Bryce Hepper v. Adams County ( 1998 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
No. 97-2180
Bryce Hepper, *
*
Appellant, *
* Appeal from the United
States
v. * District Court for the
* District of North Dakota.
Adams County, ND, *
*
Appellee. *
Submitted: November 21, 1997
Filed:
January 14, 1998
Before LOKEN, HEANEY, and BRIGHT, Circuit Judges.
HEANEY, Circuit Judge.
Bryce Hepper appeals the district court’s grant of
summary judgment in favor of Adams County, North Dakota
(“the County”), on Hepper’s claim of negligence related
to an automobile accident in which Hepper was injured.
We affirm.
I.
The facts of the case are undisputed. On July 25,
1993, Hepper was a passenger in an automobile driven by
Mera Merz. After Merz lost control of the vehicle, it
left
2
the road and rolled over, injuring Hepper. Hepper’s
injuries required substantial medical treatment and will
require ongoing medical care in the future. Leo
Ehrmantraut, the claims adjuster for Merz’s automobile
insurance company, American Family Mutual Insurance
(“American Family”), represented Merz and American Family
in negotiating a settlement with Hepper, which included
a general release. The release provided that Hepper:
[H]ereby fully and forever release[s] and
discharge[s] Harvey Merz and Mera Merz[,] their
heirs, administrators, executors, successors and
assigns, and all other persons and organizations
who are or might be liable . . . . By executing
this release, we intend and agree that this
release applies to all of our claims . . .
arising from said accident, present and future,
including, but not limited to, damage to or
destruction of property; claims for known or
unknown injuries, developments, consequences and
permanency of those injuries; and there is no
misunderstanding in this regard.
Appellee’s Brief at 5.
After reaching the settlement with American Family,
Hepper sued the County, claiming that the County was
negligent in the signing and striping of the road on
which the accident occurred.1 The County moved for
summary judgment on Hepper’s claim of negligence,
asserting that the general release signed by Hepper
released all parties who might be liable and that the
1
The road had an “s-curve,” which was marked by a road sign indicating the first
curve but not the second, which curved back in the opposite direction. There was no
painted center line, nor did the road have a “fog line” or a “barrier stripe.”
3
County enjoys discretionary immunity. Supported by
Ehrmantraut’s testimony, Hepper responded that the
release was not intended to act in accordance with its
specific language. Hepper further asserted that the
County did not enjoy immunity because its actions
constituted negligent execution rather than discretionary
judgment.
4
The district court granted the County’s motion for
summary judgment because the language of the release was
unambiguous, parole evidence of intent was therefore
inadmissible, and consequently, the agreement’s clear
language released “all other persons who are or might be
liable.” Following the court’s grant of summary
judgment, Hepper moved for relief from the judgment under
Rule 60(b),2 requesting reconsideration of the judgment
and permission to amend his complaint to add a claim for
contract reformation. The district court denied Hepper’s
motion. Hepper appeals the district court’s grant of
summary judgment and its denial of his motion for relief
from the judgment.
II.
We review a grant of summary judgment de novo,
affirming the grant only if the record shows no issue of
material fact and the prevailing party is entitled to a
judgment as a matter of law. Treleven v. University of
Minnesota, 73 F.3d 816, 817 (8th Cir. 1996) (citations
omitted). Under North Dakota law, whether a contract is
ambiguous is a question of law to be decided by the
court. Pamida, Inc. v. Meide, 526 N.W.2d 487, 490 (N.D.
1995). Where a contract is clear and unambiguous, the
2
Hepper’s motion cited Rule 60(b)(6) of the Federal Rules of Civil Procedure,
which provides that “the court may relieve a party . . . from a final judgment [or] order”
for any reason “justifying relief from the operation of the judgment.” Fed. R. Civ. P.
60(b)(6).
5
court is not permitted to examine parole evidence to
contradict the terms of the agreement. Id. at 490.
6
Under North Dakota law, the release of one’s right to
sue where multiple tortfeasors might be involved is
governed by N.D. Cent. Code § 32-38-04.3 North Dakota’s
Supreme Court has not yet interpreted § 32-38-04 to
determine whether the terms of a general release such as
the one signed by Hepper “so provide” for the release of
all potential tortfeasors. Where the question remains
open, North Dakota law allows a court to “seek
interpretive guidance from other states that [have]
adopted uniform laws” in interpreting the release
statute. Estate of Zimbleman, 539 N.W.2d 67, 72 (N.D.
1995) (citations omitted).
Our court has addressed the question of whether
potentially-liable parties may rely on a general release
of liability where they were neither named nor a party to
the agreement. In Douglas v. United States Tobacco Co.,
670 F.2d 791, 794-95 (8th Cir. 1982), for example, we
determined that a general release executed in Arkansas
released third parties from liability. We recently
affirmed that interpretation in a similar case in South
Dakota. Enos v. Key Pharm., Inc., 106 F.3d 838, 839-40
3
Section 32-38-04 provides in pertinent part:
32-38-04. Release or covenant not to sue. When a release or a
covenant not to sue or not to enforce judgment is given in good faith to
one of two or more persons liable in tort for the same injury or the same
wrongful death:
1. It does not discharge any of the other tort-feasors from liability
for the injury or wrongful death unless its terms so provide . . . .
N.D. Cent. Code § 32-38-04 (1997).
7
(8th Cir. 1997) (a party executing a broad general
release in a malpractice action released third parties
from liability in the matter).
Hepper cites a number of cases favorable to his
argument in which states have answered the question
whether a party is required to be specifically named by
the
8
release to enjoy its effects. See Noonan v. Williams,
686 A.2d 237, 244-46 (D.C. 1996); Russ v. General Motors
Corp., 906 P.2d 718, 723 (Nev. 1995); Moss v. Oklahoma
City, 897 P.2d 280, 288-89 (Okla. 1995). Although Hepper
makes strong equitable arguments for adopting such a
rule, under North Dakota’s statutory language we are
bound by our previous determinations that the language of
a general release, such as that executed by Hepper,
releases third parties, such as the County, from
liability. See Brown v. First Nat’l Bank in Lenox, 844
F.2d 580, 582 (8th Cir. 1988) (one panel of the Circuit
may not reverse a decision of another panel).
We review a grant or denial of relief under Rule
60(b) of the Federal Rules of Civil Procedure for an
abuse of discretion. Sheng v. Starkey Labs., Inc., 117
F.3d 1081, 1083 (8th Cir. 1997) (citation omitted). Rule
60(b) provides for extraordinary relief which we properly
grant only where the movant has shown exceptional
circumstances. Mitchell v. Shalala, 48 F.3d 1039, 1041
(8th Cir. 1995) (citation omitted). Although Hepper’s
argument that the agreement with American Family should
have been reformed might have merit, Hepper has failed to
demonstrate that exceptional circumstances prevented him
from seeking reformation of the contract prior to
bringing his claim against the County. We therefore
conclude that the district court did not abuse its
discretion by denying Hepper’s motion.
III.
For the foregoing reasons, the district court’s grant
of summary judgment is affirmed.
9
BRIGHT, Circuit Judge, dissenting.
I dissent.
10
It is clear from all of the documents4 filed in this
case that Bryce Hepper did not intend a general release
of liability. When Hepper settled his case against the
insurance company that provided coverage for the vehicle
in the accident, he unwittingly executed a general
release of liability. Hepper's counsel may not have been
aware of this problem. Adams County seeks and has been
given the benefit of the general release form. It has
received an unintended benefit without payment of
consideration.
This case is an extraordinary one that may call for
equitable relief. I, therefore, would remand this case
to the district court to permit Hepper to amend his
complaint in order to seek reformation of the release
agreement to show the true intent of the parties.
4
For example, the agreement among the three injured parties to divide the
accident vehicle's insurance proceeds clearly shows that the parties had not received
anything close to full compensation for their injuries. The vehicle in the accident had
minimal insurance coverage, providing $25,000 of coverage per person with a $50,000
maximum limit per occurrence. At the time of the agreement, the three individuals,
Hepper, Rhett Peterson, and David Knutson had incurred medical costs of $16,083.78,
$41,246.07, and $15,552.26, respectively. The $50,000 was prorated among the
claimants based on their respective medical expenses. Since Peterson's medical costs
were over 50% of the total costs incurred by all three parties, Peterson received the
maximum under the policy of $25,000 per person. Hepper's costs in relationship to
Knutson's costs represented 50.84% of the remaining $25,000 in coverage. Therefore,
Hepper received only $12,710.
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A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH
CIRCUIT.
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