Tulsa City Lines v. Mains

• Decision Date: 08 November 1939
• Docket Number: No. 1843.,1843.
• Citation: 107 F.2d 377
• Parties: TULSA CITY LINES, Inc., v. MAINS.
• Court: U.S. Court of Appeals — Tenth Circuit

107 F.2d 377 (1939)

TULSA CITY LINES, Inc., v. MAINS.

No. 1843.

Circuit Court of Appeals, Tenth Circuit.

November 8, 1939.

Truman B. Rucker, of Oklahoma City, Okl. (Clayton B. Pierce and A. M. Covington, both of Oklahoma City, Okl., on the brief), for appellant.

Jno. L. Ward, of Tulsa, Okl. (L. A. Justus, Jr. and John L. Ward, Jr., both of Tulsa, Okl., on the brief), for appellee.

Before PHILLIPS, BRATTON, and HUXMAN, Circuit Judges.

BRATTON, Circuit Judge.

May Mains instituted this suit against Tulsa City Lines, Inc., hereinafter called the company, and Doyle Layton, to recover damages for personal injuries alleged to have been sustained as the result of negligence in the operation on a street in Tulsa, Oklahoma, of a bus owned by the company, on which plaintiff was a passenger for hire. Layton was not served with process. By answer, the company pleaded unavoidable accident, contributory negligence, and compromise, settlement, and written release of liability. By reply, plaintiff admitted the execution of the written instrument of release but alleged that it was void for fraud and mutual mistake of material fact. Trial by jury was waived and the cause submitted to the court.

There was evidence tending to establish these facts. Plaintiff was forty-eight years of age and in sound health. She was active in community affairs, and conducted a nursery under the direction of the Children's Service Bureau from which she derived an income of about $50 per month. Due to the manner in which the bus was operated, she was thrown violently to the floor and rendered unconscious for a short time. As she left the bus, the operator told her that Dr. Glass was the company doctor, for her to go to him and he would take care of her at the expense of the company. She called the doctor the next day. He came to the residence to see her, and told her that she should come to his office in order that some X-rays could be taken and a thorough examination made. She went to his office the following day, an X-ray examination of her head was made, a thorough physical examination was conducted, and the findings were noted by a secretary. The doctor gave her some tablets to be taken at home, and told her to go to bed and be quiet. He further told her that her injuries were not serious, that they were trivial in nature, that her condition was mild, and that she would be all right in a few days. She employed an attorney on the same day. The next day, she encountered difficulty in contacting Dr. Glass and her attorney sent Dr. McKenzie to see her. He also had Dr. Pittman examine her. Dr. Glass made a report in writing of his findings, addressed to the insurance company which indemnified the bus company. After reviewing the history given him, and the conditions which he found, he stated in summary that in his opinion she had a mild concussion and that her injuries were not of a permanent nature. Dr. McKenzie made a written report, addressed to the claim adjuster for the bus company and the insurance company. He stated that her injuries could be analyzed as consisting of two factors, concussion and local injury; that he believed she would recover completely in several weeks; that she might be susceptible to headaches for several months following too much sun; and that complete rest, freedom from responsibility, and sedatives for four to six weeks were the treatment. Dr. Pittman made a written report, likewise addressed to the claim adjuster. It was limited to her ears and eyes. It stated in summary that all findings were negative, except a contusion on the left side of the head behind the ear. Her attorney demanded $3,000 for settlement, and stated that according to the report of the company doctor plaintiff's nervous switchboard — the brain — had been jostled and that her condition was serious. After such demand had been made, Dr. Glass and Dr. McKenzie advised the attorney that the condition of plaintiff was inconsequential, and that she would be all right in a few weeks or months at the outside if she would go to the country. The attorney then told plaintiff that since the doctors said that was her condition, the best he could do would be a few hundred dollars, and that she might just as well settle. Moved by the statements of the doctors, he then reduced the offer to $400. He was not present when the settlement was finally effected, but he told an associate to effect a compromise if an agreement as to amount could be reached with the adjuster. The amount of $250 was agreed upon about three weeks after the accident. Upon the agreement being reached, the claim adjuster prepared a release and three drafts in his office. One draft for $20 was payable to plaintiff, her husband, the attorney, and Dr. Glass; another for like amount was payable to plaintiff, her husband, the attorney, and Dr. McKenzie; and the third for $210 was payable to plaintiff, her husband, and the attorney. The adjuster then took the release and drafts to the office of the attorney. Plaintiff and her husband were there. The written reports of the three doctors were there and the associate of the attorney read them to plaintiff before the settlement was finally made. The release was also read to her, and she and her husband signed it. It recites that it releases the company of any and all actions, causes or actions, claims, demands, damages, costs, loss of services, expenses and compensation on account of, or growing out of any and all known and unknown personal injuries resulting from the accident; and it further recites that plaintiff and her husband declared and represented that the injuries sustained were permanent and progressive, that recovery therefrom was uncertain and indefinite, that it was understood and agreed that they relied wholly upon their own judgment, belief, and knowledge of the nature, extent and duration of such injuries; and that they had not been influenced to any extent by any statement or representation made by a physician or surgeon employed by the company. Plaintiff went to the country and rested, but she did not recover. Instead, she became worse. At the time of the trial her left arm, side, and limb were numb, she showed some paralysis of the muscles of the throat, her muscles were weak, she lacked co-ordination, she overreached or underreached things, she fell frequently, she often fell against the side of the door when passing through it, she had a tenderness in the mastoid and scalp region, she suffered pain in the head, back and hips, she could read only large print, and she had a peculiar expression of the eyes which indicated mental abnormality. It was the opinion of a doctor who examined her a few days before the trial that in addition to the concussion, there was a contusion or laceration of the brain cells, and pressure on the brain. Plaintiff believed and relied upon the statement of Dr. Glass that her injuries were minor and trivial.

The court found, among other things, that at the time of the execution of the release all parties were mutually mistaken as to the nature, character, and extent of plaintiff's injuries; that they thought such injuries were mild and inconsequential; but that in fact they were serious, more serious than was thought by the parties. Plaintiff was awarded judgment for $2,750, less the $250 paid on the execution of the release. The company appealed.

It is urged that the court was not authorized as a matter of law to set aside the release on the ground of mutual mistake. The question must be determined by the law of the State of Oklahoma. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487. Ruhlin v. New York Life Insurance Co., 304 U.S. 202, 58 S.Ct. 860, 82 L.Ed. 1290.

The inveterate policy of the law is to encourage, promote, and sustain the compromise and settlement of disputed claims. But it is well settled in Oklahoma that a release of liability may be set aside if its execution was induced or brought about by fraudulent statements or representations of the physician of the defendant in respect to the extent of the injuries and the condition of the plaintiff. However, the fraud must be predicated upon existing facts; it cannot consist of statements which are essentially mere promises or forecasts of future developments or conditions; and it must be established by clear and convincing evidence. Where the ground of attack is solely and exclusively fraud and no question of mutual mistake is involved, evidence that the physician of the defendant made the positive statement to plaintiff that his...