McKenna v. Austin

• Decision Date: 11 February 1943
• Docket Number: No. 7979.,7979.
• Citation: 134 F.2d 659
• Parties: McKENNA et al. v. AUSTIN.
• Court: U.S. Court of Appeals — District of Columbia Circuit

134 F.2d 659 (1943)

McKENNA et al. v. AUSTIN.

No. 7979.

United States Court of Appeals for the District of Columbia.

Decided February 11, 1943.

Mr. James F. Reilly, of Washington, D. C., with whom Messrs. William E. Leahy and Eugene B. Sullivan, both of Washington, D. C., were on the brief, for appellants.

Mr. Irvin Goldstein, of Washington, D. C., for appellee.

Before STEPHENS, VINSON, and RUTLEDGE, Associate Justices.

RUTLEDGE, Associate Justice.

Plaintiffs' suit was for damages for personal injuries incurred by Helen H. McKenna in a collision of a taxicab in which she was a passenger with an automobile operated by defendant's employee. The taxicab was owned by Independent Taxi Owners Association and William L. Driscoll (herein designated together as Independent), and was operated by their employee. The husband's claim is on account of medical and hospital expenses and loss of consortium and services. Defendant denied his employee was negligent. He alleged that the taxicab was driven carelessly, at excessive speed, and this was the sole cause of the injuries. A further defense was that plaintiffs had made full accord and satisfaction with Independent by a release which is claimed to bar this action. The sum paid in compromise was $3,000.

In this state of the pleadings defendant moved for summary judgment, which the court granted, relying upon Kaplowitz v. Kay, 1934, 63 App.D.C. 178, 70 F.2d 782. The plaintiffs appeal.

The release is set forth in the margin.¹ The plaintiffs first covenant not to sue Independent on account of injuries or losses resulting from the collision. The instrument then purports to reserve any cause of action against defendant and his employee and recites that it "is intended to be and is a complete discharge of any and all liability" of Independent.

The sole question is whether this agreement operated to discharge the defendant. He stands on the more generally prevailing rule,² adopted in Kaplowitz v. Kay, that release of one joint tortfeasor discharges the others and insists it is applicable in the present facts.

Plaintiffs say the rule is not applicable. They urge that the instrument is not a release from substantive liability but is merely a covenant not to sue. They rely upon authorities which hold that such a covenant does not effect discharge of the co-tortfeasors,³ and that an agreement which reserves rights against them is such a covenant.⁴ Plaintiffs also insist that defendant and Independent were not joint tortfeasors, but acted independently. They say the court should have taken evidence and decided this question as a matter of fact before it construed the agreement. In their view the only effect proper to be given the settlement is to apply the amount received to reduce pro tanto the total damages.

The facts in this case and in Kaplowitz v. Kay are similar in that the plaintiff in both was a passenger in an automobile which collided with another, settled with one of the wrongdoers, and then sued the remaining one. On this showing the court held the latter was discharged.

The basis and scope of the decision are ambiguous. It does not appear whether joint or independent tortfeasors were involved. The opinion does not set forth the terms of the agreement. It makes no point of any distinction between a release and a covenant not to sue or between joint and independent tortfeasors. There is language which may indicate the plaintiff accepted the amount paid as full satisfaction for the total injury.⁵ This could be construed as pivoting the discharge upon the parties' intention. Other statements, however, and authorities quoted appear to put the matter more broadly, so that whenever the negligence of two or more persons combines to produce a single injury, the release of one "ipso facto" discharges the others. If this is the effect of the decision, the amount received, its relation to the total damage done, and the parties' intention to retain rights against the other wrongdoers would be immaterial, as would any difference between joint and independent tortfeasors. Because of its ambiguity the plaintiffs say the Kaplowitz case is not controlling in this one.

We agree with defendant that distinction between a "release" and a "covenant not to sue" is entirely artificial. When one surrenders all means of enforcing his claim against another and does this in settlement of a dispute and threatened litigation, he effectually extinguishes the underlying right. Thereafter, if it is right at all, it is right without remedy. We know that courts of highest authority have recognized the existence of such "rights" in exceptional situations involving particularly matters of international adjustment and of governmental credit.⁶ Absence of means of compulsion against the sovereign may make judicial assertion that rights exist against it, without other remedy, an appropriate sanction in such cases and possibly in others. But for the ordinary run of private rights and private litigation, the idea of right without remedy is hardly a working hypothesis. Everyday law is predicated upon the courts' capacity to do something about disputes. When one wholly surrenders his recourse to the courts in such matters, he insulates his adversary against his claim as effectually as when in so many words he releases him.

The distinction gains no strength from the conflict which exists concerning what is a release and what is a covenant not to sue. Some courts regard the matter as one of intention to be gathered from the whole instrument.⁷ Giving lip service to the rule, they avoid its effects when the purpose to reserve rights against the wrongdoers not released can be found, as generally it may be. Specific terms of release give way before a clause expressly reserving such rights or other indication of like intent.⁸ In this view the present instrument would be merely a covenant not to sue.

Other courts adhering to the distinction refuse to permit such a clause to overcome express words of release and allow escape only when the formula is limited to covenanting not to sue.⁹ To the extent that they decline to give effect to the clause they disregard the parties' intention, as would a court refusing entirely to recognize the distinction. In this view the agreement now in question would be a release and would discharge defendant by operation of law.

In determining the character as well as the effect of such an agreement, we are unwilling to concede so much potency to mere verbalism. The matter does not require the formalism of conveyancing. Whether words of "release" or of "covenant" are used, the effect should be the same. Wide acceptance of the distinction, notwithstanding its want of substance, and the decisions that in applying it intention should control, point the way to reexamination of the rule and its foundations.

The rule's results are incongruous. More often than otherwise they are unjust and unintended. Wrongdoers who do not make or share in making reparation are discharged, while one willing to right the wrong and no more guilty bears the whole loss.¹⁰ Compromise is stifled, first, by inviting all to wait for the others to settle and, second, because claimants cannot accept less than full indemnity from one when doing that discharges all. Many, not knowing this, accept less only to find later they have walked into a trap. The rule shortchanges the claimant or overcharges the person who settles, as the recurring volume and pattern of litigation show. Finally, it is anomalous in legal theory, giving tortfeasors an advantage wholly inconsistent with the nature of their liability.

It is a first principle that liability in tort is several, not joint, however many participate in inflicting the wrong and whether they act separately or in conjunction.¹¹ With this principle the rule is at war. Their essential inconsistency would seem apparent. The prevalence of the rule, however, shows that it is not evident. There is occasional explicit recognition, as in Black v. Martin, 1930, 88 Mont. 256, 292 P. 577.¹² That this is not more general accounts, perhaps, for the rule's retention and for the artificial method of escape taken in the covenant not to sue. Escape is proper, notwithstanding it is partial. It should be total, and in forthright fashion.

The foundations of the rule are in confusion. By and large they come down to two reasons, which in fact are separate and independent, applicable with a single exception in different situations. Yet generally they are made to overlap in a confused admixture and indiscriminate application. Neither sustains the rule, except in the single instance to be noted.

As they are commonly stated, the reasons are: (1) that there is but a single right and a single correlative obligation, with only one cause of action, though this unitary nexus attaches to several persons as obligors; (2) there is merely a single and entire injury, though it is caused by the acts of a number of persons, whether acting separately or in conjunction. From each it is concluded the release of one obligor discharges the others.

Logically this consequence follows from the first reason without regard to whether the settlement is in fact full reparation for the injury or is intended to be so received. It results from the assumed indivisibility and entirety of the nexus binding the wrongdoers to the injured person. Being entire the liability must exist or vanish in entirety, notwithstanding its attachment to more than one obligor. Whatever extinguishes it as to one, therefore, whether judgment, settlement or other bar, does so as to all.

Applied independently of the first reason, the second one would dictate the same result only when full satisfaction for the injury is made. The crux of discharge therefore would be whether the amount paid for the release is in fact adequate or is so accepted for this purpose. Entirety of injury, without entirety of obligation, would furnish no...