Neverkovec v. Fredericks

In Neverkovec v. Fredericks (1999) 74 Cal.App.4th 337, Neverkovec was injured when the car in which he was a passenger (driven by Fredericks) collided with a second car. He settled with the driver of the other car, and pursued a claim against Fredericks. Fredericks then obtained summary judgment on the ground Neverkovec had signed "an unambiguous release of all claims he had against any party with potential liability." Neverkovec, supra, 74 Cal.App.4th at p. 341 The Court of Appeal reversed, holding "Fredericks was not a party to the release agreement, and in order to enforce it as a third party beneficiary he had to show the parties intended their agreement to benefit him. He did not meet this burden." (Ibid.) The court concluded "California contract law requires a third party to show he was an intended beneficiary of a general release and permits extrinsic evidence of the contracting parties' intent and the circumstances in which the agreement was executed." Neverkovec, supra, 74 Cal.App.4th at p. 354. It further noted "Because the court must consider the circumstances of the contracting parties' negotiations to determine whether a third party not named in the release was an intended beneficiary, it will seldom be sufficient for the third party simply to rely on a literal application of the terms of the release. 'The fact that . . . the contract, if carried out to its terms, would inure to the third party's benefit is insufficient to entitle him or her to demand enforcement.'" Neverkovec, supra, 74 Cal.App.4th at p. 349.