Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. IP 99-1385-C-Y/S--Richard L. Young, Judge.
Before Cudahy, Easterbrook and Evans, Circuit Judges.
The opinion of the court was delivered by: Cudahy, Circuit Judge.
Betty Deckard, Michael W. Deckard, Frank Pershing, Donna Shields and Brian Shields (the plaintiffs) appeal from the order of the district court dismissing their claims against General Motors Corporation (GM) arising from an automobile accident. We reverse.
On August 16, 1997, Karen Watson, while driving her 1992 Toyota Tercel, failed to stop at a stop sign and struck a 1994 GMC Jimmy truck driven by Betty Deckard. The Jimmy was occupied by passengers Donna Shields, Brandi Shields and Sherry Pershing (who was pregnant with Adrianna *fn1 ). As a result of the impact of the collision, the Jimmy rolled over and all of its occupants, except Brandi, were ejected. Betty Deckard and Donna Shields were seriously injured; Sherry and Adrianna Pershing were killed.
On February 4, 1998, the plaintiffs in settling their claims against Karen Watson and her insurer, United Farm Bureau Mutual Insurance Company (Farm Bureau), signed release agreements. Betty and her husband, Michael Deckard, and Donna and her husband, Brian Shields, signed the same form release agreements that purported to release:
. . . United Farm Bureau Mutual Insurance and all other persons, firms or corporations liable or who might be claimed to be liable . . . from any and all claims, demands, damages, actions, causes of action or suits of any kind or nature whatsoever, on their own behalf and on behalf of their children, and particularly on account of all injuries, known and unknown . . . which resulted or may in the future develop from an accident which occurred on or about the 16th day of August, 1997, in or near Bedford, Lawrence County, Indiana . . . . Separate App. to Appellant's Br., Exhibit 4, at 3 (emphasis added).
Although Betty Deckard and Donna Shields allegedly incurred over $200,000 and $40,000, respectively, in medical expenses, the Deckards and the Shields settled their claims for $5,000 each.
Frank Pershing also signed release agreements to settle claims arising from the death of his wife Sherry and his unborn daughter Adrianna. With respect to the claims arising from the death of Sherry, Frank purported to release:
. . . United Farm Bureau Mutual Insurance and all other persons, firms or corporations liable or who might be claimed to be liable . . . on account of all injuries, death and damages suffered directly to Sherry Pershing and for the loss of services of said Sherry Pershing to Frank Pershing which resulted or may in the future develop from an accident which occurred on or about the 16th day of August, 1997, in or near Bedford, Lawrence County, Indiana . . . . Id. at 1 (emphasis added).
Frank Pershing received $42,500 in settlement of these claims with respect to Sherry. He received an additional $42,500 in exchange for settling the claims arising out of the death of Adrianna. *fn2
On August 12, 1999, the plaintiffs filed an automotive products liability suit against GM claiming that the Jimmy was improperly designed. On March 1, 2000, GM filed a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, alleging that the release agreements that the plaintiffs entered into with Farm Bureau also released GM.
On March 27, 2000, Farm Bureau entered into agreements captioned "Rescission Agreement and Release" with the plaintiffs, purporting to rescind the original release agreements and to enter into new release ...