Cingoranelli v. St. Paul Fire and Marine Ins. Co.

• Decision Date: 14 February 1983
• Docket Number: No. 81SC306,81SC306
• Citation: 39 A.L.R.4th 366,658 P.2d 863
• Parties: Mary CINGORANELLI, Petitioner, v. ST. PAUL FIRE AND MARINE INSURANCE CO., St. Paul Mercury Insurance Co., and The St. Paul Insurance Company, Respondents.
• Court: Colorado Supreme Court

Page 863

658 P.2d 863

39 A.L.R.4th 366

Mary CINGORANELLI, Petitioner, v. ST. PAUL FIRE AND MARINE INSURANCE CO., St. Paul Mercury Insurance Co., and The St. Paul Insurance Company Respondents.

No. 81SC306.

Supreme Court of Colorado En Banc.

Feb. 14, 1983.

John P. Hartman, Englewood, for petitioner.

Paul D. Renner, P.C., John R. Rodman, Denver, for respondents.

J.D. MacFarlane, Atty. Gen., Richard F. Hennessey, Deputy Atty. Gen., Mary J. Mullarkey, Sol. Gen., David K. Rees, Asst. Atty. Gen., Denver, for amici curiae, Atty. Gen. and Com'r of Ins.

QUINN, Justice.

We granted certiorari to review the decision of the court of appeals in Cingoranelli v. St. Paul Fire & Marine Ins., 636 P.2d 1285 (Colo.App.1981), which held, in a case of first impression, that a general release executed in favor of a tortfeasor by an automobile accident victim barred the victim from pursuing "no fault" personal injury protection (PIP) claims against a PIP insurer and precluded the victim from recovering PIP benefits retained by the PIP insurer from the tort settlement proceeds paid in consideration of the general release. Because PIP benefits are distinct in both purpose and effect from tort claims, we hold that a general release of a tortfeasor by an automobile accident victim does not serve to release an insurance carrier from its PIP obligations in the absence of a specific provision which unequivocally includes PIP claims within the scope of the release instrument. We therefore reverse and remand for further proceedings.

I.

On April 7, 1975, petitioner Mary Cingoranelli was riding as a passenger in an automobile owned and operated by Mary Mazzacco, who had liability and PIP insurance coverage with St. Paul Insurance Company (St. Paul). ¹ Mazzacco's vehicle collided with an automobile driven by Bertha Betonski, who was insured by Travelers Insurance Company (Travelers). Cingoranelli suffered severe injuries in the accident, including the loss of an eye and multiple bone fractures. She required extensive medical care and rehabilitation, and asserted tort claims against Betonski and Mazzacco. In addition, she submitted several PIP claims to St. Paul, and by April of 1976 St. Paul had paid her a total of $13,687.20 in PIP benefits.

On April 13, 1976, Cingoranelli, who was represented by counsel, agreed to settle her tort claim against Betonski for $25,000, the limit of Travelers' liability insurance coverage. Cingoranelli signed a general release which was silent as to St. Paul and any PIP claims. The release provided in pertinent part as follows:

"I, Mary Cingoranelli, ... for the sole consideration of twenty-five thousand dollars ($25,000), to me in hand paid, receipt whereof is hereby acknowledged, have remised, released, and forever discharged, and ... do hereby remise, release, and forever discharge, Bertha Betonski and ... her ... successors and assigns ... and all other persons, firms, and corporations, of and from any and all claims, demands, rights, or causes of action of whatsoever kind or nature, arising from or by reason of any and all known and unknown, foreseen and unforeseen bodily and personal injuries, damage to property, and the consequences thereof, resulting, or to result, from a certain accident which happened on or about the 7th day of April 1975, for which I have claimed the said Bertha Betonski to be legally liable, which liability is hereby expressly denied."

Travelers issued a check for $25,000 payable to Cingoranelli, her attorney, and St. Paul. Out of this amount St. Paul retained $13,687.20 as reimbursement of the PIP benefits previously paid to Cingoranelli.

In August of 1976 a settlement was reached on Cingoranelli's claim against Mazzacco. Cingoranelli received $4,474.88 from St. Paul, the liability insurer of Mazzacco, and executed a second release which, like the former one, did not mention St. Paul or PIP claims. The Mazzacco release stated:

"Mary Cingoranelli [claimant] ... does hereby REMISE, RELEASE AND FOREVER DISCHARGE MARY MAZZOCCO [sic] [,] her agents, and servants, and all other persons, firms, and corporations whomsoever of and from any and all actions, claims and demands whatsoever which Claimant now has or may hereafter have on account of or arising out of the accident, casualty and/or event which happened on or about the 7th day of April, 1975, including those consequences thereof which may hereafter develop as well as those which have already developed or are now apparent.

"As a further consideration of said sum Claimant warrants that no promise or agreement not herein expressed has been made to Claimant; that in executing this Release Claimant is not relying upon any statement or representation made by the party or parties hereby released or said party's or parties' agents, servants or physicians concerning the nature, extent or duration of the injuries and/or damages, or concerning any other thing or matter, but is relying solely upon her own judgment; that the above mentioned sum is received by Claimant in full settlement and satisfaction of all the aforesaid claims and demands whatsoever; that Claimant is over twenty-one years of age and legally competent to execute this Release; and that before signing and sealing the Release Claimant has fully informed herself of its contents and meaning and has executed it with full knowledge thereof."

Cingoranelli, after executing the releases, continued to submit PIP claims which St. Paul refused to pay. On May 22, 1978, Cingoranelli filed suit against St. Paul in the Denver District Court, seeking to recover not only PIP claims accrued after April 13, 1976, the date of the first release, but also the $13,687.20 which St. Paul had retained from the Travelers settlement proceeds. Cingoranelli also claimed, pursuant to section 10-4-708(1), C.R.S.1973, a statutory entitlement to interest, attorney fees and treble damages due to St. Paul's alleged "willful and wanton failure ... to pay [PIP] benefits when due ...." ² St. Paul denied liability, claiming that Cingoranelli had released it from all PIP obligations when she executed the general releases in favor of Mazzacco and Betonski.

Trial was to the court. Pursuant to the judge's request, the parties first presented their evidence and arguments relating to the two releases. By way of offer of proof, Cingoranelli presented testimony from an expert witness, an attorney specializing in tort claims, that the settlement value of her tort claims against Betonski and Mazzacco was approximately $100,000. The trial court concluded that both releases constituted a bar to Cingoranelli's suit against St. Paul. Noting that neither release expressly reserved rights against St. Paul for PIP benefits, the court ruled that as a matter of law the release of one tortfeasor operated as a total bar to all claims for PIP benefits against St. Paul. The court of appeals affirmed, holding that Cingoranelli reserved "no right of action against the St. Paul companies in either release" and that "[g]eneral releases, such as these, discharge all joint tortfeasors, in addition to those specifically named." Cingoranelli v. St. Paul Fire & Marine Ins., supra at 1286. The court of appeals also held that because Cingoranelli executed a general release in favor of Mazzacco, St. Paul's insured, without expressly reserving any right of action against St. Paul for the $13,687.20 retained by it from the Betonski settlement proceeds, her claim against St. Paul for this amount was similarly barred.

II.

We first examine the effect of a general release upon Cingoranelli's PIP claims accruing after the execution of the releases. Cingoranelli argues that because PIP claims are contractual claims which exist independently of tort liability and arise by operation of the Colorado Auto Accident Reparations Act, section 10-4-701 et seq., C.R.S.1973 and 1982 Supp., they are not barred by the joint tortfeasor release rule relied upon by the court of appeals. We agree with her argument.

A.

A release is the relinquishment of a claim to the person against whom the claim is enforceable. E.g., Trustee Co. v. Bresnahan, 119 Colo. 311, 203 P.2d 499 (1949). The scope of a release is determined primarily by the intent of the parties as expressed in the release instrument, considered in light of the nature of the claim and the objective circumstances underlying the execution of the instrument. See, e.g., Mills v. Standard Title Ins., 195 Colo. 281, 577 P.2d 756 (1978); Farmers Elevator Co. v. Morgan, 172 Colo. 545, 474 P.2d 617 (1970); Cox v. Pearl Investment Co., 168 Colo. 67, 450 P.2d 60 (1969). For many years the rule in Colorado was that the release of a joint tortfeasor served to release all other joint tortfeasors. E.g., Price v. Baker, 143 Colo. 264, 352 P.2d 90 (1959); Morris v. Diers, 134 Colo. 39, 298 P.2d 957 (1956); Denver and R.G.R. Co. v. Sullivan, 21 Colo. 302, 41 P. 501 (1895). This rule stemmed from the common law notion as to the unity of a cause of action. Prosser, Joint Torts and Several Liability, 25 Calif.L.Rev. 413 (1937). Under this view, where multiple tortfeasors acted in concert in causing an injury, the act of one became the act of all, with each participant liable for the entire loss sustained by the plaintiff. Id. at 418. The surrender of that single cause of action resulted in releasing each joint tortfeasor from liability. W. Prosser, Handbook on the Law of Torts § 49 at 301 (4th ed. 1971).

Some Colorado cases expanded the joint tortfeasor release rule to include torts which were independent or successive and did so on the basis that the compensation received for the first release was presumed to include any injuries and damages resulting from the other tort claims. E.g., Ashley v. Roche, 163 Colo. 498, 431 P.2d 783 (1967); Sams v. Curfman, 111 Colo. 124, 137 P.2d 1017 (1943). In Cox v. Pearl Investment Co., supra, we recognized the harshness of this rule, especially where its application was...