Jaynes v. Louisville & Nashville Railroad
560 F. Supp. 57, 1981 U.S. Dist. LEXIS 17835 (1981)
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Rule of Law:
Under the Federal Employers’ Liability Act (FELA), a release of claims is not enforceable and may be set aside if it was executed based on a mutual mistake of fact concerning the nature and extent of the employee's injuries, notwithstanding language in the release purporting to cover all known and unknown injuries.
Facts:
- Mr. Jaynes, an employee of Clinchfield Railroad, sustained an injury during his employment.
- Approximately ten days before a settlement was reached, Clinchfield's physician examined Jaynes and released him to return to work.
- Both Jaynes and Clinchfield's claim agent believed that Jaynes had only suffered a minor and temporary injury, diagnosed preliminarily as a bruised knee.
- On May 6, 1977, Jaynes executed a release in favor of Clinchfield in exchange for a payment of $1,312.00.
- The settlement amount of $1,312.00 was calculated to cover substantially little more than the wages Jaynes had lost to date.
- The release document explicitly stated that it covered claims for "injuries not now known."
- Subsequent to the signing of the release, it was discovered that Jaynes's injury was, in fact, serious and permanent.
Procedural Posture:
- Plaintiff Jaynes filed an action in the U.S. District Court to recover damages from Clinchfield Railroad under the Federal Employers’ Liability Act (FELA).
- Defendant Clinchfield moved for summary judgment, arguing the claim was barred by a release signed by Jaynes.
- The District Court denied the defendant's motion for summary judgment.
- The court then ordered a bifurcated trial, where the issue of the release's validity would be tried first.
- A jury found that the release was invalid.
- Defendant Clinchfield moved for a judgment notwithstanding the verdict or, in the alternative, for a new trial.
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Issue:
Does a release agreement signed by an employee under the Federal Employers’ Liability Act (FELA), which purports to cover all known and unknown injuries, bar a subsequent claim if both the employee and the employer were mutually mistaken about the true nature and severity of the employee's injuries at the time the release was signed?
Opinions:
Majority - Neese, District Judge
No. A release agreement under FELA does not bar a claim when founded upon a mutual mistake of fact as to the nature of the injuries. The validity of releases under FELA is a federal question determined by federal law, which recognizes mutual mistake as a ground for voiding a release. The court reasoned that there was sufficient evidence for a jury to find that both Jaynes and Clinchfield's agent were acting under the mistaken belief that Jaynes's injury was minor and not permanent. This inference is strongly supported by the modest settlement amount, which primarily compensated for lost wages and would have been unlikely had the parties known the injury's true severity. Citing precedent like Taylor v. Chesapeake & Ohio Railway Company, the court held that boilerplate language in a release covering 'unknown injuries' does not provide a defense against a claim of mutual mistake under federal law.
Analysis:
This case reinforces the protective purpose of the Federal Employers’ Liability Act (FELA) for railroad workers by prioritizing the actual understanding of the parties over the literal text of a release agreement. It establishes that courts will look beyond boilerplate clauses covering 'unknown injuries' to determine if there was a genuine mutual mistake about the fundamental nature of an injury. The decision highlights that the size of a settlement can serve as powerful circumstantial evidence; a modest sum covering only lost wages suggests the parties were unaware of a long-term disability. This precedent makes it more difficult for employers to use standardized releases to summarily dismiss FELA claims where a severe injury was latent or misdiagnosed at the time of settlement.
