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THORNTON v. HUBILL9/24/1997
e of all liability. We agree.
The pertinent language of the settlement agreement provides:
Plaintiff [Thornton] agrees that by reason of such assumption and assignment, . . . Hubill, Inc., Economy Fire & Casualty Company and United States Fidelity & Guaranty Company are fully and completely released and forever discharged from their liability to make all periodic payments set forth in paragraph 2(b) of this Agreement herein, and are completely released and forever discharged from liability to fulfill any and all other obligations under this Agreement.
Thornton also signed an acceptance of annuity contract and assignee stating:
The undersigned, Carl Jefferson Thornton, and his attorney, Rick Olson, hereby accept the assignment by the released parties in the Settlement Agreement and Release executed October 31, 1984, of the obligations under paragraph 2(b) thereof to the Executive Life Insurance Company of California; acknowledge that any liability for the obligations under paragraph 2(b) on the part of the released parties is extinguished in accordance with paragraph 6; and hereby accept the First Executive Corporation, a California corporation, as the "ASSIGNEE" acceptable to the Plaintiff.
A release is a contract governed by the applicable contract rules. Huber v. Hovey, 501 N.W.2d 53, 55 (Iowa 1993). Accordingly, we apply the law governing the construction and interpretation of contracts to the settlement agreement and related documents [571 NW2d Page 33]
to determine the meaning of their terms and their legal effect. Interpretation involves ascertaining the meaning of the contract words; construction refers to determining their legal effect. Fashion Fabrics of Iowa, Inc. v. Retail Investors Corp., 266 N.W.2d 22, 25 (Iowa 1978) (citation omitted). In construing written contracts, the cardinal principle is the parties' intent must control; and except in cases of ambiguity, this is determined by what the contract itself says. Iowa R. App. P. 14(f)(14). An ambiguity exists when, after application of the pertinent rules of interpretation to the contract language, a genuine uncertainty exists as to which of two reasonable constructions is proper. Berryhill v. Hatt, 428 N.W.2d 647, 654 (Iowa 1988). An ambiguity does not exist simply because the parties disagree on the meaning of a phrase. Farm Bureau Mut. Ins. Co. v. Sandbulte, 302 N.W.2d 104, 108 (Iowa 1981). If a contract is not ambiguous, it will be enforced as written. Spilman v. Board of Directors, 253 N.W.2d 593, 596 (Iowa 1977).
Interpretation is reviewed as a legal issue unless it dependent at the trial level on extrinsic evidence. Construction is always reviewed as a legal issue. Fashion Fabrics of Iowa, Inc., 266 N.W.2d at 25. The district court found the language of the parties' settlement agreement and release was unambiguous. Moreover, the summary judgment record does not indicate extrinsic evidence was considered in determining the meaning of the language in the agreement documents. Therefore, we review the district court's determination on these issues as a matter of law for this court to finally decide. Our task is to determine the intent of the parties as evidenced by the language of their agreement. We will not make a new contract for the parties by arbitrary judicial construction. Kinney v. Capitol-Strauss, Inc., 207 N.W.2d 574, 576 (Iowa 1973).
We conclude, based on our review, the terms of the settlement agreement are clear and unambiguous. Therefore, the contract will be enforced as written. Spilman, 253 N.W.2d at 596. The terms of the agreement clearly express the parties' intent to release Economy Fire of all liability and legal oblig
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