Day on Torts
Where plaintiff was the passenger in a car accident that occurred when the vehicle she was riding in crashed into fencing and construction equipment owned by defendant construction company that was located in the right lane of a street, and plaintiff had settled with and executed a release of the driver and the driver’s insurance company, the trial court’s grant of summary judgment to defendant construction company based on the release was reversed.
In Neal v. Patton & Taylor Enterprises, LLC, No. W2022-01144-COA-R3-CV (Tenn. Ct. App. Jan. 18, 2024), plaintiff was riding in the passenger seat of a car when the car crashed into fencing and construction materials located in the right lane of the street. Plaintiff settled with the driver of the car and the driver’s insurance company, and she executed a release. The release listed the driver and insurance company, but it also contained some broad language releasing “all other persons, firms or corporations of and from any claim, demand, right or cause of action,…on account of or in any way growing out of any and all personal injuries…resulting from [the] accident[.]”
Sometime after the release was executed, plaintiff filed suit against defendant construction company, claiming its negligence and negligence per se in the placement of and warnings about the construction equipment caused her injuries. Defendant moved for summary judgment, which the trial court granted based on the release executed by plaintiff. On appeal, this ruling was reversed.
While a “release is a contract, and thus, the rules of construction for interpreting contracts are used in construing releases,” the Court noted that “[t]he scope of a release is determined by the intention of the parties as expressed in the terms of the particular instrument considered in the light of all the facts and circumstances.” (internal citations omitted). “[E]ven when a release was unambiguous, this Court has looked to the facts and circumstances surrounding the execution of the release to ascertain the parties’ intent.” (internal citation omitted). The Court of Appeals cited several cases where it followed a “two-step process of analyzing the language of the release and then the facts and circumstances surrounding the execution of the release.”
Turning to the release and the affidavit submitted by plaintiff in this case, the Court noted the release’s broad language but also pointed out that defendant “is not designated as a releasee” or in any way mentioned in the document. The trial court had failed to consider plaintiff’s affidavit, but the Court of Appeals took plaintiff’s statements into consideration. Plaintiff stated in her affidavit that she did not know about potential claims against defendant when she executed the release, that she first learned about potential claims against defendant about a month after signing the release, and that she did not intend to release defendant. Defendant countered the affidavit by arguing that plaintiff had reason to know about potential claims, as the “dumpster and other materials at the construction site were immediately apparent at the time of the accident.”
Taking the release and the facts and circumstances into account, the Court of Appeals found that there was a factual dispute regarding whether plaintiff knew about her potential claims against defendant construction company at the time she executed the release, and that this factual dispute precluded summary judgment. The Court wrote that “the issue of whether [plaintiff] knew about her potential claims must be decided to resolve whether she intended to release her claim and whether this claim was in her contemplation at the time of execution.” (internal citation omitted). Summary judgment was therefore reversed.
This opinion was released four months after oral arguments in this case.