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Memorial Medical Center of East Texas v. Keszler

Supreme Court of Texas
Apr 18, 1997
943 S.W.2d 433 (Tex. 1997)

Summary

holding that a doctor's claims against a hospital for exposure to ethylene oxide gas were released by broad release language in a settlement agreement in a lawsuit in which the doctor sued the hospital for revoking his staff and clinical privileges

Summary of this case from Elias Family Mgmt. Co. v. APS Capital Corp.

Opinion

No. 96-1262.

April 18, 1997.

Appeal from the 217th District Court, Angelina County, David V. Wilson, J.


In Duncan v. Cessna Aircraft Co., 665 S.W.2d 414 (Tex. 1984), we held that releases are only effective against named parties to the release or parties that are described in the release with such descriptive particularity that their identity is not in doubt. In this case, we decide whether a release which fails to specifically denominate a cause of action is ineffective to release that claim. The court of appeals said yes. We disagree. Also, the court of appeals concluded that a party may not release a claim of gross negligence. On this issue we also disagree. We reverse the judgment of the court of appeals and render judgment for Memorial Medical Center of East Texas.

Memorial instituted "corrective action" against Dr. Berney R. Keszler when he was found guilty of tampering with government documents. After Memorial revoked his staff and clinical privileges, Keszler sued Memorial. Memorial and Keszler entered into a Compromise Settlement Agreement in which Memorial agreed to pay Keszler $225,000 and assume payment on a note in exchange for a release of claims executed by Keszler. Both parties also signed a Release in which they expressly released their claims against each other.

After the settlement, Keszler sued Memorial for fraud, negligence, and gross negligence. Keszler sought damages for injuries suffered as a result of his alleged exposure to ethelyne dioxide (ETO), a toxic sterilizing agent the hospital used during his employment. Memorial moved for summary judgment on the grounds that Keszler had released all claims. The trial court granted summary judgment, and Keszler appealed. The court of appeals reversed and remanded for trial.

The two documents the parties executed are the Compromise Settlement Agreement and the Release. The Settlement Agreement provides:

KESZLER shall release and forever discharge MEMORIAL . . . from any and all claims, causes of action, demands, known or unknown, which KESZLER has or may have and which have not accrued, arising out of and in connection with the corrective action taken against KESZLER by MEMORIAL and any other actions KESZLER might have against MEMORIAL for any such action taken against KESZLER.

The Release, on the other hand, provides:

Keszler . . . does hereby RELEASE, ACQUIT and FOREVER DISCHARGE [Memorial] . . . from any and all claims, demands, actions, and causes of action of any kind whatsoever . . . which [Keszler] has or might have, known or unknown, now existing or that might arise hereafter or which have not yet accrued, directly or indirectly attributable to or in any way arising out of corrective action taken by [Memorial] against [Keszler] and any other matter relating to [Keszler's] relationship with [Memorial], including but not limited to his relationship as a member of the staff or as a physician having clinical privileges, it being the intent of [Keszler] to release all claims of any kind or character which he might have against [Memorial]. . . .

(emphasis added).

Clearly the documents are not identical. The parties, however, have not contested the validity of the release or claimed ambiguity or fraud in its execution. Consequently, the interpretation of the release is to be decided by the court as a question of law. Westwind Exploration v. Homestate Sav. Ass'n, 696 S.W.2d 378, 381 (Tex. 1985).

When dealing with two documents comprising a single agreement, a court should read and construe them together. Jones v. Kelley, 614 S.W.2d 95, 98 (Tex. 1981). Accordingly, the intent of Memorial and Keszler must be deduced by examining the Agreement and the Release together. Although the quoted language of the Agreement purports to release only those claims related to the "corrective action," the Release contemplates the release of other claims as well. Construing the agreements so narrowly as to effectuate a release of only those claims arising out of Memorial's "corrective action" would nullify the Release.

It is true that to release a claim, the releasing document must "mention" it. Victoria Bank and Trust Co. v. Brady, 811 S.W.2d 931, 938 (Tex. 1991). But the court of appeals holds a claim is not mentioned unless it is specifically enumerated, stating "We find no mention in the preambles of anything related to appellant's present claims for exposure to ethelyne oxide gas. . . . " 931 S.W.2d at 62. Moreover, Keszler argues that our decisions in Victoria and Duncan support the court of appeals' judgment. We disagree.

In Victoria, a dispute arose between a business called "The Cattle Company" and Victoria Bank and Trust. Victoria, 811 S.W.2d at 933. The Cattle Company and the Bank had engaged in two distinct transactions, one involving a $150,000 loan in which The Cattle Company was a co-obligee and one involving the extension of a line of credit. Id. at 933-34. When matters involving the loan deteriorated, a lawsuit ensued between the parties to the loan. Id. at 934. They reached a settlement in which The Cattle Company agreed to release the Bank from "any and all claims and causes of action . . . directly or indirectly attributable to the above described loan transaction." Id. at 938. When The Cattle Company sued the Bank over the transaction involving the line of credit, the Bank argued that The Cattle Company had already released it from all claims. Id.

Looking at the preamble to the settlement agreement, we determined that the "above described loan transaction" referred only to the initial loan. Id. Claims involving the line of credit transaction were not released because that transaction was not mentioned. Id. at 939. This case is distinguishable from Victoria because the release is not limited to the "corrective action" taken by Memorial. On the contrary, the Agreement and the Release read together release all claims relating to Keszler's relationship with Memorial.

In Duncan, a case involving multiple tortfeasors, one tortfeasor settled with the plaintiff and obtained a release. Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 418 (Tex. 1984). Cessna, a second tortfeasor, claimed that the document released all tortfeasors from liability. Cessna argued that because the release purported to discharge "any other corporations or persons whomsoever responsible" for the accident, the document released Cessna from liability. Id. We held that in a multiple tortfeasor context:

the mere naming of a general class of tortfeasors in a release does not discharge the liability of each member of that class. A tortfeasor can claim the protection of a release only if the release refers to him by name or with such descriptive particularity that his identity or his connection with the tortious event is not in doubt.

Id. at 419-20. In this way, a plaintiff would not inadvertently release non-settling wrongdoers. Id. at 422. Accordingly, Duncan also is distinguishable.

In this case, the parties agreed that Keszler would release all claims "relating to [Keszler's] relationship with [Memorial]." Keszler's claim of ETO exposure, because it is related to his relationship with Memorial, is "mentioned" in the releasing document. The court of appeals erred in holding otherwise.

The remaining question is whether claims for gross negligence can ever be released. The court of appeals held that such a release is against public policy. 931 S.W.2d at 63 (citing Smith v. Golden Triangle Raceway, 708 S.W.2d 574, 576 (Tex.App. — Beaumont 1986, no writ)). However, the court of appeals failed to distinguish a pre-accident waiver of liability from a post-injury release made in settlement of claims. In Golden Triangle, the issue was whether a pre-injury release could effectively dispense with a claim of gross negligence. Golden Triangle, 708 S.W.2d at 576. The court found a pre-injury release of gross negligence invalid as against public policy. Id. We have never held post-injury releases of gross negligence claims invalid. There is no logic in prohibiting people from settling existing claims. Significantly, such a rule would preclude settlement of many such claims. The court of appeals erred in holding that Keszler could not release his gross negligence claim against Memorial.

Pursuant to Rule 170 of the Texas Rules of Appellate Procedure, this Court grants Memorial's application for writ of error and, without hearing oral argument, reverses the court of appeals' judgment. TEX.R.APP.P. 170. Further, under Rule 180 of the Texas Rules of Appellate Procedure, this Court renders judgment that Keszler take nothing. TEX.R.APP. P. 180.


Summaries of

Memorial Medical Center of East Texas v. Keszler

Supreme Court of Texas
Apr 18, 1997
943 S.W.2d 433 (Tex. 1997)

holding that a doctor's claims against a hospital for exposure to ethylene oxide gas were released by broad release language in a settlement agreement in a lawsuit in which the doctor sued the hospital for revoking his staff and clinical privileges

Summary of this case from Elias Family Mgmt. Co. v. APS Capital Corp.

holding that release physician entered into as part of settlement in action against hospital for revoking his privileges barred subsequent suit for toxic exposure during his employment, because he had released all claims relating to his relationship with the hospital

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holding that, because parties agreed to release all claims related to corrective action taken by hospital against physician "and any other matter relating to [physician's] relationship with [hospital]," all claims relating to physician's relationship with hospital were released

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holding that, where parties agreed to release all claims related to corrective action taken by hospital against physician "and any other matter relating to [physician's] relationship with [hospital]," all claims relating to physician's relationship with hospital were released

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holding that a release covering all claims relating to Keszler's relationship with the hospital was enough to release claims arising out of exposure to hazardous materials

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holding that release, which stated that parties agreed to release all claims related to corrective action by Memorial against Keszler "and any other matter relating to [Keszler's] relationship with [Memorial]" was not limited to claims regarding corrective action, but released all claims relating to Keszler's relationship with Memorial, including ethylene dioxide exposure claim

Summary of this case from Coppedge-Link v. St. Farm Life

holding broad-form mutual release of all claims "related to" relationship of doctor with hospital in proceeding for corrective action for tampering with documents sufficient to release defendant's claim for exposure to toxic substance

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finding that a release, which stated that the parties agreed to release all claims related to corrective action by Memorial against Keszler "and any other matter relating to [Keszler's] relationship with [Memorial]" was not limited to claims regarding corrective action, but released all claims relating to Keszler's relationship with Memorial, including the ethelyne dioxide exposure claim

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upholding broad savings clause from release that reads, "and any other matter relating to [the defendant's] relationship with [the plaintiff]"

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explaining that post-accident release is not invalid

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In Keszler, a doctor signed a release in settlement of his suit against a hospital for disciplinary action taken against him.

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In Keszler, Memorial brought a "corrective action" against Keszler and revoked his privileges after he was found guilty of tampering with government records.

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construing two documents that constituted a single agreement and concluding that, even though the release given by releasor in one part of the agreement was clearly narrower than the release given by releaser in another part of the agreement, the court would still give effect as a matter of law to the unambiguous, broader language

Summary of this case from Nat'l City Bank of Ind. v. Ortiz

interpreting two documents that constituted a single agreement and concluding that, even though the release given by releasor in one part of the agreement was clearly narrower than the release given by releaser in another part of the agreement, the court would still give effect as a matter of law to the unambiguous, broader language

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authorizing post-injury releases of even gross negligence

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construing document that released hospital from "any and all claims . . . of any kind . . . directly or indirectly attributable to or in any way arising out of corrective action . . . and any other matter relating to Keszler's relationship with Memorial" as releasing later claims for fraud, negligence, and gross negligence against hospital for doctor's exposure to ethelyne dioxide

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interpreting Victoria Bank Trust Co. v. Brady, 811 S.W.2d 931, 938 (Tex. 1991)

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In Keszler, the court of appeals held that for a claim to be "mentioned," it had to be specifically enumerated within the release.

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In Keszler, after a physician sued the hospital that revoked his privileges in a "corrective action," the parties reached a compromise whereby the hospital paid the physician $225,000.00. After that settlement, the physician sued the hospital for his alleged exposure to a toxic sterilizing agent during his employment there. The court then had to decide whether the release in the lawsuit about the corrective action sufficiently "mentioned" the toxic exposure claim so as to bar that claim.

Summary of this case from Lexington v. M.W. Ke.

In Memorial Medical Center of East Texas v. Keszler, 943 S.W.2d 433, 435 (Tex. 1997), the Texas Supreme Court somewhat tempered this language by recognizing that, while a claim must be "mentioned," it need not be "specifically enumerated" to be released.

Summary of this case from Lexington v. M.W. Ke.

In Keszler, the court found that a physician's claim against a hospital for exposure to a particular chemical was discharged by language purporting to release all claims "relating to [Keszler's] relationship with [Memorial]."

Summary of this case from Davis v. American Bank of Comm

reiterating the court's reluctance to approve of a rule that prevents the settlement of claims

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Case details for

Memorial Medical Center of East Texas v. Keszler

Case Details

Full title:MEMORIAL MEDICAL CENTER OF EAST TEXAS, Petitioner, v. Berney R. KESZLER…

Court:Supreme Court of Texas

Date published: Apr 18, 1997

Citations

943 S.W.2d 433 (Tex. 1997)

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