Williams v. Glash
789 S.W.2d 261 (1990)
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Rule of Law:
A release of claims for personal injuries may be set aside on the grounds of mutual mistake if objective evidence surrounding the execution of the release indicates that neither party intended it to cover a later-discovered injury that was unknown at the time of signing.
Facts:
- Margaret Williams was a passenger in a car rear-ended by a car driven by Stephen Glash.
- At the time of the accident, Williams believed she was uninjured and reported no injuries to Glash's insurer, State Farm.
- Williams and State Farm discussed only the property damage to her vehicle, which was appraised at $889.46.
- State Farm issued Williams a check for the exact amount of the property damage appraisal, $889.46.
- The back of the check contained pre-printed language purporting to release all claims for bodily injury, 'whether known or unknown.'
- The release language was never discussed with or explained to Williams.
- After endorsing the check, Williams was diagnosed with temporomandibular joint syndrome (TMJ) as a result of the accident.
- The check issued by State Farm was marked with an internal code indicating a settlement for property damage only, not personal injury.
Procedural Posture:
- Margaret and David Williams sued Stephen Glash in trial court for personal injuries.
- Glash filed a motion for summary judgment, asserting the claim was barred by the release Williams had signed on the back of the insurance check.
- The trial court granted summary judgment in favor of Glash.
- The Williamses, as appellants, appealed the decision to the court of appeals.
- The court of appeals affirmed the trial court's judgment.
- The Williamses, as Petitioners, then appealed to the Supreme Court of Texas.
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Issue:
Does a general release for all claims, including those for injuries 'known or unknown,' bar a subsequent lawsuit for a significant personal injury that was unknown to both parties at the time the release was executed?
Opinions:
Majority - Justice Doggett
No. A general release may be invalidated on the basis of mutual mistake when objective evidence shows the parties did not intend to release claims for unknown injuries. Texas law treats a release as a contract, which can be avoided if both parties were mistaken about a basic, material assumption on which the contract was made. To determine if a mutual mistake occurred, courts must look beyond the boilerplate language of the release to objective circumstances, such as the parties' knowledge at the time, the amount of consideration paid, the extent of negotiations concerning personal injuries, and the haste of the settlement. Here, the evidence—including that only property damage was discussed, the payment was the exact amount of the car repair, and Williams and State Farm were both unaware of the TMJ—creates a genuine issue of material fact as to whether the parties intended the release to cover this unknown injury.
Dissenting - Justice Spears
Yes. A clear and unambiguous release that expressly covers 'unknown' injuries should bar a subsequent lawsuit, as the law favors the finality of settlements. The court's holding effectively invalidates most releases, as a fact question can now be raised in almost every case, preventing summary judgment and undermining the purpose of a settlement, which is to 'buy peace.' The mistake in this case was unilateral on the part of Williams; the insurer's intent was precisely to settle all potential claims, known or unknown. By rewriting the parties' bargain, the court engages in 'benevolent paternalism' that distorts contract law and creates uncertainty for insurers.
Analysis:
This decision significantly alters Texas law on personal injury releases by aligning it with the modern trend of allowing releases to be challenged on the basis of mutual mistake for unknown injuries. It overrules prior precedent that gave controlling weight to the unambiguous language of a release. By shifting the focus from the 'four corners' of the document to the objective circumstances of its execution, the court makes it more difficult for defendants to obtain summary judgment based on a signed release. The ruling requires a fact-intensive inquiry into the parties' intent, increasing the likelihood that such cases will proceed to trial.
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