Metropolitan Life Ins. Co. v. Ritz

• Decision Date: 19 January 1967
• Docket Number: No. 38687,38687
• Citation: 422 P.2d 780,70 Wn.2d 317
• Parties: METROPOLITAN LIFE INSURANCE COMPANY, Respondent, v. Gaylord C. RITZ and Verlie G. Ritz, individually and as the marital community of them composed, Appellants.
• Court: Washington Supreme Court

Page 317

70 Wn.2d 317

422 P.2d 780

METROPOLITAN LIFE INSURANCE COMPANY, Respondent, v. Gaylord C. RITZ and Verlie G. Ritz, individually and as the

marital community of them composed, Appellants.

No. 38687.

Supreme Court of Washington, Department 2.

Jan. 19, 1967.

Rehearing Denied March 8, 1967.

Critchlow, Williams & Ryals, David E. Williams, Richland, for appellants.

Gose & Gose, Walla Walla, for respondent.

LANGENBACH, Judge. ^*

The defendants have appealed from a summary judgment in favor of the plaintiff insurance company. The only issue is whether a full and final general release of All claims included a release of claims for medical expenses where a plea to the contrary raised no suggestion of fraud, overreaching, questionable conduct, misrepresentation, incapacity or mutual mistake.

There is no question of fact. Under these circumstances the release of All claims included All claims as a matter of law. Pepper v. Evanson, Wash., 422 P.2d 817 (1966); Beaver v. Estate of Harris, 67 Wash.Dec.2d 609, 409 P.2d 143 (1965).

Plaintiff insurance company (respondent here) had insured all employees of the General Electric Co. under a group policy which covered 'medical expenses.' The defendants were such employees. The group policy had a subrogation clause which provided:

In the event a participating employee * * * is entitled to receive payment or reimbursement from any other person * * * as a result of legal action or claim * * * with respect to any expenses paid or reimbursed to him under this plan, the insurance company shall be entitled to rights of subrogation against such other person * * *.

The policy had an exclusion clause which provided:

Exclusions. Expenses for the following are not covered medical expenses under the plan:

(j) Expenses for which payment or reimbursement is received by or for the account of the individual as the result of a legal action or settlement * * *.

Thereafter, the defendants, husband and wife, were both injured in an automobile accident and incurred medical expenses. Plaintiff, under the group policy, paid them a total of $1,865.39 for their medical expenses. At that time defendant executed a reimbursement agreement. In this agreement, they agreed to repay plaintiff the covered medical expenses which might be recovered as a result of a legal action or settlement. The pivotal part of this reimbursement agreement is as follows I * * * acknowledge the receipt of benefits in payment of Covered Medical Expenses incurred as a result of injuries suffered on Nov. 27, 1960.

In accordance with the provisions of this insurance plan, I agree to reimburse * * * (plaintiff) to the extent of any recovery of said expenses as the result of legal action or settlement * * *.

The defendants, through legal counsel, negotiated with their tort-feasor concerning the adjustment of liability and finally made a settlement for $7,000. This settlement was arranged without the assistance or advice of the plaintiff insurance company. At the conclusion of the negotiations and upon the receipt of the $7,000, defendants executed, and acknowledged before their attorney as notary, a 'Release In Full of All Claims.' This was a complete and comprehensive form, the essential part of which recited:

For and in consideration of the payment to me/us at this time of the sum of Seven thousand and no/100 Dollars ($7,000.00), the receipt of which is hereby acknowledged, I/we, being of lawful age, do hereby release, acquit and forever discharge Ross Daniel Phillips of and from any and all actions, causes of action, claims, demands, damages, costs, loss of services, expenses and compensation on account of, or in any way growing out of, any and all known and unknown personal injuries and property damage resulting or to result from accident that occurred on or about the 27th day of November, 1960, at or near U.S. Highway #30, near Cascade Locks, Oregon.

Defendants refused to reimburse plaintiff insurance company for its payment of their medical expenses. This action followed. Both parties filed motions for summary judgment with supporting affidavits. Defendants submitted affidavits to the effect that their settlement represented compensation for wage loss and general damages only; that the release of their tort-feasor made no specific reference to and did not include any medical expenses; and that, therefore, they were not required to reimburse plaintiff. The trial court denied defendants' motion and granted plaintiff's motion. Defendants were ordered to pay plaintiff $1,865.39, the amount of medical expenses which plaintiff had paid defendants under the group policy. Defendants have appealed.

The trial court entered the following finding of fact No. 6:

That the Plaintiff Company had obtained from the Defendants prior to payment of any claims a reimbursement agreement in which they agreed to repay the Plaintiff to the extent of any recovery of medical expenses as a result of a legal action or settlement. That said reimbursement agreement was merely a reaffirmation of the obligations to which the Defendants were bound under the terms of the insurance plan; that under the terms of the insurance plan, the Plaintiff was subrogated to the right of the Defendants to recover from any third party, the medical payments made by the...