*1 Dist., Aug. A081405. First Div. Three. [No. 1999.] NEVERKOVEC, LARRY Plaintiff and Appellant, FREDERICKS, JOSEPH GREGORY Defendant and Respondent. *4 Counsel Roth, Blank for D. Roth and Karen L. D. Harry Harry
Law Offices of Plaintiff Appellant.
McNamara, Houston, McClure D. M. & Lisa Dodge, Ney, Guy Borges, U’Ren and E. Miller Defendant Cynthia Respondent.
Opinion PARRILLI, J. this case we examine a that has recurred problem In in California but an across nation. An settles with injured party insurer, tortfeasor’s alleged general signing appears to excuse in the world Then everyone liability. injured party tortfeasor, a different who proceeds against alleged raises as a defense. conclude that We contract law principles governing beneficiaries, evidence, of third and related rules rights provide best approach for such cases. resolving
Larry Neverkovec sued Fredericks for Joseph Gregory injuries personal suffered in an automobile accident. The trial court Fredericks’s granted motion for summary judgment, ground Neverkovec had an release of unambiguous all claims he had against any party potential liability. Neverkovec from the Fre- appeals ensuing We reverse. judgment. dericks was not party to the release and in agreement, order enforce a third he had to party beneficiary show the intended their to benefit him. He not meet this burden.
Background *5 1994, In September Neverkovec Scott Larry and Moore were in a riding brother, car driven Jason by Larry’s Neverkovec. Fredericks was driving them, turn, toward his son as with Justin a As made a Jason left passenger. car, Fredericks’s vehicle struck the the right side of seriously injuring Larry and Moore. According Patrol collision Highway report, Jason admit- turn, ted he not look for traffic oncoming when the left because making he was to The officer talking Larry. who wrote the testified his report that he found no basis for deposition holding Fredericks fault. Alexander, Jason was a car driving owned Robert who the by employed mother, Neverkovecs’ Howard. Alexander allowed Howard to use the Cindy vehicle as she The by wished. vehicle was insured Insurance Philadelphia $30,000 the Company, agreed which to limit of but all pay policy required 1996, to in one claimants settlement. In for join February attorneys Fredericks, Howard as and Moore met to discuss (acting Larry’s guardian), the settlement. The for and attorneys Howard Moore did discuss with Fredericks’s whether were attorney they filing against claims contemplating 1996, Fredericks, In March release of such claims discussed. any nor was a as proceeds three an attorneys agreement apportioning policy signed $4,500 $10,000 Moore; $15,000 to to as Larry’s guardian; follows: Howard Fredericks; $500 to and to stated: “Upon payment Justin. their release these sums Insurance by Philadelphia Company, claims Jason Neverkovec.” against to Insurance Company, was forwarded Philadelphia to be their clients. attorneys signed by
sent back release forms to general 1996, counsel filed a Fredericks. On Moore’s complaint April a release on behalf on 1996. general Larry’s April Howard signed 24th, a on In May Fredericks similar release 1996. signed April ad and Larry, approved Howard litem guardian court appointed on military training Jason. Moore was settlement of claim on the same form as Fredericks’ release mission when a sent to his counsel. Moore June 1996. signed on signed by Release and Howard Indemnity Agreement” The “Parents’ release, “forever broad. Howard agreed behalf was Larry’s particularly Rent Alexander & and covenant to hold harmless Associates d/b/a discharge Philadelphia Indemnity Wreck, Cindy and Howard Jason Neverkovec. Companies firm or any corporation charged Insurance and other person, heirs, administrators, their execu- or liability, chargeable responsibility demands, claims, tors, and all any damages, from assigns, successors action, services, costs, loss actions and causes belonging expenses, up out of act or occurrence arising any the said minor or the undersigned time, resulting Larry’s injuries account” of the present particularly Moore and Fredericks included the accident.1 The releases is as “In consideration of agreement signed full Howard follows: 1The text of and------XX/100 undersigned, of the sum of Fifteen Thousand Dollars payment, Cindy (Dollars) ($15,000.00) acknowledged, undersigned receipt hereby of which Larry minor, release, discharge guardian do forever parent Howard Neverkovec. Rent A Jason Neverk hold Alexander & Associates d/b/a and covenant to harmless Wreck. Companies Philadelphia Indemnity Cindy person, Insurance Howard ovec. *6 heirs, liability, or their admin corporation charged chargeable responsibility or with firm or demands, executors, claims, istrators, damages, any assigns, and and all successors services, action, costs, or belonging of to said minor expenses, loss of actions and causes time, any up present particularly and arising of act or occurrence undersigned out damages any kind disability, damage, loss or personal injury, property all on account of by undersigned, or may by be the said minor that hereafter sustained sustained'or September, 1994, day at or or an accident that occurred on about 15th consequence of Dixon, near CA. Cindy executors, administrators, heirs, and undersigned hereby do bind Howard “The Companies Philadelphia Indemnity and Insurance assigns to to the said repay successors and heirs, liability, charged or their corporation responsibility or with any person, firm his, her, their, servants, the same named “and or its parties succes- agents, sors, heirs, executors, firms, administrators and all other persons, corpora- tions, associations or partnerships.” 16, 1996,
On September Howard filed a behalf complaint Larry’s against Fredericks. the action was consolidated By stipulation, with Moore’s case Fredericks. In Jason) Howard April (acting Alexander & Associates moved for a determination of faith settlement Procedure, under Code of Civil section 877.6.2 The court the motion granted over Fredericks’s objection, ruling that Fredericks could not contest settlement because he one of the settling Fredericks moved for parties. summary judgment June the releases contending signed Moore by and Howard operated relieve him of any Howard that liability. responded extrinsic evidence showed the parties never intended to release Fredericks. court granted cases, trial summary judgment to Fredericks in both ruling that “the releases or on behalf of the Plaintiffs by were unambiguous, and each operated release all claims arising against any party potential liability.” administrators, executors, assigns, any (sic) successors and money additional sum any or may of them hereafter be compelled pay injuries on account of the to said minor because of the said accident. Cindy procure sum, “To payment (sic): of the said hereby Howard declare that no representations about the nature and extent injuries, of the said damages disabilities or made by any physician, released, attorney agent any or any representations regarding nor the nature and legal liability extent of or responsibility any financial parties of the released Cindy have induced Howard to make this indemnity agreement; release and that in determin- ing the amount of the said sum there has been taken into consideration not injuries, ascertained damages, disabilities and but possibility injuries also the that the sus- may tained permanent indefinite, be progressive recovery therefrom uncertain and so consequences not now anticipated result from the said accident. “It is further agreed understood and rights that all under Section 1542 of the Civil Code of any California and any similar law of state territory or hereby United States are expressly waived. Said section reads as by general follows: ‘1-542. claims not Certain affected release. A release does not extend to claims which the creditor does not know or release, suspect to exist in his favor at the executing (sic) time of which if know him materially Further, must have affected his rights settlement with the debtor. all under (sic) 790.03(n) insurance Code expressly are waived.’ undersigned agree, “The as a further consideration and inducement for this release and indemnity agreement, that it apply shall to all unanticipated injuries unknown and damages directly accident, indirectly resulting from said as to well those now disclosed. undersigned “The understand that the hereby released liability admit no sort (sic) reason or said accident and that payment compromise said is made to terminate controversy further respecting all damages claims for that said undersigned minor or the have heretofore might personally asserted or through personal representatives hereafter assert because of said accident.” Procedure, statutory 2Further references are to the Code of Civil unless specified. otherwise
344 Neverkovec has
Only Larry appealed.3
Discussion the of A meet burden moving summary defendant judgment the a defense. If the establishing action is meritless showing complete the a burden shifts to showing, plaintiff defendant makes sufficient the 437c, (§ subd. facts a triable issue of material fact. showing present specific Here, a (o)(2).) the trial court found that Fredericks established complete the claims executed Howard. defense based on Larry’s novo, trial de the role of the assuming We review the court’s ruling We trial court and the merits of motion. construe redetermining liberally, and the moving strictly party’s papers party’s papers opposing doubt to whether there is a triable issue favor resolving any 604, (1998) Cal.4th (Artiglio Corning v. Inc. party. opposing [76 479, 1313]; v. Cal Accountants Mutual Montgomery Cal.Rptr.2d 39]; Pensinger Ins. Co. 858-859 Cal.App.4th Cal.Rptr.2d [72 Bowsmith, 531].) Inc. 717-718 Cal.Rptr.2d v. sufficient to shift general We conclude even if Howard, a before the court raised burden extrinsic evidence proof to release triable issue intent Fredericks. involving relied on two cases summary
Fredericks’s motion judgment In broad releases aftermath automobile accidents. (1993) 12 General Motors Court Corp. Superior (General Motors), the counsel advised the manu- Cal.Rptr.2d plaintiff’s 622] liability facturer vehicle that there was possible products plaintiffs settled with the other driver involved in claim. then plaintiff accident, all a release her “and other signing exonerating any persons, not,” to or firms and herein named referred whether corporations, claims from the accident. The obtained arising plaintiff subsequently manufacturer, unsuccessfully new counsel and filed suit (Id. release. moved for based on the summary judgment manufacturer’s The Court of in General Motors granted peti Appeal directing tion for a writ of mandate entry summary judgment. not discharge held a release of one tortfeasor does
court that while (§ (a)), terms “unless its so subd. liability tortfeasors from provide” briefs, caption party appellant has Moore as a 3Neverkovec’s counsel included improper he This is an points appeal. and refers to at various as if were a this Moore judgments entered separate brief that the appellant’s reply asserts in the practice. Counsel Moore not file That claim is frivolous. against Neverkovec and Moore are not severable. record; disposition part him is of this our a notice of appeal; effect on Moore. appeal of Neverkovec’s will have no
345 release need who are identify tortfeasors agreement specifically released.4 agree- Under usual rules contract the release interpretation, ment before the court the manufacturer and the unambiguously discharged rest of the world from the automobile accident. The liability arising from no extrinsic evidence to plaintiff presented suggest competent intended another and meaning possible language they employed, had been aware of claim the manufacturer. plaintiff potential Furthermore, the other had an to include driver incentive all other potential court, tortfeasors in the release to litigation, avoid noted entanglement 875, Co. Court citing Singer (1986) v. 179 883-884 Superior Cal.App.3d tortfeasor faith is settling good discharged Cal.Rptr. (although [225 159] 877, liability (b), from for to other under subd. contribution tortfeasors § tortfeasor must if made a settling joint cross-defendant tortfea- respond Motors, sor). (General 439-443.) 12 Cal.App.4th pp.
The General Motors rejected court claims that a broad interpretation release was unconscionable or The court also contrary public policy. dismissed the argument that the manufacturer lacked to enforce the standing release third as a It was for the party beneficiary. only necessary manufacturer that was show one of a class of for benefit whose persons made, this test under the was met court’s interpreta- Motors, (General tion of the release. 12 Cal.App.4th Fredericks also relied (1993) on Lama v. Comcast 14 Cablevision (Lama), which the settled Cal.Rptr.2d plaintiff 224] with the other driver all claims other against “any person, or association with corporation, charged partnership responsibility for injuries person property as a result of the Undersigned” accident. The counsel did plaintiff’s no and conducted no discovery inves driver, tigation into status of the other been employment who had driving her husband’s car. Counsel asked merely the other driver’s insurance claims provides 4Section part: given in relevant “Where a ... faith before verdict to one of a or more number of tortfeasors claimed to be liable for the following same it shall tort... have the effect: “(a) discharge any party liability provide, It shall not such so other unless its terms but it shall stipulated by reduce claims the others in the .... amount the release “(b) discharge given liability any It shall to whom it is from all contribution any parties.” Section was enacted of a bill law part intended to abolish two common rules—one tortfeasors, forbidding among mandating joint of one contribution another a release tortfeasor for consideration released all others. The have striven to the statute to courts apply goals sharing among encouragement accommodate of settle- equitable tortfeasors ments, Woodward-Clyde (Tech-Bilt, Inc. & always necessarily “are not harmonious." Forge, 159]; Associates Mattco Cal.Rptr. 38 Cal.3d 493-494 Young 581].) Inc. v. Arthur & Co. Cal.Rptr.2d 1349 [45 receiving negative whether other insurance representative applied, dismissed his answer. After settling, plaintiff complaint prejudice. *9 a the against Four later he retained counsel and filed months new complaint had in the course and other the other driver been employer, alleging driver’s the In a trial on of at the time of accident. bifurcated her scope employment issue, that the the trial court ruled the release agreement expressly liability a release and dismissal constituted released the that the employer, 61-63.) at (Lama, retraxit. pp. Cal.App.4th affirmed, Lama it “of no moment” The Court of in was Appeal holding of third that the was not a to the release. The release parties employer benefited other her from future by shielding damages the driver exposure the The driver’s claims testified representative from accident. other arising of the was the insured from causes designed any that release to protect action, full that the not have settled without a release. insurer would release; the mistake fact the regarding meaning There was no mutual admitted he no attention to its the first counsel plaintiff’s paid particular a “corporation terms. The court with the claim agreed employer’s accident, the resulting . . for from injuries” . charged responsibility liability the the and was thus discharged came within terms of release an action (a). Although under section subdivision section permits a “that is only tortfeasor even after dismissal with prejudice, joint has of another discharge in the case in which there not been specific 63-64.) (Lama, the tortfeasor release.” by pp. Lama, that, as in General Motors and he was Fredericks argued just the and was therefore entitled language covered release to the summary judgment his favor. Neverkovec’s opposition judgment evi that the extrinsic ground motion Motors distinguished General intend to release Fredericks.5 Neverk dence here showed the did not circumstances, Apple instead on another case similar involving ovec relied (Appleton). Cal.Rptr.2d ton v. Waessil 27 Cal.App.4th 676] the other driver The filed a action Appleton personal injury plaintiff accident, car, of the and a broker who arranged owner other the other driver. The car to loaned to an affiliated with organization be broker, based on owner and to dismiss the agreed settled with the plaintiff arrangement counsel representations opposing favor signed general the car had been loaned. plaintiff owner, broker, firms, “all other associations corpora persons, faith, and the settlement tions.” The court determined the was release, on the defense based 5By on the merits to Fredericks’s affirmative responding the defense in his answer. objection plead failed to waived Fredericks Neverkovec 411].) (Jones Cal.Rptr.2d Co. 876-877 Dutra Construction dismissed owner and broker action. He then served from the plaintiff driver, based on summary other who moved for successfully (Id. the broad terms of the agreement. reversed, Court that the release was not holding Appeal to include the driver under
specific enough section subdivision (a). The Lama Appleton court on the that the distinguished grounds Appleton did conduct the other with the plaintiff into driver’s discovery relationships broker, vehicle’s owner and realized he releasing agents entities, of those he advised counsel would be employees opposing proceed- driver, the other ing against dismissed his action as to the owner *10 Motors, and broker. The court also the distinguished characterizing General result in that case as “unfortunate.” The court that the Appleton emphasized presented the extrinsic evidence plaintiff following showing the release not to the other driver: the the other and apply complaint, naming driver accident; his the alleging primary for with responsibility correspondence counsel that the other not opposing verifying driver an was employee of the agent an settling unchallenged declaration the parties; by plaintiff’s counsel counsel opposing always was aware the plaintiff pursue would driver; his action the other the motion for determination of faith motion, settlement and the on the ruling neither of which mentioned the dismissal, name; other driver the by and which only to the owner and applied the broker. The court the reasoned that if had intended to release the other driver have him they would named given his specifically,' important role the accident. The fact that he was not named made the term “all and raised a issue the persons” ambiguous triable intent to the include in the driver release. at (Appleton, supra, Motors, Lama, We believe the situation in General presented Appleton, and case at bench is best suited to resolution under well-settled contract third beneficiaries.6 Before to principles governing party turning those prin we ciples, briefly review circumstances which parties signed settlement agreement and in this case. the releases objects theory, 6Fredericks party beneficiary to Neverkovec’s reliance on the third which one, summary judgment objection Neverkovec did not raise papers. proper The is a and However, argument we have the discretion to deem waived. under the circumstances beneficiary this case we choose to the issue. third party theory address The was mentioned in Motors, both Lama General point which are principal Fredericks’s authorities. The was papers, briefed in Moore’s opportunity respond motion thus Fredericks had the to it underlying undisputed. parties seeking below. The facts are situation The of third enforce general presents important legal yet releases likely issues have recurred and are recur again, application party beneficiary third yet rules in such cases has not received (Canaan Abdelnour extended consideration from California court. appellate 703, 722, 915]; Marriage In re Cal.Rptr. Cal.3d fn. 69 A.L.R.4th counsel for Howard agreement negotiated by settlement was jointly Fredericks, Neverkovec), and Moore. (acting Larry object her son the car was to divide the proceeds policy covering Neverkovec, Alexander driven Jason insured Howard’s by by employer, limits and to release & Associates. The divide parties agreed policy their claims Jason Moore’s forwarded only. attorney either to the insurer with letter will stating: “My understanding you this a full or send releases to each and pay individual accept party each check.” The took the obtaining insurer party separate option on its terms. Accordingly, individual releases own the claim- negotiated among Howard on behalf was Larry’s jointly executed, at times and ants. Each claimant different separately places, insurer, its them on behalf of acting releases sent to release, (Howard’s Jason). Howard By insureds employer signing awas with the insurer that claims were satisfied. Fredericks agreed Larry’s that release third party agreement. law of
Release are agreements governed by generally applicable 554; Motors, contracts. General (Appleton, p. 439.) “A third should not be to enforce 12 Cal.App.4th p. permitted *11 benefit, He not a not for his but rather for others. is covenants made on the contracting to contracting right predicated party; performance (1976) Cal.3d (Murphy intent to benefit him.” v. Allstate Ins. Co. 17 parties’ 937, 424, 584]; 553 P.2d v. Ins. Co. Harper 944 Wausau Cal.Rptr. [132 Bancomer, 1079, 64]; A. v. (1997) 56 1087 S. Cal.Rptr.2d Cal.App.4th [66 1450, 435]; 1458 (1996) Cal.Rptr.2d 44 Superior Cal.App.4th Court [52 311, 332]; (1996) 43 316 Bitting Cal.Rptr.2d v. Cal.App.4th [50 Kalmanovitz 1717, (1994) 26 1724 Casualty Surety v. Aetna & Co. Jones Cal.App.4th [33 291].) The that a literal contract interpretation circumstance Cal.Rptr.2d entitle that a benefit to the third is not to enough party would result in party to have intended to demand enforcement. The must contracting parties (1972) 25 (Walters a on the third v. Calderon confer benefit party. Bancomer, Court, 863, 89]; Superior S. A. v. 871 Cal.App.3d Cal.Rptr. [102 1458; Bitting, supra, 44 at v. supra, Cal.App.4th p. Kalmanovitz 43. Co., 314; & 26 Casualty Surety v. Aetna supra, at Jones Cal.App.4th p. at Cal.App.4th pp. third to be named in specifically
It is not for the necessary party contract, he promise but such a bears burden proving party to a class of which made him personally seeks enforce was actually 1218, 893]; (1994) Resolution Trust Cal.Rptr.2d 1227-1228 Cal.App.4th 25 of Moschetta 1799, 510].) (1992) Cal.Rptr.2d Corp. Cal.App.4th v. 9 1809 [12 Winslow
349 225]; (Garratt he is a Cal.2d member.7 v. Baker 5 748 [56 Garcia Ins. Exchange v. Truck 36 Cal.3d Cal.Rptr. Co., 1100]; at 682 P.2d Ins. Harper supra, Cal.App.4th v. Wausau pp. 1086-1087; Bancomer, Court, A. v. at Superior supra, Cal.App.4th S. p. determination, a 1458.) In the court must read the contract as making (Garcia whole in it circumstances under which was entered. light 437; Bancomer, Truck Ins. 36 Cal.3d at S. A. v. Exchange, supra, Superior p. Court, 1458; at v. Aetna & supra, Casualty Surety Jones p. Co., 1725.) at p.
Thus, to obtain on the that a summary judgment ground has him from third to the release discharged liability, party must show that the intended release him. affirmatively parties The burden of is on the third both proof under contract law party, 437c, (§ (o).) summary statute. subd. Because court must consider the circumstances to deter contracting parties’ negotiations mine a third whether named in the release an intended party will it seldom be sufficient third beneficiary, for the party simply rely a literal of the terms of the fact . application release. “The that . . contract, terms, carried if out to its inure third would party’s benefit[,] is (Jones insufficient to entitle him or demand her to enforcement.” Co., 1724-1725, v. Aetna & Casualty Surety supra, 26 Cal.App.4th Calderon, following 871.) Walters v. “However Cal.App.3d p. contract, broad be the terms it extends to those things that the concerning (Civ. intended to contract.” appears Code, 1648.) “Whether a third is an intended ... beneficiary § intent, contract involves construction of the gleaned reading contract as whole light the circumstances under which it was *12 Co., (Jones entered.” v. Aetna Casualty & at Surety supra, 26 Cal.App.4th p. 1725.)
Here, the Fredericks offered little extrinsic evidence of contracting intent, on a instead literal of the terms relying of the interpretation Indeed, release and the Lama. agreement holdings General Motors and Fredericks to the extrinsic evidence offered the objected by opposing parties, the rule contending evidence consideration extrinsic parol precluded evidence the . contradicting release term . . including “any person or from the charged chargeable resulting or responsibility liability” the General Motors court’s long-standing ruling 7This contract principle supports law (12 require Cal.App.4th that section does not of all released specific parties. 877 identification at pp. We He on argument appeal.8 accident. renews are not persuaded. (see, an General
Parol evidence is admissible to resolve ambiguity e.g., Motors, 441), and the clause of the supra, at Cal.App.4th p. repayment release Howard renders we discuss agreement signed by ambiguous, it Furthermore, an below. even unambiguous apparently 1856, of the circumstances. Section light surrounding properly interpreted rule, bars of any codifies the evidence “evidence prior agree which parol or of that contradicts a final ment oral contemporaneous agreement” 1856, (§ (a).) But the “does not exclude agreement. written subd. statute or the under which the made other evidence of circumstances relates, 1860, as defined to . . . otherwise to which in Section interpret 1856, (§ . . the terms of the . .” subd. Garcia v. Truck Ins. (g); 435.) Cal.3d “For the Section 1860 Exchange, supra, provides: p. instrument, of an the circumstances under which it was construction proper instrument, made, of the' the situation of the of the including subject it, shown, also be so that the be in the parties Judge placed position 1856, (e) (See of those whose he is to also subd. language interpret.” § 1979, apply contracting party á parol 8Before the evidence rale did not an action between revising stranger Legislature contract. The abolished this limitation in 1978 Therefore, (Kern parol grounds. County on object 1856. Fredericks evidence section is free 77, Agency Belridge Storage Water Dist. 86-87 [22 Water Witkin, Evidence, 1986) 354]; (3d Documentary Cal. ed. 1011- Cal.Rptr.2d §§ Evidence 3, 1012, 435, Exchange, p. also Garcia Ins. 36 Cal.3d at fn. 954-955. See v. Truck 441, Motors, 1, noted the p. and General fn. in which courts however, above, effect.) conflict amendment but not decide its As discussed we find no necessity parol rale and to consult extrinsic evidence under between evidence circumstances of this case. implicated the criticism the former We note the situation before us is not in the cited party parol restriction third use evidence rule found authorities County and the court. declares that his criticism of restriction “is Witkin Kern Corbin to a applicable” involving parties in the least to a case the actual intention of legal party. on relations one of them and a third operation the instrument between 577, (3 11.5.) Wigmore proper states p. on fn. that the § Corbin Contracts utterances, involving parties, cases third application of the rule is to exclude extrinsic even in very legal they purpose writing superseded has them as the if are offered “for (Chadbourn 1981) (9 original.) Wigmore p. Evidence rev. italics in § act." Here, excluding beg writing’s since the question purpose, evidence would extrinsic actually be to bar all future third very issue to resolved is whether the intended notes, Wigmore theory of the is that the they As rale claims when executed release. “[t]he be of their particular that a document shall made sole embodiment parties have determined *13 Hence, legal purposes so that effect and those legal purposes act for certain far as [citation]. else, concerned, writing may and no matter desire they must be found nowhere who are concerned, writing has purposes far as are the to avail himself of it. But so other effects conduct, conduct, may and it still be persons’ other resorted superseded not their other nor material, persons it either themselves.” any other for which is other purpose for (Ibid., original.) italics in
351 to issues the is not concerning relevant of “imperfection writing” [evidence Pierce, Smith, excluded]; Lynch, Atascadero v. Merrill Fenner & Inc. City of 445, (1998) of 473 evidence Cal.Rptr.2d [80 329] [extrinsic circumstances of is consulted to determine mutual intent objective properly contracting parties].)
Our
Court has held that
the
of
determining meaning
Supreme
“[i]n
made,
written
of a
contract
for the benefit
third
allegedly
part,
party,
evidence of the
[surrounding] circumstances
negotiations
parties
And,
admissible.
making the contract is both relevant and
the
‘[i]n
absence of
for
the
should be
grounds
contracting
allowed
estoppel,
Corbin,
(4
actual
.
(1971
to their
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.
.’
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testify
supp.)
776,
8; see,
Farmers Market &
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p.
e.g., Hoge v.
Cruces
Supply
§
(1956)
476];
We note that while the contracting parties may testify their regarding intent, actual the of such evidence sufficiency must be determined according to the usual standard of contract The trier objective of fact interpretation.9 must decide a reasonable how person party’s shoes would releasing have believed other party (Civ. understood release. scope Code, 1649; 1254, Superior Bank West v. Court § Cal.4th 545]; 1264-1265 833 P.2d Cal.Rptr.2d Operations Medical Manage ment, Laboratories, Inc. v. National Health Inc. 176 Cal.App.3d Thus, 455].) Cal.Rptr. testimony by releasing party situation, he who thought he while serve to releasing, explain Motors, does not (General determine effect of release. legal 441-442, 2.) fn. How reasonable would view the person inference of the release is a matter of party’s understanding generally conflict, based on the extrinsic evidence. Unless that extrinsic is in evidence (See, is one of law. Medical question Management, Inc. e.g., Operations concurring colleague’s contracting 9We share suspicion testimony by parties regard our However, ing beneficiary their undisclosed are satisfied third intentions. we that in the context, Garcia is proposition testimony and the authorities it cites stand for the such properly understanding surrounding admitted to assist trier of fact in circumstances negotiations, (See controlling interpretation. but ultimate issue of contract 437; Exchange, supra, Springfield Garcia v. Truck Ins. States see United p. Cal.3d 935, 936-937, 1; Fire & Marine (8th 1953) Ins. Co. F.2d Cir. fn. 4 Corbin on (1999 21.) Contracts supp.) p. § *14 Laboratories, Inc., 891-892, at v. National Health Cal.App.3d 893.) for the court determine which On motion summary judgment, evidence,” deducible from the and may grant inferences are “reasonably or if conflict other inferences there is no with reasonable summary judgment 437c, (§ (c).) evidence. subd. mind, of the in these turn to the terms release
With we principles in which it The this case and the evidence of the circumstances was signed. to for anyone chargeable liability Larry release with agreement purports for It declares that the given exchange Neverkovec’s injuries.10 payment to claims the release “is made terminate further all controversy respecting However, or make in the future. damages” Larry for had made might (on behalf) must also that Howard additional Larry’s any provides “repay” for be injury might amounts that anyone chargeable liability Larry’s curious, is to future. This provision compelled pay repayment to the release to be creates as actual intentions. If was ambiguity parties’ not be injuries, liable for could against anyone Larry’s Larry operative (For to recover further amounts from which make repayments. expected ante.) text release see the full fn. agreement, to the The General Motors and Lama courts benefit emphasized a consideration strict litigation supporting insured future foreclosing Motors, (General broad enforcement of releases. case, however, 443; Lama, 63.) this In p. p. be release that some liable might anticipates possibility Moreover, if broad to make further even Larry.
compelled payments deemed to shift the burden of the release were sufficient language proof Howard, surround circumstances summary proceeding intent a triable issue the release disclose ing to foreclose claim Fredericks. release was any against provided claimants, among agreement negotiated insurer to settlement implement Fredericks, Jason who had to release Neverkovec. including agreed only Associates with Howard Alexander & signed, joined After settlement under Jason) for to seek a determination faith (acting “bar for such a motion any joint section 877.6. purpose tortfea or from further claims co-obligor any settling tortfeasor 877.6, (c).) If the release had (§ sor.” subd. accomplished “any Larry damages arising anyone liable to from purports 10The release also Thus, time,” just with Fredericks. present from accident up act or occurrence construed, Larry pursuing claim someone who literally the release bar from would him, other actionable offense. property stole committed *15 there would been have no reason for Jason or Alex- purpose already, ander & Associates to seek the offered section by 877.6.11 protection
Howard’s to the included a motion opposition summary judgment Jason, declaration that she release to understood the her son her apply Alexander, and She employer Alexander’s businesses. not specifically Fredericks, intend to release and signed my release “because attorney advised be and I me it would because understood that I okay was be might who associated with the vehicle in son releasing people my was a but not other vehicle.” counsel declared he passenger, Howard’s release, had intended to Fredericks at the but proceed against time because the waiting statute of limitations was tolled by Neverkovec’s minor ity and because the full extent of Neverkovec’s injuries was uncertain. Moore’s counsel declared she had intended file a complaint Fredericks, and did so before her client his release. She stated “[i]n cases, my with automobile accident the insurers releases experience write their their from protect and insureds further claims.” entity The insurer’s declared that the representative settlements were intended to fully finally statements, terminate all claims These against Howard Jason. to the intentions, extent they merely reveal declarants’ would undisclosed alone be insufficient to establish triable issue on the determinative of question how a reasonable the release have understood the person signing would However, insurer’s intentions the release of third in view parties. of the terms of the release and the surrounding circumstances—particularly the settlement release and motion for determi preceding nation of good faith settlement following conclude that whether it—we Fredericks was an intended actually beneficiary is a triable issue. faith, 11Since the court good found that settlement was entered Jason Alexander Fredericks, & were protected any liability Larry’s Associates from action without
having rely signed by on the Singer Howard. General Motors court cited Co. v. Court, Superior Cal.App.3d proposition settling for the that a tortfeasor Motors, good might “dragged (General faith still be into” a lawsuit. at however, 442-443.) pp. Singer, settling party brought makes it difficult for such a to be into subsequent litigation by joint a cross-complaining cross-complainant tortfeasor. “The must amendment, allege, initially or exposed liability that he is to substantial on the claim, (2) plaintiff’s subject relationship plaintiff’s that his matter claim was known reasonably should settling parties, have been known to the that he therefore a necessary given prior good adjudication. who was notice not faith A settlor who objects good need cross-complaint move to dismiss on the basis of the faith prior determination; cross-complainant prove must then to the satisfaction of the court his status i.e., defendant, necessary party, likely as a the time of settlement or face Moreover, hurdle, cross-complainant dismissal. if a this he even overcomes initial must [¶] proving duly hearing still bear burden at a pursuant noticed to section 877.6 that the prior good settlement was not in faith and thus he is not bound faith determina (179 pursue partial indemnity.” tion but cross-complaint for contribution Cal.App.3d like those involved in General releases arising problems Motors, Lama, numerous analyzed by and this case have been Appleton, 877, provid- in other with statutes like section jurisdictions courts appellate its terms so release does not “unless discharge that a ing elsewhere, and we need ably The cases have been collected provide.” three different have review them detail here. Generally, approaches *16 bars (1) absolutely a that a release holding general view minority developed: tortfeasors; a (2) view proceeding against settling party are not not named or otherwise identified specifically presuming parties released; court or that the must a more less view equally prevalent release unnamed third determine intended to party. whether parties rule,” evidence of courts an “intent some hold extrinsic Among following if the of the release is language intentions admissible even parties’ be con- others hold that extrinsic evidence may while unambiguous, 1996) (See, (D.C. resolve an Noonan v. Williams ambiguity. e.g., sulted to 237, 241-244, N.W. 203 Hansen v. Ford Motor Co. 686 A.2d 952, 956-958], (1993) 225 v. Honda Motor Co. Conn. Sims 995, 999-1001].)12 A.2d third As have California contract law a requires party we explained, an of a release and permits show he was intended beneficiary and the circumstances in contracting extrinsic of the intent evidence which the was executed. agreement broad, loose overly
In we counsel both sides avoid closing, urge We to counsel for insurers that terms in release agreements. suggest in high release terms are view questionable benefits sweeping California, have In consider- engendered. volume of such terms litigation settling be given statutory parties ation should protection provided 877.6, to reduce the ought faith under sections 877 and which but large. to release not the insured also just population temptation enjoy the a third should not same expressed 12Several courts have the view that parties “A rely on of a as the themselves. privilege to the four comers plaintiffs gratu a not part the satisfaction of claim should tortfeasor who has taken no itously arrangements expense at the time and others from settlement undertaken benefit poses by looking only of the document too a to the four comers Interpreting .... surrendering separate cause of action when great plaintiff trapped a will be into a risk that Co., 958; (Hansen v. Ford Motor p. P.2d at see also this was not his her intent.” 1047,1054 1989) [noting position v. Potter (Colo. unsympathetic “Colorado’s Neves 769 P.2d they advantage take of an when are gratuitous who parties toward seek Co., Harley-Davidson Inc. (D.R.I. 1986) Motor McInnis agreement”]; parties consistently position unsympathetic have F.Supp. adopted Island courts 952 [“Rhode agreements they advantage of took no gratuitous to take parties toward who seek generally, parol evidence rale see parties third part”].) California law On ante. footnote Counsel sign for claimants should advise their clients not to releases that to bar claims the client does not intend to The that an appear give adage up. ounce of is worth of cure prevention pound here—attorneys’ applies energies are better sure that release making agreements spent accurately reflect their clients’ than litigating intentions what their clients really intended agreements when terms that counsel failed to they signed including in the case. analyze circumstances specific
Disposition The reversed. trial court is directed to enter an order Fredericks’s denying motion summary judgment against Neverkovec. shall bear their own costs on appeal. J., Corrigan, P. concurred. Acting *17 concur,
WALKER, J. I
but write
separately
clarify
addressed
point
While
majority.
concluding,
that a
correctly,
intent
party’s subjective
cannot create a triable issue of material fact
a contract’s
regarding
objec-
tively reasonable
that such
meaning,
majority suggests
evidence is
ante,
350-351,
nonetheless admissible.
352.)
I
(Maj. opn.,
believe that
such
issue,
evidence is not
insufficient to create a
triable
but is
intent,
irrelevant as
proof
contractual
party’s
therefore inadmis-
(See
sible.
Zurich General
&Acc.
Assur.
Liability
Co. v. Industrial Acc.
Commission
P.2d
Cal.App.
assent
[mutual
572]
understood from the reasonable
ascribed to the
words
meaning
acts, and not from their
secret
unexpressed,,
intentions or understandings].)
Garcia v.
Truck Ins. Exchange