Fitzwater v. Lambert and Barr, Inc.

• Decision Date: 07 May 1982
• Docket Number: Civ. No. 81-4076.
• Citation: 539 F. Supp. 282
• Parties: Donald M. FITZWATER and Barbara Fitzwater, Plaintiffs, v. LAMBERT AND BARR, INC. and Wausau Insurance Companies, Defendants.
• Court: U.S. District Court — Western District of Arkansas

539 F. Supp. 282

Donald M. FITZWATER and Barbara Fitzwater, Plaintiffs, v. LAMBERT AND BARR, INC. and Wausau Insurance Companies, Defendants.

Civ. No. 81-4076.

United States District Court, W. D. Arkansas, Texarkana Division.

May 7, 1982.

COPYRIGHT MATERIAL OMITTED

E. Ben Franks, Arnold, Lavender, Rochelle, Barnette & Franks, Texarkana, Ark., for plaintiffs.

Marshall H. Moore, Dowd, Harrelson & Moore, Texarkana, Ark., for defendants.

MEMORANDUM OPINION

H. FRANKLIN WATERS, Chief Judge.

Introduction

This action was brought by plaintiffs, Donald M. Fitzwater and his wife, Barbara Fitzwater, pursuant to 28 U.S.C. § 1332, based upon complete diversity of citizenship, arising from an automobile accident which occurred on U. S. Highway 82 near Stamps, Arkansas. Plaintiffs assert that the negligence of Arvie Johnson, an employee of Lambert and Barr, Inc., was the proximate cause of the collision, and that Lambert and Barr, Inc., is therefore liable by virtue of respondeat superior.

Defendants moved this Court for summary judgment in November of 1981, and filed an amended motion in March of 1982. Plaintiffs have timely responded and the issues are ripe for resolution.

Findings of Fact

1. Plaintiff, Donald M. Fitzwater is a citizen and resident of Bowie County, Texas. Plaintiff, Barbara Fitzwater, is the lawful wife of Donald Fitzwater and resides with him in Bowie County, Texas.

2. On July 30, 1979, Donald Fitzwater was involved in an automobile accident on U. S. Highway 82 near Stamps, Arkansas. Plaintiffs allege that their vehicle was struck from the rear by a vehicle driven by Arvie Johnson. Plaintiffs allege that Arvie Johnson was acting in the course and scope of his employment with the defendant, Lambert and Barr, Inc.

3. Mr. Fitzwater was approached by an insurance adjuster on August 22, 1979, at which time Mr. Fitzwater executed a release, which purported to be in full settlement of any claim he may have against Arvie Johnson and Lambert and Barr, Inc. Mrs. Fitzwater did not sign because of her concern for possible repercussions from the accident, unknown at that time.

4. On October 3, 1979, after Mr. Fitzwater had been observed by his family physician, both Mr. and Mrs. Fitzwater executed a second release. This release was in consideration of $1,756.50, for medical expenses and property damage, and released Arvie Johnson and Lambert and Barr, Inc. from any claims arising from the vehicular accident, known and unknown. The release unambiguously stated that the nature, extent, and duration of the injuries were not known at that time. Plaintiffs wrote on the release that they read it prior to signing it and understood that it settled everything.

5. On June 17, 1981, plaintiffs instituted this action, alleging that the release was ineffective because of fraud, duress, undue influence, mistake, lack of capacity, and failure of consideration. Defendants answered affirmatively raising the defense of release and settlement.

6. In November of 1981, defendants moved for summary judgment. In support of their motion defendants submitted the pleadings, depositions of the plaintiffs and the exhibits thereto. In February, plaintiffs responded, asserting that Donald Fitzwater was mentally incapacitated to the point that the release was void. Plaintiffs offered the pleadings, the plaintiffs' depositions, and the affidavit of Dr. Murray Day.

7. In March of 1982 the defendants filed an amended motion for summary judgment, proffering the deposition of Dr. Day in support. Plaintiffs responded, proffering the same deposition.

8. The Court finds that the plaintiff, Donald Fitzwater, suffers from low-grade hydrocephalus, caused at least partially by the accident of July 30, 1979. Because of the nature of the injuries there was a considerable delay in the appearance of the symptoms.

9. Donald Fitzwater is a high school graduate with some college and experience in the oil business. The Court finds that there is no genuine issue of fact presented with respect to Donald Fitzwater's legal incapacity to sign the releases. There is no evidence that Donald Fitzwater was generally incapable of executing legal documents, and there is no evidence that Donald Fitzwater was mentally incapacitated on August 22, 1979 or October 3, 1979 to the point that he was unable to understand the nature of his actions and their consequences. The Court finds that there is not the "slightest doubt" as to the plaintiffs' mental capacity presented. The Court finds that Donald Fitzwater and Barbara Fitzwater did not lack the legal capacity to contract on the dates in question. The evidence is not such that any other conclusion is possible.

10. The Court finds that there is no evidence that any circumstances constituting fraud surrounded the execution of the releases. There is no genuine issue of fact presented, and the evidence is not such that any other conclusion is possible.

11. The Court finds that no menacing or threatening circumstances such as to excite the reasonable apprehensions of a person of ordinary courage were present during the execution of either release. Nor, therefore, were the releases executed under the influence of same. There is no genuine issue of fact presented, and the evidence is not such that any other conclusion is possible.

12. The Court finds that Barbara Fitzwater, Donald Fitzwater and Wausau Insurance Companies fully understood the terms and effects of the releases. There is no genuine issue of fact presented, and the evidence is not such that any other conclusion is possible. Nor is there any evidence of fraud, misrepresentation or other inequitable conduct on the part of either defendant. There is no genuine issue of fact presented, and the evidence is not such as will admit of the slightest doubt that a material factual issue is not presented.

13. The Court finds that the insurer paid the plaintiffs the sum of $1,746.50, as compensation for both medical expenses and property damage. Viewed in the light of circumstances existing as of the time of the execution of the releases, this sum was not, as a matter of law, so grossly inadequate as to constitute a failure of consideration. No other pertinent circumstances surrounded the execution of the releases. There is no genuine issue of material fact presented, and the evidence is not such that any other conclusion is possible.

14. The releases were executed under such circumstances that the effects of same cannot be avoided. The Court finds that there is not the slightest doubt that a genuine issue of fact concerning the validity of the releases is presented.

Discussion

This cause arises under 28 U.S.C. § 1332 for injuries sustained by plaintiff, Donald M. Fitzwater, a citizen and resident of Bowie County, Texas, in an automobile accident which occurred on July 30, 1979, on U. S. Highway 82, in Arkansas. Plaintiff alleges that his vehicle was struck from the rear by a vehicle driven by one Arvie Johnson, in the course and scope of Mr. Johnson's employment with the defendant, Lambert and Barr, Inc.

Plaintiff allegedly suffered severe injuries as a result of the negligence of Arvie Johnson, which negligence is allegedly imputable to the defendant, Lambert and Barr, Inc., by virtue of respondeat superior.

Subsequently, Mr. Fitzwater executed a release on August 22, 1979, which purported to be a full settlement of the plaintiff's claim. Mrs. Fitzwater did not sign, because she "wanted to know if (Mr. Fitzwater) had any repercussions, possible repercussions from the accident." On October 3, 1979, after Mr. Fitzwater had been observed by his family physician, the plaintiffs executed a second release. The releases were presented to the plaintiffs by an insurance adjuster, employed by defendant Wausau Insurance Companies. So far as can be ascertained the releases were identical with respect to their effects, although as noted, Barbara Fitzwater did not sign the initial release, and the handwritten portions of each may have differed.

The October 3, 1979 release provides in pertinent part:

We for and in consideration of the sum of Seventeen Hundred and Forty Six and 50/100 Dollars ($1746 50/xx) to us paid, ... do hereby ... fully and forever release and discharge ... Lambert and Barr Incorporated and Arvie Johnson ... from any and all claims and demands, actions and causes of action, damages, claims for injuries, both known and unknown, including future developments thereof, ... or in any way growing out of, any and all known and unknown personal injuries including death resulting therefrom....

. . . . .

We agree that this settlement is in full compromise of such injuries and damages and that the payment is not to be construed as an admission of liability. We further agree that the nature, extent and results of the injuries or damages sustained by me (us) are not now all known or anticipated, but we nevertheless desire to settle and compromise said claim in full.

. . . . .

We have read the above release ourselves before signing it and understand that it settles everything.

/s/ Donald Fitzwater /s/ Barbara Fitzwater

(Underlined portions are handwritten)

On June 17, 1981, plaintiffs brought this action against defendants Lambert and Barr, Inc. and Wausau Insurance Companies, alleging that plaintiffs' claims were not barred by the release because of fraud, duress and undue influence, mutual mistake, lack of capacity, and want of consideration. Defendants responded, raising affirmatively the defense of release and satisfaction, generally denying that the release was executed under circumstances of fraud, duress, mistake, incapacity, and failure of consideration.

In November of 1981, defendants moved for summary judgment on the ground "that there is no genuine issue of material fact and that the Defendants are entitled to judgment as a matter of law." In support of their motion, defendants submitted the pleadings, depositions of the plaintiffs and the exhibits...