Waiver of California Civil Code section 1542 and Unknown Claims in Personal Injury Litigation

By Michael Reiter, Attorney at Law

In California, a release is often the end of a dispute or lawsuit.  Commonly, you will see language waving California Civil Code section 1542.  California Civil Code section 1542 reads:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Waiving rights under California Civil Code section 1542 is so routine, many attorneys mistakenly use the pre-2005 version of the section (which added “or her” in three places).  Releases are among the most copied documents amongst lawyers.  The problem is that some copy verbiage that does not necessarily apply in every situation (for example the Insurance Code verbiage where there is no insurance carrier is involved).

In a case where there was no express California Civil Code section 1542 waiver, the court still found that the release waived all claims:

Plaintiff testified he understood he was releasing claims arising under all statutes the agreement referred to, even those he did not understand. This knowledge is sufficient to withstand the provisions of Civil Code section 1542. Nothing in that statute requires that it be designated in the release or that a party specifically waive its provisions. While it might have been more comprehensive to have a reference to Civil Code section 1542 in the release, “ ‘To be effective, a release need not achieve perfection….’ [Citation.]” (Skrbina v. Fleming Companies, supra, 45 Cal.App.4th at p. 1368, 53 Cal.Rptr.2d 481.) Thus, as to defamation and the overtime claim, the release is enforceable.  Perez v. Uline, Inc. (2007) 157 Cal. App. 4th 953, 959,
Even when the release recites a waiver of California Civil Code section 1542, that may not be enough to actually waive the rights and release the tortfeasor:
Furthermore, mere recital, as in the release signed by plaintiffs, that the protection of Civil Code, section 1542 is waived, or that the release covers unknown claims or unknown parties is not controlling. Whether the releaser intended to discharge such claims or parties is ultimately a question of fact. Leaf v. City of San Mateo (1980) 104 Cal. App. 3d 398, 411, 163 Cal. Rptr.
That does not mean that the obligations are not discharged at the time of signing.  Some cases find that mistake or fraud require the release’s rescission.  Some cases find that the waiver is valid, based on the facts of the situation:
Review of the circumstances confirms our interpretation that the release was designed to extinguish all claims extant among the parties. First, Winet was represented by counsel and was aware at the time he entered into the release of possible malpractice claims against Price relating to certain services Price had rendered to him.  With this knowledge and the advice of counsel concerning the language of (and the import of waiving) section 1542, Winet expressly assumed the risk of unknown claims. Second, it is significant that the parties were able to, and did, fashion language memorializing their agreement to preserve identified claims from the operation of the release when such was their intention, specifically, the Canoga Storage Partners, Ltd. malpractice claim exclusion. Finally, Winet was represented by his own counsel, who explained to Winet the import of the release in general and of the waiver of section 1542 in particular. Under these circumstances we may not give credence to a claim that a party did not intend clear and direct language to be effective. (Bodle v. Bodle (1978) 76 Cal.App.3d 758, 764, 143 Cal.Rptr. 115 [“Where a formal contract has been prepared by persons learned in the law, the words should be given their ordinary legal import.”].)  Winet v. Price (1992) 4 Cal.App.4th 1159, 1168.
The moral of the story is that claimants and their attorneys should very carefully review any release before signing.  If specific causes of action or claims need to be preserved (for example, insurance bad faith), they should be expressly removed from the release.   The release should not be boilerplate that does not apply to the situation, and should be narrowly tailored to the facts of the situation.  The  should be satisfied with the deal before signing the release, because there may be no opportunity to undo the deal after the release is signed.

The information you obtain at this blog is not, nor is it intended to be, legal advice. No attorney-client relationship is established by reading or commenting on this blog. You should consult an attorney for advice regarding your individual situation.

New California Case Rules Plaintiff Entitiled to Recover the Reasonable and Necessary Costs Caused by Someone Who Wrongfully Injured Cat

By Michael Reiter, Attorney at Law

A new case in the First District Court of Appeals, Division 1, Kimes v. Grosser (May 31, 2011), 2011 WL 2128649:

“Under Civil Code section 3333 plaintiff may present evidence of the bills incurred to save the cat’s life and is entitled to recover the reasonable and necessary costs caused by someone who wrongfully injured the cat. Defendants are entitled to present evidence why the costs were unreasonable under the circumstances.” Id. at *4.

The Court gives the background of the case is:

Plaintiff Kevin Kimes alleges as follows: His pet cat Pumkin was shot with a pellet gun on October 28, 2005, while perched on a fence between his property and that of defendants Charles Grosser et al. Emergency surgery costing $6,000 saved Pumkin’s life, but left Pumkin partially paralyzed, and plaintiff incurred an additional $30,000 in expenses caring for Pumkin because of the injury. Plaintiff contends the shot that wounded Pumkin was fired from defendants’ backyard, and defendants Charles or Joseph Grosser were responsible for the “willful[ ] and malicious[ ]” shooting.

Plaintiff filed this suit to recover amounts paid for Pumkin’s care as a result of the shooting, and punitive damages. Defendants filed motions in limine to exclude evidence of plaintiff’s expenses caring for Pumkin, a cat they described as “an adopted stray of very low economic value,” on the theory that their liability was limited to the amount by which the shooting reduced Pumkin’s fair market value. When the court granted the motions at the outset of the trial, plaintiff declined to proceed, effectively conceding that Pumkin had no market value that justified the expenses of trial. Plaintiff’s appeal is from the judgment of dismissal entered on his failure to prosecute. Id. at *1

The dismissal was reversed by the Court. The takeaway from this decision is that animals will not be treated exactly like other property.

I once argued in the alternative that the value of an animal was limited to its fair market value. That dog was a German Shepherd named Woman. The dog attacked the police officers during a neighborhood evacuation when an unexploded bomb was found nearby. Non-lethal force (mace) was used before the dog was shot, and the dog survived for another year before being put down.

Unlike the case with Pumkin, the judge ruled that Woman’s shooting was within the discretionary immunity under the Government Code, and because the officers were immune, the City of San Bernardino was immune. Judgment was entered in favor of my client, the City of San Bernardino. There is a saying that “this case is a real dog” and sometimes, it is true.

In my time as an attorney, I’ve come across a variety of pet names. The City of San Bernardino had an arson dog named Cinder. Another Deputy City Attorney had an appeal of a determination to destroy a dog named Biscuit (who was later absolved because there was a “counterfeit Biscuit” running around the neighborhood, causing the mayhem attributed to Biscuit). Dangerous dog hearings and appeals are the less glamorous side of municipal law.

The information you obtain at this blog is not, nor is it intended to be, legal advice. No attorney-client relationship is established by reading or commenting on this blog. You should consult an attorney for advice regarding your individual situation.

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