Quick Summary
Irwin Duane Gleason (defendant) and Coin Fresh, Inc. (defendant) were involved in an incident where Darlene Benavidez (plaintiff) was injured. After settling and releasing their claims, Darlene experienced unforeseen epileptic seizures.
The main issue was whether the release could be voided due to a mistake about her injury’s nature.
The Supreme Court of Colorado affirmed that there was a genuine issue of fact regarding this matter and upheld the court of appeals’ decision to reverse summary judgment in favor of the defendants.
Facts of the Case
Irwin Duane Gleason (defendant) was operating a truck for his employer Coin Fresh, Inc. (defendant), when a vending machine fell from the vehicle, striking Darlene Benavidez (plaintiff), a fourteen-year-old minor at the time, on the head. This incident occurred on September 29, 1970.
Darlene, now known as Darlene Guzman (plaintiff), was diagnosed with a left temporal lobe contusion and later with a left intratemporal lobe hematoma. Post-accident, Darlene and her parents believed she had fully recovered from her injuries.
In November 1970, Darlene’s parents retained an attorney to pursue a personal injury claim on her behalf. By October 1972, the case was settled for $6,114.35 after negotiations with the defendants’ insurance carrier.
Darlene’s father, Mr. Benavidez (plaintiff), as her appointed guardian, executed a general release of the claim against the defendants following probate court approval. However, in May 1974, Darlene began experiencing epileptic seizures, diagnosed as post-traumatic epilepsy potentially linked to the accident.
Procedural History
- Darlene Guzman filed a lawsuit seeking damages for injuries sustained in the accident.
- The defendants raised the defense of the release executed by her guardian as a bar to the lawsuit.
- The trial court granted the defendants’ motion for summary judgment based on the release.
- The court of appeals reversed the trial court’s decision, leading to the defendants seeking certiorari review by the Supreme Court of Colorado.
I.R.A.C. Format
Issue
Whether a release executed by a guardian for a minor’s personal injury claim can be set aside due to mistake regarding the nature of the injury.
Rule of Law
A release can be set aside if it was executed under a mistaken or false impression that the injured party was fully informed as to the nature of their injuries. The mistake must relate to a present or past fact rather than a prognosis or prediction about future recovery.
Reasoning and Analysis
The Supreme Court of Colorado affirmed the court of appeals’ decision, holding that there was indeed a genuine issue of material fact as to whether the guardian was mistaken about the nature of his daughter’s injury when he executed the release.
The court distinguished between mistakes in prognosis (future recovery predictions) and mistakes in diagnosis (nature of current or past injuries), concluding that the latter could justify rescission of a release. The evidence suggested that when the release was executed, Darlene’s guardian believed she had fully recovered and was unaware of any risk of developing epilepsy, which was diagnosed later.
The court also rejected the argument that because the release was general and all-encompassing, it should preclude rescission for unknown injuries or their consequences. Instead, it held that if unknown injuries were not within the contemplation of the parties when executing the release, it could be set aside.
Conclusion
The judgment of the court of appeals is affirmed, meaning that the case will be remanded for further proceedings consistent with this opinion.
Dissenting Opinions
Justice ERICKSON specially concurred in part with different reasoning, emphasizing procedural errors and disagreeing with some aspects of the majority’s reasoning regarding diagnosis versus prognosis.
Chief Justice HODGES and Justice ROVIRA dissented, arguing that there were no disputed issues of fact and that any mistake related to prognosis should not invalidate the release contract.
Key Takeaways
- A release for personal injury claims can be set aside due to mistake concerning the nature of injuries but not for mistakes about prognosis or future complications.
- The Supreme Court of Colorado held that there was a genuine issue of material fact regarding whether there was a mistake when executing the release.
- General releases do not necessarily preclude rescission for unknown injuries if they were not within the contemplation of the parties at execution.
Relevant FAQs of this case
What constitutes a mistake of fact in contract law?
A mistake of fact occurs when parties enter into a contract with erroneous beliefs about a material existing fact, significantly impacting the agreed-upon exchange. This can lead to the contract being voidable at the option of the adversely affected party.
- For example: Two parties enter into a contract for the sale of a horse believed by both to be alive at the time of agreement; however, the horse was dead. This mistake concerning a basic assumption on which the contract was made renders it voidable.
Can discoveries of unforeseen medical conditions after an accident affect prior settlements?
Discoveries of unforeseen medical conditions post-settlement can affect prior agreements if the conditions were not within the contemplation of the parties at the time and can prove that there was a mutual mistake or lack of informed consent regarding the release.
- For example: A cyclist settles with a motorist after an accident believing she only suffered minor injuries. Later, it’s discovered she has a spinal injury that was not diagnosed at settlement. This new fact, if unknown and unforeseeable, may allow for rescission of the settlement agreement.
What is the difference between mistake in prognosis and mistake in diagnosis in personal injury claims?
In personal injury claims, a mistake in diagnosis pertains to an incorrect understanding of the injury’s nature at settlement, which may render a release voidable. In contrast, a mistake in prognosis refers to incorrect predictions about future recovery, which typically does not invalidate a release.
- For example: Consider an individual who settles a claim after being told he has suffered a sprained ankle, when in reality there was an undiagnosed fracture. This misdiagnosis directly misrepresents the then-existing injury and can justify overturning the settlement. Conversely, if the same individual was correctly diagnosed but unpredictably developed arthritis as a consequence later on, that would be considered a mistaken prognosis.
References
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