Hendricks v. Simper

• Decision Date: 19 August 1975
• Docket Number: CA-CIV,No. 1,1
• Citation: 24 Ariz.App. 415,539 P.2d 529
• Parties: John F. HENDRICKS and Cheryl Dawn Hendricks, husband and wife, Appellants, v. William SIMPER and Trina Simper, husband and wife, and Austin Simper and Jane Doe Simper, husband and wife, Appellees. 2621.
• Court: Arizona Court of Appeals

Page 529

539 P.2d 529

24 Ariz.App. 415

John F. HENDRICKS and Cheryl Dawn Hendricks, husband and wife, Appellants, v. William SIMPER and Trina Simper, husband and wife, and Austin Simper and Jane Doe Simper, husband and wife, Appellees.

No. 1 CA-CIV 2621.

Court of Appeals of Arizona, Division 1, Department B.

Aug. 19, 1975.

[24 Ariz.App. 416] Chard & Karasek, Ltd. by Robert A. Chard and David J. Karasek, Phoenix, for appellants.

Johnson, Tucker, Jessen & Drake, P.A. by Michael M. Johnson, Phoenix, for appellees.

OPINION

HAIRE, Chief Judge.

On this appeal we are required to determine whether the trial judge erred in directing a verdict for the defendants (appellees). The sole issue at trial concerned the validity of a release which had been executed by the plaintiffs. The facts show that on November 25, 1969, plaintiff, John F. Hendricks, was injured while riding a horse near Holbrook, Arizona. The horse was owned by Austin Simper, who was insured by Farmers Insurance Group. After sustaining his injuries, Mr. Hendricks was transferred to Good Samaritan Hospital in Phoenix, Arizona. While a patient in the hospital, Mr. Hendricks and his wife, Cheryl Hendricks, signed a release dated December 11, 1969, upon the receipt of a draft from Farmers Insurance Group in the sum of $2500.00.

The release provided as follows:

'For and in consideration of the sum of $Two Thousand Five Hundred and 00/100 (2,500.00) receipt of which is acknowledged, I release and forever discharge Austin Simper and William Simper their principals, agents, representatives and insurance carriers from any and all rights, claims, demands and damages of any kind, known or unknown, existing or arising in the future, resulting from or related personal injuries death or property damage, arising from an accident that occurred on or about the 25 day of November, 1969, at or near Holbrook, Arizona.

'I understand that this is a compromise settlement of all my claims of every nature and kind whatsoever arising out of the accident referred to above, but is not an admission of liability. I understand that this is all the money or consideration I will receive from the above described parties as a result of this accident. I have read this release and understand it.'

Approximately ten days later, after Mr. Hendricks had been released from the hospital, both he and Mrs. Hendricks endorsed the $2500 draft, which contained the following release language printed immediately above their endorsements:

'Endorsement of this draft constitutes a release of all claims, known or unknown, the undersigned has or may have against the payor and any other person on account of any and all claims arising out of the loss referred to on the face hereof.'

It was plaintiffs' theory that the release was invalid and should be set aside because:

1. John Hendricks was mentally incompetent to execute a release on December 11, 1969, and therefore the release was ineffective as a contract.

2. The release was invalid under the principles established in Dansby v. Buck, 92 Ariz. 1, 373 P.2d 1 (1962), because it was based on a mutual or unilateral mistake of the parties.

3. The release was invalid because it was induced by the actual or constructive fraud of the defendants' agent.

Additional facts pertinent to each of these contentions will be set forth in our discussion of plaintiffs' argument.

Initially, we note that when reviewing the granting of a motion for a directed verdict, we must consider the evidence and reasonable inferences therefrom in a light most favorable to the opposing party, Tanner v. Levie, 105 Ariz. 149, 460 P.2d 995 (1969). Moreover, the court cannot weigh the evidence when passing upon the propriety of such a motion, Cano v. Neill, 12 Ariz.App. 562, 473 P.2d 487 (1970). The test, as stated by the Arizona Supreme Court in Davis v. Weber, 93 Ariz. 312, 380 P.2d 608 (1963), is:

'A defendant's motion for a directed verdict admits the truth of whatever evidence the opposing party has introduced and any inferences reasonably drawn therefrom. (Citation omitted). On such a motion the evidence must be treated and viewed in a light most favorable to the party against whom the motion is sought. (Citation omitted). The motion should be granted only where the evidence is not sufficient to support a contrary verdict or so weak that a court would feel constrained to set aside such a verdict on a motion for new trial.' 93 Ariz. at 314--15, 380 P.2d at 609.

Applying these principles, we conclude that the trial judge correctly granted the defendants' motion for directed verdict.

I. COMPETENCY TO EXECUTE THE RELEASE

Plaintiffs' contentions in this regard are somewhat elusive inasmuch as plaintiffs have not set forth in their brief any authority or any standard against which to measure the evidence concerning Mr. Hendricks' competency to contract. Generally they point out that Mr. Hendricks was afflicted with worries stemming from his personal and financial difficulties, pain resulting from his injuries, and that he was taking medication to relieve his physical discomfort. No such contentions are made as to Mrs. Hendricks, who also executed the release. We find the evidence in this regard completely insufficient to establish a prima facie case which would justify submission of the competency issue to the jury. The standard against which the evidence must be measured is whether, under all the circumstances, a person's mental abilities have been so affected as to render him incapable of understanding the nature and consequences of his acts, that is, unable to understand the character of the transaction in question. Cundick v. Broadbent, 383 F.2d 157 (10th Cir. 1967); Wood v. Dunlop, 8 Wash.App. 957, 510 P.2d 260 (1973); See generally: 41 Am.Jur.2d, Incompetent Persons, § 71. Although we find no Arizona decisions directly in point dealing with competency in an ordinary contractual situation, substantially this same standard has been applied in questions dealing with the competency of a grantor when the validity of a deed is questioned. Thus, in Pass v. Stephens, 22 Ariz. 461, 198 P. 712 (1921) the Arizona Supreme Court stated:

'It is well settled that mere mental weakness in the grantor does not invalidate a deed. To have that effect the mental power must be so far deteriorated or destroyed that the grantor is incapable of understanding in a reasonable degree and knowing the consequences of the instrument he executes.' 22 Ariz. at 470, 198 P. at 715.

See also, Stewart v. Woodruff, 19 Ariz.App. 190, 505 P.2d 1081 (1973); Young v. Lujan, 11 Ariz.App. 47, 461 P.2d 691 (1969).

One asserting the invalidity of a contract on the grounds of incompetency has a burden of showing such incompetency by clear and convincing evidence. Stewart v. Woodruff, supra. Evidence of a party's worries is insufficient. Carrillo v. Murray & Layne Co., 25 Ariz. 303, 216 P. 689 (1923). Both of the medical experts' testimony indicated that the pain endured by Mr. Hendricks would not be a significant factor in his mental processes at the time the release was executed. Although considerable evidence was presented concerning medications given to Mr. Hendricks while he was in the hospital, there is no evidence that any medication received by him rendered him incapable of understanding the nature of the transaction at the time of the execution of the release. In fact, all the evidence is to the contrary. The court had the benefit of a tape recording of the insurance agent's interview with Mr. Hendricks recorded at the time in question. From Mr. Hendricks' answers, it is abundantly clear that he knew and understood exactly what was going on and clearly assented thereto. In addition, some ten days later, he endorsed the draft which again set forth the release provisions. Under these circumstances it would have been error for the trial judge to submit the...