## Facts

- Willard C. Cox and Audrey M. Cox sought damages for injuries Audrey Cox suffered in a fall on property owned by Pearl Investment Company.
- Goodwill Industries was a tenant of Pearl; the complaint alternatively alleged that the fall occurred either within or outside the leased premises.
- The complaint asserted negligence claims against Pearl, not Goodwill.
- Before suing Pearl, the Coxes accepted $2,500 from Goodwill in exchange for a written “Covenant Not to Proceed with Suit.”
- The covenant included language reserving the Coxes’ right to sue others for damages arising from the accident.
- Pearl answered asserting contributory negligence and assumption of risk, but did not plead “release” as an affirmative defense.
- Pearl moved for summary judgment, arguing the covenant operated as a release of one tortfeasor and therefore released all potentially liable tortfeasors, including Pearl.

## Issues

1. Whether the defense of release was unavailable on summary judgment because Pearl did not plead release as an affirmative defense under Colorado Rule of Civil Procedure 8(c).
2. Whether a “covenant not to sue” given to one alleged tortfeasor, with an express reservation of rights against others, releases non-settling tortfeasors under Colorado law.

## Decision

- The Colorado Supreme Court reversed the summary judgment for Pearl and remanded for further proceedings.
- The court held Pearl’s failure to plead release did not bar consideration of the defense on summary judgment because amendment would have been permitted.
- The court held the covenant not to sue Goodwill did not release Pearl.
- The court overruled prior Colorado precedent applying the rule that release of one tortfeasor releases all others.

## Legal Principles

- Failure to plead an affirmative defense does not necessarily preclude its consideration where amendment to conform the pleadings would be allowed and no unfairness results.
- The effect of an agreement settling with one alleged tortfeasor depends on the manifest intent expressed in the instrument.
- A covenant not to sue one alleged tortfeasor, particularly with an express reservation of claims against others, does not discharge other alleged tortfeasors.
- The common-law rule that releasing one joint tortfeasor releases all is rejected where it defeats the parties’ expressed intent and can prevent full compensation for injury.

## Conclusion

The court held that the plaintiffs’ covenant not to sue the tenant, which reserved claims against others, did not release the landlord; it also rejected the automatic “release one, release all” rule and required courts to honor the agreement’s expressed intent.


Cox v. Pearl Inv. Co., 168 Colo. 67, 450 P.2d 60 (Colo. 1969)