## Facts

- Margaret U. Williams was a passenger in a family car that was rear-ended by Stephen Glash; there were no observable injuries at the scene, though the car was damaged.
- Williams contacted Glash’s insurer, State Farm, and was instructed to bring the vehicle to a State Farm office for a property-damage appraisal.
- State Farm estimated repairs at $889.46 and issued a check for that amount.
- At the State Farm office, Williams completed a claim form and indicated no one was injured; only property damage was discussed, with no negotiation about releasing personal-injury claims.
- The back of the check contained preprinted language releasing “all claims” for property damage and bodily injury, “whether known or unknown,” arising from the accident; the language was not explained or discussed with Margaret or David Williams.
- The face of the check included a State Farm internal code indicating a property-damage claim rather than a bodily-injury settlement.
- The Williamses endorsed the check to the repair facility.
- After the repair payment, Williams was diagnosed with temporomandibular joint syndrome (TMJ) and alleged it was caused by the accident.

## Issues

1. Whether a broadly worded release on the back of an insurance check purporting to cover “known or unknown” bodily injuries necessarily bars a later suit for an injury unknown to both parties at the time of execution.
2. Whether the release may be avoided based on mutual mistake regarding a material fact, specifically the existence of a personal injury at the time of settlement.
3. Whether summary judgment is proper when evidence raises a fact dispute about the parties’ intent and the presence of mutual mistake.

## Decision

- The Supreme Court of Texas reversed the summary judgment for Glash and remanded for further proceedings.
- The Court held that a personal-injury release, even if it states it covers “known or unknown” injuries, can be set aside for mutual mistake if the parties were mistaken about a material fact and did not intend to assume the risk of the unknown injury.
- The Court concluded the evidence raised a genuine issue of material fact as to whether both sides believed the accident involved only property damage and did not intend to settle an unknown bodily-injury claim.

## Legal Principles

- A release is a contract and may be avoided on traditional contract grounds, including mutual mistake.
- Mutual mistake requires proof that both parties shared the same misunderstanding about the same material fact at the time the agreement was executed.
- Boilerplate “known or unknown” language is not conclusive when surrounding circumstances show the parties did not actually bargain over, or intend to allocate the risk of, unknown personal injuries.
- Mutual mistake is generally unavailable when parties recognize the possibility of unknown injuries and deliberately settle with an agreed allocation of that risk.
- When evidence supports competing inferences about intent and mistake, the effect of a release on later-discovered injuries presents a fact question that precludes summary judgment.

## Conclusion

The Texas Supreme Court held that a broadly drafted release printed on an insurer’s repair-payment check did not automatically bar a later personal-injury suit for a condition unknown to both sides at settlement; evidence of mutual mistake and lack of intent to settle bodily-injury risk created a fact issue requiring trial court proceedings on remand.


Williams v. Glash, 789 S.W.2d 261 (Tex. 1990)