Sylvester J. Meola v. Vincent Naso, 84-LW-1828

• Decision Date: 17 May 1984
• Docket Number: 47276,84-LW-1828
• Parties: Sylvester J. Meola, et al., Plaintiffs-Appellants v. Vincent Naso, et al., Defendants-Appellees
• Court: Ohio Court of Appeals

Sylvester J. Meola, et al Plaintiffs-Appellants v. Vincent Naso, et al., Defendants-Appellees

No. 47276.

84-LW-1828 (8th)

Court of Appeals of Ohio, Eighth District Cuyahoga

May 17, 1984

Civil appeal from Common Pleas Court, Case No. 016,996.

For Plaintiffs-Appellants: Paul Mancino, Jr., Esq., 1001 One Public Square, Cleveland, Ohio 44113.

For Defendants-Appellees: Ed Duncan, Esq., 1144 Huntington Bank Building, Cleveland, Ohio 44115.

JOURNAL ENTRY and OPINION

DAY C.J.

The plaintiff-appellant, Sylvester Meola (plaintiff), appeals a decision granting summary judgment in favor of the defendant-appellee, Nationwide Insurance Co. (defendant). For the reasons adduced below, the judgment is reversed and the cause remanded.

I.

The plaintiff was injured in an automobile accident, having been struck from behind by a vehicle driven by Vincent Naso. Naso was uninsured. Therefore, the plaintiff filed a claim against Nationwide - his own insurance company - under the uninsured motorist provision of his policy. The claim was refused on that ground that in consideration of $100, the plaintiff had signed a "Release and Trust Agreement" purporting to release Nationwide from all uninsured motorist claims arising out of the accident.

The plaintiff brought suit against Naso and Nationwide alleging fraud in the excution of the release and seeking recovery under his policy; his wife was joined as a plaintiff in a loss of consortium claim against Naso.

II.

For purposes of this case, decided on a motion for summary judgment, Nationwide does not dispute the facts as given by the plaintiff at deposition and by affidavit.

Briefly, the facts are these: About one month after the collision, the plaintiff received a phone call from Donald McCoy, a Nationwide insurance adjuster. McCoy said the plaintiff had $100 coming to him representing a waiver of the $100 deductible on the policy. The waiver was in consideration of the plaintiff's cooperation in the processing of the claim. When asked the ?? of his authority to waive, McCoy answered that adjusters had discretion in such matters within modest dollar amounts. The plaintiff agreed to accept the money and asked McCoy to mail it to him. McCoy, however, insisted on dropping by the plaintiff's office to deliver the check in person.

McCoy arrived, gave the plaintiff the check, then, according to the plaintiff's deposition:

"[H]e put a document in front of me, and I believe he wrote on it at the time and said, 'Oh, we have to have you sign this.'

"He filled in some blanks and offered it to me and looked at it, and it's a little bit lengthy and it's in legal terminology, and I told him I didn't have the time to read it. All I wanted to know from him is that I'm not waiving any of my rights from my policy, and he stated emphatically that I'm not waivng any rights."

"I specifically told him I didn't have the time to read the document, I would take his word for it, that I'm not waiving any rights under my policy. And his assurance that I wasn't, I signed this. That basically is what happened." (Dep. at 32-33)

The plaintiff also said in his deposition that he was told:

"A. This $100 could be charged off - if I sustained any settlement, they could recoup their $100 by virtue of them giving it to me now if I were to receive anything under any claims I might have. This is what I was led to believe. That's fine. Perfectly legitimate situation. If I get a thousand dollars and Nationwide wanted back $100, fine, let them take it.

"Q. And that is the only reason he gave you for signing Exhibit A? [The release.]

"A. Yes. . . ." (Dep. at 36)

III.

Assignment of Error No. I:

"The court committed prejudicial error in granting the motion for summary judgment as genuine issues as to material facts exist concerning the validity of the release and the relationship of the parties."

Nationwide's ultimate position on the motion for summary judgment was that, assuming that fraud and misrepresentation occurred as the plaintiff alleged, he was not entitled to relief as a matter of law. The motion was essentially for dismissal, see Kwait v. John David Management Co. (1974), 42 Ohio App. 2d 63, 66. In support of this position it relies on Dice v. The Akron, Canton & Youngstown Rd. Co. (1951), 155 Ohio St. 185, an action brought by an employee to avoid the release of a Federal Employers' Liability Act claim. In Dice, the court denied relief saying:

"Even if, as alleged in the amended reply, defendant did misrepresent to plaintiff the contents of the release and plaintiff executed the release in reliance upon that misrepresentation and in the belief that it was something else, plaintiff could admittedly read the release and there was no evidence that anything was done to prevent him from reading it. Plaintiff testified that he was told by defendant's employee that he would not have to read the release. This was denied by defendant's employee. However, there was no evidence tending to prove that plaintiff was denied an opportunity to read the release.

"A person of ordinary mind cannot say that he was misled into signing a paper which was different from what he intended to sign when he could have known the truth by merely looking when he signed. . . . If this were permitted, contracts would not be worth the paper on which they are written. If a person can read and is not prevented from reading what he signs, he alone is responsible for his omission to read what he signs."®1¯ Id., at 190-191.

Footnote 1 . This case was reversed in Dice v. Akron, Canton & Youngstown Rd. Co. (1952), 342 U.S. 359, 361. The Supreme Court held the validity of the release raised a question of federal rather than state law. Of course, this does not affect the implications of the decision in the Supreme Court of Ohio for releases with no federal consequence.

Although Dice has been relied upon in subsequent cases, see McBennett v. Piskur (1965), 3 Ohio St. 2d 8, 13; Leedy v. Ellsworth Construction Co. (1966), 9 Ohio App. 2d 1, 4-5,®2¯ it is not the total word on the subject. A release is a contract. And there is a considerable body of Ohio case law permitting recission of a contract obtained through fraud, despite the negligence of the defrauded party, see City View Apartment & Storage Co. v. Neiss (App. 1926), 154 N.E. 161, 162; Monnett v. The Columbus, Sandusky & Hocking Rd. Co. (1904), 4 Ohio Cir. Rep., N.S. 369, 375-376; Tyler v. Thomas (Cv. M. Ct. 1948), 7 8 N.E. 2d 80, 81-82. The fundamental issue is whether the negligent party was fraudulently induced into reliance on the misrepresentations of the other, cf. Horton v. Reynolds (8th Cir. 1933), 65 F. 2d 430, 434-435; Johnson v. Allen (S. Ct. Utah, 1945), 158 P. 2d 134, 137. Despite some broad language, the implicit ground of many cases which have denied relief to the negligent party in the face of intentional wrongdoing, has been that the reliance was not justified, see p.e., McAdams v. McAdams, Sr. (1909), 80 Ohio St. 232, 240 (the negligent grantor's claim of fraud was vitiated by the fact that the deed prepared for him was in "exact accord with the grantor's declarations"); McBennett v. Piskur, supra, at 12-13 (the plaintiff actually read the release which was written in simple and understandable language); The Aetna Ins. Co. v. Reed (1877), 33 Ohio St. 283, 291-293 (the plaintiff had no right to rely on the insurance agent's misrepresentations of law). This view, which considers "a right to rely" and reliance the key, requires consideration of all the relevant circumstances, and is in accord with many decisions and the opinions of the major text writers, see, 12 Williston on Contracts, 3d Ed., ]] 1515(B) and (C) (1980); and 3 Corbin on Contracts, ] 607 (3rd Reprint 1979). Corbin gives the rationale for both sides of the issue:

Footnote 2 . Note, moreover, the possibility exists that the principle announced in McBennett and Leedy may be endangered by analogy to Stone v. Davis (1981), 66 Ohio St. 2d 74. In Stone, the court found a fiduciary relationship between a bank and its customer in a particular setting:

"The facts surrounding and the setting in which a bank gives advice to a loan customer on the subject of mortgage insurance warrant a conclusion that, in this aspect of the mortgage loan process, the bank acts as its customer's fiduciary and is under a duty to fairly disclose to the customer the mechanics of procuring such insurance."

Stone may portend further development in the law of releases. Anticipation of that development is not essential to decision in this case.

"The case is materially different when a party signs or accepts a written instrument without reading it, thinking that he knows its contents. If the contents are not what he supposed, he is assenting under a mistake of fact. This case should be dealt with just as are other cases of unilateral mistake. If the other pa

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