Gossinger v. Association of Apartment Owners of Regency of Ala Wai

Decision Date25 August 1992
Docket NumberNo. 15320,15320
Citation835 P.2d 627,73 Haw. 412
PartiesPhyllis GOSSINGER and Herman Gossinger, Plaintiffs-Appellants, v. ASSOCIATION OF APARTMENT OWNERS OF the REGENCY OF ALA WAI, and Carol Sutherland, Defendants-Appellees.
CourtHawaii Supreme Court

Syllabus by the Court

1. On appeal, an award of summary judgment is reviewed under the same standard applied by the lower court. Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law.

2. An insurer that does not respond promptly to a party's settlement demand and does not negotiate settlement in good faith may violate HRS §§ 431:13-102 and 431:13-103(a)(10).

3. The general rule applicable in other contexts is that, absent fraud, duress, coercion, undue influence, or other acts of overreaching by a releasee, a release can only be avoided by a releasor on the grounds of mutual mistake.

4. A compromise damages settlement for personal injury is ordinarily not voidable for mistake because the injury was greater and lasted longer than was expected at the time of settlement, if the parties knew or had reason to know that the extent of the injury was uncertain and that was the very reason for the compromise.

5. A mistake, whether mutual or unilateral, as to the nature or extent of an injury is not a proper basis for rescinding a release when the party seeking rescission has initiated and urged settlement of his or her personal injury claims (or has not otherwise been improperly induced into settlement by an unfair claim settlement practice) and has signed the release knowing that he or she is not completely cured and is aware that the injury may require future treatment.

6. Although public policy favors securing fair and just compensation for actionably inflicted injuries, public policy also favors the finality of negotiated settlements that avoid the costs and uncertainties of protracted litigation.

7. A motion for reconsideration is permissible under HRCP 59(e) as a motion to alter or amend the judgment.

8. On appeal, the standard of review for denial of a motion for reconsideration is whether the lower court abused its discretion.

9. The lower court does not abuse its discretion in denying a motion for reconsideration if the arguments and evidence supporting the motion could and should have been produced in opposition to the other party's motion for summary judgment.

Douglas R. Spencer, Spencer & Richards, Honolulu, for plaintiffs-appellants.

Paul T. Yamamura (Jonathan L. Ortiz and Dennis E.W. O'Connor, Jr. with him on the brief, Ortiz & Yamamura), Honolulu, for defendant-appellee AOAO of Regency of Ala Wai.

Edquon Lee (George W. Brandt with him on the brief; Lyons, Brandt, Cook & Hiramatsu), Honolulu, for defendant-appellee Carol Sutherland.

Before LUM, C.J., MOON, and LEVINSON, JJ., and HEEN, Associate Judge, Intermediate Court of Appeals, in Place of WAKATSUKI, J., Recused, and BURNS, C.J., Intermediate Court of Appeals, in Place of KLEIN, J., Recused. LEVINSON, Justice.

The plaintiffs-appellants Phyllis Gossinger (Mrs. Gossinger) and Herman Gossinger (collectively the Gossingers) appeal an order granting summary judgment in favor of the defendants-appellees Association of Apartment Owners of the Regency of Ala Wai (the Association) and Carol Sutherland (Sutherland) on the Gossingers' negligence claim arising out of a slip and fall accident in their apartment. The Gossingers also appeal an order denying their motion for reconsideration of the summary judgment. We affirm both orders.

I.

On the morning of June 8, 1988, Mrs. Gossinger slipped and fell on soapy water that had flooded the bathroom floor of the apartment the Gossingers had rented from Sutherland, a member of the Association. Immediately after the accident, Mrs. Gossinger drove herself to the Queen's Medical Center (QMC) Emergency Room (ER) where the ER physician on duty examined her. Various diagnostic tests, including x-rays, were performed. Based on the examination and test results, the ER physician concluded that Mrs. Gossinger had suffered a back strain, which he advised her "would take a long time to heal." The ER physician advised Mrs. Gossinger to rest and swim in order to aid her recovery. He also advised her to have a follow-up examination at the beginning of the following week--or sooner if her condition worsened.

The next day, June 9, 1988, the Gossingers wrote to the Association demanding compensation for personal injury and property damage caused by the flooding incident. In their letter (the demand letter), the Gossingers stated:

                  We would like compensation for the personal injury and mental stress that
                  your company has put us through
                  This includes
                3 months back Rent at 600. per mo                                      $1800.00
                1 Bathroom Scale....                                                   $ 107.00
                Physical Injury & Mental Stress                                          600.00
                                       Total                                           $2507.00
                  We will wait five (5) working [sic] for a response.  If nothing is done to
                  compensate us we will take legal action immediately 
                ----------
                

(Reproduced as in original.) Three days later, on June 12, 1988, Mark Kochi, an insurance adjuster for State Farm Insurance Company (State Farm), the Association's general liability insurance carrier, met with the Gossingers to settle their claims as set forth in the demand letter. As a result of the meeting, the Gossingers settled their claims for the sum of $1,100.00 and signed a release form (the release) drafted by State Farm, which provided:

For the Sole Consideration of [$1,100.00], the receipt and sufficiency whereof is hereby acknowledged, the undersigned [Gossingers] hereby releases [sic] and forever discharges [sic] [the Association], their heirs, executors, administrators, agents and assigns, and all other persons, firms or corporations liable or who might be claimed liable, ... from any and all claims, demands, damages, actions, causes of action or suits of any kind or nature whatsoever, and particularly on account of all injuries, known and unknown, both to person and property, which have resulted or may in the future develop from an accident which occurred on or about the 9th [sic] day of June 1988....

(Emphasis added.)

The record reflects that the Gossingers read the release before voluntarily signing it. On the face of the release, the settlement sum included compensation for Mrs. Gossinger's claimed injury. When the Gossingers executed the release Mrs. Gossinger was still suffering from back pain, and the Gossingers knew that Mrs. Gossinger had not fully recovered from her back injury. In their demand letter, as noted above, the Gossingers had threatened to "take legal action immediately" against the Association if the Association's insurer did not settle their claims.

Approximately one year after signing the release, Mrs. Gossinger's back pain had not subsided. Upon examination by a physician, she was diagnosed as suffering from a herniated disc requiring surgery. The Gossingers incurred over $20,000 in medical expenses for the surgery and follow-up care.

On January 18, 1990, the Gossingers filed a complaint against the Association and Sutherland (collectively the defendants), claiming that they were entitled to damages based on the defendants' negligence in failing to keep the property in a reasonably safe condition and to prevent and warn them of the dangerous condition. Both defendants pleaded, inter alia, the affirmative defense of discharge and release based on the Gossingers having voluntarily and knowingly signed the release. On December 20, 1990, the Association filed a motion for summary judgment, and on December 27, 1990, Sutherland filed a joinder in the Association's motion. The Gossingers opposed the motion on the grounds of unilateral or mutual mistake. On March 12, 1991, the circuit court entered an order granting summary judgment in favor of the Association and Sutherland, ruling as follows:

[T]he Court hereby finds that Plaintiff Phyllis Gossinger was aware of her lower back injury at the time she initiated her demand for payment for, among other things, her physical injury. The Court also finds that she was also aware that the injury would require future treatment and although she was apparently unaware of the extent of the injury or its degree, she nevertheless accepted settlement, indeed urged it, and knowingly signed the Release. The Court finds that under these circumstances, mutual mistake is unavailing.

On March 20, 1991, the Gossingers filed a motion for reconsideration of the order; on April 23, 1991, the motion was denied. The Gossingers filed a timely notice of appeal challenging the two orders.

II.

A.

On appeal, the Gossingers contend that the circuit court committed three errors in granting summary judgment in favor of the Association and Sutherland: (1) when it found that Mrs. Gossinger was "aware that the injury would require future treatment" at the time she signed the release; (2) by not allowing the release to be rescinded based on a good faith mistake of fact as to the nature or extent of Mrs. Gossinger's injury; and (3) in disposing, by way of summary adjudication, of the question whether there existed a mutual mistake of fact.

We review an award of summary judgment under the same standard applied by the circuit court. Birmingham v. Fodor's Travel Publications, Inc., 73 Haw. 359, 365, 833 P.2d 70, 74 (1992); Cuba v. Fernandez, 71 Haw. 627, 631, 801 P.2d 1208, 1211 (1990); First Hawaiian Bank v. Weeks, 70 Haw. 392, 396, 772 P.2d 1187, 1190 (1989). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together...

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