Roy v. USAA Cas. Ins. Co.Roy v. USAA Cas. Ins. Co.
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- Before:
- Calogero
In this case, we examine the language contained in a settlement and release executed by an automobile accident/tort victim in order to determine whether the release expressly reserved his right to sue other parties (potentially liable co-debtors, who, for purposes of our consideration are solidary obligors) for his damages which are in excess of the recovered limits of the tortfeasor‘s liability insurer‘s policy. Both lower courts ruled in favor of the ostensibly released co-debtor (a UMI carrier), and dismissed the plaintiff‘s suit on a motion for summary judgment, reаsoning that the release of one co-debtor in solido released all co-debtors in solido. Upon review and for the following reasons, we reverse, finding an express reservation in the release executed by plaintiff.
Our only concern in this case is whether or not
We are not oblivious to the myriad problems attending the legal and contractual relationship of victim, tortfeasor and uninsured/underinsured motorist insurance carrier. We do not, as a consequence, purport to resolve all questions which might emanate therefrom. For instance, we do not in this opinion dеcide whether or under what circumstances the UMI carrier might somehow be barred from collecting whatever it has to pay, against the uninsured/underinsured motorist. See Pace v. Cage, 419 So.2d 443 (La.1982) which held that an uninsured motorist carrier cannot recover from a tortfeasor when the insured had completely discharged the tortfeasor before the uninsured motоrist carrier made any payment to the insured, because the insured had no rights against his former debtor to subrogate to the insurer. See also Bond v. Commercial Union Assurance Co., 407 So.2d 401, 402 (La.1981) (On Rehearing) wherein all claims were litigated and no releases granted, and we found that the defendant/third party/plaintiff/UMI carrier was entitled to judgment against the tortfeasor because of a conventional subrogation in its policy. Nor do we worry here about whether the victim who releases the tortfeasor and then tries to recover against the UMI carrier is deprived of doing so (aside from any principles of solidary obligation) simply because by releasing the tortfeasor he interfered with any contractual or statutory rights of the UMI carrier to recover monies paid under his policy.
As earlier indicated, all we are going to address in this opinion is whether there is, in the release before us, language which expressly reserves to relator the right to seek further compensation for damages from other parties. With that qualification, we examine the facts and very narrow issue presented in the case before us now.
On January 8, 1981, Mr. Albert L. Roy, Jr. was involved in an automobile accident caused solely by the negligence of Dora G. Melancon. On April 10, 1981, Roy settled his claim with, and granted a release to, Dora Melancon and her insurer Hartford Accident and Indemnity Company, in еxchange for ten thousand dollars ($10,000), the maximum limits of her liability insurance policy. Thereafter Roy filed suit against United Services Automobile Association-Casualty Insurance Company (hereinafter USAA-CIC), his uninsured and underinsured motorist insurer, claiming that the amount recovered from Melancon and Hartford as a result of the accident was not adequate compensation for his personal injuries. Pursuant to a Motion for Summary Judgment, USAA-CIC pleaded in a second supplemental and amended answer the prior release and settlement as a bar to relator‘s lawsuit on the theory that the release of a solidary obligor (Dora Melancon and Hartford Accident and Indemnity Company), without an express reservation of rights, resulted in the release of USAA-CIC.
USAA-CIC‘s Motion for Summary Judgment was granted and Roy‘s suit was dismissed with prejudice. In his reasons, the trial judge found that USAA-CIC was a solidary obligor with Dora Melancon and her insurer and, because Roy did not reserve his rights against USAA-CIC in his settlement and release of Melancon and Hаrtford, he was barred from any recovery from USAA-CIC.
Plaintiff appealed the dismissal, contending that the release signed by him was restrictive and did not release other solidary obligors. The Third Circuit Court of
Both lower courts found this case controlled by Hoefly v. Government Employees Insurance Company, 418 So.2d 575 (La.1982) wherein we found the tortfeasor and UMI carrier were liable in solido, at least for the purpose of allowing an interruption of prescription.1 In this application, relator does not protest that there is no solidary obligation between the tortfeasor and the UMI carrier. The relator argues instead that the lower courts erred in concluding that the release of the solidary obligor did not contain a reservation of rights against USAA-CIC.
The release and settlement agreement executed by Roy, Melancon and Hartford Accident and Indemnity Company reads in pertinent part as follows:
For the sole consideration of $10,000.00, I/We Mr. Albert L. Roy, Jr., residing at 1721 N. Jake Street, Lake Charles, Louisiana, do hereby release, acquit and forever discharge Dora Melancon and Hartford Accident and Indemnity Company from any and all actions, causes of action, claims and demands, damages, costs, loss of services, expenses and compensation on account of or in any way growing out of any and all known and unknown personal injuries and property damage resulting or to result from an accident whiсh occurred on or about January 8, 1981 and do hereby agree to indemnify and save harmless the said Dora Melancon and Hartford Accident and Indemnity Company from all further claims or demands, costs or expenses arising out of the injuries or damages sustained by me/us. It is further agreed that in the event other parties are responsible to me/us for damages as a result of this accident, the execution of this agreement shall operate as a satisfaction of my/our claim against such other parties to the extent of the pro-rata share of the parties herein. (emphasis provided)
It is the italicized portion of the release, above, that relator suggests expressly reserves his right to proceed against another co-debtor in solido (USAA-CIC here) for his damages in excess of the $10,000 settlement. We determine that the italicized portion has the effect of an express reservation against other co-debtors in solido under
The remission or conventional discharge in favor of one of the codebtors in solido, discharges all the others, unless the creditor has expressly reserved his right against the latter.
In the latter case, he can not claim the debt without making a deduction of the part of him to whom he has made the remission. (emphasis provided)
Concerning what constitutes an express reservation of rights contained in a release under
There is nothing sacramental about the form in which the reservation shall be made, and, since no one is presumed to renounce a right unless it clearly appears that he intended to do so, it follows that it suffices that the intention to reserve the right against codebtors may be inferred
from any expression in the release of one codebtor which negatives the intent to release the other codebtors. (emphasis provided)
In Cusimano, there were involved seven indorsers on a note and two separate releases of two co-debtors. One release of one of the co-debtors (Paolo Nicolоsi) was made “with full and complete reservation of all my rights against all of the judgment debtors in said suit.” In the other release of one Vincenzo Nicolosi, plaintiff authorized as well the cancellation of a mortgage as to certain property of one V.S. Dantoni, but “in all other respects the said judgment is to remain in full forcе and effect.” This Court concluded that these releases did not have the effect of releasing Dantoni, stating at 129 So. 630:
We consider all these expressions sufficient to express clearly an intention on the part of plaintiff not to abandon any rights which he had against the several codebtors; and a clearly expressed intention not to abandon a right is a clearly expressed intention to reserve it. (emphasis provided)
See also Honeycutt v. Town of Boyce, 341 So.2d 327 (La.1977) and the cases cited therein. 341 So.2d at 331.
Although this Court has not recently had to decide what manner of expression fits the
The plaintiff appealed to the Fourth Circuit arguing that “her scratching out of the phrase `... and all other persons, firms and corporations ...’ [in her release and settlement with the tortfeasor] negated any intent to release the other co-debtor in solido (State Farm), and was therefore sufficient to meet the codal requirement of LSA-C.C. Art. 2203.” 437 So.2d at 367. The appellate court agreed with plaintiff2 and reversed, finding:
The altered release does not provide an unconditional discharge of all co-debtors. When plaintiff lined through the catch-all phrase, she expressly limited the release to those specified, thereby making it evident she was not fully compensated by the settlement and would proceed against others. 437 So.2d at 368.
In like manner we now examine the language in this release to seе if there is therein “the clearly expressed intention [on the part of the victim] not to abandon a right [to seek further compensation for the accident]” which qualifies as “a clearly expressed intention to reserve it.” Cusimano, 129 So. at 630.
The document is entitled “Release and Settlement of Claim.” As noted earlier in this opinion the first sentence of the release specifically discharged Melancon and Hartford. By its terms, however, only Dora and Hartford (and no one else) are released. Then, immediately following the sentence releasing Melancon and Hartford, there is expressed:
It is further agreed that in the event other parties are responsible to me /us for damages as a result of this accident, the execution of this agreement shall operate as a satisfaction of my/our claim against such other parties to the extent of the pro-rata share of the parties herein. (emphasis provided)
We find that just as the deletion in Dobard made it evident that the victim was not admitting full compensation by the settlement, and that she might, or intended to, proceed against others, so too the inclusion of the language in the release before us makes it еvident that Roy was not admitting full compensation by the settlement and was reserving the right to proceed against others. Applying
Furthermore the reservation in this case is not just an acknowledgment that there are other possibly outstanding claims against other parties. It also sеts out the consequence in the event “other parties are responsible.” The consequence of releasing Dora and Hartford, stated in this agreement, is that in the event damages are received from other parties, by the victim, any claim those other co-debtors might have against the tortfeasor is satisfied “to thе extent of the pro-rata share of the parties herein.” This consequence is analogous to a “deduction of the part of him to whom he has made the remission,” the result dictated by
We find, therefore, in the release and settlement executed by Roy with Melancon and Hartford the express reservation of rights required by
DECREE
For the foregoing reasons the trial court‘s granting the Motion for Summary Judgment on behalf of USAA-CIC and the Court of Appeal affirmance of that judgment are reversed and the motion denied. The case is remanded to the district court for further procеedings.
REVERSED; REMANDED.
BLANCHE, J., dissents and assigns reasons.
BLANCHE, Justice (dissenting).
The majority correctly cites Cusimano v. Ferrara, 170 La. 1044, 129 So. 630 (1930), for the proposition that an express reservation of rights against solidary debtors contained in a release may be inferred, in satisfaction of
The test laid down in Cusimano is whether there is a clear intent to reserve rights exhibited in the release language. Clarity of intent to reserve rights is conspicuous in the instant language only by its absence.
The Cusimano case recognized the inequity and inherent unfairness of requiring stringent, technical language to accomplish a reservation of rights. At the same time, it recognized that the language of
While I do not agree with Hoefly v. Government Employees Insurance Company, 418 So.2d 575 (La.1982), that the tortfeasor and UMI carrier are liable in solido, as of now it is the law of this state and we are compelled to follow it, as that issue is not before us at this time. I do not find it appropriate, however, to weaken the requirement under
As this writer does not find the language contained in the release to constitute a “clearly expressed intention to reserve a right,” I respectfully dissent.
Notes
The insurance statute mandates uninsured motorist coverage unless rejected by the insured.