Opinion
NO. 2016 CW 1075 R
06-02-2017
KERRY MAGGIO v. JAMES PARKER; THE SANDWICH KINGS, LLC (D/B/A JIMMY JOHN'S); REPUBLIC-VANGUARD INSURANCE COMPANY; AND METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY
Scott M. Emonet Greg A. Rozas Baton Rouge, LA Attorneys for Plaintiff-Respondent, Kerry Maggio Nicholas C. Gristina Gordon P. Guthrie, III Leandro R. Area New Orleans, LA Attorneys for Defendant, James Parker Geoffrey C. Hingle, Jr. Lance B. Williams Quincy T. Crochet Covington, LA Attorneys for Defendants-Relators, Sandwich Kings, LLC d/b/a Jimmy John's, and Republic-Vanguard Insurance Company
On Appeal from the 23rd Judicial District Court In and for the Parish of Ascension State of Louisiana
Trial Court No. 113,206 Honorable Alvin Turner, Jr., Judge Presiding Scott M. Emonet
Greg A. Rozas
Baton Rouge, LA Attorneys for Plaintiff-Respondent,
Kerry Maggio Nicholas C. Gristina
Gordon P. Guthrie, III
Leandro R. Area
New Orleans, LA Attorneys for Defendant,
James Parker Geoffrey C. Hingle, Jr.
Lance B. Williams
Quincy T. Crochet
Covington, LA Attorneys for Defendants-Relators,
Sandwich Kings, LLC d/b/a Jimmy
John's, and Republic-Vanguard
Insurance Company BEFORE: HIGGINBOTHAM, THERIOT, AND CHUTZ, JJ. HIGGINBOTHAM, J.
In this matter arising out of an automobile accident, defendants-relators, The Sandwich Kings, LLC (d/b/a Jimmy John's) and Republic-Vanguard Insurance Company filed an application for supervisory writs to this court to review the trial court judgment denying their motion for summary judgment based on a release entered into by plaintiff-respondent, Mr. Kerry Maggio.
FACTS AND PROCEDURAL HISTORY
On January 14, 2015, Mr. Maggio was involved in a motor vehicle accident with Mr. James Parker on Airline Highway in Gonzalez, Louisiana. After the accident on June 19, 2015, Mr. Maggio filed a petition for damages naming as defendants: Mr. Parker, the driver of the vehicle; Sandwich Kings, Mr. Parker's employer, contending that Mr. Parker was in the course and scope of his employment at the time of the accident; Republic-Vanguard, Sandwich King's automobile insurer; and Metropolitan Property Casualty Insurance Company, Mr. Maggio's uninsured motorist insurer.
Less than a month after filing suit, on July 6, 2015, Mr. Maggio entered into a "Final Release and Settlement of Claim" (the release) with Brenda Parker, Mr. Parker's mother, and Louisiana Farm Bureau Casualty Insurance Company, the automobile liability insurer of the vehicle driven by Mr. Parker and owned by Ms. Parker. Farm Bureau and Ms. Parker were not named defendants in the suit filed by Mr. Maggio. In the release, for consideration of the payment of $25,000.00, Mr. Maggio released Ms. Parker and Farm Bureau, as well as, "all other persons, firms, or corporations who are or might be liable" for the January 14, 2015 accident. After obtaining a copy of the release, on March 30, 2016, Sandwich Kings and Republic-Vanguard (relators) filed a motion for summary judgment contending that the release effectively released all persons who might be liable for the injuries Mr. Maggio incurred as a result of the January 14, 2015 accident, including relators. Mr. Maggio opposed the motion for summary judgment, arguing that relators were not a party to the release and did not provide any consideration for the release, and therefore, cannot claim a benefit from it.
The district court denied relators' motion for summary judgment, and relators filed for supervisory writs with this court seeking review of the district court's decision. On October 7, 2016, relators' writ was denied by this court, and relators filed for supervisory writs with the supreme court. On December 16, 2016, the supreme court granted relators' writ application and remanded the matter to this court for briefing, argument, and full opinion. Pursuant to the supreme court's remand and the recent revisions to summary judgment law, we now consider the district court's judgment denying relators' motion for summary judgment. The issue is whether Mr. Maggio relinquished his rights to pursue a claim against relators based on the terms of the release.
SUMMARY JUDGMENT
On appeal, summary judgments are reviewed de novo under the same criteria that govern the trial court's consideration of whether summary judgment is appropriate. Sunrise Const. and Development Corp. v. Coast Waterworks, Inc., 2000-0303 (La. App. 1st Cir. 6/22/01), 806 So.2d 1, 3, writ denied, 2001-2577 (La. 1/11/02), 807 So.2d 235. A motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show that there is no genuine issue as to material fact and that the mover is entitled to judgment as a matter of law. La. Code Civ. P. art. 966(A)(3). The party filing the summary judgment motion bears the burden of proof. La. Code Civ. P. art. 966(D)(1). If the mover will not bear the burden of proof at trial on the issue, the mover need only point out to the court the absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. Id. The burden is on the adverse party to produce factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law. Id. Facts are material if they potentially insure or preclude recovery, affect a litigant's ultimate success, or determine the outcome of the legal dispute. Simply put, a material fact is one that would matter on the trial on the merits. Smith v. Our Lady of the Lake Hosp., Inc., 93-2512 (La. 7/5/94), 639 So.2d 730, 751. Although summary judgment is seldom appropriate for determinations based on subjective facts of motive, intent, good faith, knowledge, or malice, summary judgment may be granted on subjective intent issues when no issue of material fact exists concerning the pertinent intent. Jones v. Estate of Santiago, 2003-1424 (La. 4/14/04), 870 So.2d 1002, 1006. Because it is the applicable substantive law that determines materiality, whether a particular fact in dispute is material can be seen only in light of the substantive law applicable to the case. The Shaw Group v. Kulick, 2004-0697 (La. App. 1st Cir. 4/8/05), 915 So.2d 796, 800, writ denied, 2005-1205 (La. 11/28/05), 916 So.2d 148. The substantive law applicable in this case involves contract law as it applies to a compromise, and because relators are not a party to the release, third-party beneficiary law must be considered as well.
Louisiana Code of Civil Procedure art. 966, regarding summary judgment, was amended and reenacted by La. Acts 2015, No. 422, § 1, with an effective date of January 1, 2016. The legal standard to be used by the courts in granting a motion for summary judgment remains unchanged by the recent legislative amendments to Article 966. See La. Code Civ. P. art. 966, 2015 cmt. (b). --------
LAW AND ANALYSIS
In their motion for summary judgment, relators assert that the clear and unambiguous language in the release discharged all persons, whether or not signatories to the release, who were or could be liable to Mr. Maggio for any and all claims arising out of the January 14, 2015 accident. In support of its motion for summary judgment, relators attached the release which provides, in part:
FOR AND IN CONSIDERATION of the payment of $25,000.00 to me/us in hand paid by Louisiana Farm Bureau Casualty Insurance Company and Brenda Parker hereinafter called payor(s), the receipt of which is hereby
acknowledged, I/we Kerry Maggio address 2148 Cherokee St #B, Baton Rouge LA 70806-6605, being of lawful age, do hereby release, acquit and forever discharge the said payor(s), their agents and employees, and all other persons , firms or corporations who are or might be liable , from any and all actions, causes of action, claims, demands, damages, costs, loss of services, loss of consortium, expenses, and compensation on account of or in any way growing out of any and all known and unknown personal injuries and property damage, resulting or to result from an accident that occurred on or about 01/14/2015 by reason of an automobile accident including any other claims that I/we may have which arose at the time of or prior to such accident, and do hereby for myself (or ourselves) heirs, executors, administrators, successors and assigns, covenant with the said payor(s), their agents and employees, and all other persons, firms or corporations which are or may be liable to indemnify and save them harmless from all claims and demands, costs, loss of services, loss of consortium, expenses and compensation on account of or in any wise growing out of said accident or its results, known and unknown, or prior claims, both to persons and property.
I/we know and understand that the injuries sustained may be permanent and progressive and recovery therefrom is uncertain and indefinite and there may be injuries or results of injuries not yet evident, recognized or known and in making this release, I/we rely wholly upon my/our judgment, knowledge and belief as to the nature, extent and duration of said injuries and as to the questions of liability involved and have not been influenced by any representations regarding the same; that the claims are doubtful and disputed and the above consideration is accepted in full compromise, accord and satisfaction thereof, and the payment of said consideration is not an admission of liability.
I have read this Release or had it read to me and I understand it. (Emphasis added.)
The release signed by Mr. Maggio specifically named Farm Bureau and Brenda Parker, and their agents and employees, but also included broad language stating "all other persons, firms or corporations" were released from liability for the January 14, 2015 accident. According to relators, under La. Civ. Code art. 2046, because the release is clear and unambiguous, parol evidence cannot be used to determine the intent of the parties.
A compromise is a contract whereby the parties, through concessions made by one or more of them, settle a dispute or an uncertainty concerning an obligation or other legal relationship. La. Civ. Code art. 3071. A release executed in exchange for consideration is a compromise. Randall v. Martin, 2003-1311 (La. App. 5th Cir. 2/23/04), 868 So.2d 913, 915. A compromise settles only those differences that the parties clearly intended to settle, including the necessary consequences of what they express. La. Civ. Code art. 3076.
The compromise instrument is governed by the same general rules of construction applicable to contracts. Brown v. Drillers, Inc., 93-1019 (La. 1/14/94), 630 So.2d 741, 748. Accordingly, when the words of the settlement agreement are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent. See La. Civ. Code art 2046. The contract must be construed as a whole and in light of attending events and circumstances. Thus, the intent which the words of the compromise instrument express in light of surrounding circumstances at the time of execution of the agreement is controlling. Brown, 630 So.2d at 748.
Louisiana courts have crafted a special exception to the extrinsic evidence rule for compromise agreements. When a dispute arises as to the scope of a compromise agreement, extrinsic evidence can be considered to determine exactly what differences the parties intended to settle. A general release will not necessarily bar recovery for those aspects of a claim unintended by the parties to be covered by the release. Under that jurisprudential rule, the parties to a release instrument are permitted to raise a factual issue as to whether unequivocal language in the instrument was intended to be unequivocal. Brown, 630 So.2d at 748-749.
However, Louisiana courts have tempered that jurisprudential rule, recognizing that, absent some substantiating evidence of mistaken intent, no reason exists to look beyond the four corners of the instrument to ascertain intent. Utilizing a case-by-case factual analysis, Louisiana courts have limited the rule's application to cases in which substantiating evidence is presented establishing either (1) that the releasor was mistaken as to what he or she was signing, even though fraud was not present; or (2) that the releasor did not fully understand the nature of the rights being released or that the releasor did not intend to release certain aspects of his or her claim. Brown, 630 So.2d at 749. When the factual circumstances surrounding the execution of the release instrument do not fall within either of the above categories, Louisiana courts have applied the general rule of construction in La. Civ. Code art. 2046 and have not hesitated to confine their analysis to the four corners of the instrument. Brown, 630 So.2d at 749.
With these principles in mind, we turn to the terms of the release in this case, the evidence presented, and circumstances in which the release was signed. Here, on its face the release unambiguously released all other persons, firms or corporations who are or might be liable to Mr. Maggio for the accident, including relators. Thus, in response to relators' motion for summary judgment, Mr. Maggio must come forth with substantial evidence of mistaken intent.
In this matter, while the language of the settlement agreement appears to be clear, the circumstances surrounding the signing of the document give rise to an issue regarding intent. Specifically, the released parties were not made defendants to Mr. Maggio's suit; relators and Mr. Maggio engaged in discovery that lasted several months after the release was signed; relators did not provide any consideration for the release; and Mr. Maggio introduced into evidence an amended release purporting to express the true intent of the release which provided that Maggio "specifically reserve his rights against" relators. While this evidence may not sufficiently establish substantiating evidence of mistaken intent, the evidence at a bare minimum raises a genuine issue regarding the intent of the parties.
Additionally, because relators are not parties to the subcontract between Farm Bureau, Ms. Parker, and Mr. Maggio, relators can only avail themselves of the benefit of the contract if they are third-party beneficiaries. See Joseph v. Hospital Service Dist. No. 2 of Parish of St. Mary, 2005-2364 (La. 10/15/06) 939 So.2d 1206, 1211; J.D. Fields & Co., Inc. v. Nottingham Const. Co., LLC, 2015-0697 (La. App. 1st Cir. 11/9/15), 184 So.3d 713, 716. Louisiana provides for a contract to be for the benefit of a third party who is not a named party to the contract. A contracting party may stipulate a benefit for a third person called a third-party beneficiary. La. Civ. Code art. 1978. Under Louisiana law, such a contract for the benefit of a third party is referred to as a "stipulation pour autrui." Paul v. Louisiana State Employees' Group Benefit Program, 99-0897 (La. App. 1st Cir. 5/12/00), 762 So.2d 136, 140.
A stipulation pour autrui is never presumed, and the intent of the contracting parties to stipulate a benefit in favor of a third party must be made manifestly clear. Additionally, to establish a stipulation pour autrui, the third-party relationship must form the consideration for a condition of the contract, and the benefit may not be merely incidental to the contract. Paul, 762 So.2d at 140. Moreover, the party demanding performance of an obligation pursuant to a stipulation pour autrui bears the burden of proving the existence of this obligation. Paul, 762 So.2d at 140. The "most basic requirement" of a stipulation pour autrui is that the contract manifest a clear intention to benefit the third party; absent such a clear manifestation, a party claiming to be a third party beneficiary cannot meet his burden of proof. Paul, 762 So.2d at 142.
The limitation on enforcement by third parties may indeed conflict with the broad language of the release clause, but such a conflict, when relators were not a party to the compromise and provided no consideration for the contract, only furnishes an occasion to further examine the agreement and other proof to ascertain the parties' intentions. As we have explained, Louisiana contract law requires a third party to show that it was an intended beneficiary, thus the pivotal question in a case of this kind is whether the parties intended to confer benefits on the party now asserting them. After review of the release, we find relators did not meet their burden of proving that the release manifested a clear intention to benefit them as third party beneficiaries. Therefore, whether it was the intent that relators were to benefit from the release to which they were not specifically named nor provided consideration for raises a genuine issue of material fact regarding intent.
CONCLUSION
For the foregoing reasons, we grant relators' writ to consider the merits, but deny relief, finding no error in the judgment of the trial court denying defendants-relators, Sandwich Kings, LLC and Republic-Vanguard Insurance Company's, motion for summary judgment. The matter is remanded for further proceedings. All costs of the writ are assessed to defendants-relators, Sandwich Kings and Republic-Vanguard.
WRIT GRANTED TO CONSIDER THE MERITS, RELIEF DENIED, AND REMANDED FOR FUTHER PROCEEDINGS. THERIOT, J., dissenting.
I respectfully disagree with the majority and would grant relief in the form of reversing the trial court and granting the relators' motion for summary judgment. The release executed between Farm Bureau and Mr. Maggio clearly and unambiguously releases "all other persons, firms or corporations who are or might be liable." A literal reading of that language offers no other conclusion than that the relators had been released from liability.
When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent. La. C.C. art. 2046. The rules of interpretation establish that when a clause in a contract is clear and unambiguous, the letter of the clause should not be disregarded under the pretext of pursuing the spirit. La. C.C. art. 2046, 1984 revision comment (b), Amoco Production Company v. Fina Oil & Chemical Company, 95-1185 (La. App. 1 Cir. 2/23/96), 670 So.2d 505, 510-11, writ denied, 96-1024 (La. 5/31/96), 673 So.2d 1037.
In such cases, the meaning and intent of the parties to the written contract must be sought within the four corners of the instrument and cannot be explained or contradicted by parole evidence. La. C.C. art. 1848. Contracts, subject to interpretation from the instrument's four corners without necessity of extrinsic evidence, are to be interpreted as a matter of law, and the use of extrinsic evidence is proper only where a contract is ambiguous after an examination of the four corners of the agreement. Amoco, 670 So.2d at 511.
Applying these long held principals of contract interpretation to the document before us, it is clear that Mr. Maggio intended to release Brenda Parker and Farm Bureau, as well as intending to release "any and all other persons, firms or corporations who are or might be liable ...." The unambiguous meaning of these words means that extrinsic evidence is not needed to determine the intent of the parties.
The majority attempts to circumvent the long held principals of contract interpretation by relying on Brown v. Drillers, Inc., 93-1019 (La. 1/14/94), 630 So.2d 741, 748. I disagree that Brown applies to documents that are clear and explicit in its wording. Even if Brown were to apply, the majority incorrectly applies the jurisprudence to the facts before us. The majority cites Brown for the premise that a contract must be construed as a whole and in light of attending events and circumstances. Thus, the intent which the words of the compromise instrument express in light of the surrounding circumstances at the time of execution of the agreement is controlling. Brown at 748.
Mr. Maggio's frame of mind on July 6, 2015 is easily ascertainable from the petition for damages filed by Mr. Maggio on June 19, 2015. In the petition, Mr. Maggio alleged he was involved in an automobile accident on January 14, 2015. Mr. Maggio alleged that James Parker, Sandwich Kings, Republic-Vanguard, and Metropolitan Property Casualty Insurance Company are liable for the damages he suffered as a result of the accident. All four parties are named defendants in the petition filed by Mr. Maggio. On July 6, 2015, Mr. Maggio, represented by counsel that filed his petition for damages merely three weeks prior, freely and voluntarily executed a Release of Claims agreement with Farm Bureau and Brenda Parker. The language of the release is clear:
FOR AND IN CONSIDERATION of the payment of $25,000.00 to me/us in hand paid by Louisiana Farm Bureau Casualty Insurance Company and Brenda Parker hereinafter called payor(s), the receipt of which is hereby acknowledged, I/we Kerry Maggio address 2148 Cherokee St #B, Baton Rouge LA 70806-6605, being of lawful age, do hereby release, acquit and forever discharge the said payor(s), their agents and employees, and all other persons , firms or corporations who are or might be liable , from any and all actions, causes of action, claims, demands, damages, costs, loss of services, loss of consortium, expenses, and compensation on account of or in any way growing out of any and all known and unknown personal injuries and property damage, resulting or to result from an accident that occurred on or about 01/14/2015 by reason of an automobile accident including any other claims that I/we may have which arose at the time of or prior to such accident, and do hereby for myself (or ourselves) heirs, executors, administrators, successors and assigns, covenant with the said payor(s), their agents and employees, and all other persons, firms or corporations which are or may be liable to indemnify and save them harmless from all claims and demands, costs, loss of services, loss of consortium, expenses and compensation on account of or in any wise growing out of said accident or its results, known and unknown, or prior claims, both to persons and property.
I/we know and understand that the injuries sustained may be permanent and progressive and recovery therefrom is uncertain and indefinite and there may be injuries or results of injuries not yet evident, recognized or known and in making this release, I/we rely wholly upon my/our judgment, knowledge and belief as to the nature, extent and duration of said injuries and as to the questions of liability involved and have not been influenced by any representations regarding the same; that the claims are doubtful and disputed and the above consideration is accepted in full compromise, accord and satisfaction thereof, and the payment of said consideration is not an admission of liability.
I have read this Release or had it read to me and I understand it. (Emphasis added.)
Thus, when Mr. Maggio clearly states in the release that he is releasing "any and all persons, firms and corporations who are or might be liable," such release inures to the benefit of Brenda Parker and Farm Bureau (payors) and any and all parties Mr. Maggio believed, on July 6, 2015, to be liable to him for damages sustained as a result of the accident of January 14, 2015. The circumstances surrounding the execution of the release on July 6, 2015 clearly establish that Mr. Maggio believed James Parker, Sandwich Kings, Republic-Vanguard, and Metropolitan Property Casualty Insurance Company were liable to him in tort. Therefore, when Mr. Maggio executed the release document, he intended to release Brenda Parker and Farm Bureau along with any and all other persons, firms and corporations he believed to be liable to him for the damages he sustained as a result of the accident of January 14, 2015. To find otherwise would lead to absurd consequences and would be a great departure from the long held line of jurisprudence pertaining to contract interpretation.
For the foregoing reasons, I would reverse the trial court and grant summary judgment in favor of the relators.