Mercer et al v. Walker et al

Filing 70

MEMORANDUM AND ORDER denying 54 Motion for Summary Judgment. Signed by District Judge Pamela L Reeves on 9/29/14. (JBR)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE

JENNIFER MERCER, and
JONATHAN MERCER,
Plaintiffs,
v.
STACIE WALKER,
CLIVE WALKER ENTERPRISES, LLC,
PROGRESSIVE HAWAII INSURANCE
CORPORATION, JOHN/JANE DOE I, and
JOHN/JANE DOE II,
Defendants.

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No.: 3:12-CV-201-PLR-CCS

MEMORANDUM AND ORDER

This case arises from an automobile accident in Roane County, Tennessee.
Plaintiffs sued two named defendants, Stacie Walker and Clive Walker, LLC, as well as
two unknown defendants, John/Jane Doe I and John/Jane Doe II. Plaintiffs also served a
summons and copy of their Complaint upon their uninsured motorist insurance carrier,
Progressive Hawaii Insurance Corporation. Progressive has filed an answer to Plaintiff’s
Amended Complaint and has chosen to defend this case in its name pursuant to the
provisions of Tenn. Code Ann. § 56-7-1201 et seq. (Uninsured Motor Vehicle Coverage).
Currently pending before the court is the motion for summary judgment filed by
Progressive Hawaii Insurance Corporation.

The court has carefully considered the

pending motion, plaintiffs’ response, and the supporting exhibits in light of the applicable
law. For the reasons stated herein, the court finds Progressive’s motion for summary
judgment not well-taken, and the motion will be DENIED.

I. Factual Background
In the Agreed Pretrial Order entered in this case, plaintiffs allege that on January
20, 2012, in Roane County, Tennessee:
A tractor-trailer changed lanes, coming over on top of the plaintiff, forcing
her off the traveled portion of the roadway and onto the shoulder where her
car then started to hydroplane. The tractor-trailer then continued to drive
on and could never be identified. The John/Jane Doe tractor-trailer violated
Tenn. Code Ann. § 55-5-136 in failing to exercise due care in the operation
of his/her truck and trailer and, more specifically, violated Tenn. Code Ann.
§ 55-8-142, turning movement, in that he/she changed lanes without
warning. This conduct also gives rise to allegations of common law
negligence in failing to notify drivers around him/her that he/she was going
to change lanes.
[R. 66].
Plaintiffs also alleged that Jennifer Mercer lost control of her car and struck a
guardrail on I-40 eastbound due to the leakage of fuel by a truck driven by Stacie Walker,
which was owned by Clive Walker Enterprises, LLC. Plaintiffs subsequently settled their
claims against Stacie Walker and Clive Walker Enterprises, LLC, and executed a Release
of All Claims and Settlement Agreement on January 17, 2014. The Release contains a
provision titled “GENERAL AND ABSOLUTE RELEASE.” In this provision, plaintiffs
“release and forever discharge” the named defendants – Stacie Walker, Clive Walker
Enterprises, LLC, and Great West Casualty Company. The Release goes on to state:
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In consideration of the payment described in Paragraph No. 1 of this
Release, and for other good and valuable consideration, the receipt and
sufficiency of which Plaintiffs hereby acknowledge, Plaintiffs do hereby
release and forever discharge . . . any other person, corporation,
association, or partnership charged with responsibility from any and all
claims, demands, obligations, liens, subrogation claims, or liabilities for
losses and damages, whether personal, property, or economic, whether now
known or unknown, in any way arising out of or related to the automobile
accident, in Roane County, Tennessee, or in any way arising out of any act
occurrence, act or omission that was, or could have been alleged in the
action by the Plaintiffs.
[R. 55-1, p. 8] (emphasis provided).
Progressive has moved for summary judgment stating that the plain and
unambiguous language of the Release clearly establishes the intention of Plaintiffs to
release all claims arising out of the auto accident for the sum of $10,000, and authorizes
the dismissal of the litigation in this case.

II.

Standard of Review

Summary judgment under Rule 56 of the Federal Rules of Civil Procedure is
proper “if the movant shows that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The moving
party bears the burden of establishing that no genuine issues of material fact exist.
Celotex Corp. v. Cattrett, 477 U.S. 317, 330 n. 2 (1986); Moore v. Philip Morris Co.,
Inc., 8 F.3d 335, 339 (6th Cir. 1993). All facts and inferences to be drawn therefrom must
be viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus.
Co. Ltd v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Burchett v. Keifer, 301 F.3d
937, 942 (6th Cir. 2002).
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Once the moving party presents evidence sufficient to support a motion under
Rule 56, the nonmoving party is not entitled to a trial merely on the basis of allegations.
Celotex, 477 U.S. at 317. To establish a genuine issue as to the existence of a particular
element, the nonmoving party must point to evidence in the record upon which a
reasonable finder of fact could find in its favor. Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). The genuine issue must also be material; that is, it must involve
facts that might affect the outcome of the suit under the governing law. Id.
The Court’s function at the point of summary judgment is limited to determining
whether sufficient evidence has been presented to make the issue of fact a proper
question for the factfinder. Id. at 250. The Court does not weigh the evidence or
determine the truth of the matter. Id. at 249. Nor does the Court search the record “to
establish that it is bereft of a genuine issue of fact.” Street v. J.C. Bradford & Co., 886
F.2d 1472, 1479 (6th Cir. 1989). Thus, “the inquiry performed is the threshold inquiry of
determining whether there is a need for a trial – whether, in other words, there are any
genuine factual issues that properly can be resolved only by a finder of fact because they
may reasonably be resolved in favor of either party.” Anderson, 477 U.S. at 250.

III. Analysis
Progressive asserts that the Release forever discharged all parties, including the
John/Jane Doe defendants, from liability arising out of any act or omission that was or
could have been alleged by Plaintiffs arising from the accident in Roane County,

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Tennessee. Progressive states that Tenn. Code Ann. § 29-11-105, Release or Covenant
not to Sue, provides:
When a release or covenant not to sue or not to enforce judgment is given
in good faith to one (1) of two (2) 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; but it reduces the claim against the others to the extent
of any amount stipulated by the release or the covenant, or in the amount of
the consideration paid for it, whichever is the greater; and (2) It discharges
the tort-feasor to whom it is given from all liability for contribution to any
other tort-feasor.
Progressive argues that a settlement agreement may release a particular defendant
if the plain language of the contract includes other unnamed parties under the release
provision. Here, the plain, unambiguous contract language in the Release includes “any
other person, corporation, association, or partnership.” Additionally, the Release patently
provides for the release of those parties “charged with the responsibility from any and all
claims . . . arising out of or related to the automobile accident in Roane County,
Tennessee.” Progressive is charged with the financial responsibility to pay for claims
against uninsured or underinsured motorists that were part of the accident in Roane
County, Tennessee. Therefore, all claims against Progressive should be dismissed
because Progressive clearly falls within the scope of the clear and unambiguous language
agreed to and executed by the plaintiffs in the Release that describes which parties should
be discharged. Finally, Progressive argues that the Release discharges defendants from
responsibility “arising out of any occurrence, act, or omission that was, or could have
been alleged in the action by Plaintiffs.” Thus, the claims in this case against Progressive
should be dismissed because they fall under the inclusive language of the Release.
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Plaintiffs respond that the Release executed as to the named defendants does not
release Progressive, the uninsured motorist carrier, from providing indemnification
coverage for the John/Jane Doe defendants. Plaintiffs concede that Progressive is entitled
to offset any judgment against John/Jane Doe by the amount received by plaintiffs in
exchange for dismissing the named defendants from this case, pursuant to Tenn. Code
Ann. § 29-11-105. However, as Progressive was not a party to the settlement between
plaintiffs and the named defendants, there was no mutual assent between plaintiffs and
Progressive to the terms of the settlement agreement. Plaintiffs further argue that because
Progressive provided no consideration for the settlement agreement, the Release is
unenforceable as to Progressive due to a lack of consideration.
The formation, interpretation, and enforceability of settlement agreements are
governed by general contract law. Sweeten v. Trade Envelopes Inc., 938 S.W.2d 383,
386 (Tenn. 1996). In order to be enforceable, a contract “must result from a meeting of
the minds of the parties in mutual assent to the terms.” Id. Thus, absent mutual assent to
the essential terms of a claimed settlement agreement, the agreement cannot be
enforceable. State v. Clements, 925 S.W.2d 224, 227 (Tenn. 1996). The intent of the
parties to a writing or writings is determined from the totality of the written terms, taken
as a whole, in the context of the surrounding circumstances. See Fort Sanders Regional
Med. Ctr. v. Collins, 1992 WL 184682 at *1 (Tenn.Ct.App. 1992).
The parties have not cited any cases from the Tennessee appellate courts directly
on point and the court has found none.

Therefore, the court has looked to the

Restatement (Third) of Torts, which states:
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(a) A settlement is a legally enforceable agreement in which a claimant
agrees not to seek recovery outside the agreement for specified injuries or
claims from some or all of the persons who might be liable for these
injuries or claims. (b) Persons released from liability by the terms of a
settlement are relieved of further liability to the claimant for the injuries or
claims covered by the agreement, but the agreement does not discharge any
other person from liability.
Restatement (Third) of Torts: Apportionment Liability § 24 Definition and Effect of
Settlement. Comment G of this section states:
When one party has a different understanding of an agreement than the
other, the contract is interpreted in favor of the party who was unaware of a
different meaning when the other party knew or should have known that the
first party was unaware of the different meanings. See Restatement
Second, Contracts § 201. Consistent with this principle, when a plaintiff
enters into a settlement agreement with one tortfeasor and understands that
the agreement only releases that settling tortfeasor, an “all persons” release
should not be interpreted as extending to all other tortfeasors. . . .

Thus, a presumption that an unadorned “all persons” release does not
release persons who are not named or otherwise described in a settlement
agreement is consistent with contract law. It reflects the reality that many
such clauses are not intended to benefit other nonsettling tortfeasors. When
the parties truly intended that an “all persons” clause in a settlement release
all other tortfeasors, the person claiming the benefit of that clause may
plead and prove the circumstances supporting such an intention.
Restatement (Third) of Torts: Apportionment Liability § 24 Definition and Effect of
Settlement, Comment G.
There is nothing in the record in the instant case to establish that plaintiffs sought
to accomplish more than to settle any claims they had against the named defendants.
There was no meeting of the minds that the plaintiffs’ claims against the John/Jane Doe
defendants were settled. When a settlement agreement specifies the parties who are
released, the agreement is subject to contract interpretation principles. If there is a
dispute over whether a particular individual is released, the burden of pleading and
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proving that the settlement releases the individual is on the party claiming release.
Progressive has not carried its burden to prove that the parties intended to release the
John/Jane Doe defendants.

There was no mutual assent between plaintiffs and

Progressive to the terms of the settlement agreement. Accordingly, the court finds that
the Release does not extinguish plaintiffs’ claims against the John/Jane Doe defendant.

IV. Conclusion
In light of the foregoing discussion, Progressive Hawaii Insurance Corporation’s
motion for summary judgment [R. 54] is DENIED.

Enter:

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UNITED STATES DISTRICT JUDGE

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