Jeanne Hawkins And Julie Wilson v. Empres Healthcare Mgmt, Llc.
193 Wash. App. 84
Wash. Ct. App.2016Background
- In 2007 Hawkins was treated at Talbot Center after surgery; lab results showed critically high vancomycin and gentamycin levels, but Talbot continued antibiotics and Hawkins suffered acute renal failure and permanent impairment.
- Hawkins sued Talbot in 2008 alleging negligence and related claims; during discovery Talbot represented it had provided complete medical records to Hawkins (via her daughter) and did not disclose any falsification.
- Hawkins settled with Talbot in 2010 and signed a Release that discharged claims "arising out of the facts" of her complaint and "involve" her diagnoses, care, and treatment; the Release also contained a no-reliance clause.
- While suing Dr. Chen later, parties discovered Talbot had produced altered medical records: original records contained physician instructions to stop antibiotics and push fluids, while records given to Hawkins bore an "O.K. John Chen" notation that forensic analysis indicated was mechanically pasted.
- Hawkins sued Talbot for fraud and misrepresentation based on the falsified records and sought rescission of the Release; the trial court dismissed her claims as barred by the Release and dismissed her declaratory relief claim as barred by res judicata.
- The Court of Appeals reversed dismissal of the fraud claims (holding the Release did not bar fraudulent inducement claims) and affirmed dismissal of the declaratory relief claim because rescission is an adequate remedy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Release bars Hawkins's fraud/fraudulent inducement claims | Release did not cover independent fraud in inducing the release or falsification of records; no explicit waiver of fraud | Release language broadly releases all claims arising out of the underlying facts and thus bars subsequent fraud claims | Release does not bar fraudulent inducement claims; ambiguous/general language construed not to cover fraud absent clear, affirmative language |
| Whether the no-reliance clause defeats Hawkins's right to rely and her fraud pleading | No-reliance clause does not expressly cover inducement by fraud; if rescission pleaded, release terms may be void | No-reliance clause and settlement procedures negate reliance as a matter of law | No-reliance clause does not categorically bar fraud claims here; reliance and reasonableness generally questions of fact, may be decided as law only in clear cases |
| Whether Hawkins abandoned her rescission claim on appeal | Hawkins preserved rescission request in complaint and assigned error to dismissal | Talbot argued abandonment for failure to brief | Court found rescission issue was not decided below and thus not abandoned on appeal |
| Whether declaratory relief is barred by res judicata / is appropriate | Hawkins sought declaration Release does not bar refiling of underlying claims | Trial court: res judicata bars declaratory relief because rescission is adequate remedy | Declaratory relief dismissal affirmed; rescission is adequate alternative remedy |
Key Cases Cited
- Matsuura v. Alston & Bird, 166 F.3d 1006 (9th Cir. 1999) (refused to read general release to bar fraudulent-inducement claims absent clear, specific language; emphasized policy favoring settlement honesty)
- Kobatake v. E.I. DuPont De Nemours & Co., 162 F.3d 619 (11th Cir. 1998) (interpreted broad release to bar later fraud claims; discussed rescission requirement—return of consideration)
- Dresden v. Detroit Macomb Hosp. Corp., 553 N.W.2d 387 (Mich. Ct. App. 1996) (upheld broad release language to bar subsequent fraud claim concerning missing X-ray evidence)
- Kwiatkowski v. Drews, 142 Wn. App. 463 (Wash. Ct. App. 2008) (explained how specific no-reliance clauses and settlement circumstances can preclude fraud claims as a matter of law)
- Trujillo v. Nw. Tr. Servs., 183 Wn.2d 820 (Wash. 2015) (standard for reviewing CR 12(b)(6) dismissals)