Krauss v. Utah State Dept. of Transp.

Decision Date19 April 1993
Docket NumberNo. 920680-CA,920680-CA
Citation852 P.2d 1014
PartiesHarold KRAUSS, Plaintiff and Appellant, v. UTAH STATE DEPARTMENT OF TRANSPORTATION, Defendant and Appellee.
CourtUtah Court of Appeals

Jeffrey D. Eisenberg and Michael E. Blue, Salt Lake City, for plaintiff and appellant.

Jan Graham and Debra J. Moore, Salt Lake City, for defendant and appellee.

Before GARFF, GREENWOOD and ORME, JJ.

OPINION

ORME, Judge:

Plaintiff in a personal injury action appeals an adverse jury verdict and the trial court's denial of his motions for a directed verdict and judgment notwithstanding the verdict. The primary issue is whether a broadly phrased release, which does not name defendant, should be deemed to have released defendant from liability. We hold it does not and remand for a new trial.

FACTS

On May 3, 1986, appellant Harold Krauss, a Colorado resident, was sleeping in the back seat of a car he borrowed from his parents when the driver fell asleep. The car ran off I-70 in southern Utah and crashed, resulting in Krauss's permanent paraplegia. Krauss sued the State of Utah, specifically naming the Utah Department of Transportation (UDOT), under a theory of negligent design and location of the guardrail that the car struck. On March 13, 1987, Krauss, with advice of his attorney, signed a document releasing his parents, the driver, their insurance companies and "any and all other persons, firms and corporations, whether herein named or referred to or not, of and from any and all" causes of action in exchange for $200,000, the liability policy limits for the driver and owners of the car. UDOT paid no consideration for the release and did not participate in the negotiations incident to the release. Indeed, UDOT was apparently unaware that such negotiations had taken place.

Before trial, UDOT claimed that Krauss released it from liability by signing the release quoted above and moved for summary judgment on that basis. The trial court denied UDOT's motion. After a four-day jury trial, UDOT and Krauss each filed motions for a directed verdict, which the court rejected. The jury received a special verdict form, the first question of which asked jurors whether Krauss "discharged or released defendant State of Utah from liability, if any, for his injuries." The remaining eight interrogatories required the jury to assess whether UDOT was negligent, and, if so, how much Krauss was entitled to as damages. The special form instructed the jurors that if they found Krauss did in fact release UDOT from liability, they should not answer the remaining interrogatories. The jury found that Krauss released UDOT from liability, did not answer any further interrogatories, and returned its verdict to the court. Krauss moved for judgment notwithstanding the verdict, which the court denied.

On appeal, Krauss asserts the release contained boilerplate language which did not discharge UDOT from liability because it was not specifically named. Krauss argues such specificity is required under Utah Code Ann. § 78-27-42 (1992), which provides: "A release given by a person seeking recovery to one or more defendants does not discharge any other defendant unless the release so provides." Krauss also contends that the trial court erred by (1) denying his motion for a directed verdict, (2) allowing the release issue to go to the jury, and (3) denying his motion for judgment notwithstanding the verdict. Ultimately, because these issues distill into a claim that there was insufficient evidence to support the jury's verdict, we discuss them in that context within. 1 Cerritos Trucking Co. v. Utah Venture No. 1, 645 P.2d 608, 611 (Utah 1982).

APPLICATION OF SECTION 78-27-42

Krauss's initial claim, that Utah Code Ann. § 78-27-42 (1992) precludes UDOT from availing itself of the release, requires this court to interpret that statutory provision. Interpreting a statute is purely a matter of law, and we therefore accord no deference to the trial court's interpretation. Ward v. Richfield City, 798 P.2d 757, 759 (Utah 1990); Lounsbury v. Capel, 836 P.2d 188, 192 (Utah App.), cert. denied, 843 P.2d 1042 (Utah 1992).

The parties offer three lines of cases from other jurisdictions as justification for their preferred statutory construction. These cases can be roughly categorized as following either the specific identity rule, the intent rule, or the four corners rule. The "specific identity rule," Krauss's preferred construction, provides that "the release of one tortfeasor does not discharge other tortfeasors unless the latter are named in the release or are otherwise specifically identifiable from the face of the instrument." Moore v. Missouri Pac. R.R., 299 Ark. 232, 773 S.W.2d 78, 80-81 (1989). UDOT prefers what it terms the "four corners rule," whereby courts have determined that language similar to the release in this case is unambiguous as a matter of law and that the release applies to unnamed parties. See, e.g., Mussett v. Baker Material Handling Corp., 844 F.2d 760, 761-62 (10th Cir.1988). Finally, under the "intent rule," "the scope of a general release is dependent upon the intent of the parties who negotiated the release." Neves v. Potter, 769 P.2d 1047, 1053 (Colo.1989). Thus, alleged tortfeasors who were not parties to the release must prove that the parties to the agreement intended them to be beneficiaries of the release. Id. While neither party prefers the intent rule, both parties claim victory with its application. Krauss claims the release is ambiguous and that UDOT failed to prove any intent to release it. UDOT, on the other hand, claims the words of the release are clear and demonstrate an intent to release it.

We eschew the notion that any of these "special" rules provides a unique principle for interpreting releases under the pertinent statute. We adhere instead to the straightforward concept that releases are contractual provisions and should be interpreted according to well developed rules of contract interpretation. See, e.g., Simonson v. Travis, 728 P.2d 999, 1001-02 (Utah 1986); Horgan v. Industrial Design Corp., 657 P.2d 751, 753 (Utah 1982). While each of the three rules is offered as the only proper method for construing releases under the statute, only the specific identity rule arguably offers a rule of construction uniquely applicable to section 78-27-42. The four corners and intent rules merely reflect general principles of contract interpretation.

A. Specific Identity Rule

While the best evidence of legislative intent is the plain language of a statute, in cases like the present one, where statutory language is ambiguous, we avail ourselves of any relevant legislative history. See Hansen v. Salt Lake County, 794 P.2d 838, 841 (Utah 1990); P.I.E. Employees Fed. Credit Union v. Bass, 759 P.2d 1144, 1151 (Utah 1988). The history of section 78-27-42 is especially enlightening. Originally, as enacted in 1973, section 78-27-42 "by necessary implication" repealed sections of the Joint Obligations Act, which had codified the common law rule that a release of one tortfeasor also released all other tortfeasors. 2 See Krukiewicz v. Draper, 725 P.2d 1349, 1350-51 (Utah 1986). In the Liability Reform Act of 1986, the Legislature shortened section 78-27-42 and created the current language as part of a bill that abolished joint and several liability in Utah. See 1986 Utah Laws ch. 199. The statute now reads: "A release given by a person seeking recovery to one or more defendants does not discharge any other defendant unless the release so provides." Utah Code Ann. § 78-27-42 (1992).

Krauss asserts that section 78-27-42 requires that all releasees be specifically named or clearly described. In essence, he would have us interpret section 78-27-42 to mean: "A release given by a person seeking recovery to one or more defendants does not discharge any other defendant unless the release expressly names or clearly refers to that defendant." While some courts with statutes similar to ours believe it necessary to adopt the specific identity rule in order to effect the legislative intent to abolish the harsh common law rule, see Bjork v. Chrysler Corp., 702 P.2d 146, 163 (Wyo.1985), neither party provides, nor does our own research uncover, any evidence that the Utah Legislature intended such an interpretation. On the contrary, the Utah Legislature's intent is probably mirrored in the experience of the Colorado Legislature.

In Neves v. Potter, 769 P.2d 1047 (Colo.1989), the Colorado Supreme Court noted the basic choice confronting that state's legislature when it passed a statute worded much like section 78-27-42. The court observed:

The [Uniform Contribution Among Tortfeasors Act] does not discharge joint tortfeasors "unless [the release] terms so provide," while the [Uniform Joint Obligation Act] does not release joint tortfeasors "unless [the release] terms expressly so provide.".... Had the General Assembly intended to require that express designation was a prerequisite to releasing a joint tortfeasor, it could have adopted a version of the UJOA rather than the UCATA.

Id. at 1053 (emphasis in original). This reasoning is persuasive in view of the Utah Legislature's ability to select from the same choices available to the Colorado Legislature. We accordingly do not read section 78-27-42 to automatically nullify a release as to a party that is not expressly named or precisely described in the release document. If the Legislature had intended that result, it could easily have said so. 3

B. Four Corners and Intent Rules

As noted above, the four corners rule and the intent rule are not rules uniquely applicable to releases under section 78-27-42, but are instead manifestations of certain principles of general contract interpretation. Utah courts have historically analyzed releases pursuant to general contract principles. See Simonson v. Travis, 728 P.2d 999 (Utah 1986); Palmer v. Davis, 808 P.2d 128 (Utah App.), cert. denied, 817 P.2d...

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