Menendez v. Perishable Distributors, Inc.

• Decision Date: 02 May 1985
• Docket Number: No. 41745,41745
• Citation: 254 Ga. 300,329 S.E.2d 149
• Parties: MENENDEZ et al. v. PERISHABLE DISTRIBUTORS, INC., et al.
• Court: Georgia Supreme Court

Page 149

329 S.E.2d 149

254 Ga. 300

MENENDEZ et al. v. PERISHABLE DISTRIBUTORS, INC., et al.

No. 41745.

Supreme Court of Georgia.

May 2, 1985.

Don A. Keenan, David S. Bills, Robert A. Falanga, Keenan & Associates, P.C., Atlanta, for Ernest Menendez et al.

T. Cullen Gilliland, M. Scott Barksdale, Gray, Gilliland & Gold, Atlanta, for Perishable Distributors, Inc., et al.

PER CURIAM.

The United States Court of Appeals for the Eleventh Circuit sent us three certified questions. The answers to questions one and two are that Florida law applies. The third question is mooted by our answers above.

The facts of the case may be found in greater detail in Menendez v. Perishable Distributors, Inc., 744 F.2d 1551 (11 Cir.1984). Briefly stated, appellant was a passenger in an automobile traveling through Georgia when a collision occurred. Appellant and the driver were Florida residents at the time the suit was filed. The owner of the other vehicle and its driver resided in Georgia. Appellant filed suit in a Federal District Court in Georgia against the two drivers and the owner of the other vehicle. The driver of the automobile was dismissed by the court due to lack of total diversity. Appellant filed a separate suit in a Florida State Court against the automobile driver. The Florida case was settled and appellant signed a release in Florida. During the course of the trial in Federal Court against the driver and the owner of the other vehicle, appellees, the existence of the release was discovered. Appellees were allowed to orally amend their pleadings to assert the release as an affirmative defense, and the court directed a verdict in their favor.

In Georgia a release is "subject to the same rules as govern ordinary contracts in writing, and parol evidence is not admissible to contradict or vary the terms or stipulations." Southern Bell Telephone and Telegraph Co. v. Smith, 129 Ga. 558, 59 S.E. 215 (1907); See also Henslee v. Houston, 566 F.2d 475, 479-80 (5th Cir.1978). A general release or a release which contains no reservations, executed in favor of one joint tortfeasor, in full settlement of damages, releases all joint tortfeasors. Zimmerman's, Inc. v. McDonough Construction Co., et al, 240 Ga. 317, 319, 240 S.E.2d 864 (1977). Florida has, by statute, abolished the common law rule that the release of one tortfeasor discharges the other tortfeasors. F.S.A. § 768.041.

QUESTION ONE: "Under the choice of law rules of the State of Georgia, what state's substantive law governs the effect of a release that was executed in the State of Florida and that by its terms, forever discharged 'all ... persons, firms or corporations ... from any and all claims, demands, actions causes of actions or suits of any kind or nature whatsoever' arising from an injury-causing accident which occurred in Georgia?"

In Georgia, a release is a contract. See Southern Bell Telephone and Telegraph Co., supra, 129 Ga., at p. 558, 59 S.E. 215. Under the holding of General Telephone Co. of the Southeast v. Trimm, 252 Ga. 95, 311 S.E.2d 460 (1984), The Florida law controls the effect of the release under the rule of lex loci contractus. ¹

QUESTION TWO: "Under the choice of law rules of the State of Georgia, what state's substantive law governs the admissibility of extrinsic evidence establishing the intent of the contracting parties who executed a release in the State of Florida that, by its terms, forever discharged 'all ... persons, firms or corporations ... from any and all claims, demands, actions, causes of actions or suits of any kind or nature whatsoever' arising from an injury-causing accident which occurred in Georgia?"

The rule of lex loci contractus controls all substantive matters, such as "the nature, construction and interpretation of contracts. [Cits.]" Cox v. Adams, 2 Ga. 158, 165 (1947). The rule of "lex fori controls all matters affecting only the remedy, such as rules of evidence, methods of shifting the burden of proof, and the presumptions arising from given states of fact. [Cit.]" Hill v. Chattanooga Railway and Light Co., 21 Ga.App. 104, 93 S.E. 1027 (1917).

The parol evidence rule " 'is not one merely of evidence, but is one of positive or substantive law founded upon the substantive rights of the parties.' [Cit.]" Albany Federal Savings & Loan Assn. v. Henderson et al., 198 Ga. 116, 143, 31 S.E.2d 20 (1944); See also Dunn v. Welsh, 62 Ga. 241, 244 (1879). Likewise, contemporaneous...