Peterson v. Coca-Cola USA

• Citation: 48 P.3d 941,2002 UT 42
• Decision Date: 26 April 2002
• Docket Number: No. 20000804.,20000804.
• Parties: Stephen L. PETERSON, Plaintiff and Appellant, v. COCA-COLA USA, Coca-Cola USA Operations, Coca-Cola USA (BOD) Bottling Operations Department, Coca-Cola Fountain, Swire Pacific Holdings, Inc., a Delaware Corporation, dba, Coca-Cola Bottling Company of Salt Lake, aka, Swire Coca-Cola, Coca-Cola Bottling Company of Salt Lake, Defendants and Appellees.
• Court: Supreme Court of Utah

48 P.3d 941

2002 UT 42

Stephen L. PETERSON, Plaintiff and Appellant, v. COCA-COLA USA, Coca-Cola USA Operations, Coca-Cola USA (BOD) Bottling Operations Department, Coca-Cola Fountain, Swire Pacific Holdings, Inc., a Delaware Corporation, dba, Coca-Cola Bottling Company of Salt Lake, aka, Swire Coca-Cola, Coca-Cola Bottling Company of Salt Lake, Defendants and Appellees.

No. 20000804.

Supreme Court of Utah.

April 26, 2002.

Tim Dalton Dunn, Paul J. Simonson, David A. Goodwill, Salt Lake, for plaintiff.

Dale J. Lambert, Rebecca L. Hill, Salt Lake City, for defendants.

DURHAM, Chief Justice:

¶ 1 This is a personal injury action brought by Stephen Peterson against Swire Pacific Holdings Inc. (Swire), a Delaware corporation doing business as Coca-Cola Bottling Company of Salt Lake, for damages sustained in a motor vehicle accident in Salt Lake City. Peterson sued Swire as the employer of the driver, Thomas Stengel (Stengel), based on the doctrine of respondeat superior. Peterson appeals the trial court's grant of partial summary judgment to Swire.

FACTS

¶ 2 On February 12, 1992, Stengel was driving northbound on 900 East when he fell asleep at the wheel and his car collided with Peterson's. At the time of the accident Stengel was employed by Swire and acting within the scope of his employment.

¶ 3 On August 4, 1993, Peterson settled with Stengel for the amount of Stengel's automobile insurance policy limits. Stengel's insurance carrier, Nationwide Mutual Company (Nationwide), paid Peterson $50,000, and in return, Peterson and his wife signed a release. At the time of this settlement, neither Peterson nor his lawyer knew that Stengel was employed by Swire. The relevant part of the release states as follows:

FOR AND IN CONSIDERATION OF the payment to me/us of the sum of $50,000.00 FIFTY THOUSAND & NO/100 Dollars, and other good and valuable consideration, I/we, being of lawful age, have released and discharged, and by these presents do for myself/ourselves, my/our heirs, executors, administrators and assigns, release, acquit and forever discharge Thomas & Susan Stengel and Nationwide Mutual Co. (reserving, however, our rights to be made whole through our uninsured motorist coverage under our auto insurer, American States Ins. Company) and any and all other persons, firms and corporations, whether herein named or referred to or not, of and from any and all past, present and future actions, causes of action, claims, demands, damages, costs, loss of services, expenses, compensation, third party actions, suits at law or in equity, including claims or suits for contribution and/or indemnity, of whatever nature, and all consequential damage on account of, or in any way growing out of any and all known and unknown personal injuries, death and/or property damage resulting or to result from an accident that occurred on or about the 12th day of Feb 19 92, at or near 2800 S. & 9th E-SLC Utah.

¶ 4 After settling with Stengel, Peterson obtained $300,000 for his injuries from Peterson's underinsured motorist carrier, American States Insurance (American). Peterson first learned of Stengel's employment with Swire during finalization of negotiations with American.

¶ 5 On February 9, 1996, this lawsuit was filed, and on December 8, 1997, Gayle Peterson was appointed Stephen Peterson's conservator and guardian because of his incapacity.

¶ 6 The trial court granted Swire's motion for summary judgment, concluding that: (1) the August 4, 1993 release entered into by Peterson was valid and relieved Swire of liability for all claims involving vicarious liability and respondeat superior; (2) there was no evidentiary or legal basis for reforming, voiding, or otherwise failing to enforce the release entered into by Peterson; and (3) if the release does not release Swire from vicarious liability, then Swire is entitled to a $350,000 credit for the money already received by Peterson from his own underinsured motorist carrier.¹ Peterson appealed.

STANDARD OF REVIEW

¶ 7 Summary judgment is proper only where "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Utah R. Civ P. 56(c). In considering a grant of summary judgment, "we review the court's legal decision for correctness, giving no deference, and review `the facts and inferences to be drawn therefrom in the light most favorable to the nonmoving party.'" Booth v. Attorneys' Title Guaranty Fund, Inc., 2001 UT 13, ¶ 28, 20 P.3d 319 (quoting J.R. Simplot Co. v. Sales King Int'l Inc., 2000 UT 92, ¶ 13, 17 P.3d 1100).

ANALYSIS

¶ 8 On appeal, Peterson argues that partial summary judgment should not have been granted. He asserts that (1) the release was not valid to relieve Swire from vicarious liability; (2) the release should have been voided or reformed; and (3) Swire should not have been granted a $350,000 credit toward its liability.

I. APPLICABILITY OF THE RELEASE TO SWIRE

¶ 9 Under Utah law, "Releases are contractual provisions and should be interpreted according to well-developed rules of contract interpretation." Ward v. Intermountain Farmers Ass'n, 907 P.2d 264, 267 (Utah 1995) (citing Simonson v. Travis, 728 P.2d 999, 1001-02 (Utah 1986)); Horgan v. Industrial Design Corp., 657 P.2d 751, 753 (Utah 1982). The underlying purpose in construing or interpreting contractual provisions is to determine the intentions of the parties. See SME Industries, Inc. v. Thompson, Ventulett, Stainback and Associates, Inc., 2001 UT 54, ¶ 14, 28 P.3d 669

(citing Winegar v. Froerer Corp., 813 P.2d 104, 108 (Utah 1991)); John Call Eng'g, Inc. v. Manti City Corp., 743 P.2d 1205, 1207 (Utah 1987). The court may consider extrinsic evidence of the parties' intentions where the contractual provision is ambiguous. See SME Industries, 2001 UT 54 at ¶ 14, 28 P.3d 669. "A contract provision is ambiguous if it is capable of more than one reasonable interpretation because of `uncertain meanings of terms, missing terms, or other facial deficiencies.'" Winegar, 813 P.2d at 108 (quoting Faulkner v. Farnsworth, 665 P.2d 1292, 1293 (Utah 1983)).

¶ 10 In addition to the general rules of contract construction that apply to releases, there are statutory provisions that govern them. The two relevant statutes are section 78-27-42 of the Liability Reform Act (the LRA release clause) and section 15-4-4 of the Joint Obligations Act (the JOA release clause). The LRA release clause 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.

Utah Code Ann. § 78-27-42 (1996).

The JOA release clause provides:

[T]he obligee's release or discharge of one or more of several obligors, or of one or more of joint or of joint and several obligors, shall not discharge co-obligors against whom the obligee in writing and as part of the same transaction as the release or discharge expressly reserves his rights; and in the absence of such a reservation of rights shall discharge co-obligors only to the extent provided in Section 15-4-5.

Utah Code Ann. § 15-4-4 (1999).

Both acts similarly provide that "the release of one obligor does not discharge co-obligors against whom the obligee in writing expressly reserves his rights." Nelson v. Corporation of Presiding Bishop of Church of Jesus Christ of Latter-day Saints, 935 P.2d 512, 514 (Utah 1997). The application of the JOA language and the LRA language differs, however, where a release does not contain an express reservation of rights. The LRA release clause has been interpreted as requiring that a release "must contain language either naming the defendant or identifying the defendant with some degree of specificity in order to discharge that defendant from liability." Child v. Newsom, 892 P.2d 9, 12 (Utah 1995). The JOA release clause, however, has been interpreted as releasing a joint obligor from liability by the release of other joint obligors unless there is an express reservation in writing by the injured party. See Krukiewicz v. Draper, 725 P.2d 1349, 1350 (Utah 1986)

.

¶ 11 In determining the reach of these two statutes, this court has previously observed that the LRA is a pro tanto repeal of the JOA as it applies to regular co-defendants, but that the JOA still applies to vicariously liable parties. See Nelson, 935 P.2d at 514 n. 3

. In the present case, Peterson is suing Stengel's employer, Swire, under a theory of vicarious liability, so the JOA applies to the interpretation of the release.

¶ 12 We find that the release is unambiguous because it is not "capable of more than one reasonable interpretation." Winegar, 813 P.2d at 108. The release specifically states that it releases Stengel, his wife, Nationwide, as well as "any and all other persons, firms and corporations, whether herein named or referred to or not." The contract's only express reservation of rights is to allow Peterson to pursue additional recovery from his underinsured motorist carrier, American. Swire is a corporation that clearly falls within the definition of "any and all other persons, firms and corporations." Because the JOA release clause required Peterson to expressly reserve his rights against Swire in writing, which he did not do, see Krukiewicz, 725 P.2d at 1350,

we find the release is valid as to Swire.

II. ENFORCEABILITY OF THE RELEASE

¶ 13 Peterson argues that the release is void or should have been reformed because (1) Swire was an undisclosed principal at the time the release was signed and therefore should not be allowed to take advantage of the release; (2) Peterson was incompetent to sign the release; (3) mutual mistake of the parties requires the release's reformation; and (4) applying the JOA instead of the LRA to vicariously liable parties is unconstitutional.

A. Undisclosed Principal

¶ 14 At the time Peterson signed the release agreement with Stengel, he did not know that Stengel was employed by Swire. Peterson...