Lеon SWANIGAN, Plaintiff-Respondent, v. STATE FARM INSURANCE COMPANY, a foreign corporation, Defendant-Appellant-Petitioner.
No. 79-235
Supreme Court of Wisconsin
Argued September 30, 1980.—Decided November 25, 1980.
299 N.W.2d 234 | 99 Wis. 2d 179
(Affirming Court of Appeals opinion not submitted for publication.)
For the respondent there was a brief by Peter S. Balistreri and Burke & Schoetz of Milwaukee, and oral
SHIRLEY S. ABRAHAMSON, J. The issue presented is whether an instrument which states that it is intended to release only the parties specifically named and which expressly reserves any other claim of whatever kind or nature against any other persons also releases as a matter of law the mother of a minor (who was released in the instrument) from liability imposed on her pursuant to
On July 4, 1977, the plaintiff, Leon Swanigan, was injured while riding in a vehicle owned by Dorothy A. Laurence, insured by American Family Insurance Company, and driven by Jimmy Zollicoffer, a minor under the age of eighteen. Brooksie Zollicoffer was the sponsor on her son Jimmy‘s application for a driver‘s license. The other vehicle in the collision was operated by Maria C. Busalacchi and insured by Allstate Insurance Company.
In December, 1977, American Family paid the plaintiff $15,000, the full amount for which it was liable under the policy. As consideration for this payment, plaintiff executed an instrument by which he released and discharged Dorothy A. Laurence, Jimmy Zollicoffer, and the American Family Insurance Company from all claims arising out of the accident, reserved his rights against other parties, agreed to indemnify the parties released and save them harmless from any claims for contribution and further agreed to satisfy any judgment which might be rendered in his favor against the parties released to the extent of the percentage that the
The instrument provides as follows:
“RELEASE
“FOR THE SOLE CONSIDERATION OF Fifteen thousand and no/100 DOLLARS ($15,000), the receipt of which is hereby acknowledged, I/we hereby fully and forever release and discharge Dorothy A. Laurence and Jimmy L. Zollicoffer and the American Family Mutual Insurance Group of Madison, Wisconsin, their heirs, administrators, executors, successors and assigns from all claims, demands, damages, actions, rights of action of whatever kind or nature which I/we now have or may hereafter have arising out of, in consequence of or on account of all injuries to person, including any latent injuries and all developments and results therefrom, known and unknown injuries, whether developed or undeveloped, and anticipated and unanticipated consequences of all such injuries, and damages to property resulting to me/us in any way from an accident which occurred on or about the 4th day of July, 1977, at or near North 68th Street & West Ruby St., Milwaukee, Milwaukee County, Wisconsin. In accepting said sum I/we hereby release and discharge that fraction, portion or percentage of thе total cause of action of claim for damages I/we now have or may hereafter possess against all parties responsible for my/our damages which shall by trial or other disposition, be determined to be the sum of the fractions, portions or percentages of causal negligence for which the parties herein released are found to be liable to me/us as a consequence of the above accident.
I/We hereby accept said sum as a compromise and settlement of all claims on account of the dispute between the parties hereto as to whether the above named parties are liable to me/us or not, and also as to the nature, extent and permanency of the injuries sustained by me/us.
I/We agree that in making this release, I/we am/are relying on my/our own judgment, belief and knowledge as to all phases of my/our claims and that I/we am/are
not relying on representations or statements made by any of the persons hereby released or anyone representing them or рhysicians or surgeons employed by them. I/We agree that the payment of the above sum is not to be construed as an admission of any liability whatsoever by or on behalf of the above named parties, by whom liability is expressly denied.
I/We further agree that any claim of whatever kind or nature the above named parties might have or hereafter have growing out of the above accident, is hereby expressly reserved to them.
This release is intended to release only the parties specifically named. The undersigned expressly reserve the balance of the whole cause of action or any other claim of whatever kind or nature not released hereby which I/we may have or hereafter have against any other person or persons arising out of the above accident.
As a further consideration, we the undersigned, agree to indemnify said parties released and save them harmless from any claims for contribution made by others so adjudged jointly liable with said parties released, and the undersigned agrees to satisfy аny judgment which may be rendered in favor of the undersigned, satisfying such fraction, portion or percentage of the judgment as the causal negligence of the parties released is adjudged to be of all causal negligence of all adjudged tort-feasors. In the event the undersigned fails to immediately satisfy any such judgment to the extent of the fraction, portion or percentage of the negligence as found against the parties released, the undersigned hereby consents and agrees that upon filing a copy of this agreement, without further notice, an order may be entered by the court in which said judgment is entered directing the Clerk thereof to satisfy said judgment to the extent of such fraction, portion or percentage of the negligence as found against the parties released and discharged under this release.
[SIGNED Leon Swanigan]”
After signing the instrument, plaintiff learned that Brooksie Zollicoffer, Jimmy‘s mother, was insured at
“343.15 Application of persons under 18; liability of sponsors; release from liability; notification of juvenile violation. (1) The application of any person under 18 years of age for a license shall be signed and verified before a person duly authorized to administer oaths, by either of the applicant‘s parents; or if neither parent has custody, then by the person or guardian having such custody or by the applicant‘s employer, subject to the exception stated in sub. (4). If the adult sponsor is the applicant‘s parent, the application may be signed and verified before a traffic officer or before a duly authorized agent of the department in lieu of being signed and verified before a person duly authorized to administer oaths.
“(2) Any negligence or wilful misconduct оf a person under the age of 18 years when operating a motor vehicle upon the highways is imputed to the parents where both have custody and either parent signed as sponsor, otherwise, it is imputed to the adult sponsor who signed the application for such person‘s license. The parents or adult sponsor is jointly and severally liable with such operator for any damages caused by such negligent and wilful misconduct.”
State Farm responded by saying that, as a matter of law, the instrument executed by plaintiff operated to release Brooksie Zollicoffer and her insurer, State Farm, from any liability and refused to pay any sum to the plaintiff. Plaintiff then brought a declaratory judgment action against State Farm to determine the effect of
State Farm moved for summary judgment. The circuit court granted summary judgment in favor of the plaintiff for the amount stipulated after concluding that
Both the plaintiff and State Farm begin their arguments by characterizing the relationship of sponsor and minor under
Plaintiff contends that thе relationship of joint tort-feasor is created between Jimmy Zollicoffer and Brooksie Zollicoffer by
State Farm rejects this view, contending that although Jimmy and Brooksie Zollicoffer are jointly and severally liable to the plaintiff, they are not joint tort-feasors. State Farm maintains that the status of joint tort-feasor arises between persons not from the nature of the liability, i.e., that defendants are jointly and severally liable, but from the nature and consequences of their conduct and that to be joint tort-feasors the parties must act in concert in the execution of a common tortious purpose or commit independent torts which concur in causing an indivisible injury. Cf. Bolick v. Gallagher, 268 Wis. 421, 427, 67 N.W.2d 860 (1955); Brown v. Hammermill Paper Co., 88 Wis.2d 224, 232, 276 N.W.2d 709 (1979). State Farm asserts that the conduct of the adult sponsor in signing the driver‘s license application does not fit within this general description of the conduct of a joint tort-feasor and that the factual allegations of the complaint are also insufficient to establish that the two are joint tort-feasors. There is no allegation that Brooksie Zollicoffer was in any way negligent or in any way involved with Jimmy Zollicoffer‘s negligent operation of the automobile.
We do not decide this case by resolving the disagreement between the parties relating to whether the sponsor and minor are joint tort-feasors. The term joint
According to State Farm,
State Farm contends in support of its argument that in Dombeck v. Chicago, M., St. P. & P. R. Co., 24 Wis.2d 420, 129 N.W.2d 185 (1964), this court viewed the law governing the master-servant relationship as applicable to
“[A] majority of this court considers it would work an unreasonable and absurd result if the statute were to be construed to abrogate, as between sponsoring parent, guardian, or employer and sponsored child, the rule that negligence of an agent or joint venturer is not to be imputed to his principal or other joint venturer in an action between the parties. . . .” 24 Wis.2d at 438.3
Dombeck does not say that the relationship between the sponsor and minor under
State Farm also relies on Geib v. Slater, 320 Mich. 316, 31 N.W.2d 65 (1948), in which the Michigan court viewed an automobile owner‘s statutory liability for the driver‘s negligence as resting on the law of agency. In
“. . . ‘The liability of the owner of a motor vehicle for damages сaused by the negligent operation thereof by another person, rests upon the doctrine of agency, express or implied. The liability is based upon the doctrine of respondeat superior.‘” Geib v. Slater, supra, 31 N.W.2d at 67.
The Michigan Supreme Court then concluded that the owner was released because by the great weight of authority a valid release of either the master or servant from liability for tort operates to release the other.
State Farm‘s reliance on Geib is misplaced. In more recent cases, the Michigan Supreme Court has retreated implicitly and explicitly from the reasoning in Geib. In Boucher v. Thomsen, 328 Mich. 312, 43 N.W.2d 866 (1950), the Michigan Supreme Court was faced with a fact situation similar to the one in Geib. In Boucher, however, the instrument was distinguishable from the one in Geib because it stated that the executor agreed not to sue the garage owner and employee and further stated that the executor‘s rights against the owner of the automobile were reserved. The trial court held that
In 1957, in Peyton v. Delnay, 348 Mich. 238, 248, 249, 83 N.W.2d 204 (1957), the Michigan Supreme Court expressly retreated from its position in Geib that the liability imposed by statute on the owner of the motor vehicle for the negligence of a driver operating the car with the owner‘s consent rests on the doctrine of respondeat superior. In Peyton the court unanimously disclaimed this analogy as follows:
“Appellants contend further that the owner here is not liable for wilful and wanton misconduct of the operator because at common law under the respondeat superior doctrine a wanton violation of the law was held to place a servant outside the scope of his master‘s service.
“The statute we interpret here is not a derivative of the respondeat superior doctrine. It is a measure adopted by the legislature to promote public safety by holding automobile owners accountable for certain negligent acts of the persons to whom they entrust their automobiles. Johnson v. Sergeant, 168 Mich 444 (2 NCCA 334); Stapleton v. Independent Brewing Co., 198 Mich 170 (LRA 1918A, 916). It would be a strange construction of such a statute to hold an owner for the ordinary negligence of the person whom he allowed to drive his car and free him from liability if his chosen driver was found guilty of gross negligence or wilful and wanton misconduct.”
We conclude that
The legislature created its own rules for liability of the sponsor in
Before we can address the question of the legal effect of the release on any cause of action which plaintiff may have against State Farm we must first determine whether a factual question exists, namely the intended scope of the instrument.6 State Farm and plaintiff agree that
Notes
Although
There are two doctrines generally applicable to the distribution of the loss among persons liable for the same harm—contribution and indemnity. Although the doctrines are distinct, the two do tend to merge. Contribution distributes the loss by requiring each person to pay his proportionate share of the damages on a comparative fault basis. Pachowitz v. Milwaukee & Suburban Transport Corp., 56 Wis.2d 383, 202 N.W.2d 268 (1972). Indemnification shifts the entire loss from one person who has been compelled to pay it to another who on the basis of еquitable principles should bear the loss. Kjellsen v. Stonecrest, Inc., 47 Wis.2d 8, 12, 176 N.W.2d 321 (1970); Jacobs v. General Accident, Fire & Life Assurance Corp., Ltd., 14 Wis.2d 1, 109 N.W.2d 462 (1961); Restatement (Second) of Torts sec. 886A, 886B (1977); Restatement of Restitution sec. 96 (1937); Prosser, Law of Torts secs. 50, 51 (1977); 1 Harper & James, The Law of Torts Ch. X (1956).
If the doctrine of contribution is applicable to the sponsor‘s claim against the minor, under State Farm‘s
Because the minor has made a payment to the sponsor, the minor will, in turn, seеk reimbursement from the injured party under the terms of the release whereby the injured party agrees to save the minor “harmless from any claims for contribution made by others so adjudged jointly liable with said parties released. . . .” If the injured party must reimburse the minor the full $40,000 which the injured party received from the sponsor, as State Farm contends, then the injured party, the minor and the sponsor are in the same position as they were before the injured party sued the sponsor.
State Farm further contends that this chain reaction of minor being released by injured party, injured party suing sponsor, sponsor suing minor for contribution, and minor suing injured party under the release, contravenes the language and purpose of the release instrument.
The release in the case at bar is a standard Pierringer-type release, Pierringer v. Hoger, 21 Wis.2d 182, 124 N.W.2d 106 (1963), applicable to cases when there is contribution between persons “jointly liable.” Under the
Having reviewed State Farm‘s position under the doctrine of contributiоn, we turn now to examine State Farm‘s position applying the doctrine of indemnification in the example we set forth previously. State Farm argues that because the sponsor is responsible to the injured party solely by imputation of law, the doctrine of indemnification, rather than the doctrine of contribution, applies to the sponsor‘s claim against the minor for reimbursement of loss. Restatement of Restitution sec. 96
Under State Farm‘s theory of contribution or indemnification, the end result of allowing the injured party to sue the sponsor is that the injured party is left in the same position as before he sued the sponsor—the injured party has recovered a total of $15,000, the amount he initially received from the settlement with the minor. The financial positions of the sponsor, the minor and the injured party are unchanged, except for payment of any costs of litigation.
To summarize, State Farm argues that as a result of the application of the doctrine of contribution or indemnification, a holding that the release does not bar the plaintiff from suing the sponsor results in multiple litigation and circuity of action. State Farm contends that the money paid by the sponsor to the injured party will pass in a circle and ultimately be returned to the sponsor: The sponsor pays the injured party, the sponsor recovers the amount paid from the minor; the minor,
Even if State Farm‘s analysis of the applicability of the rules of contribution and indemnification to
We are not persuaded to adopt State Farm‘s position. We hold that the release in the instant case does not operate as a release of the sponsor. We have reached this conclusion because we have determined that of the alternatives available, this holding best comports with the legislative intent and purpose of
Our holding that the sponsor is not released as a matter of law in the instant case comports with the legislative intent and purpose in enacting
Our holding that the sponsor is not released аs a matter of law in the instant case gives effect to the intent of the injured party in executing the release. This court has favored following what it views as the clear trend of the law that the only desirable rule of law as to the effect of a release “would seem to be that a plaintiff should never be compelled to surrender his cause of action against any wrongdoer unless he has intentionally done so, or unless he has received such full compensation that he is no longer entitled to maintain it.” Prosser, Law of Torts sec. 49 at 304 (4th ed. 1977), quoted with approval in Brown v. Hammermill Paper Co., supra, 88 Wis.2d at 237. See also sec. 885, Restatement (Second) of Torts (1964). Giving effect to the intent of the parties to the release helps prevent the parties from being misled and fosters equitable termination of litigation and settlement of disputes.
Although our holding raises the possibility of circuity of action and multiple litigation depending on the applicability of indemnification or contribution, State Farm concedes that circuity of action and multiple litigation will not necessarily arise in every instance where a minor was released. Indeed thе case at bar may be an example where there will be no circuity of action or multiple litigation.
The approach we have taken in this case, namely holding that the reservation of rights in the instant release is to be given effect, was followed by the New York Court of Appeals in Plath v. Justus, 28 N.Y.2d 16, 268 N.E.2d 117 (1971).9 In Plath the administrator of dece-
“The liability of an owner, such as defendant, does not rest on any claim that he was himself guilty of negligence resulting in damages sustained by the plaintiff but arises solely by virtue of the statute. In other words, the driver‘s liability is grounded in common law, and the owner‘s liability, by statutory enactment.” Plath, supra, 268 N.E.2d at 119.
Thе New York court concluded that the driver and owner of the car were not joint tort-feasors and that the release with an express reservation of rights against others did not release the owner of his derivative liability under the statute:
“Where a release has been given but the releasor reserves the right to proceed against other wrongdoers, we believe effect should be given to the intention of the parties as expressed by these reservations and allow the suit against any defendant not a party to the release.” Plath, supra, 268 N.E.2d at 120.
State Farm attempts to distinguish Plath by arguing that the New York law did not state that the driver‘s negligence is imputed to the owner; the New York law merely stated that the owner is liable for injury resulting from negligent operation of his vehicle by a person using the vehicle with permission. We do not think the concept of imputing negligence which is used in the
For the reasons set forth, we hold that plaintiff‘s action pursuant to
By the Court.—Decision of the court of appeals affirmed.
COFFEY, J. (dissenting). I dissent in this case because the majority, expanding upon the reasonable requirements contained in
“. . . that fraction, portion or percentage of the total cause of action of claim for damages I/we now have or may hereafter possess against all parties responsible for my/our damages which shall by trial or other disposition, be determined to be the sum of the fractions, portions, or percentages of causal negligence for which the par-
ties herein released are found to be liable to me/us as a consequence of the above accident.”
At the same time, the release expressly reserved:
“. . . the balance of the whole cause of action or any other claim of whatever kind or nature not released which I/we may have or hereafter have against any other person or persons arising out of the above accident.”
The effect of a Pierringer release is that it shields the settling defendant from a potential claim for contribution by the nonsettling party (defendant) thus allowing those who choose with full knowledge and deliberation to compromise their claim to buy their way out of the lawsuit. At trial, the primary inquiry is to determine the percentage of causal negligence attributable to the nonsettling defendant—in this case Brooksie Zollicoffer, the sponsor of her son, Jimmy Zollicoffer, (
“The issue between the plaintiff and the nonsettling defendant, which should be framed by an amendment to the pleadings, is the percentage of causal negligence, if any, of the nonsettling defendant, but such percentage of negligence can only be determined by a proper allocation of all the causal negligence, if any, of all of the joint tort-feasors and of the plaintiff if contributory negligence is involved.” (Emphased supplied.) Id. at 192-193.
Thus, the negligence of the defendant is not judged in a vacuum; instead, a determination is made as to each and every party involved in the accident—the plaintiff, settling defendants, etc. A Pierringer release in effect
A prime example of how the nonsettling party‘s liability is to be determined is expressed in the case of Peiffer v. Allstate Ins. Co., supra. In Peiffer, the plaintiff executed a release identical to the one in the case at bar except that it involved a specific reservation of rights against the driver of the automobile involved in the accident and the driver‘s insurer. The plaintiff argued that this particular reservation entitled him to seek recovery for whatever portion of the cause of action he chose to pursue against the nonsettling defendant, possibly even the whole of the judgment, if he so desired. The court rejected this contention, holding that the plaintiff had been satisfied to the extent of the negligence of the settling defendants at the time he executed their release—thus, his recovery against the nonsettling parties was limited to that “unsatisfied percentage of the damages—the percentage attributable to the nonsettling tortfeasor. . . .” Peiffer, supra at 335. In other words, Peiffer stands specifically for the point that the nonset-
As basic and well-understood as the above principles may be, their application to the present case along the lines mandated by the majority presents problems. According to Pierringer, at the trial against the nonsettling dеfendant, Brooksie Zollicoffer, (sponsor of the minor driver, Jimmy Zollicoffer) a determination must be made as to the percentages of negligence attributable to each of the parties involved in the accident. Then, as per the Peiffer decision, the nonsettling defendant would be responsible only for that amount not satisfied by the previously released defendants—the “unsatisfied percentage of the damages.”
However, in the case at bar there exists no unsatisfied percentage of the plaintiff‘s cause of action. When Leon Swanigan (plaintiff) executed the release involving Jimmy Zollicoffer, Dorothy Laurence and her insurer he in effect released all the parties to the action who were actively negligent and all those who could have been responsible for a percentage of the total negligence.10 The amount satisfied by the released defendants in fact equals 100%, thus leaving nothing to be assigned to the nonsettling defendant, Brooksie Zollicoffer. Therefore, according to the procedure of Pierringer and the rationale of Peiffer, it is impossible to hold the nonsettling defendant liable for any damages. To rule otherwise would be to violate the firmly established principles set forth in Pierringer and Peiffer and render their continued value as precedent worthless.
In any event, the rule of Peiffer remains the same: the nonsettling defendant is responsible only for that portion of the causal negligence attributable to him. Where, as in this case, the plaintiff released all of the parties whose causal negligence contributed to the plaintiff‘s injuries, the nonsettling defendant cannot be held liable because of the execution of the release.