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A release is a contract and is subject to avoidance, on grounds such as fraud or mistake, just like any other contract. Pursuant to the doctrine of mutual mistake, when parties to an agreement have contracted under a misconception or ignorance of a material fact, the agreement will be avoided. The parol evidence rule does not bar extrinsic proof of mutual mistake. The law of mutual mistake does not, of course, preclude a person from intentionally assuming the risk of unknown injuries in a valid release.
Margaret Williams ("Williams") was a passenger in her family car when it was struck from behind by a car driven by the respondent Stephen Glash. While damage to Williams’ car was apparent at the time of the accident, there were no observable injuries. Williams immediately contacted State Farm Mutual Automobile Insurance Company, Glash's insurer, who advised Williams to bring the car to its local office for an appraisal of the property damage claims. State Farm estimated the cost of repairs at $889.46 and provided Williams a check payable for that precise amount. At the State Farm office, Williams was asked to complete a claim form containing a question as to whether anyone had been injured by the accident. She checked "No" in response. There was no negotiating or bargaining for release of a personal injury claim; only property damage to the car was discussed. Nonetheless, the back of the check contained language purporting to release personal injury claims. This release language was never explained to nor discussed with Williams or her husband. Williams was later diagnosed as having temporomandibular joint syndrome ("TMJ"), causing head and neck pain, as a result of the accident. Both the trial court and the court of appeals found that suit for this injury was barred by execution of the release.
Did the execution of the release for personal injuries in this case bar a subsequent suit for an injury unknown at the time of signing?
The court reversed the lower court's grant of summary judgment on behalf of respondent insurance company and remanded the case because it found that there was a genuine issue of material fact that precluded summary judgment. The court found that the release signed by the Williams when they settled with respondent insurance company for an automobile accident did not contemplate the release of a claim for unknown injuries. The court found that the Williams intended to sign a release for any further property claims and had no knowledge at the time of signing that there were undiscovered injuries as a result of the accident. The court found that the summary judgment evidence regarding Williams’ objective intent when she signed the release showed that she had no knowledge of the injury, and that she did not bargain for the settlement of a personal injury claim. The court found that there was sufficient summary judgment evidence to establish that a genuine issue of material fact as to whether the parties intended the release to cover the injury for which suit was later brought.