Quintana v. Motel 6, Inc.

• Decision Date: 18 December 1984
• Docket Number: No. 7855,7855
• Citation: 693 P.2d 597,102 N.M. 229,1984 NMCA 134
• Parties: Linda QUINTANA, Plaintiff-Appellee, v. MOTEL 6, INC., et al., Defendants-Appellants.
• Court: Court of Appeals of New Mexico

Page 597

693 P.2d 597

102 N.M. 229

Linda QUINTANA, Plaintiff-Appellee, v. MOTEL 6, INC., et al., Defendants-Appellants.

No. 7855.

Court of Appeals of New Mexico.

Dec. 18, 1984.

[102 NM 229] Elias N. Quintana, Albuquerque, for plaintiff-appellee.

Katherine E. Tourek, Gordon J. McCulloch, Bradley & McCulloch, P.A., Albuquerque, for defendants-appellants.

OPINION

BIVINS, Judge.

Defendants appeal from an order setting aside a portion of a court-approved settlement in a worker's compensation action. The issue on appeal is whether the trial court erred. We hold it did and reverse.

Plaintiff suffered an accidental injury to her lower back in April, 1982. Following discovery the parties entered into a settlement which included extended medical benefits for a period of two years up to a limit of $9,000. The trial court approved the settlement in January, 1983. Less than a year later plaintiff through new counsel moved for relief from the judgment, claiming mutual mistake of fact. The trial court found for plaintiff and set aside that part of the judgment limiting defendants' obligation for future medical.

Dr. Eugene Szerlip, an orthopedic surgeon, and plaintiff's treating physician, had originally diagnosed plaintiff's injury as spondylolisthesis of the L-5, S-1 with a back strain superimposed which made that congenital defect symptomatic. Because conservative treatment was not relieving the symptoms, Dr. Szerlip recommended a fusion. This surgical procedure together with estimated cost figured into the settlement. A few months following the settlement Dr. Szerlip ordered a discogram in preparation for the fusion. This diagnostic procedure revealed a degenerative disc at the L-4 level which he said was the "true cause of her pain." This disc, according to the physician, had not bulged sufficiently out of place to register on the myelogram nor was it hitting any nerve root so that it would show up on the electromyogram, two diagnostic procedures administered at the outset. Dr. Szerlip said this was not an unusual situation in lower back problems with people having spondylolisthesis. He said, "[w]hen you get them [causes] all sorted out, it becomes evidence that at least part of the pain is coming from an injury to the disc just above the spondylolisthesis and [the] spondylolisthesis itself, if not the cause of their pain, is certainly not the cause of all of their pain. Therefore, the answer must address both of those disc phases." He said any treatment for the lower back would have to include a laminectomy (excision of the postenor arch of L-4) as well as a fusion. The estimated cost of both procedures would be $15,080.

Generally, in order to set aside or avoid a written settlement or release, there must be evidence of misrepresentation, fraud, undue influence, coercion or mutual mistake, and such evidence must be clear and convincing. Woods v. City of Hobbs, 75 N.M. 588, 408 P.2d 508 (1965); Durham v. Gulf Interstate Engineering Company, 74 N.M. 277, 393 P.2d 15 (1964); Mendenhall v. Vandeventer, 61 N.M. 277, 299 P.2d 457 (1956). Plaintiff here claims only mutual mistake of fact. There is no dispute as to the facts, the issue involved being solely one of law. This being so, do the facts constitute a mutual mistake of fact that would warrant relief from the settlement?

Because of the change in diagnosis the trial court found "[t]hat there was a mutual mistake of fact as to the existence of the injury suffered by Plaintiff Linda Quintana." The trial court relied on language from Mendenhall v. Vandeventer, which makes a distinction between an incorrect diagnosis, which may provide a basis for rescinding a settlement, and an incorrect prognosis, which does not.

Such distinction does not help plaintiff. In Mendenhall, as in this case, there was a known injury. Mrs. Mendenhall had a fractured ulna; plaintiff had a lower back injury. It was with reference to a known injury that settlement was effected in each case. At the time of the settlement there was no mistake by plaintiff, her doctor, her attorney, or defendants as to the injury itself; that was known. What was unknown was the precise cause, i.e. the degenerative disc at L-4 as opposed to the spondyloslisthesis of the level below.

In accord with the Mendenhall holding are cases from Florida with facts strikingly similar to the one before us. In DeWitt v. Miami Transit Co., 95 So.2d 898 (Fla.1957), a personal injury action, plaintiff signed a release in reliance of the doctor's initial examination which revealed " 'muscular and ligamentous strains with perhaps some minor tearing in her lower back.' " About a year later, plaintiff underwent a myelogram examination which revealed the existence of a herniated disc in the fourth lumbar interspace. Corrective surgery ensued. Plaintiff then instituted suit to avoid the general release on grounds of mutual mistake. On a motion for summary judgment, plaintiff submitted the affidavit of her doctor which stated that on the initial examination, there was no evidence of a herniated disc. The affidavit further stated that in the doctor's opinion, the plaintiff's accident was the proximate cause for the herniated disc.

The Florida Supreme Court affirmed the lower court's ruling in favor of defendant's motion for summary judgment, stating:

In the case before us there was no mistake as to the injury itself. The mistake, if any, here was as to the ultimate consequences of the injury. The opinion of the orthopedist is clear that there was no evidence of a herniated disc at the outset. Although the doctor may have suspected something of this nature, he "was not convinced" of it, according to his affidavit, until August, 1953, a full thirteen months after the release was executed. Here Mrs. DeWitt and her doctors were fully informed by x-rays and otherwise that she had suffered an injury to her lower back. They merely failed to evaluate accurately at the time of the examination the ultimate product of the injury she had received.

While a release executed pursuant to a mistake as to a past or present fact may on proper showing be set aside, unknown or unexpected consequences of known injuries will not result in invalidating the release. An erroneous opinion or error of judgment respecting future conditions as a result of presently known facts will not justify setting the release aside. If the rule were otherwise no release could be safely accepted in personal injury matters. The end result would be that all such claims would be forced into litigation. Such a conclusion would be directly contrary to the policy of the law favoring amicable settlement of disputes and the avoidance of litigation.

95 So.2d at 901. See also Swilley v. Long, 215 So.2d 340 (Fla.App.1968), (Plaintiff who signed release on basis that injuries consisted of only a contusion and sprain of lower back was barred from invalidating release after a subsequent examination revealed a herniated disc); Zock v. Douglas, 284 So.2d 496 (Fla.App.1973) (Though plaintiff's nerve root injury assertedly did not manifest itself until after the release had been executed, plaintiff could not void a release on basis of mutual mistake since nerve root injury was merely the consequence of a known injury).

Here there was a lower back injury, the slipped disc was not evident on the initial exam, and the physician testified that he "had missed the true cause of her pain." The physician had merely failed to evaluate accurately at the time of the examination the ultimate product of the known injury. Here, as in Mendenhall, the mistake was as to the consequences of a known injury, not the injury itself.

In Smith v. Loos, 78 N.M. 339, 431 P.2d 72 (Ct.App.1967) this court held: "A contract or settlement, which equity will reform or rescind because of a mutual mistake, must fail to express the agreement actually entered into, or fail to express what was really intended by the parties." 78 N.M. at 343, 431 P.2d 72 (citations omitted). The stipulation, judgment and release, and satisfaction of judgment contains language which clearly expressed the parties' intent. They provide, inter alia, for a "full, complete and final satisfaction of all claims, past, present or future, which Plaintiff may have or claim against the Defendants ... on account of the injury sustained by the Plaintiff." Moreover, the trial court carefully examined plaintiff with regard to her understanding of the settlement, as well as the provisions concerning the limited future medical benefits. The court informed plaintiff and her husband who was present at the hearing that, if the case went to trial, plaintiff could receive lifetime medical benefits and that, by settling, she was giving that up. Plaintiff acknowledged her understanding of the agreement and expressed her wish for its approval.

To permit the rescission of this settlement would undermine the policy which favors settlements. This court recently restated that policy in Gonzales v. Atnip, 102 N.M. 194, 692 P.2d 1343 (1984):

The historical and current public policy of this state is to favor the settlement of disputed claims. Ratzlaff v. Seven Bar Flying Service, Inc., 98 N.M. 159, 646 P.2d 586 (Ct.App.1982). This policy applies to the settlement of lawsuits. Jones v. United Minerals Corp., 93 N.M. 706, 604 P.2d 1240 (1979); Bogle v. Potter, 68 N.M. 239, 360 P.2d 650 (1961); Esquibel v. Brown Construction Co., 85 N.M. 487, 513 P.2d 1269 (Ct.App.1973). The settlement of a lawsuit will be enforced by the courts. Jones.

To allow relief under the facts of this case would mean...