA
****
THE HONORABLE CHERYLE W. GERING
Judge
****
TIMOTHY L. JAMES of
James & Larson Law
Yankton, South Dakota
and
DAN RASMUS of
Hovland & Rasmus, PLLC
Edina, Minnesota Attorneys for plaintiffs
and appellants.
MELISSA C. HINTON of
Evans Haigh & Hinton LLP
Sioux Falls, South Dakota Attorneys for defendants
and appellees.
****
CONSIDERED ON BRIEFS
ON NOVEMBER 30, 2015
OPINION FILED 02/03/16
#27438, #27446
ZINTER, Justice
[¶1.] A minor child sustained physical injuries in an auto accident. The
minor and her parent–conservator signed a general release in exchange for a
settlement with the driver, insured, and insurer of the auto. The release did not
specifically name the treating physician or clinic, but it released all other claims
that might develop from the accident. The minor and her parent subsequently filed
a malpractice suit against the clinic and the physician who treated the injuries the
minor sustained in the accident. The circuit court ruled that the release discharged
the malpractice claims, and the court granted summary judgment in favor of the
medical providers. The parent and minor appeal. We affirm.
Facts and Procedural History
[¶2.] On July 28, 2010, fifteen-year-old Haley Gores was a passenger in a
van driven by Steven Smith. Smith lost control of the van, and Haley suffered
lacerations to her right arm. Dr. Lisa Miller debrided Haley’s wounds at the
hospital. The next day, Dr. Miller performed an excisional debridement and closed
the lacerations. On August 13, Dr. Miller performed a second excisional
debridement. Haley continued to see Dr. Miller for her care until October 21, 2010,
when Dr. Miller determined that Haley’s arm had completely healed. Haley’s last
contact with Dr. Miller was in December 2010.
[¶3.] In March 2011, a court appointed Haley’s mother, Dawn Gores, as
Haley’s conservator for the purpose of prosecuting and settling claims arising from
the accident. In April 2011, Dawn asked the conservator court to approve a
settlement with Smith’s insurer for the policy limit of $25,000 in exchange for Dawn
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and Haley’s general release. 1 The conservator court approved the settlement, and
Dawn and Haley (Appellants) executed the release. 2
[¶4.] In April 2013, Haley and Dawn (in her individual capacity and as
Haley’s conservator) sued Dr. Miller and Yankton Surgical Associates (YSA), Dr.
Miller’s practice group. Appellants claimed that Haley received substandard
medical care for the arm injury Haley suffered in the auto accident. More
specifically, they alleged that Haley would have healed faster and required less
treatment if Dr. Miller had done a skin graft and properly instructed Haley on how
to dress her wounds.
[¶5.] Dr. Miller and YSA moved for summary judgment, contending that the
release discharged Appellants’ claims against them. Appellants moved for
additional time to conduct discovery to ascertain the intent of the parties to the
release, including the intent of the judge who approved the settlement. The
discovery motion was denied. The court determined that Appellants signed a
general release that was unambiguous. The court further determined that because
the release was unambiguous, the release expressed the intent of the parties.
Based on the language of the release, the court concluded that the malpractice
claims were discharged as a matter of contract, and the court granted summary
judgment in favor of Dr. Miller and YSA.
1. Steven Smith was insured under his mother’s policy.
2. The court also approved a settlement with Appellants’ insurance company for
its $100,000-underinsured-motorist limit, less the liability limit paid by
Smith’s carrier.
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[¶6.] Appellants raise four issues on appeal: (1) whether the release was
intended to discharge Appellants’ claims against Dr. Miller and YSA; (2) whether
Dr. Miller and YSA were “independent tortfeasors,” who were beyond the scope of
the release; (3) whether the circuit court should have allowed additional time for
discovery to ascertain the intent of the parties; and (4) whether res judicata barred
the release defense.
Decision
[¶7.] In their first issue, Appellants argue that the release was not intended
to discharge the claims against Dr. Miller and YSA. Appellants point out that the
release did not mention Dr. Miller and YSA and that Appellants were not fully
compensated through the settlement. In their second issue, Appellants argue that
the release did not apply to the medical providers because they were “independent
tortfeasors” who caused injuries in addition to those caused by Smith. Because the
scope of the release often controls the questions raised in these issues, the first two
issues are discussed together.
[¶8.] A release is a contract, and if a contract is unambiguous, we rely on
the language of the contract to ascertain and give effect to the parties’ intent.
Fenske Media Corp. v. Banta Corp., 2004 S.D. 23, ¶ 8, 676 N.W.2d 390, 393. If the
language is unambiguous, neither the releasor’s subjective intent nor the failure to
obtain full satisfaction in the settlement governs: the terms of the release control.
Flynn v. Lockhart, 526 N.W.2d 743, 746 (S.D. 1995); see also Aggregate Constr., Inc.
v. Aaron Swan & Assocs., Inc., 2015 S.D. 79, ¶ 13, 871 N.W.2d 508, 512 (concluding
that broad language of a release controlled even though the defendants were
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different entities subject to different claims). Contract interpretation is a legal
question we review de novo. Tri-City Assocs., L.P. v. Belmont, Inc., 2014 S.D. 23,
¶ 9, 845 N.W.2d 911, 915.
[¶9.] The release in this case provided in relevant part:
[T]he undersigned hereby releases, and forever discharges Lori
Smith and her heirs, executors, administrators, agents, insurers,
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 but all expressly deny any liability,
from any and all claims, demands, damages, actions, causes of
action or suits of any kind or nature whatsoever, and particularly
on account of all injuries, known and unknown, both to person
and property, which have resulted or may in the future develop
from an incident which occurred on or about the 28th Day of
July, 2010, at or near Springfield, South Dakota . . . .
The undersigned hereby represents that the terms of this
settlement have been completely read and are fully understood
and voluntarily accepted for the purpose of making 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 . . . .
(Emphasis added.)
[¶10.] This language is broad and unambiguous. Under it, Appellants
released all “additional claims” of “any kind or nature whatsoever” against “all
other persons” for “all injuries” that had or might “result from,” “develop” from, or
“arise out of” the accident. Applying this language, we note that Dr. Miller treated
Haley for the injuries she sustained in the accident, and the damages Appellants
seek from this malpractice claim are for a suboptimal recovery from those same
injuries. Because the alleged malpractice damages developed from the injuries
Haley sustained in the accident, the language of the release covers the malpractice
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claim. We have previously held that this type of broad language in general releases
discharges additional claims against third parties not named. See Aggregate
Constr. Inc., 2015 S.D. 79, ¶ 13, 871 N.W.2d at 512; Flynn, 526 N.W.2d at 746. 3
[¶11.] Appellants, however, contend that the release does not apply because
the medical providers were “independent tortfeasors” who caused injuries separate
and distinct from those inflicted by the auto accident. This contention fails to
acknowledge that in actions for malpractice involving treatment of an injury caused
by a prior wrongdoer, the act of the prior wrongdoer is a legal cause of the damages
flowing from subsequent, negligent medical treatment. See Restatement (Second) of
Torts § 457 (Am. Law Inst. 1965)4; W. Page Keeton et al., Prosser & Keeton on the
3. Appellants argue that Flynn is inapplicable because they contend that unlike
Flynn, the release in this case does not specifically exonerate Dr. Miller and
YSA. See Flynn, 526 N.W.2d at 746. Appellants also point out that the
release in this case did not provide for the discharge of joint tortfeasors. Id.
We agree that Flynn involved the specific exoneration of another “joint
tortfeasor.” We stated that if a release specifically provides for a release of
other unnamed joint tortfeasors, the unnamed joint tortfeasor is released. Id.
We reasoned that the release in that case specifically applied to joint
tortfeasors, the defendant was an unnamed joint tortfeasor, and therefore the
contractual language of the release provided for the discharge of the
unnamed tortfeasor. Id.; SDCL 15-8-17. Our reasoning was based on the
language of the contract that included the release of other identifiable claims.
That reasoning is applicable in the threshold question involving the scope of
Appellants’ release whether the case involves joint tortfeasors or any other
identifiable claims.
4. A Restatement illustration demonstrates the rule:
A’s negligence causes B serious harm. B is taken to a hospital.
The surgeon improperly diagnoses his case and performs an
unnecessary operation, or, after proper diagnosis, performs a
necessary operation carelessly. A’s negligence is a legal cause of
the additional harm which B sustains.
Restatement (Second) of Torts § 457 illus. 1.
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Law of Torts § 47, at 309 (5th ed. 1984). Therefore, even if Dr. Miller and YSA are
“independent tortfeasors” who caused distinct injuries—a question we do not decide
in this case—the law regards all of these injuries as causally related to the accident
See Restatement (Second) of Torts § 457 cmt. a. 5 Because Smith is responsible for
both injuries as a matter of law, 6 Appellants have no argument that their claim
against Dr. Miller and YSA is not causally related to the auto accident. This result
is contemplated in such releases. As we have previously noted, “the defendant who
originally procures the release gains nothing if the plaintiff can [still] sue other joint
or concurrent tortfeasors. In such a case, the original defendant is left open to
claims for contribution and/or indemnity and may wind up having to litigate the
case anyway.” Flynn, 526 N.W.2d at 746. And that is what would happen in this
5. The comment provides:
The situation to which the rule stated in this Section is usually
applicable is where the actor’s negligence is the legal cause of
bodily harm for which, even if nothing more were suffered, the
other could recover damages. These injuries require the other to
submit to medical, surgical, and hospital services. The services
are so rendered as to increase the harm or even to cause harm
which is entirely different from that which the other had
previously sustained. In such a case, the damages assessable
against the actor include not only the injury originally caused by
the actor’s negligence but also the harm resulting from the
manner in which the medical, surgical, or hospital services are
rendered, irrespective of whether they are rendered in a
mistaken or negligent manner, so long as the mistake or
negligence is of the sort which is recognized as one of the risks
which is inherent in the human fallibility of those who render
such services.
Restatement (Second) of Torts § 457 cmt. a (emphasis added).
6. Because causation is established as a matter of law, we need not address
Appellants’ argument that the joint-versus-independent-tortfeasor distinction
is a question of fact for the jury.
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case. Although Smith obtained a full release, he would wind up having to litigate
the accident and defend a contribution and indemnity claim by Dr. Miller and YSA.
[¶12.] Appellants released all persons from all claims that developed from the
accident. Because Haley’s malpractice damages developed from the injuries
sustained in the auto accident, we conclude that the release applied to the
suboptimal recovery allegedly caused by the medical treatment of the accident
injuries. The circuit court correctly determined that the release barred Appellants’
claims as a matter of contract. In light of our interpretation of the contract,
Appellants’ other arguments need not be addressed. 7
7. Appellants’ authorities from other jurisdictions are inapposite. In Posey v.
Medical Center–West, Inc., 354 S.E.2d 417 (Ga. 1987), the Georgia Supreme
Court held that the liability of two doctors and a hospital was not discharged
by a release signed by the parents of a child struck by an automobile. Id.
at 417. But in Georgia, unlike South Dakota, only the parties named in a
release are discharged. See Lackey v. McDowell, 415 S.E.2d 902, 902 (Ga.
1992) (clarifying the decision in Posey). In Galloway v. Lawrence, 139 S.E.2d
761 (N.C. 1965), the court applied a stricter interpretation of North
Carolina’s joint-contribution-nonrelease rule. Id. at 763. Contra Flynn, 526
N.W.2d at 746. In Neves v. Potter, 769 P.2d 1047, 1054 (Colo. 1989) (en banc),
and Williams v. Physicians & Surgeons Community Hospital, Inc., 292 S.E.2d
705, 707 (Ga. 1982), parol evidence was admitted to show the signatories’
intent because in those jurisdictions such evidence may be used when
nonparties to a release claim coverage. Likewise, in Pennington v. Bluefield
Orthopedics, P.C., 419 S.E.2d 8, 12, 14 (W. Va. 1992), the court allowed parol
evidence to ascertain the parties’ intent in a settlement release that named
only the original tortfeasor. However, South Dakota does not permit parol
evidence in unambiguous releases. See Flynn, 526 N.W.2d at 746
(disallowing extrinsic evidence to contradict an unambiguous release).
Finally, Ash v. Mortensen, 150 P.2d 876 (Cal. 1944), involved a release that
was executed following a prior action that had proceeded to judgment. Id.
at 877. Further, the analysis in Ash suggests that the language of that
release only purported to release the negligent driver. Therefore, the issue in
that case involved the rules of “full compensation or satisfaction” rather than
the contractual scope of the release. Id. at 879.
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[¶13.] In their third issue, Appellants argue that the circuit court erred in
denying their motion for a continuance to conduct additional discovery before ruling
on the motion for summary judgment. The circuit court concluded that the
language of the release was unambiguous and, therefore, that there were no
additional facts regarding the parties’ intent that were essential to discover in
opposition to the motion for summary judgment. We agree.
[¶14.] SDCL 15-6-56(f) authorizes a court to order a continuance to permit a
party opposing summary judgment to conduct discovery when necessary to oppose
the motion. Dakota Indus., Inc. v. Cabela’s.com, Inc., 2009 S.D. 39, ¶ 6, 766 N.W.2d
510, 512. Under the rule, “the facts sought through discovery must be essential to
opposing the summary judgment[.]” Id.; SDCL 15-6-56(f). “A circuit court’s refusal
to grant additional discovery prior to awarding summary judgment is reviewed for
abuse of discretion.” Stern Oil Co. v. Border States Paving, Inc., 2014 S.D. 28, ¶ 24,
848 N.W.2d 273, 281.
[¶15.] Appellants sought additional time to depose Smith, Dawn, and the
judge who approved the release in the conservatorship. Appellants sought to
discover those individuals’ subjective intent regarding who and what claims were to
be released. However, as already explained, this is a case of contract
interpretation—a question of law that is based on the language used in the contract
rather than the parties’ subjective belief. Fenske Media Corp., 2004 S.D. 23, ¶ 8,
676 N.W.2d at 393; see also Flynn, 526 N.W.2d at 746 (rejecting a claim that the
releasor was misled by her attorney where the language of the release was
unambiguous—the language of the release controlled). Therefore, the additional
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facts regarding subjective intent were not essential to resist the motion for
summary judgment. “If the contract is plain and unambiguous[,] extrinsic evidence
is not considered because the intent of the parties can be derived from within the
four corners of the contract.” Kernelburner, L.L.C. v. MitchHart Mfg., Inc., 2009
S.D. 33, ¶ 7, 765 N.W.2d 740, 742. The circuit court did not abuse its discretion in
denying Appellants’ request for time to conduct additional discovery.
[¶16.] In their fourth issue, Appellants argue that the conservator court
determined the release was only a partial release. Appellants point out that a court
approving a minor’s settlement is required to tend to the minor’s best interest.
Accordingly, Appellants contend that we must assume the conservator court
determined that the release did not apply to future claims. Appellants further
contend that the conservator court’s future claim determination is res judicata,
precluding the assertion of a release defense in this action.
[¶17.] This argument is speculative at best. Courts routinely approve broad,
general releases in settlements not involving full compensation for all injuries
sustained. Furthermore, the language of this release leaves no room for future
claims. Finally, the circuit court noted that the conservator did not inform the
conservator court that the money recovered in this settlement and the settlement
with the underinsured carrier was not sufficient to fully compensate Appellants or
that other defendants may have liability. Under these facts, we will not assume
that there was a prior judicial determination barring a release defense.
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[¶18.] We affirm the circuit court’s grant of summary judgment. Because we
affirm on that issue, we do not address Dr. Miller and YSA’s statute-of-limitations
issue raised by notice of review.
[¶19.] GILBERTSON, Chief Justice, and SEVERSON, WILBUR, and KERN,
Justices, concur.
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