Douglas v. U.S. Tobacco Co.

Decision Date10 February 1982
Docket NumberNo. 81-1596,81-1596
PartiesRoy Travis DOUGLAS, Executor of the Estate of Ada Clayborn, deceased, Appellant, v. UNITED STATES TOBACCO COMPANY, Appellee.
CourtU.S. Court of Appeals — Eighth Circuit

Gregory G. Smith (argued), Pryor, Robinson, Taylor & Barry, Fort Smith, Ark., for appellant.

Alston Jennings, Little Rock, Ark., and Edwin J. Jacob, New York City, for appellee.

Before HEANEY and McMILLIAN, Circuit Judges, and REGAN, * Senior District Judge.

McMILLIAN, Circuit Judge.

Roy Travis Douglas appeals from a summary judgment entered in the District Court 1 for the Western District of Arkansas based on a general release executed by appellant's decedent, Ada Clayborn.

For reversal appellant argues that the district court erred (1) in finding that the release complies with the provisions of Ark.Stat.Ann. § 34-1001 et seq. (Uniform Contribution Among Tortfeasors Act) so as to discharge appellee United States Tobacco Co., and (2) in not allowing appellant to introduce parol evidence to prove that the parties to the release did not intend to discharge appellee. In response appellee argues that the general release barred any action against it and also that the terms of the release are unambiguous. For the reasons discussed below, we affirm the district court.

The original claim by appellant's decedent, Clayborn, was a malpractice action against the estate of Dr. Manley alleging that he failed to properly diagnose and treat Clayborn's oral cancer. In February 1973, Clayborn settled and dismissed the suit for the consideration of $5,000 and executed the following general release discharging:

Mary B. Manley, as Administratrix of the Estate of R. H. Manley, Deceased, and his, her, their, or its agents, servants, successors, heirs, executors, administrators, and all other persons, firms, corporations, associations or partnerships of and from any and all claims, actions, causes of action, demands, rights, damages, costs, loss of service, expenses and compensation whatsoever, which the undersigned now has/have or which may hereafter accrue on account of or in any growing out of any and all known and unknown, forseen and unforseen bodily and personal injuries and property damage and the consequences thereof resulting or to result from the accident, casualty or event which occurred on or about the day of , 1971, at or near Clarksville, Johnson County, Arkansas.

Clayborn subsequently initiated a negligence action against appellee based on its failure to warn snuff users of the potential carcinogenic effect of snuff. 2 Clayborn died in 1977 and her executor, appellant, was substituted as plaintiff. On May 13, 1981, appellee first learned of the release and filed an amended answer asserting the affirmative defense of accord and satisfaction and also filed a motion for a summary judgment.

The parties agreed that the applicable law was Arkansas' Uniform Contribution Among Tortfeasors Act (Uniform Act), Ark.Stat.Ann. § 34-1001 et seq., which provides in relevant part:

34-1002

(1) The right of contribution exists among joint tortfeasors.

(2) A joint tortfeasor is not entitled to a money judgment for contribution until he has by payment discharged the common liability or has paid more than his pro rata share thereof.

(3) A joint tortfeasor who enters into a settlement with the injured person is not entitled to recover contribution from another joint tortfeasor whose liability to the injured person is not extinguished by the settlement.

34-1004

A release by the injured person of one joint tortfeasor, whether before or after judgment, does not discharge the other tortfeasors unless the release so provides; but reduces the claim against the other tortfeasors in the amount of the consideration paid for the release.... (emphasis supplied)

The district court granted appellee's motion finding that the release was unambiguous and that the language of the release discharging "all other persons, firms, corporations ..." satisfied the language of § 34-1006 of the Uniform Act providing that other tortfeasors are discharged "if the release so provides." Douglas v. United States Tobacco Co., No. FS-76-72-C (W.D. Ark. May 21, 1981). In support of its holding the district court reasoned that under § 34-1002(2) of the Uniform Act appellee could not have proceeded against the estate of Dr. Manley until it had discharged the common liability or paid more than its pro rata share. Therefore, the release would not limit Dr. Manley's exposure unless it also limited the total exposure of all joint tortfeasors. The court further reasoned that under § 34-1002(3) of the Uniform Act a joint tortfeasor is not entitled to recover from a second joint tortfeasor whose liability has not been extinguished by settlement. Therefore, Dr. Manley or his estate could not have contribution from appellee unless appellee was also a beneficiary of the release and the entire claim of Clayborn was settled.

In further support of its holding the district court cited Morison v. General Motors Corp., 428 F.2d 952 (5th Cir.), cert. denied, 400 U.S. 904, 91 S.Ct. 142, 27 L.Ed.2d 141 (1970), in which the Fifth Circuit held that a general release discharging "all other persons" was sufficient under § 34-1004 of Arkansas' Uniform Act to release joint tortfeasors who were not parties to the release.

On appeal appellant first argues that the district court erred, as a matter of law, because the Arkansas Supreme Court has held that a joint tortfeasor is discharged only if specifically named in a release, citing Smith v. Tipps Engineering & Supply Co., 231 Ark. 952, 333 S.W.2d 483 (Ark.1960) (Smith ), and Allbright Brothers Contractors v. Hull-Dobbs Co., 209 F.2d 103 (6th Cir. 1953) (Allbright ), which was relied upon in Smith. We disagree with appellant's interpretation of those cases and conclude that they are distinguishable from the present case.

In Smith the sole issue before the court was whether a judgment in a friendly suit barred a subsequent action against a joint tortfeasor. The case is based upon § 34-1003 of the Uniform Act, which provides for the effect of a judgment against one tortfeasor and is not at issue here. In addition, the release in that case provided: "(W)e hereby covenant that no release has been or will be given to or settlement or compromise made with any third party who may be liable for any damages to us...." 333 S.W.2d at 484. Therefore, in contrast to the release before us, the release in Smith explicitly provided that no other persons were to be or had been discharged.

Allbright is similarly distinguishable on the basis that the release in that case did not release anyone but the named tortfeasor. 209 F.2d at 103. In addition, the issue for decision in Allbright, like Smith, was not the language of a release. The case involved judgments entered upon a settlement agreement in which only the paying joint tortfeasor was named. The judgments that were paid did not purport to discharge the common liability of the other joint tortfeasors nor did they purport to discharge the other joint tortfeasors from liability to the injured parties. 3

We conclude that neither Smith nor Allbright support appellant's argument. In addition, our research indicates that there are no Arkansas or Eighth Circuit cases construing the words "unless the release so provides" which deal with a release of "all other persons, firms, or corporations, etc."

The majority of cases from other jurisdictions have held that language releasing any and all persons in addition to the named parties satisfies the requirement of the Uniform Act "unless the release so provides." Morison v. General Motors Corp., supra, 428 F.2d 952; Doganieri v. United States, 520 F.Supp. 1093 (N.D.W.Va.1981); Stefan v. Chrysler Corp., 472 F.Supp. 262 (D.Md.1979), aff'd, 622 F.2d 587 (4th Cir. 1980); Fuls v. Shastina Properties, Inc., 448 F.Supp. 983 (N.D.Cal.1978); Bonar v. Hopkins, 311 F.Supp. 130 (W.D.Pa.1969), aff'd, 423 F.2d 1361 (3d Cir. 1970); Dorenzo v. General Motors Corp., 334 F.Supp. 1155 (E.D.Pa.1971); Peters v. Butler, 253 Md. 7, 251 A.2d 600 (1969); Johnson v. City of La Cruces, 86 N.M. 196, 521 P.2d 1037 (1974); Hasselrode v. Gnagney, 404 Pa. 549, 172 A.2d 764 (1961). We agree with this construction as announced in these cases. 4

The Fifth Circuit in Morison v. General Motors Corp., supra, 428 F.2d 952, explains the policy reasons for allowing an unnamed defendant to have the benefit of a general release, especially in light of the Uniform Act. The defendant who originally procures the release gains nothing if the plaintiff can 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.

We believe that Morison is a carefully considered opinion based upon sound reasoning. Also, we note that it was decided in 1970, and the legislature of the State of Arkansas has had ample opportunity to act if it thought that the Morison decision was inconsistent with Arkansas law. The legislature has not acted. Nor has any litigant sought to have an Arkansas appellate court overturn the Morison ruling. In addition, we note that Morison is consistent with the majority position. Therefore, in the absence of any indication that Arkansas would not follow the majority position, we affirm the district court.

Appellant next argues that the insertion of the date "1971" in the release, which was executed in 1973, demonstrates the parties' intent to release only Dr. Manley's estate or, alternatively, creates an ambiguity so that parol evidence should have been admitted. 5 Appellant also argues that the Arkansas Supreme Court would, if presented with the issue, hold that a party to a release could introduce parol evidence in a suit against a stranger. In response appellee argues that, under Arkansas law, when a...

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