Opinion
C.A. No. 01C-02-269-JRJ
Date Submitted: February 11, 2002
Date Decided: March 11, 2002
On Defendant's Motion for Summary Judgment — DENIED.
On Plaintiff's Motion for Summary Judgment — DENIED.
Donald E. Marston, Esquire, Doroshow, Pasquale, Krawitz, Siegel Bhaya, 1202 Kirkwood Highway, Wilmington, DE 19805.
Ransford B. Palmer, Jr., Esquire, Bouchelle Palmer, 131 Continental Drive, Suite 407, Newark, DE 19713.
Dear Counsel:
This is the Court's decision on the parties' Motions for Summary Judgment relating to the validity of a "Release of All Claims" signed by plaintiff following a motor vehicle collision.
Background
On March 21, 1999, plaintiff, Lemual A. Webb, sustained personal injuries as a result of a motor vehicle collision. The vehicle that collided with Webb's vehicle was operated by Levin Dickerson. In a complaint filed in this Court on February 28, 2001, Webb alleged that Dickerson turned left in front of Webb's vehicle and thereby caused the collision. Dickerson filed an answer and counterclaim in which he alleged that because plaintiff had signed a "Release of All Claims" in exchange for a check in the amount of $1,300, plaintiff was prohibited from bringing a claim against Dickerson as a result of this accident. The plaintiff and defendant filed motions for summary judgment on this issue. The defendant claims that when Webb signed the release he discharged Dickerson from any and all claims, excluding PIP and property damage, arising out of the accident. Webb, on the other hand, argues that the release does not operate as a bar to this suit because the insurance adjustor for Nationwide and Webb were mistaken as to the existence and extent of Webb's injuries when they entered into the release. Webb further argues that the release is not binding because he signed it under duress or coercion. Finally, Webb argues that the release is not binding because there was not valid consideration. The Court heard oral argument on February 1, 2002 and the matter is ripe for decision.
Facts
The collision occurred on March 21, 1999. On the morning following the collision, an insurance adjustor from the defendant's liability carrier, Nationwide, (the "Adjustor") interviewed Webb over the telephone and took a recorded statement from Webb. The Adjustor's questions focused predominantly on the manner in which the collision occurred. The Adjustor asked Mr. Webb only one question about the injuries he sustained in the collision and only two questions about the treatment he received for those injuries. The only question the Adjustor asked Webb concerning his injuries was, "Any injuries to yourself?" In response to this question, Webb replied, "Just my neck and my back and my leg." It is important to note that the Adjustor did not follow-up with any further questions regarding the nature and extent of the injuries to those areas of Webb's body or the degree of pain any or all of those injuries produced. The Adjustor's follow-up question was, "Did you receive any emergency treatment?" When Webb replied that he had gone to the Christiana Hospital, the Adjustor asked if he was treated and released. Webb responded in the affirmative. The Adjustor did not question Webb as to the nature and extent of treatment he had received or any future treatment he intended to seek for those injuries. The Adjustor did not ask what diagnosis he was given by the treating physician(s) at Christiana Hospital. The Adjustor did not ask Webb whether he was in pain or whether he had taken any pain medication. During this same phone call, the Adjustor arranged to meet with Webb at his house the following day, March 23, 1999. The purpose of that meeting, according to the Adjustor, was to "discuss the whole case, go over it a little more in detail, to discuss the whole case with him."
Deposition of Veronica E. Oulds, September 21, 2001 at 36 (Hereinafter "Oulds Dep. At ___").
Later in the day on March 22, after the Adjustor took Webb's recorded statement, she went to the salvage yard where Webb's vehicle was stored in order to assess the property damage and take photographs of his vehicle. Coincidentally, Webb was also at the salvage yard. His sister had driven him to the salvage yard to collect personal belongings from the trunk of his damaged vehicle. Prior to going to the salvage yard, Webb had ingested medication prescribed for him at the Christiana Hospital. This medication was Flexeril and Percocet. The Adjustor testified that while at the salvage yard she and Webb discussed "the whole case, the vehicle damages and his injuries." She further testified that although she did not have the police report, she had already determined that her insured caused the accident. At no time during the salvage yard conversation did the Adjustor ask Webb whether the doctors at the Christiana Hospital Emergency Room offered any diagnoses, whether he was scheduled for any follow-up treatment for the injuries he sustained in the accident, whether he was experiencing pain, or whether he had taken pain medication. During this impromptu conversation at the salvage yard, the Adjustor offered Webb $1,300 to settle all claims except PIP and property damage. She wrote out a check in that amount and prepared a "Release of all Claims." The Adjustor admitted that during this conversation she did not advise Webb that if his injuries turned out to be more severe than she and he thought they were at present, he would not be permitted to come back and ask for more money from Nationwide. Although the Adjustor told Webb the $1,300 check was a "full and final settlement for his injuries," she did not explain what "full and final" meant, rather, she "thought he understood." The Adjustor testified that she "explained the PIP" to Webb at the salvage yard and told him that PIP and property damage were excluded under the release. The Adjustor admitted that she did not have any discussion with Webb as to what would happen when his PIP was exhausted. Although the release has a signature line for a witness and for a Notary, the release was not signed by a witness or in the presence of a Notary. When questioned by Webb's counsel about this at her deposition, the Adjustor testified that it is "optional" as to whether the release is witnessed or notarized.
Id. at 37.
Id. at 48-49.
Id. at 46.
Id. at 46-47.
Id. at 47.
Id. at 52.
Id. at 53-54.
Webb testified that this entire meeting lasted only fifteen minutes. The Adjustor testified that she made the offer of $1,300 to settle all of Webb's personal injury claims, excluding PIP and property damage, after ten to fifteen minutes of discussion. According to the Adjustor, Webb did not appear to be under the influence of any medication at the salvage yard. According to Webb, however, he felt "pretty messed up" and "drugged up" as a result of the narcotic and muscle relaxant medication he was prescribed by Christiana Hospital. Further according to Webb, as a result of his pain, he just wanted to go home and did not have an adequate opportunity to read the release. Webb stated, "I was in pain and I was wanting to leave to go back home." He admits he did not advise the Adjustor of this circumstance.
Id. at 52.
Id. at 62.
Deposition transcript of Lemual A. Webb, September 24, 2201 at 31, 38 (Hereinafter referred to as "Webb Tr. at ___.").
Webb Tr. At 33.
Id.
During the entire discussion with Webb, Webb's sister was waiting in the car for him. Webb and the Adjustor talked outside near the car. The Adjustor admitted that at the time Webb signed the release and she tendered the $1,300 check to him she had no opinion on the severity of his injuries and had not reviewed any medical records. Webb testified that he felt the Adjustor "fast talked" him into signing the release and taking the settlement check. According to Webb, the Adjustor "kind of didn't explain all to me what the PIP and all that stuff is." Webb stated, "I remember her — recall her talking, but she kind of like fast talked me to sign that check." Webb was experiencing pain in his legs at the time he talked with the Adjustor and he and the Adjustor were standing during the conversation. Because of his concern about being "fast talked," Webb did not cash the $1,300 check. Instead, he promptly sought legal counsel. Within days, Webb hired legal counsel and his attorney returned the uncashed $1,300 check to Nationwide.
Webb Tr. at 32-38.
Id. at 32.
Id at 32.
Standard of Review
Summary Judgment may only be granted when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. The Court must consider the facts in the light most favorable to the non-moving party. When considering a Motion for Summary Judgment, the Court is required to "examine the present record, including pleadings, depositions, admissions, affidavits, and answers to interrogatories."
Wilson v. Joma, Inc., 537 A.2d 187 (Del.Super. 1998).
Oliver B. Cannon Sons, Inc. v. Door-Oliver, Inc. 312 A.2d 322 (Del.Super. 1973).
Id.
Discussion A. Was There Mutual Mistake by the Parties?
The execution of a general release is an absolute bar to bringing suit against the released party. However, a release will not operate as a bar if both parties are under a mutual mistake as to the existence or extent of a plaintiff's injuries at the time they entered into the release. The test is whether the plaintiff's present condition was a condition which was known at the time of executing the release. A mistake as to the prognosis of recovery from injury cannot be grounds for avoiding a release. "The mistake must relate to a past or present fact material to the contract and not to an opinion respecting future conditions as results of present facts." Thus, in order to rescind an agreement on the basis of mutual mistake, there must have been a mistake of a past or present fact material to the agreement. As noted by the Court in Reasin, "[a] mistake as to the future unknowable effect of existing facts, a mistake as to the future uncertain duration of a known condition, or a mistake as to the future effect of a personal injury, cannot [constitute a mutual mistake]. . . . ."Webb argues that the release should not bar suit because it was the result of a mutual mistake of fact regarding the existence and severity of his injuries. The defendant claims that there can be no mutual mistake because the Adjustor had no opinion as to the severity of the plaintiff's injuries and Webb admitted that at the time he signed the release he believed his pain was serious. Defendant relies on Reasin in arguing plaintiff is barred from filing suit.
In contrast to the facts in Reasin, Webb was ultimately diagnosed with a neurologic injury, a condition unknown to both parties when the release was proffered and signed. Moreover, one of his physicians has found that he is need of a fusion in his back. According to plaintiff, this diagnosis is far different from the diagnosis Webb was given at the Christiana Hospital Emergency Room. It is undisputed that neither the Adjustor nor Webb knew at the time the release was executed that he suffered from a disc injury. Although the defendant adamantly maintains it was not mistaken about the existence or extent of Webb's injuries, there is a genuine question of material fact as to whether the Adjustor would have offered only $1,300 if she knew Webb suffered from a disc and nerve injury.
The release was signed less than twenty-four hours after the accident, before the Adjustor reviewed any medical records or talked with any of the physicians at the Christiana Hospital who treated Webb, before the Adjustor knew what Webb's diagnosis was, before Webb was seen in follow-up care by a family doctor or specialist, and before any inquiry was made by the Adjustor as to the true nature and extent of Webb's injuries other than her cursory questions to Webb.
Although Webb knew he was injured, and the Adjustor knew he was injured, there is a question as to whether Webb and the Adjustor were mistaken as to the existence and extent of certain of his injuries. It is clear that neither knew there was a disc injury. Neither knew there was nerve damage. Neither knew the etiology of the leg pain Webb complained about. In short, there was insufficient medical information concerning his diagnosis at the time the Adjustor secured his signature on the release, and his condition was fluid in so far as the full extent of his injuries could not be known, understood or appreciated by him or the Adjustor within the first twenty-four hours following the accident. For these reasons, summary judgment is inappropriate on this issue.
I feel it important to add that the sequence of events leading up to Webb's execution of the release are troublesome to the Court. There was no urgency expressed by Webb in resolving his personal injury claim. There was no cognizable reason why the release had to be executed at a chance meeting outside at the salvage yard the day before the adjustor had planned to meet with Webb at his house to fully discuss the accident. It appears Webb was caught off guard and unprepared by the Adjustor's presence at the salvage yard and the ensuing discussion. Webb was not physically or mentally prepared for such a meeting or the ensuing discussion. The record suggests Webb was in pain and had consumed a narcotic analgesic along with a muscle relaxant for his pain. Given these facts, the salvage yard was hardly an appropriate setting for a meaningful, informed discussion about Webb's rights and, more importantly, the waiver of Webb's rights contained in the release.
The Court takes judicial notice of the fact that Percocet is a controlled substance prescribed by physicians for patients experiencing significant pain. It is described as an "opioid analgesic with multiple actions qualitatively similar to those of morphine; the most prominent involves the central nervous system. . . ." Physicians' Desk Reference 1326 (56th ed. 2002). Flexeril is a muscle relaxant which "may enhance the effects of alcohol, barbiturates, and other CNS depressants." Id. at 572. Both of these medications "may impair mental and/or physical abilities required for performance of hazardous tasks, such as operating machinery or driving a motor vehicle." Id.
B. Was Webb Under Duress or Coercion at the Time He Executed the Release?
Plaintiff moves for summary judgment on the ground that he was under duress or coercion at the time he executed the release. The record reveals that this chance meeting at the salvage yard took place outside, and although Webb told the Adjustor he was having pain in his legs and his leg pain was the worst pain of all his injuries, they stood for the discussion. Webb testified he was feeling "pretty messed up" and "pretty drugged up" and all he wanted to do was to go home because of his pain. He further testified that he had taken his medication before heading to the salvage yard. Webb's testimony strongly suggests his comprehension was impaired. Webb's testimony and the circumstances surrounding the execution of the release raise a question as to Webb's mental, physical and emotional state. Was Webb in a suitable frame of mind to discuss the important legal issue of whether he intended to waive his right to recover monetary damages from the tortfeasor? He testified he felt the Adjustor "fast talked him." The Adjustor, however, testified that she thought Webb understood "what we were doing at the time." She also testified Webb did not indicate that he had taken medication, did not have any questions about the release and he did not seem to be under the influence of medication, drowsy or inattentive. Clearly there is a factual issue with regard to the effect of the pain Webb was experiencing and the medication he consumed prior to the meeting with the Adjustor, whether he was impaired, whether she knew it, and whether, notwithstanding this knowledge, she secured the release of all claims.
Oulds Tr. at 15.
Id. at 15.
The Court is concerned that the Adjustor procured Webb's signature on a release within twenty-four hours of an accident which resulted in physical injury to him. His injuries were severe enough to require transport and treatment at the Christiana Hospital Emergency Room, and to warrant a prescription of Percocet and Flexeril, yet the Adjustor did not make any inquiries as to whether or not his medication prevented him from understanding or comprehending the gravity of the rights he was signing away. The Adjustor proceeded to negotiate a settlement and obtain a signature at the unplanned meeting at the salvage yard when she knew that she had scheduled a meeting with Webb at his home to take place the next day. She had to know Webb did not expect to see her at the salvage yard because they had no plans to meet until the following day. It is unclear why the insurance Adjustor felt the necessity to negotiate a settlement and have the plaintiff sign the release in the middle of the salvage yard rather than waiting until the next day. Presumably, had the Adjustor waited until their planned meeting, Webb, who is clearly unsophisticated in legal matters, would have had more time to recover from the trauma sustained in the accident, he would have been in his own environment, he would have been more comfortable sitting down during the discussion, and as a result, the discussion would probably have been longer and more thorough.
The sequence of events described in the depositions and during oral argument suggests to the Court that there was some sort of urgency on behalf of Nationwide in procuring the settlement. That is troubling in light of the fact that, by rushing to settle the matter, neither side knew exactly what injuries Webb had sustained or the extent of those injuries, and Webb felt "fast talked" into the settlement. The Adjustor indicated that Webb in no way suggested that he needed money right away. When questioned at oral argument about the speed with which this process took place, Nationwide pointed out to the Court that there are no statutes or regulations issued by the Insurance Commissioner's Office that prohibit an insurance carrier from negotiating a settlement this soon after an accident. While the Court acknowledges there are no such statutes or regulations, as a matter of public policy and fundamental fairness to those injured through no fault of their own, it would make sense to allow an injured party reasonable time to recuperate from the trauma and injuries sustained in an accident before the tortfeasor's liability carrier negotiates a full and final release of all bodily injury claims. Not only was the plaintiff in this case suffering from pain in his legs and other parts of his body as a result of the accident, but he was under the influence of strong pain and muscle relaxant medications for those injuries. There is nothing in the record to suggest that there was any need for the expedited settlement or the urgency with which the settlement was negotiated. Webb did not request it. The Court can only assume that Nationwide made a business judgment that it was in its best interest to negotiate a prompt settlement of this matter. While it is Nationwide's perogative to dictate its business practices, so long as they are within the confines of the law and the applicable regulations, such a practice in this instance was clearly not in the best interest of the individual injured by the insurance carrier's insured and raises an issue for the jury to decide as to whether Webb had the requisite mental capacity when he executed the release. There is also a genuine issue of material fact as to whether Webb was unduly or unfairly influenced, whether he was under duress, and whether he was coerced.
See G.A.S. v. S.I.S, 407 A.2d 253 (Del.Fam.Ct. 1978) (Holding mental incapacity from use of drugs may furnish a ground for voiding a contract.)
See McAllister v. Schettler, 521 A.2d 617, 623 (Del.Ch. 1986); Rudnitsky v. Rudnitsky, 2001 WL 1671149 (Del.Ch.) at *4.
Was there Valid Consideration for the Release?
Plaintiff moves for summary judgment on the ground that there was not a valid consideration for the release. The Court cannot rule as a matter of law that there was not valid consideration for the release. Plaintiff cites Smith v. Nationwide Mutual Insurance Company, and this case is supportive of plaintiff's position, however, defendant that case law which suggests that, notwithstanding the fact Webb did not sign the check, the fact he took the check after he signed the release was sufficient to create binding consideration. The Court finds that this is an issue for the jury to decide in that it involves genuine issues of material fact relating to whether the check was returned before the bargain was fully "sealed."Conclusion.
The Court finds that there is a genuine issue of material fact as to whether there was a mutual mistake concerning the existence and extent of Webb's injuries at the time Webb executed the release. The Court further finds that there is a genuine issue of material fact as to whether Webb had the requisite mental capacity to execute the release and whether he signed the release as a result of undue influence, duress or coercion. Finally, the Court finds there is a genuine issue of material fact as to whether there was valid consideration for the release. For the foregoing reasons, Defendant's and Plaintiff's Motions for Summary Judgment are DENIED.IT IS SO ORDERED.