Cline v. Homuth


Cline v. Homuth

Court: California Court of Appeal, Third Appellate District
Opinion Date: March 30, 2015

Areas of Law: Contracts, Insurance Law, Injury Law

Plaintiff Ronald Lee Cline was severely injured when his motorcycle collided with a turning car driven by a teenager with a provisional license. He settled with the driver and the driver’s parents for their $100,000 insurance policy limit. Cline executed a release that released the driver and his parents “and any other person, corporation, association, or partnership responsible in any manner or degree” for the accident. Cline subsequently sued defendant Berniece Delores Homuth, the driver’s grandmother and the sole adult in the car with him at the time of the collision, for negligent supervision. Homuth raised the release as an affirmative defense. She moved for summary judgment; the trial court denied the motion. A court trial followed, centering on the validity of the release and whether Homuth was an intended third party beneficiary of the release. Relying on Rodriguez v. Oto (2013) 212 Cal.App.4th 1020, the trial court found the release “unambiguously expresses a mutual intent to benefit a class of persons of which [Homuth] is a member” and that Homuth was entitled to enforce it. Cline appealed the judgment in favor of Homuth, arguing the extrinsic evidence demonstrated that Homuth was not an intended beneficiary of the release. The Court of Appeal affirmed, finding that Cline failed to provide sufficient evidence to counter Homuth’s showing that she was an intended beneficiary of the release.

“A third party may enforce a contract that is expressly made for his benefit. (Civ. Code, § 1559.) The third party need not be named in the contract, but he has the burden to show the contracting parties intended to benefit him. (Garcia v. Truck Ins. Exchange (1984) 36 Cal.3d 426, 436.) Determining this intent is a question of contract interpretation. (Ibid.) “In determining the meaning of a written contract allegedly made, in part, for the benefit of a third party, evidence of the circumstances and negotiations of the parties in making the contract is both relevant and admissible. And, ‘[i]n the absence of grounds for estoppel, the contracting parties should be allowed to testify as to their actual intention . . . .’ [Citations.]” (Id. at p. 437.)”

A reading of the opinion wherein numerous “release the world” cases were analyzed by the court, lead the court to affirm the judgment by the trial court that Cline presented insufficient evidence in the subject release’s negotiated circumstances to demonstrate that the “parties” did not intend that Homuth would be excluded from the release’s broad “and any other person, corporation, association, or partnership responsible in any manner or degree” for the accident language.

Anyone interested in this area of the law should read the entirety of the opinion for a comprehensive primer on when and when not a broadly worded general release will indeed release a later sued “person” or “corporation.”