Aid Insurance Co. v. Davis County

426 N.W.2d 631, 1988 Iowa Sup. LEXIS 189, 1988 WL 74401
CourtSupreme Court of Iowa
DecidedJuly 20, 1988
Docket87-937
StatusPublished
Cited by23 cases

This text of 426 N.W.2d 631 (Aid Insurance Co. v. Davis County) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Aid Insurance Co. v. Davis County, 426 N.W.2d 631, 1988 Iowa Sup. LEXIS 189, 1988 WL 74401 (iowa 1988).

Opinions

SCHULTZ, Presiding Justice.

The issue on this appeal is whether a general release purporting to discharge one tortfeasor and all others who might be liable effectively releases an unnamed or otherwise unidentified joint tortfeasor. The trial court ruled that under the terms of the release the injured parties released the unnamed tortfeasor. We disagree and reverse.

In 1983, an insured of plaintiff Aid Insurance Company was operating a motorcycle on a highway maintained by defendant Davis County. The insured negligently drove the motorcycle off the paved surface onto the shoulder of the highway, causing the motorcycle to crash. His passenger was seriously injured.

The injured party’s medical bills were paid by her health insurance carrier. After plaintiff determined its insured was liable, it obtained a general release from the injured parties, made an arrangement with the health insurance carrier on its subrogation claim and paid its policy limits of $100,-000.

Plaintiff also concluded that defendant Davis County was negligent in the maintenance of its road and sent it written notice of a claim, see Iowa Code § 613A.5 (1987), after unsuccessfully suggesting the injured party and her spouse should make a claim against the county. Within the period of limitation, plaintiff commenced an action against the county for contribution. At trial, the jury returned a special verdict finding that plaintiff and defendant were each fifty percent at fault for the passenger’s injuries. Judgment was entered against the defendant for $50,000.

[632]*632During trial, defendant moved for a directed verdict on the grounds that plaintiff was not entitled to contribution because it had not discharged defendant’s liability to the injured parties as required by Iowa Code section 668.6 (1985). The court overruled both defendant’s directed verdict motion and its judgment notwithstanding the verdict motion made on the same grounds following the trial.

The issue in this case is but another aftereffect from our adoption of comparative negligence by judicial decision. See Goetzman v. Wichern, 327 N.W.2d 742 (Iowa 1982). The legislature responded by adopting comparative fault legislation, including Iowa Code chapter 668 (1985)1 entitled Liability in Tort — Comparative Fault. See 1984 Acts ch. 1293, §§ 1-10. This chapter is a substantial adaptation of the Uniform Comparative Fault Act, approved by the National Conference of Commissioners on Uniform State Laws in 1977. Unif. Comparative Fault Act, 12 U.L.A. (cum. Annual Pocket Part 1988) pp. 37-38. This Act is designed for states that adopt comparative fault, incorporating portions of the earlier Uniform Contribution Among Tortfeasors Act. Id. at 38.

Our comparative fault statutes provide guidelines for contribution between tort-feasors. Contribution is permitted between two persons who are liable upon the same indivisible claim for the same harm. Iowa Code § 668.5(1). The right of contribution is available to a person who settles with a claimant “only if the liability of the person against whom contribution is sought has been extinguished and only to the extent that the amount paid in settlement was reasonable.” § 668.5(2). Percentages of fault may be established by a separate action. § 668.6(2). If contribution is sought in a case where judgment has not been rendered, it is enforceable upon the condition that “the person bringing the action for contribution must have discharged the liability of the person from whom contribution is sought by payment made within the period of the statute of limitations applicable to the claimant’s right of action_” § 668.6(3).

In applying these statutes, it is clear that the plaintiff seeking contribution must establish that the defendant’s liability to the injured parties has been discharged. Plaintiff does so here by relying upon its release agreement. Defendant claims the release does not discharge its liability. In interpreting the effect of this release, both parties turn to Iowa Code section 668.7. This section states:

A release ... entered into by a claimant and a person liable discharges that person from all liability for contribution, but it does not discharge any other persons liable upon the same claim unless it so provides.

(Emphasis added.)

The parties disagree as to whether the release in question “provides” a discharge of the defendant’s liability. In its preprint-ed boilerplate language, the release purports to discharge “all other persons, firms, or corporations, known or unknown, who are, or might be claimed to be liable....” Plaintiff maintains that this language is unambiguous and discharges defendant, as an “other ... corporation” from any possible claims. Defendant, however, urges that we interpret the statutory phrase “unless it so provides” to require the release to name or otherwise specifically identify the parties.

Defendant also injects another possible interpretation of section 668.7 by asserting that the adjustor and the injured parties had no intention of discharging the defendant’s liability in the release. Plaintiff responds that ambiguity in the release must be found first before extrinsic evidence of intent may be considered.

Thus, the parties propose three possible interpretations of what section 668.7 requires when it dictates that a person is not discharged by a release “unless it so provides.” First, a release with this boilerplate clause satisfies the language of section 668.7 and releases an unnamed or unidentified joint tortfeasor. Second, this [633]*633section requires a specific identification of the person discharged. Third, the statute requires that such boilerplate language would allow the introduction and consideration of extrinsic evidence to determine the intention of the parties to the release.

We first examine plaintiffs claim that the phrase “any other person, firm, or corporation” is unambiguous and discharges the liability of any other tortfeasor. It cites Douglas v. United States Tobacco Co., 670 F.2d 791 (8th Cir.1982); Ralkey v. Minnesota Mining and Manufacturing Co., 63 Md.App. 515, 492 A.2d 1358 (1985); and Battle v. Clanton, 27 N.C.App. 616, 220 S.E.2d 97 (1975), as cases referring to the Uniform Contribution Among Tort-feasors Act that hold such boilerplate language discharged remaining tortfeasors even though they were not named in the release. Plaintiff maintains these cases stand for the proposition that the language in the release is unambiguous and expressly releases all other tortfeasors from all claims arising out of the event. Douglas, 670 F.2d at 795; Ralkey, 63 Md.App. at 524-25, 492 A.2d at 1363; Battle, 27 N.C.App. at 621, 220 S.E.2d at 100.

We note that in each of these cases the injured party claims the release was not an effective discharge of all claims.

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Aid Insurance Co. v. Davis County
426 N.W.2d 631 (Supreme Court of Iowa, 1988)

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Bluebook (online)
426 N.W.2d 631, 1988 Iowa Sup. LEXIS 189, 1988 WL 74401, Counsel Stack Legal Research, https://law.counselstack.com/opinion/aid-insurance-co-v-davis-county-iowa-1988.