Lead Opinion
In this matter, which is at the summary judgment phase, we are called upon to decide whether a settlement which purports to release "all other persons, firms, or corporations who are or might be liable" applies to defendants who were not direct parties to the settlement. For the reasons that follow, we find that the defendants are not entitled to summary judgment, reverse the opinion of the court of appeal, and remand for further proceedings.
FACTS AND PROCEDURAL HISTORY
The pertinent facts of this case are largely undisputed. On January 14, 2015, plaintiff Kerry Maggio was injured in an automobile accident when his vehicle was struck by a vehicle operated by James Parker, an employee of The Sandwich Kings, LLC d/b/a Jimmy Johns ("Sandwich Kings"). The vehicle operated by Mr. Parker was owned by Brenda Parker and insured by Louisiana Farm Bureau ("Farm Bureau").
On June 19, 2015, plaintiff filed a petition for damages naming as defendants: Mr. Parker; Sandwich Kings, Mr. Parker's employer, contending that Mr. Parker was *877in the course and scope of his employment at the time of the accident; Republic-Vanguard, Sandwich King's automobile insurer; and Metropolitan Property Casualty Insurance Company, plaintiff's uninsured motorist insurer. Notably, plaintiff did not name Brenda Parker or Farm Bureau as defendants.
Less than one month later, on July 6, 2015, plaintiff entered into a "Final Release and Settlement of Claim" ("Release") with Brenda Parker and Farm Bureau. In exchange for Farm Bureau's $25,000 policy limits, plaintiff executed a release agreement which provides as follows:
FOR AND IN CONSIDERATION of the payment of $25,000.00 to me/us in hand paid by Louisiana Farm Bureau Casualty Insurance Company and Brenda Parker hereinafter called payor(s), the receipt of which is hereby acknowledged, I/we Kerry Maggio address 2148 Cherokee St # B, Baton Rouge LA 70806-6605, being of lawful age, do hereby release, acquit and forever discharge the said payor(s), their agents and employees, and all other persons, firms or corporations who are or might be liable , from any and all actions, causes of action, claims, demands, damages, costs, loss of services, loss of consortium, expenses, and compensation on account of or in any way growing out of any and all known and unknown personal injuries and property damage, resulting or to result from an accident that occurred on or about 01/14/2015 by reason of an automobile accident including any other claims that I/we may have which arose at the time of or prior to such accident, and do hereby for myself (or ourselves) heirs, executors, administrators, successors and assigns, covenant with the said payor(s), their agents and employees, and all other persons, firms or corporations which are or may be liable to indemnify and save them harmless from all claims and demands, costs, loss of services, loss of consortium, expenses and compensation on account of or in any wise growing out of said accident or its results, known and unknown, or prior claims, both to persons and property.
I/we know and understand that the injuries sustained may be permanent and progressive and recovery therefrom is uncertain and indefinite and there may be injuries or results of injuries not yet evident, recognized or known and in making this release, I/we rely wholly upon my/our judgment, knowledge and belief as to the nature, extent and duration of said injuries and as to the questions of liability involved and have not been influenced by any representations regarding the same; that the claims are doubtful and disputed and the above consideration is accepted in full compromise, accord and satisfaction thereof, and the payment of said consideration is not an admission of liability.
I have read this Release or had it read to me and I understand it.
(Emphasis added.)
After obtaining a copy of the release, on March 30, 2016, Sandwich Kings and Republic-Vanguard ("defendants") filed a motion for summary judgment contending that they were entitled to dismissal based upon the July 6, 2015 Release. According to defendants, because the Release released "all other persons ... who are or might be liable" for the injuries plaintiff incurred as a result of the accident, the Release had the effect of releasing defendants. Plaintiff opposed the motion for summary judgment, arguing that defendants were not a party to the release and did not provide any consideration for the release, and therefore, cannot claim a benefit from it.
*878The district court denied defendants' motion for summary judgment. The defendants thereafter sought supervisory review with the court of appeal, which denied the writ without comment. Defendants then applied for review to this Court. We granted defendants' writ application and remanded the matter to the court of appeal for briefing, argument, and full opinion. Maggio v. Parker , 16-1988 (La. 12/16/16),
DISCUSSION
A motion for summary judgment is a procedural device used when there is no genuine issue of material fact for all or part of the relief prayed for by a litigant. It is reviewed on appeal de novo, with the appellate court using the same criteria that govern the trial court's determination of whether summary judgment is appropriate; i.e ., whether there is any genuine issue of material fact, and whether the movant is entitled to judgment as a matter of law See , e.g. , Dunn v. City of Kenner , 15-1175, p.10 (La. 1/27/16),
In their motion for summary judgment, defendants assert that the clear and unambiguous language in the release discharged all persons, whether or not signatories to the release, who were or could be liable to plaintiff for any and all claims arising out of the January 14, 2015 accident. As set forth above, the release specifically named Farm Bureau and Brenda Parker, and their agents and employees, but also included broad language, stating "all other persons, firms or corporations " were released from liability for the January 14, 2015 accident. According to defendants, under La. Civ. Code art. 2046, because the release is clear and unambiguous, parol evidence cannot be used to determine the intent of the parties.
"A compromise is a contract whereby the parties, through concessions made by one or more of them, settle a dispute or an uncertainty concerning an obligation or other legal relationship." La. Civ. Code art. 3071. The compromise instrument is governed by the same general rules of construction applicable to contracts. Brown v. Drillers, Inc ., 93-1019 (La. 1/14/94),
Accordingly, when the words of the settlement agreement are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent. C.C. art 2046. However, Louisiana courts have crafted a jurisprudential exception to the extrinsic evidence rule for compromise agreements. When a dispute arises as to the scope of a compromise agreement, "extrinsic evidence can be considered to determine exactly what differences the parties intended to settle." Brown ,
In interpreting this jurisprudential rule, courts have cautioned that, absent some substantiating evidence of mistaken intent, no reason exists to look beyond the four comers of the instrument to ascertain intent. Brown ,
With these principles in mind, we turn to the terms of the Release in this case, the nature of the substantiating evidence presented, and circumstances surrounding the signing of the Release. As an initial matter, the Release unambiguously released "all other persons, firms or corporations who are or might be liable from any and all actions, causes of action, claims, demands, damages, costs, loss of services, loss of consortium, expenses, and compensation on account of or in any way growing out of any and all known and unknown personal injuries and property damage, resulting or to result from an accident that occurred on or about 01/14/2015." Defendants argued that this broad language released them from any liability they may have had to plaintiff. Therefore, plaintiff must offer substantiating evidence of mistaken intent to oppose summary judgment.
*880Circumstances unique to this case surrounding the signing of the document give rise to an issue of fact regarding intent sufficient to defeat summary judgment. First, the released parties, Farm Bureau and Brenda Parker, were not made defendants in the lawsuit. In other words, the Release was negotiated with potentially liable parties who were not involved in the litigation. Second, the Release was signed just weeks after the lawsuit was filed, and yet the Release did not expressly include defendants. Indeed, defendants were not involved in the Release negotiations and contributed nothing to the settlement. Third, plaintiff did not dismiss the lawsuit against defendants after the Release was signed. Rather, defendants and plaintiff engaged in discovery that lasted for several months after to the signing. Plaintiff has therefore satisfied his burden to introduce extrinsic evidence under Brown to determine "exactly what differences the parties intended to settle" and whether the language of the Release "was intended to be unequivocal." Brown ,
Additionally, we note that defendants, at this stage of the proceedings, have not demonstrated that a third-party benefit was conferred upon them such that summary judgment is warranted. Pursuant to La. C.C. art. 1978, "[a] contracting party may stipulate a benefit for a third party" who is not named in the contract; in Louisiana, such a contract for the benefit of a third party is called a "stipulation pour autrui." See Joseph v. Hosp. Serv. Dist. No. 2 of Parish of St. Mary , 05-2364, p.9 (La. 10/15/06),
This Court has recognized that summary judgment "is rarely appropriate for a determination based on subjective facts such as intent, motive, malice, knowledge or good faith." Penalber v. Blount ,
DECREE
For the reasons assigned, we affirm the judgments of the trial court and court of appeal denying the motion for summary judgment of defendants Sandwich Kings, LLC and Republic-Vanguard Insurance Company. The matter is remanded for further proceedings.
AFFIRMED
Concurrence Opinion
Civil Code article 3075 provides: A compromise entered into by one of multiple persons with an interest in the same matter does not bind the others, nor can it be raised by them as a defense , unless the matter compromised is a solidary obligation (emphasis added). End of story. As for stipulation pour autrui, there must be specific intent by the contracting parties to benefit (the here unnamed) beneficiary. It's supposed to be a stipulation , not an accident.
Just because the law has been poorly argued, or the lower courts or this court failed to discover the correct law to apply to the facts, is not an excuse to fail to apply the law correctly once it is discovered. Louisiana has fact pleading. It is our duty to apply the correct law to the facts. Lack of research is not a worthy position for the state's highest court.
Dissenting Opinion
I concur in the dissent of Justice Clark in this matter and write separately only to offer additional comments.
*881In my opinion, the fundamental flaw in the majority opinion is that it eschews civil law principles that recognize the supremacy of legislation
The applicability of this codal provision is implicitly acknowledged with the declaration that the "Final Release and Settlement of Claim" at issue herein "unambiguously released 'all other persons, firms or corporations who are or might be liable from any and all actions, causes of action, claims, demands, damages, costs, loss of services, loss of consortium, expenses, and compensation on account of or in any way growing out of any and all known and unknown personal injuries and property damage, resulting or to result from an accident that occurred on or about 01/14/2015.' " Maggio v. Parker , 17-1112, slip op. at 6 (La. 6/ /18) (emphasis added). With this acknowledgment, the inquiry should have ended.
Nevertheless, under the guise of following the jurisprudential "exception" to the clear directive of La. C.C. art. 2046 recognized in Brown , an examination is made of the factual evidence to determine "whether unequivocal language in the instrument was intended to be unequivocal ." Maggio , supra (quoting Brown ,
Moreover, that reliance on jurisprudence is unnecessary, as Brown is clearly distinguishable from the instant case. In Brown , the plaintiff, Buell Brown, filed suit against numerous defendants, seeking damages for injuries resulting from his fall from a drilling rig. Mr. Brown's wife later asserted a loss of consortium claim. Subsequently, the parties entered into a settlement, whereby the Browns released their claims against the defendants and dismissed their lawsuit. Five years later, Mr. Brown died as a result, at least in part, of *882the injuries he sustained in his fall, and his widow filed a wrongful death action. The defendants moved for summary judgment, arguing that the wrongful death action was barred under the terms of the release. Mrs. Brown opposed the motion, arguing that she never intended to dismiss her wrongful death claims, as she did not expect Mr. Brown to die from his injuries.
Brown clearly arose under unique facts, as the wrongful death claim in that case did not accrue until long after the settlement was confected. Unlike Brown , where the issue before the court was whether a release confected while an injured party was still alive extended to the future, uncontemplated wrongful death action of his widow and minor child, this case involves a plaintiff who was obviously aware of his claims against the instant defendants, as he filed suit on June 19, 2015, alleging that James Parker, The Sandwich Kings LLC, Republic-Vanguard Insurance Company, and Metropolitan Property Casualty Insurance Company were liable for the damages he suffered as a result of the accident, and entered in the settlement with Farm Bureau and Brenda Parker less than one month later.
Nevertheless, under the aegis of following Brown , an attempt is made to identify "[c]ircumstances unique to this case surrounding the signing of the document [that] give rise to an issue of fact regarding intent." Maggio , slip op. at 7. While, admittedly, the circumstances identified are unique to this case, many of the cited circumstances are ultimately irrelevant. For example, it is of no moment that the defendants were not specifically named in the release document, as that document expressly, explicitly, and clearly extends the release to "all other persons, firms or corporations who are or might be liable." It is equally of no moment that the defendants did not participate in the settlement negotiations or contribute any money towards the settlement because, as third party beneficiaries of the release, there is no requirement that the defendants furnish consideration for that release. See J. Denson Smith, Third Party Beneficiaries in Louisiana: The Stipulation Pour Autrui ,
Moreover, there are other circumstances unique to this case that are not mentioned and that are, in my mind, significant. Foremost among those is the fact that the plaintiff signed the release directly below the following sentence, appearing in bold print in the document: "I have read this Release or had it read to me and understand it. " Justice Clark observes in his dissent what has been recognized for over a century: "signatures to [a document] are not mere ornaments," which statement reflects the principle of Article 2046. See Boullt v. Sarpy ,
The situation in which the plaintiff finds himself as a result of his failure to reserve his rights against the defendants herein is not an unsympathetic one. However, the resolution of this case, on the thin case of "unilateral mistake" presented by the plaintiff,
Finally, the document at issue is entitled "Final Release and Settlement of Claim." The result of the majority's resolution of this case is that there will now be a trial on the issue of intent, a trial which subverts the release's entire purpose-to clearly and explicitly conclude this litigation. The document entitled "Final Release and Settlement" is not now in any way final. (Emphasis added.)
I respectfully dissent from the majority opinion.
GUIDRY, J., dissents and assigns reasons.
I respectfully dissent from the majority opinion for the reasons assigned by Justice Clark.
Clark, Justice, dissents and assigns reasons.
For the reasons that follow, I respectfully dissent from the majority opinion. In this matter, we are asked to determine whether the unambiguous language of a compromise must be enforced as written. In conformity with established law, I answer affirmatively. As an initial (and notable) matter, the majority recognizes that the language of the contract is indeed unambiguous. However, it relies on a jurisprudential exception that allows extrinsic evidence to be considered to glean the parties' intent in entering into the contract and the scope of the matters compromised. See Brown v. Drillers, Inc. , 93-1019 (La. 1/14/94),
First, I note that at the time the July 6, 2015 release was signed, the record reveals that plaintiff was aware of his claim *884against the Sandwich King defendants, having just filed suit against them in the preceding weeks. The provision of the compromise which released "all other persons, firms or corporations who are or might be liable" is neither confusing nor ambiguous. A reasonable person signing a compromise with such language, knowing that he or she had just recently filed a lawsuit against defendants who were allegedly liable, would know that this provision would have the effect of releasing these defendants. Plaintiff now contends he did not fully understand the nature of the rights he was releasing; however, such a contention does not change the fact that he signed the release, which contained a provision that stated, "I have read this Release or had it read to me and understand it." In Aguillard v. Auction Management Corp. , 04-2804, p. 23 (La. 6/29/05),
It is well settled that a party who signs a written instrument is presumed to know its contents and cannot avoid its obligations by contending that he did not read it, that he did not understand it, or that the other party failed to explain it to him.See, e.g., Tweedel v. Brasseaux ,433 So.2d 133 , 137 (La. 1983) (stating: "The presumption is that the parties are aware of the contents of writings to which they affixed their signatures ... The burden of proof is upon them to establish with reasonable certainty that they have been deceived." "If a party can read, it behooves him to examine an instrument before signing it; and if he cannot read, it behooves him to have the instrument read to him and listen attentively whilst this is being done.") [emphasis added].
To allow a party to circumvent the provisions to which he contractually agreed, merely by protesting that he did not understand the provisions, undermines the essence of compromise agreements and could result in the real undoing of Louisiana contract law. As we explained in Lama v. Manale ,
Where there is a clause in a contract, and that clause is the agreement of the parties, the defense of a lack of knowledge of its existence is untenable. Courts are not created to relieve men of their bad bargains made. Where a clause of a contract is clear and unambiguous, "the letter of it should not be disregarded, under the pretext of pursuing the spirit." [emphasis added].
If the plaintiff wished to reserve his claims against the Sandwich King defendants he either could have declined to sign the release as written or inserted a reservation of rights. The plaintiff's subsequent representation that he was unaware of the broad scope of the provision, while potentially true and sympathetic, does not merit an abandonment of established Louisiana contract law, which requires clear and unambiguous language of contracts to be honored.
Second, the majority's willingness to wander outside of the four corners of the document in search of the party's intent is in contravention of previous cases, which have held similar releases to be clear and explicit (See Baudoin v. Montoya , 07-910 (La. App. 3 Cir. 1/30/08),
Based on the foregoing, I do not believe that either of the trigger requirements have been met to employ the Brown exception. Thus, based on the clear language of the settlement, the compromise should be enforced as written with no further consideration of extrinisic evidence.
Last, I disagree with the majority's view that the existence of a stipulation pour autrui cannot be established via summary judgment in this case. I find that all requirements for a third-party beneficiary contract are satisfied. (See , Joseph v. Hospital Service Dist. No. 2 of Parish of St. Mary , 05-2364, p. 9 (La. 10/15/06),
See La. C.C. art. 2 ("Legislation is a solemn expression of the legislative will."); La. C.C. art. 1, 1987 Revision Comment (c) ("In Louisiana, as in other civil law jurisdictions, legislation is superior to any other source of law.").
Synonyms for unequivocal ("not subject to misinterpretation or to more than one interpretation") include: "clear, clear-cut, crystal clear, decided, ... evident, obvious, open-and-shut, ... plain, straightforward, ... unambiguous, unambivalent, unmistakable." See Merriam-Webster Thesaurus at merriam-webster.com (online 6/18/2018). Words related to unequivocal include: "comprehensible, ... graspable, ... understandable, ... simple, ... uncomplicated, ... discernible, ... black-and-white, explicit, ... well-defined, ... [and] readable."
While no relevant "absurd consequences" from the application of La. C.C. art. 2046 in this case have been noted, a complete, full, and final release of Brenda Parker and "all other persons, firms or corporations who are or might be liable" would protect her from a potential third-party claim based on negligent entrustment.
As Professor Smith explains:
There is nothing in the laws of this State or in the civil law background to our Code to indicate in any fashion that a third party beneficiary must furnish anything in the nature of consideration for the promise in his favor. The "consideration" for the promise is furnished by the promisee and the promise is binding for this reason.
Smith, Third Party Beneficiaries in Louisiana: The Stipulation Pour Autrui , 11 Tul.L.Rev. at 51.
Basically, the only fact presented by the plaintiff in favor of his position that he did not intend to release the defendants herein is that, following execution of the release, he continued to engage in discovery and did not dismiss his lawsuit against the defendants. However, as noted previously, weighed against this consideration is the fact that the plaintiff signed the release fully aware of his claim against the defendants, having filed suit a few weeks earlier. Given the clear and unequivocal language of the release, the only reasonable explanation for the plaintiff's subsequent conduct is that he simply did not read the release, despite his representations to the contrary. While unfortunate, it is not the role of the courts to relieve individuals of their own bad bargains. Lama v. Manale ,