February 03, 2011
A recent published opinion of the Court of Appeals, White v Taylor Distributing Company,
Inc., has interpreted the scope of a release narrowly.
Plaintiff White was injured when she was rear-ended by a semi-truck. Plaintiff sued the
driver of the semi-truck, the owner, and the driver’s employer. Previously the Plaintiff had settled
her first party claims and signed a release. The Defendants in the third party case argued that
Plaintiff’s lawsuit was barred by the prior release given to the Plaintiff’s no fault insurer. The trial
court agreed and dismissed the case. On appeal, the Court of Appeals reversed.
GARAN LUCOW MILLER, P.C.
ANN ARBOR • DETROIT • GRAND BLANC • GRAND RAPIDS • LANSING • MARQUETTE • PORT HURON • TRAVERSE CITY • TROY
MERRILLVILLE, INDIANA
The issue before the court concerned how broadly to read the release, or, in other words,
who was released by it. It appears to have been undisputed that under third party beneficiary
contract law, a release agreement can bar a subsequent lawsuit against individuals who were not
part of the settlement agreement or the prior lawsuit.
Defendants relied upon the following phrase in the release: “It is expressly agreed that this
release also refers to any and all (past, present, and future) claims/benefits arising or that may
arise from the March 15, 2004 accident.” The trial court agreed with the Defendants that this
language was broad enough to apply to claims against any Defendant, including the Defendants
in the third party lawsuit. However, the Court of Appeals disagreed.
The Plaintiff argued that the quoted language merely emphasized the fact that the release
in favor of the no-fault carrier in the first party carrier was absolute. The Court of Appeals stated
that the trial court confused the issue of “who is being released” with the issue of “what is being
released.” It found that the phrase, “any and all…claims/benefits” must be read in light of some
other language that was present earlier in the release, which listed all of the claims that the
Plaintiff was releasing, which did not specifically list the Defendants.
In order to make this ruling, the Court of Appeals had to distinguish Romska v Opper, 234
Mich App 512 (1999), upon which the Defendants had relied, as well as the trial court. In Romska,
the release was found to apply to subsequent Defendants who were not part of the settlement at
issue, but the release was broader than the one at issue in the White case. In Romska, the
release included some named Defendants, and “all other parties, firms, or corporations who are
or might be liable….”
Historically, as Romska indicated, releases have usually been interpreted according to what
they say, as opposed to what the courts believe the parties intended. The language was presumed
to be the best evidence of what the parties intended. However, on occasion, that has created
results which sometimes seems unfair, especially when a Plaintiff settles certain claims for a
nominal amount of money, and is subsequently prevented from maintaining an action worth much
more money against different defendants, as a result of failing to carefully read the scope of the
release. In the White case, it is unclear whether the Court of Appeals is shifting towards a
different standard for interpreting release agreements which is more likely to avoid such unfair
results, or if the results of the White case should be limited to the facts of the case.
Regardless of whether White demonstrates a new trend or should be isolated to its facts,
it is a reminder that parties and their attorneys need to be careful when drafting releases, and
before signing releases, to ensure that the release says what the parties want it to say.
STATUTORY MAXIMUM
THE ANNUAL COLA ADJUSTMENT INCREASES THE STATUTORY MAXIMUM TO
$4,929 AS OF OCTOBER 1, 2010. THIS REPRESENTS A 1.05% INCREASE OVER THE 2009
STATUTORY MAXIMUM.
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Upcoming Seminars
BUCKEYE SEMINAR
Wednesday, October 13, 2010 at the Greater Columbus Convention Center in Columbus, Ohio.
Agenda as follows:
8:30 – 9:00 a.m. CONTINENTAL BREAKFAST / REGISTRATION
9:00 – 9:10 a.m. WELCOME AND INTRODUCTION
Speaker: SUSAN M. WILLIAMS
9:10 – 10:00 a.m. 2010 NOTEWORTHY NO-FAULT DECISIONS
Speaker: CARYN GORDON
*McCormick v. Carrier
*U of M v. Titan
*Overview of important Court of Appeals’ decisions
10:00 – 11:00 a.m. MICHIGAN AUTOMOBILE NO-FAULT – PIP UPDATE
Speaker: STACEY KING
*Test of the Employment Relationship
*PIP Causation
*Partial or Total Reimbursement of Incurred Allowable Expenses
*Stolen Vehicle Exclusion – MCLA §500.3113(A)
*Uninsured Motor Vehicle Exclusion – MCLA §500.3113(B)
*Avoiding Attorney Fees – MCLA § 500.3148(1)
11:00 – 11:15 a.m. BREAK
11:15a.m. – 12:00 p.m. CATASTROPHIC INJURIES
Speaker: SUSAN M. WILLIAMS
*Home modifications
*Transportation purchase/agreements
*Attendant Care
12:00 – 1:30 p.m. LUNCH
1:30 – 2:15 p.m. MEDICAL MARIJUANA AND OTHER NON-STANDARD TREATMENTS UNDER THE
NO-FAULT ACT
Speaker: MATTHEW LaBEAU
2:15 – 3:00 p.m. 3RD PARTY AUTO/TORT LIABILITY
Speaker: JOHN WHITMAN
3:00 – 3:30 p.m. QUESTION AND ANSWER SESSION
RETURN EVALUATION FORMS
Comprehensive written materials will be distributed to all program attendees. To register please contact Eileen Carty
at Ecarty@garanlucow.com.
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WINDY CITY SEMINAR
Thursday, November 4, 2010 at the DoubleTree Hotel in Arlington Heights, Illinois. Agenda to follow at
a later date.