Opinion
No. 74-334
Decided June 3, 1975. Rehearing denied June 20, 1975. Certiorari denied August 5, 1975.
Purchasers of real property brought action against seller, his broker, and broker's employee alleging misrepresentations relative to the sale. Upon basis of "Covenant Not to Execute" agreement entered by plaintiffs and seller, trial court entered summary judgment for other defendants, and plaintiffs appealed.
Affirmed
1. CONTRACTS — Name of Document — Not Controlling — Agreement of Parties. It is not what a document is called that controls, but the agreement of the parties as contained in the body of the document.
2. RELEASE — "Covenant Not to Execute" — Settlement of All Claims — Rights Against Broker — Not Reserved — Explicit Release. Where, in action premised upon alleged misrepresentations in sale of real estate, the plaintiffs entered an "Agreement and Covenant Not to Execute" with the seller of the property wherein the agreement stated that it was "intended as a full compromise and settlement of all claims" arising from the sale of the property, the agreement not only did not reserve any rights as against the real estate broker but expressly included all claims set forth in the misrepresentation action; hence, it clearly represents an explicit release on all such claims.
3. PRACTICE AND PROCEDURE — Release — Preclude Recovery — Claim Against Broker — Refusal — Amendment of Complaint — Allege Separate Claim — Not Error. Since, in an action premised on misrepresentations in sale of real estate, all actions complained of took place before the asserted injury occurred and involved joint actions of all defendants, and since the agreement not to execute entered by plaintiffs with the seller of the land would preclude recovery on any claim against the real estate broker involved in the sale, the trial court did not err in refusing to permit plaintiffs to amend their complaint to allege an independent and separate cause of action against that broker.
Appeal from the District Court of Larimer County, Honorable Dean Johnson, Judge.
Fischer, Wilmarth Hasler, G. William Beardslee, Elery Wilmarth, for plaintiff-appellants and cross-appellees.
Hill Hill, Alden v. Hill, for defendant-appellee and cross-appellant.
Plaintiffs sued to recover damages from defendants Greybar, Faith Realty Development Co. (Faith), and Fish for misrepresentations relative to real property purchased by plaintiffs from Greybar. Faith filed a motion for summary judgment which was granted. Plaintiffs appeal from the ensuing judgment dismissing their action as to Faith and Fish. We affirm.
The facts pertinent to this appeal are undisputed. Greybar desired to sell an apartment house in Fort Collins. He employed Faith as his broker. Fish was Faith's salesman. Greybar told Fish the lot dimensions of the property were 90 feet by 160 feet. After negotiations with Fish and Greybar, and after being shown the property by both defendants, plaintiffs bought the property. Both Greybar and Fish told plaintiffs the lot was 90 feet wide and Greybar pointed out the boundaries to plaintiffs on that basis. Some time after the purchase, plaintiffs learned the lot was only 70 feet wide when their neighbor claimed the extra 20 feet. The recorded plat of the lot established that the lot was, in fact, only 70 feet wide. Defendants refused plaintiffs' demand for compensation for the loss, and this suit followed.
Faith failed a motion for summary judgment which was denied, and the action was set for trial. Thereafter it filed an answer, which included several affirmative defenses, and a cross-claim against Greybar for the amount of any judgment obtained against Faith, and which included by reference the appropriate allegations in plaintiffs' complaint which involved Greybar.
Shortly before the trial date, Faith learned that plaintiffs had settled their dispute with Greybar and had executed a document designated as "Agreement and Covenant Not to Execute." Faith thereupon filed an additional motion for summary judgment on the ground that the agreement constituted a release which released all the joint tortfeasors. This motion was granted by the trial court, and the action was dismissed as to all defendants.
The "Agreement and Covenant Not to Execute," after outlining the facts, stated that, in consideration of $1,500 paid by Greybar to plaintiffs, plaintiffs agreed not to execute any judgment that they might obtain in the pending action; that plaintiffs would hold Greybar harmless from any judgment that Faith might obtain on its cross-claim and that Greybar would not be obligated to defend against the cross-claim. It then stated:
"It is further understood and agreed that this Agreement is intended as a full compromise and settlement of all claims, demands, and rights of action, if any, arising from Greybar's sale to the Hyzaks of the real property described above, whether or not said demands, claims, or rights of action are set forth in the said Civil Action No. 22687, and the Hyzaks hereby release Greybar from all of said demands, claims and rights of action, if any."
The trial court found that, although the agreement showed an "indication of proceeding" with the lawsuit, the above quoted paragraph unequivocally stated a full compromise and release from which Faith was not excepted, and that no rights against Faith were reserved. We agree.
[1] Plaintiffs contend that the trial court misconstrued the agreement, and that a covenant not to execute, like a covenant not to sue, does not release joint tortfeasors. However, it is not what the document is called that controls, but the agreement of the parties as contained in the body of the document. Union Pacific Ry. v. Chicago, Rock Island Pacific Ry., 163 U.S. 564, 16 S.Ct. 1173, 41 L.Ed. 265.
Plaintiffs rely on Cox v. Pearl Investment Co., 168 Colo. 67, 450 P.2d 60, which involved a "Covenant Not to Proceed with Suit." The Supreme Court, in that case, stated, "the manifest intent of the parties to a contract should always be given effect unless it be in violation of law or public policy." The court then determined that the covenant releasing one joint tortfeasor did not release all, because the contract expressly reserved to the plaintiffs the right to sue any other person "against whom they may have or assert any claim . . . arising out of the . . . accident." We agree with, and follow, the rule that the intent expressed in the contract must be given effect. Here, the intent of the parties is clearly expressed by the statement that the agreement "is intended as a full compromise and settlement of all claims . . . arising from Greybar's sale to the Hyzaks . . . . "
[2] The agreement not only does not reserve any rights as against Faith, but expressly includes all claims set forth in the within action. It is difficult to imagine how a more explicit release of these claims could be drafted.
[3] Plaintiffs further assert that the trial court erred in not permitting them to amend their complaint to allege "an independent and separate" cause of action against Faith. They contend that they should be allowed to assert an independent claim against Faith, apparently to bring them within the rule set forth in Bayers v. W.O.W., Inc., 162 Colo. 391, 426 P.2d 552, and in Sanchez v. George Irvin Chevrolet Co., 31 Colo. App. 320, 502 P.2d 87, that the release of one tortfeasor does not necessarily operate as a release of damages caused by independent or successive tortfeasors. However, in this action all actions complained of took place before the asserted injury occurred and involved joint actions of all defendants. Further, the agreement itself would preclude recovery on any such claim since it releases all claims, "whether or not said . . . claims . . . are set forth in" the present action.
We find no merit in plaintiffs' other asserted error and, in view of our affirmance of the trial court, do not consider Faith's cross-appeal.
Judgment affirmed.
JUDGE VAN CISE and JUDGE KELLY concur.