Business Law 11th Edition by Kenneth Clarkson,Roger LeRoy Miller,Gaylord Jentz,Frank Cross

تمرين 1

Roberts v. Century Contractors, Inc.
Court of Appeals of North Carolina, 2004. 592 S.E.2d 215.
LEVINSON, Judge.
Plaintiff (Bobby Roberts) suffered a compensable injury by accident on 28 July 1993 when he was struck by a pipe while working for Century Contractors, Incorporated, causing trauma to his neck and back. Defendants admitted liability, and plaintiff sought treatment for his injuries with Dr. James Markworth of Southeastern Orthopaedic Clinic. Dr. Markworth diagnosed plaintiff as having some narrowing of the cervical spinal canal and some degeneration of multiple levels of the cervical disks, with bulging of some of the discs. Dr. Markworth performed an anterior cervical discectomy infusion * * * with bone grafts * * *.
* * * Dr. Markworth subsequently indicated that plaintiff was at maximum medical improvement [MMI] and stopped treating plaintiff. A physician's assistant at Southeastern Orthopaedic Clinic continued to treat plaintiff. Because he was still experiencing pain, plaintiff issued a request for a second medical opinion on 3 April 1998.
On 2 June 1998, plaintiff saw Dr. Allen Friedman for a second medical opinion. Dr. Friedman noted that there was a question [about one of the grafts] and that x-rays needed to be repeated to be sure that the fusion was stable. Dr. Friedman indicated his concern to plaintiff that current x- rays needed to be obtained to be certain as to whether the fusion was solid.
The parties attended a mediation on 13 May 1998. The negotiation resulted in a settlement amount of $125,000 and payment of related medical expenses. Following his visit to Dr. Friedman, plaintiff executed the settlement agreement that had been negotiated on 13 May 1998. The settlement agreement contained a waiver of any right to make further claims in regard to plaintiff's injury.
The settlement agreement was approved by the North Carolina Industrial Commission [the state administrative agency empowered to rule on workers' compensation claims] on 25 June 1998.
Plaintiff subsequently filed a claim for Workers' Compensation, seeking compensation and medical benefits for the same injuries which were addressed in the settlement agreement. Plaintiff alleged that the Commission should set aside the settlement agreement * * * due to mutual mistake of fact. In support of this allegation, plaintiff offered Dr. Markworth's deposition testimony that his office's diagnosis of maximum medical improvement was a mistake.
The * * * Commission found that the parties had mistakenly relied on Dr. Markworth's diagnosis of maximum medical improvement and that this fact was material to the settlement agreement. The * * * Commission set aside the agreement and awarded plaintiff compensation and medical benefits in an Opinion and Award filed on 18 September 2002.* * *
Defendants appeal [to a North Carolina state intermediate appellate court], contending * * * the * * * Opinion and Award must be reversed because the * * * Commission erred in setting aside the parties' mediated settlement agreement on the basis of mutual mistake of fact * * *.
* * * *
* * * Compromise settlement agreements, including mediated settlement agreements in Workers' Compensation cases, are governed by general principles of contract law.
It is a well-settled principle of contract law that a valid contract exists only where there has been a meeting of the minds as to all essential terms of the agreement. Therefore, where a mistake is common to both parties and concerns a material past or presently existing fact, such that there is no meeting of the minds, a contract may be avoided. [Emphasis added.]
To afford relief, the mistake must be of a certain nature. The fact about which the parties are mistaken must be an existing or past fact. The mistaken fact must also be material * * *. It must be as to a fact which enters into and forms the basis of the contract, or in other words, it must be of the essence of the agreement-the sine qua non -or, as is sometimes said, the efficient cause of the agreement, and must be such that it animates and controls the conduct of the parties.
Additionally, relief from a contract due to mistake of fact will be had only where both parties to an agreement are mistaken. Thus, as a general rule relief will be denied where the party against whom it is sought was ignorant that the other party was acting under a mistake and the former's conduct in no way contributed thereto. Likewise, a party who assumed the risk of a mistaken fact cannot avoid a contract. [Emphasis added.]
A party bears the risk of a mistake when
(a) the risk is allocated to him by agreement of the parties, or
(b) he is aware, at the time the contract is made that he has only limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient, or
(c) the risk is allocated to him by the court on the ground that it is reasonable in the circumstances to do so.
* * * *
* * * The x-rays [examined by Dr. Friedman] after Dr. Markworth or Southern Orthopaedic Clinic had last treated plaintiff [Roberts], indicated Dr. Markworth's diagnosis of maximum medical improvement * * * was a mistake. Dr. Markworth testified * * * that advising plaintiff that he was at maximum medical improvement at that time was a mistake.
* * * *
* * * [T]he finding of maximum medical improvement and the impairment rating given by Dr. Markworth were material to the settlement of this claim and * * * both parties relied on this information in entering into settlement negotiations.
* * * *
* * * [T]he parties believed that plaintiff had reached maximum medical improvement and, further, * * * they materially relied upon this fact in reaching a settlement. Defendants' essential argument on appeal is that because plaintiff either knew that there was a possibility that [he had not reached MMI] or was negligent in not declining to sign the settlement agreement, mutual mistake is a legal impossibility in this case. As the facts * * * support a contrary conclusion, we do not agree.
* * * The plaintiff testified that he based his decision to sign the settlement agreement on Dr. Markworth's diagnosis and that he would not have settled his case if Dr. Friedman had told him that [he had not reached MMI]. Thus, there is competent record evidence to support the * * * findings that the parties were mistaken as to whether plaintiff had reached maximum medical improvement and that this mistaken fact was material.* * *
* * * *
* * * We affirm the * * * Award filed 18 September 2002.
1. Why did the court in this case consider Dr. Markworth's misdiagnosis a bilateral mistake rather than a unilateral mistake
2. Why are situations such as the one presented in this case often sources of litigation appealed to the states' highest courts