Holmstead v. Abbott G. M. Diesel, Inc.
493 P.2d 625
Utah
1972
Check Treatment

*1 represent change dulged, but some do that, changes, other

circumstances with

shown, aggregate require the might in the

application court in a of the rule that the agreement,

proper is not bound case or to- lesser warrant some

tal are con- modification. Therefore we for a new

strained to remand this case

trial to entertain evidence with instructions after, before, occurring

of facts entered, and in accordance

decree was herein,

with observations stated —and (Emphasis added.)

we so hold.

CALLISTER, J., TUCKETT, C. CROCKETT, JJ., concur.

ELLETT and HOLMSTEAD, Plaintiff and

Hal E. Respondent, DIESEL, INC., M. Defendant

ABBOTT G. Appellant.

No. 12257.

Supreme Court of Utah. 25,

Jan. (1951) ground A.L.R.2d of the de- See also 18 where not a for modification alleged concurring opinion is observed that “Where the also cree.” See two of the Justices MacDonald v. change parties Mac- circumstances of the expected Donald, one that the trial court 236 P.2d 1066 Utah probably (1951). made allowances for when en- tering original decree, change

HI Diesel, Inc., against M. action Abbott G. Christensen, Reed L. Worsley, & Snow through this res- and that mutual mistake defendant Martineau, City, for Lake Salt from document ervation was omitted appellant. and and Allen plaintiff. Allstate executed Howard, Lewis, Pro- Howard & Jackson taken permitted a default to be respondent. vo, plaintiff for however, action; in this counsel for them presented documen- testified and CALLISTER, Chief Justice: tary indicating that Allstate evidence plaintiff's agreed counsel had action cor- this initiated Plaintiff rights against corpo- would reserve his its em- alleging porate defendant employer. rate vehicle operating his motor ployee, while employment, negli- scope within granted trial court decree of vehicle, gently with collided reformation; record of this re- the entire loss. causing plaintiff injuries property action is included in instant case. lated employee, join Plaintiff did Thereafter, summa- defendant’s motion for action, Allen, since were this ry denied; judgment was heard and Allen process negotiating a settlement. granted petition court defendant’s *3 carrier, represented insurance his was appeal. an intermediate Insurance, procured from which Allstate provisions of the Covenant The relevant a to for con- plaintiff a covenant not sue Not to as follows: Sue were $10,000, maximum cover- sideration of age policy. Defendant under Allen’s of sum of consideration In summary judgment on the for moved $10,000.00, hereby I do cove- ... not to ground plaintiff’s that covenant sue any agree to de- and make nant never Allen, operated as of agent, a matter claim, or cause or or commence or mand or from to release the master law permit prosecuted any action at to be liability. any proceeding equity, of or or law Allen description, against be- any Gideon motion, hearing to of this Prior or injury, of personal ... cause against Allen plaintiff filed an action or any have sustained loss of kind that I seeking reformation insurance carrier may consequence of hereafter sustain Specifically, of the covenant not to sue. about that or an accident occurred on Allstate, alleged acting on behalf that December, 1968, at day or the 6th of plain- agreed insured, Allen, of with its Lehi, near Utah. specifi- that would tiff’s counsel cally reserve rights to proceed in his [*] [*] [*] [*] [*] [*] joint pay- tort-feasor right that would have no . . . to I understand to terminate seek contribution from Allen. recited is made above ment controversy respecting all claims further hand, On other defendant contends as- I heretofore damages that have for that a not to covenant sue favor of an repre- my personal or or that I serted agent operates or servant as a release of a assert hereafter sentatives liability, any, master or whose accident. of said Allen because Gideon wholly derivative. my rights hereby all of I reserve Inc., Diesel, includ- Abbott G. M. liability A for master’s the acts my right which ing pursue the lawsuit of his servant is under the doctrine of re day of filed on the 17th ... spondeat superior.2 Under the doctrine ,.1 April, 1969 . . respondeat superior, liability case, plaintiff’s analysis person injuries a in Under master to third reject, the master and servant flicted a course of his which we servant in the agent joint employment scope principal and are tort-feasors and within the of his authority secondary, joint tort- and a covenant not to sue one derivative release; and, primary, feasor does not amount a while of the servant therefore, any other than does not dis- absent delict the master servant, through charge joint tort-feasor. A cor- the exoneration of other upon ollary right foundation to this rule is that there is no servant removes joint tort-feasors, impute negligence the master. of contribution between may jointly the master be sued with covenant not to sue or a release with While latter, com joint for a tort of the made with one servant a reservation of scope authority or not relieves him of mitted within tort-feasor they joint only directly injured party employment, are not tort-feasors but also equal wrong legal whereby may are there is no basis in the sense contribution, for the indirectly through right of held liable contribution doers without the servant joint to his tort-feasors. In other recover from fellow master tort, case, words, by the theory caused to him under of this amount loss including any required he has to sue relieved sum been covenant *4 it; person of liability, directly pay and indi- a third on account Allen of all both master, by in the ab- rectly, corporate payments made since the defendant as a 1, paragraph City, 94 Utah 2. Gleason v. Lake 1. This final was added under Salt previously (1937). 13, P.2d 1225 reformation men 74 decree of tioned. JJg Subrogation is to a part, said be creation are not made of of on bis fatllt sence equity purpose effecting his of for the wrongdoer, but reason of as him a adjustment parties between so as to se- for the act of obligation to answer ultimately hand, payment discharge or cure the other servant. On person wholly good debt a in because a who con- arises servant wrong; doing ought it does to for personal pay science it.4 act of master the relation not arise out of action, corpo instant In the law upon the common exists

servant hut compelled respond rate he to defendant every person so or must act obligation that subrogat damages plaintiff, it would be injure controls he as use which ed claim and could recover re- required to another. If master servant, Allen. thereunder from its damages by rea- person spond a third However, specified to sue the covenant not liability under the doctrine son of his agree that plaintiff understood that superior, subrogated respondeat will be controversy terminate further ment was to injured person third rights of respecting damages all claims may over from servant recover per or that had asserted liable.3 primarily who is representatives thereafter as sonal Duties, obligations, lia- . . . Plaintiff has sert Gideon Allen. de- may order or different bilities be against the servant relinquished his claim one, primary a gree. One right of sub impaired and thus defendant’s secondary may arise one. One another a rogation. of the oth- of a failure only in the event concurrently as to may exist er. Both true that and the It as those liable party, third but between right destroy cannot defendant’s servant grows out duty, the often or under one indemnity its consent and there without of the other. failure entitled fore defendant still 467, Parrill, Kan. 351 3. v. 186 Jacobsen (1956) ; Thompson, 143 2d 914 Hamm v. Townsley Simpson (1960) ; 194 v. P.2d (1960) ; 298, Bacon Colo. 353 P.2d 73 (CA 1960), 743, 10th, A. F.2d 92 283 8th, 1963), (CA 321 v. States United 526; Insur. L.R.2d American Southern F.2d 880. Service, Inc., 275 Ala. v. Dime Taxi Co. (1963) ; 51, Holcomb v. 783 151 So.2d City Schubach, Utah 108 Salt Lake v. 558, Flavin, 34 Ill.2d 216 N.E.2d 811 (1945) ; 266, 287, 149, 158, 159 159 P.2d 212, Craig, (1966) ; Tenn. Stewart County Indem Home also see Beaver (1961) ; Continental 344 Casualty S.W.2d nity Co., 34-36, 1, P.2d 88 Utah Co., Phoenix Construction Co. v. (1935). A.L.R. 46 Cal.2d *5 However, indemnity.5 as against the court ob- liability direct plaintiff,7 and the in Simpson Townsley6 served specific the cove- language mili- wholly nant not to sue would be abortive tates such narrow interpretation, object its intended purpose it we compelled are to conclude that there protect went no further than to the em- were no against defendant to be re- ployee against by a direct action in- the served. Defendant’s merely jured party protection but afforded no secondary; derivative and the exoneration employer. an action over If servant, Allen, prevented imputing the. the narrowly construed, covenant be so negligence to defendant. payment made as consideration would con- This cause is remanded to the trial court stitute no more than a credit on the with an grant order to defendant’s motion amount injured person might which the ul- for summary judgment. No costs are timately judgment, recover under a awarded. employee remain would liable for the re- mainder. The court determined that CROCKETT, HENRIOD and JJ., con- protect covenant not to sue was intended to cur. employee against liability, direct or in- direct, damages resulting injured to the ELLETT, (Dissenting) : Justice party from the The accident. court con- agree I holding am unable to with the cluded that the covenant not to sue consti- opinion. the main it is true that the complete tuted a While exoneration of the em- agent joint ployee and the are not tort- any upon removed foundation feasors, liable, yet jointly are impute negligence employ- agent wrongful because of conduct and er. (re- because of a rule of law spondeat superior). claimed, Since has not action, the instant that the not to covenant split is a in the authorities as to There protect solely sue was to Allen not to a release of or a whether covenant Restitution, 5. See Restatement ly plain See. between Allstate Insurance p. p. Commenta, 41S and allegations tiff’s There were no counsel. proof that Allen consented to 3, supra. 6. Note paid to Allstate had reservation. Since policy limits, the insurer had no au the thority position plain- 7. This is consistent with comprom to bind the assured complaint tiff’s for reformation of the beyond policy limits. Brown ise covenant not to sue and the evidence and Co., Cal.App.2d Guarantee Insurance testimony hearing adduced at there- on, 69, 74, agree- where was indicated A.L.R.2d plaintiff’s rights (1957). ment to reserve was sole- mary given judgment release trial court for primarily will also liable sue one defendant, ap- on for the same which was reversed jointly liable who is another saying: at peal, 20 A.L.R.2d court there annotation in tort. Carolina, Georgia, North

page 1044 lists reached We differ with the conclusion holding as release and Ohio fallacy the trial court. The common principal. The will also release agent *6 the cases above cited illustrated best Illinois, California, Kentuc- annotation lists by opinion language the in Bacon docs holding it ky, Michigan as that v. United wherein court at States the principal. In addition release the not F.2d, page 884, of stated that when 321 cited, Fed- are there there jurisdictions the liable, the the servant not master liability of the holding the cases that eral liable, should not be and that it matters the by a principal is affected release not by little the released how servant was agent. liability. opinion In our it matters greatly liability how the servant’s was First Secu- case of United States The extinguished. 951, the Where master’s liabil- Bank, 424, A.L.R.2d rity F.2d 42 208 ity solely respondeat superior, on rests plain- Utah Law. The decided under was by is exonerated trial on the servant under the United States tiff there sued then, course, merits, master can- giving a covenant Act after Claims Tort logical liable, not be held but there is no agent. identi- negligent The to sue the not legal extending made the Gov- basis for the rule to- argument was there cal majority adopted situations where terminates his as in the a servant ernment that Ap- liability obtaining in a covenant not to opinion this case. The Court of rejected peals argument sue. (10th Cir.) . permitted judgment against The case of Ellis v. Rhodes Mo- Jewett to stand. Government Cal.App.2d 395, Company, tor 29 plaintiff was where the (1938), 791 one Marionneaux, case of

The Williams agent, gave a to sue the covenant not 713, permit (1960), 240 La. 124 So.2d 919 vehicle, and then sued driver of a motor employer to be held where ted principal. judgment against The employee harmless to save the appeal. principal on was affirmed made. was 312, Thomsen, 245, 328 Mich. Flavin, In Boucher v. Ill.App.2d In Holcomb v. 321, 322, 866, there (1950), N.W.2d plain- (1965), N.E.2d plaintiff against the filed agent, was suit gave a not to sue the tiff covenant agent, who driver of principal and was principal. There a sum- then sued the was gors, the action a motor vehicle. While was shall discharge not co-obligors given not to sue pending, obligee a covenant whom the in writing and as agent. part trial court as to the The dismissed of the same transaction as the release principal, Supreme re- to the Court or discharge expressly rights; reserves his versed, saying: think the above decisions indicate We There is no in distinction this statute be- applied rule of law to the correct tween primarily those who are liable and express language The the case at bar. those secondarily who are liable. The stat- question leaves no as covenant simply provides ute obligee that an can do parties actually thereto intend- what the exactly what in the instant part ed. If on the of defendant matter did losing do and this without enforced, assert,

Franck co-obligor. to sue the maintain, perhaps a claim that is enti- really did release the tled to reimbursement from Thomsen agent. merely He covenanted never sue out, pointed As and Plemel. before him or to cause him be sued. If it be parties must be assumed that the thought by suing a cause possible covenant had situation of action arises favor of the agree- mind when executed their *7 against and agent, the still the speculate not entitled ment. We are to plaintiff is agent, between the and the and as to their reasons or in motives rights this defendant has no under it. The matter, sought but have not to void agent specifically agreed plaintiff that the undertaking presumably in and it is reserving was against all of his de- their accordance with deliberate conclu- fendant herein under the cause of action proper sions as to the course to follow. which had then pending been for some sev- It is our conclusion that the covenant en and a half months. may given preclud- not be the effect of ing prosecution against of the action agent The have known that must he the defendant Franck. His to motion might upon prin- be called to reimburse his dismiss should have been denied. cipal plaintiff might in case the recover It seems to me the better reasoned judgment in collect a excess of the recovery permit against cases princi- figure. a settlement For reasons best known pal, recovery himself, and in permitted Utah is may to assumed risk. It 15-4-4, U.C.A.1953, statute. thought principal Section be that he his would nev- provides clearly upon satisfy any that the release of “one or er be judgment called to joint joint more of may or and several obli- It against rendered him. be that he

H7 possibility recover at concern itself about the plaintiff could not thought agent might pay defendant thought defendant’s have that he all. It be I, therefore, it some future action. would (if any has —and insurance carrier plain wording would one) not have follow the the statute employer does say, car- great his own then plaintiff as did words of Bard with the settle “Mischief, afoot, rate, willing settle any art take thou what rier. At thou allowing was, by liability, any if there course thou his wilt.”1 money furnish the his insurance carrier to given TUCKETT, dissenting to him. J.,

for the covenant concurs ELLETT, opinion of J.' against judgment rendered a Even of the amount in excess defendant agent and it has with the the settlement sub- judgment, there no

pay that excess

rogation defendant rights of the agent. All

rights against the payment be settled would 493 P.2d 631 innocent judgment. The of the Utah, By Through its STATE ROAD action simply have an would MISSION, Appellant, COM Plaintiff and any agent for reimbursement errant upon pay be called sum which woman, Betty LeSOURD, al., et Defend agent. of the wrongdoing because Respondents. ants and interpret- not to sue If the covenant Utah, By Through STATE of its ROAD responsible for ed hold the COMMISSION, Appellant, Plaintiff and be filed causing an action to defendant) agent, surely (this Davies, wife, and Thelma Alex DAVIES County, whether Defendants and not be concerned with Summit should Respondents. agent plaintiff for breach sues the simply no concern of of covenant. That No. 12471.

this defendant. Supreme Court Utah. willing agent by agreement was 27, 1972. Jan. *8 reimbursing this defend- take risk

ant, evidencing any con- and he is not now should

cern about I think court it. Caesar, Act 2. Julius Scene