E-Alert Case Updates

General Release for accident tortfeasor releases product liability claims against manufacturer.

Berhane, et al. v. Allstate Insurance Company, et al.
Civil No. PJM 13-173, Not Reported (2013)
by Gregory S. Emrick, Associate
Semmes, Bowen & Semmes (www.semmes.com)

Plaintiff, Berenesh Berhane, was involved in a motor vehicle accident with Damun Walling. The Plaintiff brought suit against Walling, Berhane’s uninsured motorist insurance carrier, Allstate Insurance Company (“Allstate”), and Nissan North America, Inc. (“NNA”). Berhane alleged that Walling caused the accident, but the Nissan Pathfinder that she was operating was negligently designed and manufactured, and that those defects contributed to her injuries. During the course of the litigation, Berhane and Walling settled their claims, and Berhane executed a general release required by Walling’s liability insurer (“Release”). Thereafter, NNA removed the matter from Prince George’s County Circuit Court to the Federal Court, and then moved for summary judgment as to the product liability claims against it, based on the language of the Release.

The Release at issue stated, in relevant part:

For the Sole consideration of Fifty thousand … dollars the receipt and sufficiency whereof is hereby acknowledged, the undersigned hereby release and forever discharges Damian & George Walling their heirs, executors, administrators, agents and assign, and all other persons, firms or corporations liable or, who might be claimed to be liable, none of whom admit any liability to the undersigned but all expressly deny any liability, from any and all claims, demands, damages, actions, cause of action or suits of any kind or nature whatsoever, and particularly on account of all injuries, known and unknown, both to the person and property, which have resulted or may in the future develop from an accident which occurred on or about November 11, 2009, at or near Forrest Blvd & RT 704, Mitchellville, MD. […]

Undersigned hereby declares that the terms of this settlement have been completely read and are fully understood and voluntarily accepted for the purpose of making a full and final compromise adjustment and settlement and any and all claims, disputed or otherwise, on account of the injuries and damages above mentioned, and for the express purpose of precluding forever any further or additional claims arising out of the aforesaid accident. (Emphasis in Opinion).

The Federal District Court observed that under Maryland law, “a general release of one tortfeasor which releases ‘all other persons’ acts to release all joint tortfeasors, whether or not such a tortfeasor was a party to the release or was specifically mentioned in the release.” The Court noted that the Release by its explicit terms precluded the claims against NNA. Both Berhane and Allstate argued that the “spoken intent” surrounding the execution of the Release made it clear that the claims against NNA were intended to survive. The Court rejected this argument, stating that a release was subject to the conventional rules of contract construction, and that where the contract was plain and unambiguous, “it must be presumed that the parties meant what they expressed.” The record did not contain sufficient evidence to raise an issue of material fact as to whether there was fraud, accident, or mutual mistake that would require the review of parol evidence. The Court further noted that there was no evidence that NNA consented to the settlement, but only that NNA agreed not to seek contribution from the Wallings. The Court held that claims against NNA had been released as a matter of law.