KAPLAN v. GOLDBAUM (1999)

In an action, inter alia, to reform a contract, the defendants appeal from an order of the Supreme Court, Nassau County (Winick, J.), dated December 18, 1997, which denied their motion for summary judgment dismissing the complaint.

ORDERED that the order is reversed, on the law, with costs, the motion is granted, and the complaint is dismissed.

The plaintiff, an attorney, allegedly sustained injuries in an automobile accident.   The plaintiff negotiated a settlement with the defendant State Farm Insurance Company (hereinafter State Farm), on behalf of its insured, the defendant Ian L. Goldbaum, pursuant to which State Farm tendered to the plaintiff the entire $10,000 available under its policy in satisfaction of his claims against Goldbaum.   The plaintiff accepted State Farm's tender, and prepared and executed a general release dated October 14, 1996, which failed to preserve any subrogation rights that his insurance carrier might have concerning any supplementary underinsurance claim the plaintiff might make.

In January 1997 the plaintiff initiated discussions with State Farm to obtain a new, limited release, preserving the subrogation rights of his insurance carrier as against Goldbaum.   State Farm declined to accept a limited release that would expose its insured to potential liability.   The plaintiff then commenced this action, seeking, inter alia, to reform the general release into a limited release, contending that it was the parties' actual intention, and that but for a mutual mistake, the release would have been so drafted.   The Supreme Court denied the defendants' motion for summary judgment, finding that issues of fact existed as to the parties' intent.   We reverse.

There is no persuasive evidence that the general release was the result of a mutual mistake.   Rather, the record strongly supports the conclusion that it was the plaintiff who made a unilateral mistake when he drafted the release without attempting to preserve the potential subrogation rights of his insurance carrier.   There is no evidence in the record of any negotiations or discussions demonstrating that State Farm was operating under a mistaken impression as to the scope of the release.   Indeed, State Farm persuasively argues that it could not have agreed to a limited release that would have potentially exposed its insured to additional liability.   In short, given the complete lack of credible evidence supporting the plaintiff's claim of mutual mistake, upon which all of the causes of action asserted in his complaint are predicated, the Supreme Court erred in denying the defendants' motion for summary judgment dismissing the action.

MEMORANDUM BY THE COURT.