                          Supreme Court of Louisiana
FOR IMMEDIATE NEWS RELEASE                                          NEWS RELEASE #030


FROM: CLERK OF SUPREME COURT OF LOUISIANA



The Opinions handed down on the 27th day of June, 2018, are as follows:



BY CRICHTON, J.:


2017-CC-1112       KERRY MAGGIO v. JAMES PARKER; THE SANDWICH KINGS, LLC (D/B/A
                   JIMMY   JOHN'S);   REPUBLIC-VANGUARD   INSURANCE   COMPANY;   AND
                   METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY (Parish of
                   Ascension)
                   In this matter, which is at the summary judgment phase, we are
                   called upon to decide whether a settlement which purports to
                   release “all other persons, firms, or corporations who are or
                   might be liable” applies to defendants who were not direct
                   parties to the settlement. For the reasons that follow, we find
                   that the defendants are not entitled to summary judgment, reverse
                   the opinion of the court of appeal, and remand for further
                   proceedings.

                   AFFIRMED.

                   WEIMER, J., dissents and assigns reasons.
                   GUIDRY, J., dissents and assigns reasons.
                   CLARK, J., dissents and assigns reasons.
                   HUGHES, J., additionally concurs and assigns reasons.
06/27/18



                     SUPREME COURT OF LOUISIANA

                                No. 2017-CC-1112

                               KERRY MAGGIO

                                     VERSUS

            JAMES PARKER; THE SANDWICH KINGS, LLC
     (D/B/A JIMMY JOHN’S); REPUBLIC-VANGUARD INSURANCE
            COMPANY; AND METROPOLITAN PROPERTY
               AND CASUALTY INSURANCE COMPANY

    ON SUPERVISORY WRITS TO THE TWENTY-THIRD JUDICIAL
        DISTRICT COURT FOR THE PARISH OF ASCENSION


CRICHTON, Justice

      In this matter, which is at the summary judgment phase, we are called

upon to decide whether a settlement which purports to release “all other persons,

firms, or corporations who are or might be liable” applies to defendants who were

not direct parties to the settlement. For the reasons that follow, we find that the

defendants are not entitled to summary judgment, reverse the opinion of the court of

appeal, and remand for further proceedings.

                   FACTS AND PROCEDURAL HISTORY

      The pertinent facts of this case are largely undisputed. On January 14,

2015, plaintiff Kerry Maggio was injured in an automobile accident when his vehicle

was struck by a vehicle operated by James Parker, an employee of The Sandwich

Kings, LLC d/b/a Jimmy Johns (“Sandwich Kings”). The vehicle operated by Mr.

Parker was owned by Brenda Parker and insured by Louisiana Farm Bureau (“Farm

Bureau”).



                                         1
      On June 19, 2015, plaintiff filed a petition for damages naming as defendants:

Mr. Parker; Sandwich Kings, Mr. Parker’s employer, contending that Mr. Parker

was in the course and scope of his employment at the time of the accident; Republic-

Vanguard, Sandwich King’s automobile insurer; and Metropolitan Property

Casualty Insurance Company, plaintiff’s uninsured motorist insurer. Notably,

plaintiff did not name Brenda Parker or Farm Bureau as defendants.

      Less than one month later, on July 6, 2015, plaintiff entered into a “Final

Release and Settlement of Claim” (“Release”) with Brenda Parker and Farm Bureau.

In exchange for Farm Bureau’s $25,000 policy limits, plaintiff executed a release

agreement which provides as follows:

      FOR AND IN CONSIDERATION of the payment of $25,000.00 to
      me/us in hand paid by Louisiana Farm Bureau Casualty Insurance
      Company and Brenda Parker hereinafter called payor(s), the receipt of
      which is hereby acknowledged, I/we Kerry Maggio address 2148
      Cherokee St # B, Baton Rouge LA 70806-6605, being of lawful age,
      do hereby release, acquit and forever discharge the said payor(s),
      their agents and employees, and all other persons, firms or
      corporations who are or might be liable, from any and all actions,
      causes of action, claims, demands, damages, costs, loss of services,
      loss of consortium, expenses, and compensation on account of or in
      any way growing out of any and all known and unknown personal
      injuries and property damage, resulting or to result from an
      accident that occurred on or about 01/14/2015 by reason of an
      automobile accident including any other claims that I/we may have
      which arose at the time of or prior to such accident, and do hereby for
      myself (or ourselves) heirs, executors, administrators, successors and
      assigns, covenant with the said payor(s), their agents and employees,
      and all other persons, firms or corporations which are or may be liable
      to indemnify and save them harmless from all claims and demands,
      costs, loss of services, loss of consortium, expenses and compensation
      on account of or in any wise growing out of said accident or its results,
      known and unknown, or prior claims, both to persons and property.

      I/we know and understand that the injuries sustained may be permanent
      and progressive and recovery therefrom is uncertain and indefinite and
      there may be injuries or results of injuries not yet evident, recognized
      or known and in making this release, I/we rely wholly upon my/our
      judgment, knowledge and belief as to the nature, extent and duration of
      said injuries and as to the questions of liability involved and have not
      been influenced by any representations regarding the same; that the
      claims are doubtful and disputed and the above consideration is

                                         2
      accepted in full compromise, accord and satisfaction thereof, and the
      payment of said consideration is not an admission of liability.

      I have read this Release or had it read to me and I understand it.

      (Emphasis added.)

      After obtaining a copy of the release, on March 30, 2016, Sandwich Kings

and Republic-Vanguard (“defendants”) filed a motion for summary judgment

contending that they were entitled to dismissal based upon the July 6, 2015 Release.

According to defendants, because the Release released “all other persons . . . who

are or might be liable” for the injuries plaintiff incurred as a result of the accident,

the Release had the effect of releasing defendants. Plaintiff opposed the motion for

summary judgment, arguing that defendants were not a party to the release and did

not provide any consideration for the release, and therefore, cannot claim a benefit

from it.

      The district court denied defendants’ motion for summary judgment. The

defendants thereafter sought supervisory review with the court of appeal, which

denied the writ without comment. Defendants then applied for review to this Court.

We granted defendants’ writ application and remanded the matter to the court of

appeal for briefing, argument, and full opinion. Maggio v. Parker, 16-1988 (La.

12/16/16), 211 So. 3d 392. On remand, in a divided opinion, the court of appeal

found no error in the judgment of the trial court denying the defendants’ motion for

summary judgment. Maggio v. Parker, 16-1075 (La. 6/2/17), 2017 WL 2399358

(unpublished) (Theriot, J., dissenting). The majority reasoned that summary

judgment was inappropriate because defendants did not meet their burden of proving

that the release manifested a clear intention to benefit them as third party

beneficiaries. The dissenting judge disagreed, finding the language of the release

was clear and unambiguous and “offers no other conclusion than that the relators

had been released from liability.” Id., at p.13. We thereafter granted certiorari to
                                           3
consider the correctness of the court of appeal’s ruling. 17-1112 (La. 10/27/17), 228

So. 3d 1224.



                                     DISCUSSION

       A motion for summary judgment is a procedural device used when there is no

genuine issue of material fact for all or part of the relief prayed for by a litigant. It is

reviewed on appeal de novo, with the appellate court using the same criteria that

govern the trial court’s determination of whether summary judgment is appropriate;

i.e., whether there is any genuine issue of material fact, and whether the movant is

entitled to judgment as a matter of law See, e.g., Dunn v. City of Kenner, 15-1175,

p.10 (La. 1/27/16), 187 So. 3d 404, 412. In ruling on a motion for summary

judgment, the judge’s role is not to evaluate the weight of the evidence or to

determine the truth of the matter, but instead to determine whether there is a genuine

issue of triable fact. All doubts should be resolved in the non-moving party’s

favor. Hines v. Garrett, 2004-0806 (La. 6/25/04), 876 So. 2d 764, 765. A fact is

material if it potentially ensures or precludes recovery, affects a litigant’s ultimate

success, or determines the outcome of the legal dispute. A genuine issue is one as to

which reasonable persons could disagree; if reasonable persons could reach only

one conclusion, there is no need for a trial on that issue and summary judgment is

appropriate. Id. at 765-66.

       In their motion for summary judgment, defendants assert that the clear and

unambiguous language in the release discharged all persons, whether or not

signatories to the release, who were or could be liable to plaintiff for any and all

claims arising out of the January 14, 2015 accident. As set forth above, the release

specifically named Farm Bureau and Brenda Parker, and their agents and employees,

but also included broad language, stating “all other persons, firms or corporations”

                                             4
were released from liability for the January 14, 2015 accident. According to

defendants, under La. Civ. Code art. 2046, because the release is clear and

unambiguous, parol evidence cannot be used to determine the intent of the parties.

      “A compromise is a contract whereby the parties, through concessions made

by one or more of them, settle a dispute or an uncertainty concerning an obligation

or other legal relationship.” La. Civ. Code art. 3071. The compromise instrument is

governed by the same general rules of construction applicable to contracts. Brown

v. Drillers, Inc., 93-1019 (La. 1/14/94), 630 So. 2d 741, 748. Therefore, in

interpreting a contract, the analysis must start with the premise that legal agreements

have the effect of law upon the parties and that the courts are bound to give legal

effect to all such contracts according to the true intent of the parties. Leenerts Farms,

Inc. v. Rogers, 421 So. 2d 216 (La. 1982). See also Brown, 630 So. 2d at 748 (a

compromise “must be interpreted according to the parties’ true intent”). This

principle is enshrined in the Civil Code, which states: “A compromise settles only

those differences that the parties clearly intended to settle, including the necessary

consequences of what they express.” La. C.C. art. 3076.

       Accordingly, when the words of the settlement agreement are clear and

explicit and lead to no absurd consequences, no further interpretation may be made

in search of the parties’ intent. C.C. art 2046. However, Louisiana courts have

crafted a jurisprudential exception to the extrinsic evidence rule for compromise

agreements. When a dispute arises as to the scope of a compromise agreement,

“extrinsic evidence can be considered to determine exactly what differences the

parties intended to settle.” Brown, 630 So. 2d at 749. As this Court unanimously

remarked in Brown, an opinion authored by Justice Pike Hall, a “long line of

jurisprudence holds that a general release will not necessarily bar recovery for those

aspects of a claim not intended by the parties to be covered by the release.” Id. Intent

                                           5
is determined by reading the compromise instrument “in light of the surrounding

circumstances at the time of execution of the agreement.” Id. at 748-49. The parties

to a release instrument are therefore “permitted to raise a factual issue as to whether

unequivocal language in the instrument was intended to be unequivocal.” Id.

      In interpreting this jurisprudential rule, courts have cautioned that, absent

some substantiating evidence of mistaken intent, no reason exists to look beyond the

four comers of the instrument to ascertain intent. Brown, 630 So. 2d at 749.

Therefore, utilizing a case-by-case analysis, Louisiana courts have limited the

application of the extrinsic evidence exception to cases in which substantiating

evidence is presented establishing either (1) that the releasor was mistaken as to what

he or she was signing, even though fraud was not present; or (2) that the releasor did

not fully understand the nature of the rights being released or that the releasor did

not intend to release certain aspects of his or her claim. Id. When the factual

circumstances surrounding the execution of the release instrument do not fall within

either of the above categories, Louisiana courts have applied the general rule of

construction in La. Civ. Code art. 2046 and have not hesitated to confine their

analysis to the four corners of the instrument. Brown, 630 So. 2d at 749.

      With these principles in mind, we turn to the terms of the Release in this case,

the nature of the substantiating evidence presented, and circumstances surrounding

the signing of the Release. As an initial matter, the Release unambiguously released

“all other persons, firms or corporations who are or might be liable from any and all

actions, causes of action, claims, demands, damages, costs, loss of services, loss of

consortium, expenses, and compensation on account of or in any way growing out

of any and all known and unknown personal injuries and property damage, resulting

or to result from an accident that occurred on or about 01/14/2015.” Defendants

argued that this broad language released them from any liability they may have had

                                          6
to plaintiff. Therefore, plaintiff must offer substantiating evidence of mistaken intent

to oppose summary judgment.

      Circumstances unique to this case surrounding the signing of the document

give rise to an issue of fact regarding intent sufficient to defeat summary judgment.

First, the released parties, Farm Bureau and Brenda Parker, were not made

defendants in the lawsuit. In other words, the Release was negotiated with potentially

liable parties who were not involved in the litigation. Second, the Release was signed

just weeks after the lawsuit was filed, and yet the Release did not expressly include

defendants. Indeed, defendants were not involved in the Release negotiations and

contributed nothing to the settlement. Third, plaintiff did not dismiss the lawsuit

against defendants after the Release was signed. Rather, defendants and plaintiff

engaged in discovery that lasted for several months after to the signing. Plaintiff has

therefore satisfied his burden to introduce extrinsic evidence under Brown to

determine “exactly what differences the parties intended to settle” and whether the

language of the Release “was intended to be unequivocal.” Brown, 630 So. 2d at

749. We express no opinion here as to whether this evidence establishes mistaken

intent outside of the summary judgment context. We merely find that the evidence

raises a genuine issue of material fact regarding the intent of the parties. See La. C.

Civ. P. art. 966(C).

      Additionally, we note that defendants, at this stage of the proceedings, have

not demonstrated that a third-party benefit was conferred upon them such that

summary judgment is warranted. Pursuant to La. C.C. art. 1978, “[a] contracting

party may stipulate a benefit for a third party” who is not named in the contract; in

Louisiana, such a contract for the benefit of a third party is called a “stipulation pour

autri.” See Joseph v. Hosp. Serv. Dist. No. 2 of Parish of St. Mary, 05-2364, p.9 (La.

10/15/06), 939 So. 2d 1206, 1212. A stipulation pour autrui is never presumed. Id.

                                           7
There are three criteria for determining whether contracting parties have provided a

benefit for a third party: 1) the stipulation is “manifestly clear”; 2) there is certainty

as to the benefit provided the third party; and 3) the benefit is not a “mere incident

of the contract between the promisor and the promisee.” Id. In short, the “most basic

requirement” of a stipulation pour autrui is that the contract manifest a clear intention

to benefit the third party; absent such a clear manifestation, a party claiming to be a

third party beneficiary cannot meet his burden of proof. Id. (citations omitted).

      This Court has recognized that summary judgment “is rarely appropriate for

a determination based on subjective facts such as intent, motive, malice, knowledge

or good faith.” Penalber v. Blount, 550 So. 2d 577 (La. 1989). Considering the fact-

intensive nature of the inquiry for determining third-party beneficiary status, we find

the lower courts reached the correct result in denying defendants’ motion for

summary judgment insofar as they claim that the Release manifested a clear

intention to benefit them as third-party beneficiaries.

                                       DECREE

      For the reasons assigned, we affirm the judgments of the trial court and court

of appeal denying the motion for summary judgment of defendants Sandwich Kings,

LLC and Republic-Vanguard Insurance Company. The matter is remanded for

further proceedings.

AFFIRMED




                                            8
06/27/18


                      SUPREME COURT OF LOUISIANA


                                      NO. 2017-CC-1112

                                      KERRY MAGGIO

                                             VERSUS

             JAMES PARKER; THE SANDWICH KINGS, LLC
            (D/B/A JIMMY JOHN’S); REPUBLIC-VANGUARD
       INSURANCE COMPANY; AND METROPOLITAN PROPERTY
                AND CASUALTY INSURANCE COMPANY

     ON SUPERVISORY WRITS TO THE TWENTY-THIRD JUDICIAL DISTRICT COURT
                       FOR THE PARISH OF ASCENSION



WEIMER, J., dissenting.

       I concur in the dissent of Justice Clark in this matter and write separately only

to offer additional comments.

       In my opinion, the fundamental flaw in the majority opinion is that it eschews

civil law principles that recognize the supremacy of legislation1 and embraces a

jurisprudential pronouncement (Brown v. Drillers, Inc., 93-1019 (La. 1/14/94), 630

So.2d 741) when a specific codal provision governs the resolution of this case.

Specifically, La. C.C. art. 2046 provides:“When the words of a contract are clear and

explicit and lead to no absurd consequences, no further interpretation may be made

in search of the parties’ intent.”

       The applicability of this codal provision is implicitly acknowledged with the

declaration that the “Final Release and Settlement of Claim” at issue herein

“unambiguously released ‘all other persons, firms or corporations who are or might


1
  See La. C.C. art. 2 (“Legislation is a solemn expression of the legislative will.”); La. C.C. art. 1,
1987 Revision Comment (c) (“In Louisiana, as in other civil law jurisdictions, legislation is superior
to any other source of law.”).
be liable from any and all actions, causes of action, claims, demands, damages, costs,

loss of services, loss of consortium, expenses, and compensation on account of or in

any way growing out of any and all known and unknown personal injuries and

property damage, resulting or to result from an accident that occurred on or about

01/14/2015.’” Maggio v. Parker, 17-1112, slip op. at 6 (La. 6/ /18) (emphasis

added). With this acknowledgment, the inquiry should have ended.

       Nevertheless, under the guise of following the jurisprudential “exception” to

the clear directive of La. C.C. art. 2046 recognized in Brown, an examination is made

of the factual evidence to determine “whether unequivocal language in the instrument

was intended to be unequivocal.” Maggio, supra (quoting Brown, 630 So.2d at 749),

emphasis added. This language from Brown represents a form of judicial “double

speak,” which evades and erodes the provisions of La. C.C. art. 2046. (After all,

“unequivocal” or “unambiguous” language2 is certainly, by any definition of the term,

“clear and explicit” language, which should trigger application of La. C.C. art. 2046,

and its directive that when the words of a contract are clear and explicit, “no further

interpretation may be made in search of the parties’ intent.”) The resort, in this case,

to jurisprudence over directly applicable codal authority is at odds with Louisiana’s

civil law heritage.




2
  Synonyms for unequivocal (“not subject to misinterpretation or to more than one interpretation”)
include: “clear, clear-cut, crystal clear, decided, ... evident, obvious, open-and-shut, ... plain,
straightforward, ... unambiguous, unambivalent, unmistakable.” See MERRIAM-WEBSTER
THESAURUS at merriam-webster.com (online 6/18/2018). Words related to unequivocal include:
“comprehensible, ... graspable, ... understandable, ... simple, ... uncomplicated, ... discernible, ...
black-and-white, explicit, ... well-defined, ... [and] readable.” Id. The words “clear” and “explicit”
are used in La. C.C. art. 2046.
  While no relevant “absurd consequences” from the application of La. C.C. art. 2046 in this case
have been noted, a complete, full, and final release of Brenda Parker and “all other persons, firms
or corporations who are or might be liable” would protect her from a potential third-party claim
based on negligent entrustment.

                                                  2
       Moreover, that reliance on jurisprudence is unnecessary, as Brown is clearly

distinguishable from the instant case. In Brown, the plaintiff, Buell Brown, filed suit

against numerous defendants, seeking damages for injuries resulting from his fall

from a drilling rig. Mr. Brown’s wife later asserted a loss of consortium claim.

Subsequently, the parties entered into a settlement, whereby the Browns released their

claims against the defendants and dismissed their lawsuit. Five years later, Mr.

Brown died as a result, at least in part, of the injuries he sustained in his fall, and his

widow filed a wrongful death action. The defendants moved for summary judgment,

arguing that the wrongful death action was barred under the terms of the release.

Mrs. Brown opposed the motion, arguing that she never intended to dismiss her

wrongful death claims, as she did not expect Mr. Brown to die from his injuries.

       Brown clearly arose under unique facts, as the wrongful death claim in that

case did not accrue until long after the settlement was confected. Unlike Brown,

where the issue before the court was whether a release confected while an injured

party was still alive extended to the future, uncontemplated wrongful death action of

his widow and minor child, this case involves a plaintiff who was obviously aware

of his claims against the instant defendants, as he filed suit on June 19, 2015, alleging

that James Parker, The Sandwich Kings LLC, Republic-Vanguard Insurance

Company, and Metropolitan Property Casualty Insurance Company were liable for

the damages he suffered as a result of the accident, and entered in the settlement with

Farm Bureau and Brenda Parker less than one month later.

       Nevertheless, under the aegis of following Brown, an attempt is made to

identify “[c]ircumstances unique to this case surrounding the signing of the document

[that] give rise to an issue of fact regarding intent.” Maggio, slip op. at 7. While,

admittedly, the circumstances identified are unique to this case, many of the cited

                                            3
circumstances are ultimately irrelevant. For example, it is of no moment that the

defendants were not specifically named in the release document, as that document

expressly, explicitly, and clearly extends the release to “all other persons, firms or

corporations who are or might be liable.” It is equally of no moment that the

defendants did not participate in the settlement negotiations or contribute any money

towards the settlement because, as third party beneficiaries of the release, there is no

requirement that the defendants furnish consideration for that release. See J. Denson

Smith, Third Party Beneficiaries in Louisiana: The Stipulation Pour Autrui, 11

Tul.L.Rev. 18 (1936-1937).3

         Moreover, there are other circumstances unique to this case that are not

mentioned and that are, in my mind, significant. Foremost among those is the fact

that the plaintiff signed the release directly below the following sentence, appearing

in bold print in the document: “I have read this Release or had it read to me and

understand it.” Justice Clark observes in his dissent what has been recognized for

over a century: “signatures to [a document] are not mere ornaments,” which statement

reflects the principle of Article 2046. See Boullt v. Sarpy, 30 La.Ann. 494, 495 (La.

1878). A party who signs a written instrument is presumed to know its contents and

cannot avoid its obligations merely by protesting that he did not understand the

provisions. Maggio, slip. op. at 2-3 (Clark, J., dissenting). This principle especially

holds true in a case, such as this one, where the plaintiff had the advice and

endorsement of counsel, who signed the document directly below the plaintiff. If the

3
    As Professor Smith explains:

         There is nothing in the laws of this State or in the civil law background to our Code
         to indicate in any fashion that a third party beneficiary must furnish anything in the
         nature of consideration for the promise in his favor. The “consideration” for the
         promise is furnished by the promisee and the promise is binding for this reason.

Smith, Third Party Beneficiaries in Louisiana: The Stipulation Pour Autrui, 11 Tul.L.Rev. at 51.

                                                   4
plaintiff did not wish to release his claims against the defendants herein, he could

have simply refused to sign the release as written or inserted a reservation of rights

clause. He did neither.

        The situation in which the plaintiff finds himself as a result of his failure to

reserve his rights against the defendants herein is not an unsympathetic one.

However, the resolution of this case, on the thin case of “unilateral mistake”

presented by the plaintiff,4 threatens to upset all compromises going forward and

wreak havoc on the law favoring compromises. That resolution, moreover, is

unnecessary, as it resorts to jurisprudence when there is a civil code article directly

on point, which provides the solution to the issue presented. Because there are no

relevant facts at issue, the matter should be resolved as a matter of law.

        Finally, the document at issue is entitled “Final Release and Settlement of

Claim.” The result of the majority’s resolution of this case is that there will now be

a trial on the issue of intent, a trial which subverts the release’s entire purpose–to

clearly and explicitly conclude this litigation. The document entitled “Final Release

and Settlement” is not now in any way final. (Emphasis added.)

        I respectfully dissent from the majority opinion.




4
   Basically, the only fact presented by the plaintiff in favor of his position that he did not intend to
release the defendants herein is that, following execution of the release, he continued to engage in
discovery and did not dismiss his lawsuit against the defendants. However, as noted previously,
weighed against this consideration is the fact that the plaintiff signed the release fully aware of his
claim against the defendants, having filed suit a few weeks earlier. Given the clear and unequivocal
language of the release, the only reasonable explanation for the plaintiff’s subsequent conduct is that
he simply did not read the release, despite his representations to the contrary. While unfortunate,
it is not the role of the courts to relieve individuals of their own bad bargains. Lama v. Manale, 218
La. 511, 515, 50 So.2d 15, 16 (1950).

                                                   5
06/27/18



                    SUPREME COURT OF LOUISIANA

                               No. 2017-CC-1112

                              KERRY MAGGIO

                                   VERSUS

            JAMES PARKER; THE SANDWICH KINGS, LLC
     (D/B/A JIMMY JOHN'S); REPUBLIC-VANGUARD INSURANCE
            COMPANY; AND METROPOLITAN PROPERTY
               AND CASUALTY INSURANCE COMPANY

    ON SUPERVISORY WRITS TO THE TWENTY-THIRD JUDICIAL
        DISTRICT COURT FOR THE PARISH OF ASCENSION


GUIDRY, J., dissents and assigns reasons.

      I respectfully dissent from the majority opinion for the reasons assigned by

Justice Clark.
06/27/18



                      SUPREME COURT OF LOUISIANA

                                 No. 2017-CC-1112

                                 KERRY MAGGIO

                                      VERSUS

            JAMES PARKER; THE SANDWICH KINGS, LLC
     (D/B/A JIMMY JOHN'S); REPUBLIC-VANGUARD INSURANCE
            COMPANY; AND METROPOLITAN PROPERTY
               AND CASUALTY INSURANCE COMPANY

    ON SUPERVISORY WRITS TO THE TWENTY-THIRD JUDICIAL
        DISTRICT COURT FOR THE PARISH OF ASCENSION



Clark, Justice, dissents and assigns reasons.

      For the reasons that follow, I respectfully dissent from the majority opinion.

In this matter, we are asked to determine whether the unambiguous language of a

compromise must be enforced as written. In conformity with established law, I

answer affirmatively. As an initial (and notable) matter, the majority recognizes that

the language of the contract is indeed unambiguous. However, it relies on a

jurisprudential exception that allows extrinsic evidence to be considered to glean the

parties’ intent in entering into the contract and the scope of the matters compromised.

See Brown v. Drillers, Inc., 93-1019 (La. 1/14/94), 630 So.2d 741. In order to take

advantage of this exception, the releasor must (1) have either been mistaken as to

what he/she was signing or (2) not have fully understood the nature or the extent of

the rights he/she was releasing. Id. I believe the majority’s reliance on Brown to

justify the examination of extrinsic evidence is against the very language therein

which instructs courts to “confine their analysis to the four corners of the instrument”

when the above categories are not met. For the following reasons, I do not believe


                                           1
the Brown exception should have been invoked, and, accordingly, I find any

resulting consideration of parol evidence is inappropriate


      First, I note that at the time the July 6, 2015 release was signed, the record

reveals that plaintiff was aware of his claim against the Sandwich King defendants,

having just filed suit against them in the preceding weeks. The provision of the

compromise which released “all other persons, firms or corporations who are or

might be liable” is neither confusing nor ambiguous. A reasonable person signing a

compromise with such language, knowing that he or she had just recently filed a

lawsuit against defendants who were allegedly liable, would know that this provision

would have the effect of releasing these defendants. Plaintiff now contends he did

not fully understand the nature of the rights he was releasing; however, such a

contention does not change the fact that he signed the release, which contained a

provision that stated, “I have read this Release or had it read to me and understand

it.” In Aguillard v. Auction Management Corp., 04-2804, p. 23 (La. 6/29/05), 908

So.2d 1, 17, this court explained that a person who signs a written instrument is

presumed to know its contents:


            It is well settled that a party who signs a written instrument
      is presumed to know its contents and cannot avoid its obligations
      by contending that he did not read it, that he did not understand it,
      or that the other party failed to explain it to him. See, e.g., Tweedel
      v. Brasseaux, 433 So.2d 133, 137 (La. 1983) (stating: “The
      presumption is that the parties are aware of the contents of writings to
      which they affixed their signatures . . . The burden of proof is upon
      them to establish with reasonable certainty that they have been
      deceived.” “If a party can read, it behooves him to examine an
      instrument before signing it; and if he cannot read, it behooves him to
      have the instrument read to him and listen attentively whilst this is
      being done.”) [emphasis added].


      To allow a party to circumvent the provisions to which he contractually

agreed, merely by protesting that he did not understand the provisions, undermines

                                         2
the essence of compromise agreements and could result in the real undoing of

Louisiana contract law. As we explained in Lama v. Manale, 218 La. 511, 515 50

So.2d 15, 16 (1950):

            Where there is a clause in a contract, and that clause is the
      agreement of the parties, the defense of a lack of knowledge of its
      existence is untenable. Courts are not created to relieve men of their
      bad bargains made. Where a clause of a contract is clear and
      unambiguous, “the letter of it should not be disregarded, under the
      pretext of pursuing the spirit.” [emphasis added].


      If the plaintiff wished to reserve his claims against the Sandwich King

defendants he either could have declined to sign the release as written or inserted a

reservation of rights. The plaintiff’s subsequent representation that he was unaware

of the broad scope of the provision, while potentially true and sympathetic, does not

merit an abandonment of established Louisiana contract law, which requires clear

and unambiguous language of contracts to be honored.

      Second, the majority’s willingness to wander outside of the four corners of

the document in search of the party’s intent is in contravention of previous cases,

which have held similar releases to be clear and explicit (See Baudoin v. Montoya,

07-910 (La. App. 3 Cir. 1/30/08), 974 So.2d 877, writ denied, 08-479 (La. 5/2/08),

979 So.2d 1284 (expansive language in a settlement agreement settled and dismissed

all claims against anyone arising out of an automobile accident, regardless of

whether they were signatories to the settlement); Hudson v. Progressive Sec. Ins.

Co., 43,857 (La. App. 2 Cir. 12/10/08), 1 So.3d 627, writ denied, 09-235 (La.

3/27/09), 5 So.3d 148 (broad language contained in a settlement agreement evinces

intent to dismiss all claims against anyone arising out of the accident); Silva v. State

Farm Mut. Auto. Ins. Co., 09-686 (La. App. 5 Cir. 3/23/10), 38 So.3d 934, writ

denied, 10-932 (La. 6/25/10), 38 So.3d 342 (holding a broad release was clear and

                                           3
unambiguous and evidenced an intent to release all parties liable for the accident);

Palmer v. Walker, 09-756 (La. App. 5 Cir. 1/12/10), 31 So.3d 443 (plaintiff’s failure

to specifically reserve rights in a settlement agreement results in the release of all

non–settling parties, including employers and insurers); Migliore v. Traina, 474

So.2d 980 (La. App. 5 Cir. 1985) (finding release language is so broad it clearly

covers any liability of any persons whatsoever arising from the accident, in the

absence of any attempt to limit the broad language of the release).


      Based on the foregoing, I do not believe that either of the trigger requirements

have been met to employ the Brown exception. Thus, based on the clear language

of the settlement, the compromise should be enforced as written with no further

consideration of extrinisic evidence.


      Last, I disagree with the majority’s view that the existence of a stipulation

pour autrui cannot be established via summary judgment in this case. I find that all

requirements for a third-party beneficiary contract are satisfied. (See, Joseph v.

Hospital Service Dist. No. 2 of Parish of St. Mary, 05-2364, p. 9 (La. 10/15/06), 939

So.2d 1206, 1212, wherein the criteria are succinctly set forth.)         Clearly the

stipulation for a third party is manifestly evident, as the compromise explicitly

provides for the release of “all other persons, firms, or corporation who are or might

be liable.” There is certainty as to the benefit provided the third party, as the

compromise releases the third parties from further liability. Finally, the benefit is

not a mere incident of the contract between plaintiff and Brenda Parker/Farm

Bureau, but is in fact a separate and specific provision releasing all other persons.

Accordingly, I would reverse and render judgment in favor of the defendants.




                                          4
06/27/18

                       SUPREME COURT OF LOUISIANA


                                 No. 2017-CC-1112

                                 KERRY MAGGIO

                                      VERSUS

     JAMES PARKER; THE SANDWICH KINGS, LLC (D/B/A JIMMY
    JOHN’S); REPUBLIC-VANGUARD INSURANCE COMPANY; AND
      METROPOLITAN PROPERTY AND CASUALTY INSURANCE
                         COMPANY

    ON SUPERVISORY WRITS TO THE TWENTY-THIRD JUDICIAL
        DISTRICT COURT FOR THE PARISH OF ASCENSION


Hughes, J., additionally concurring.

      Civil Code article 3075 provides: A compromise entered into by one of
multiple persons with an interest in the same matter does not bind the others, nor
can it be raised by them as a defense, unless the matter compromised is a solidary
obligation (emphasis added). End of story. As for stipulation pour autrui, there
must be specific intent by the contracting parties to benefit (the here unnamed)
beneficiary. It’s supposed to be a stipulation, not an accident.
      Just because the law has been poorly argued, or the lower courts or this court
failed to discover the correct law to apply to the facts, is not an excuse to fail to
apply the law correctly once it is discovered. Louisiana has fact pleading. It is our
duty to apply the correct law to the facts. Lack of research is not a worthy position
for the state’s highest court.
