Bacon v. United States

• Decision Date: 21 August 1963
• Docket Number: No. 17236.,17236.
• Parties: Florence E. BACON and Francis G. Bacon, Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

321 F.2d 880 (1963)

Florence E. BACON and Francis G. Bacon, Appellants, v. UNITED STATES of America, Appellee.

No. 17236.

United States Court of Appeals Eighth Circuit.

August 21, 1963.

Ted M. Henson, Jr., Poplar Bluff, Mo., for appellants.

Sherman L. Cohn, Atty., Dept. of Justice, Washington, D. C., for appellee. John W. Douglas, Asst. Atty. Gen., Mark R. Joelson, Atty., Dept. of Justice, Washington, D. C., and Richard D. FitzGibbon, Jr., U. S. Atty., St. Louis, Mo., with him on the brief.

Before VAN OOSTERHOUT and BLACKMUN, Circuit Judges, and YOUNG, District Judge.

YOUNG, District Judge.

On September 1, 1960, Frank J. Krouse, an employee of the United States, while driving one of its cars, struck an automobile driven by appellant Florence E. Bacon, wife of appellant Francis G. Bacon. On May 15, 1961, appellant Florence Bacon brought an action for damages against Krouse in the Circuit Court of Butler County, Missouri, seeking $10,000.00 for personal injuries sustained in the collision. On March 6, 1962, this suit was settled by the appellants, Florence and Francis Bacon,¹ and a "Covenant Not to Sue" was entered into with Krouse. This document provides:

"For the sole and only consideration of the payment of Two Thousand Two Hundred Eighty-seven and 80/100 ($2,287.80) Dollars, the receipt of which is hereby jointly and severally acknowledged, we do hereby for ourselves and for each of us and for our respective heirs, executors, administrators, personal representatives and assigns, covenant and agree never to make any further demand or claim or to commence or cause or permit to be prosecuted any further action in law or equity or any proceeding of any description against Frank J. Krouse or Government Employees Insurance Company, on account of any personal injury, disability, loss of services, expense, loss, or damages of any kind that we, or either of us, have sustained or may hereafter sustain in consequence of an accident that occurred on or about September 1, 1960, at approximately 8:15 a. m., near the intersection of Seventh and Vine Streets in the City of Poplar Bluff, County of Butler, State of Missouri.

"It is specifically understood and agreed by the parties hereto that the payment mentioned above includes the sum of Fifty and No/100 ($50.00) Dollars which represents the deductible amount paid by Francis G. Bacon and Florence E. Bacon under their collision coverage contract with the State Farm Mutual Automobile Insurance Company. Florence E. Bacon and Francis G. Bacon specifically retain their claim for the balance of the damage done to their 1953 Lincoln automobile as a result of the aforementioned accident occurring on September 1, 1960.

"EXHIBIT A

"To procure payment of the said sum, we and each of us do hereby declare that we are each more than twenty-one (21) years of age; that no representations about the nature and extent of the said injuries, disabilities, or damages made by an physician, attorney or agent or any part to whom this covenant extends, nor any representations regarding the nature and extent of legal liability or financial responsibility of any of the parties to whom this covenant extends, have induced us, or either of us, to make this covenant; that in determining the said sum, there has been taken into consideration not only the ascertained injuries, liabilities and damages, but also the possibility that the injuries sustained may be permanent and progressive and recovery therefrom uncertain and indefinite, so that consequences not now anticipated may result from said accident.

"We further agree that this covenant may be pleaded as a defense, counterclaim, or cross-claim to any action or suit brought by us or anyone on our behalf against Frank J. Krouse or Government Employees Insurance Company, or their legal representatives, which arises out of, or may arise out of, said collision.

"We further agree that we will fully indemnify the said Frank J. Krouse and Government Employees Insurance Company from attorneys fees, costs or damages which he or it may sustain by reason of any further action being brought.

"This agreement is not intended as, nor shall it be construed as a release of the United State (sic) of America or any other person or corporation.

"We and each of us understand that the parties to whom this covenant extends admit no liability of any sort by reason of said accident and that the payment of the sum above recited is made to terminate further controversy respecting all claims for damages that we or each of us have heretofore ascertained against, or that we or each of us might hereafter ascertain against Frank J. Krouse or Government Employees Insurance Company, because of the said accident.

"IN WITNESS WHEREOF, we have hereunto set our hands this ...... day of March, 1962.

"/s/ Francis G. Bacon "Francis G. Bacon "/s/ Florence E. Bacon "Florence E. Bacon

"Filed in the United States District Court for the Eastern District of Missouri (Southeastern Division) on the 10th day of August, 1962."

Two particular provisions in this instrument should be pointed out here: (1) The covenant stated that the Bacons specifically retained their claim for the balance of the damage done to their automobile;² (2) The sixth paragraph of the document expressly provides that this agreement will not be construed as a release of the United States.

On April 20, 1962, the appellants filed an action against the United States under the Federal Tort Claims Act, 28 U.S.C. § 1346(b), seeking damages for the injuries sustained as a result of the alleged negligence of the same Frank J. Krouse, an employee of the United States. It was not alleged, nor is it contended, that the United States was in any way negligent, but the appellants sought recovery against it under the doctrine of respondeat superior.

On August 15, 1962, the United States filed a motion for summary judgment. On October 8, 1962, the District Court granted appellee's motion and entered judgment for it. The trial court found that the "Covenant Not to Sue" completely released the employee, Krouse, and that a release of the employee bars a subsequent action against his employer, when the employer's liability could only be based upon respondeat superior. Bacon v. United States, 209 F.Supp. 811 (D.C. E.D.Mo.1962).

These then are the issues: (1) Was this action against the United States based exclusively on the alleged negligence of its employee? (2) Was the employee completely released by the covenant not to sue executed by the appellants? (3) If No. 1 and No. 2 are answered in the affirmative, is the employer, the United States, also relieved of liability?

(1)

The first two issues can be answered quickly. As to issue No. 1, there can be no doubt, nor do the appellants make any such contention, that the United States could not have been independently negligent in any way. The only possible cause of action against the appellee would be founded under the doctrine of respondeat superior.

(2)

Although paragraph two of the covenant specifically states that the appellants are retaining their claim "for the balance of the damage done to their * * automobile * * *," it becomes obvious from a careful reading of the entire document that they do not in fact retain such a claim. In this regard we adopt the language of the trial court:

"The problem is that paragraph two contradicts every other relevant paragraph of the instrument. In the first paragraph plaintiffs agree never to make any further demand or claim or to commence or cause to be prosecuted any further action against Frank J. Krouse on account of `any personal injury, disability, loss of services, expense, loss, or damages of any kind\' as a result of the collision. Paragraph three states that in determining the amount of payment, the parties have considered the ascertained injuries, liabilities and damages as well as those unforeseen. Most importantly, paragraph four promises that the covenant may be pleaded as a defense, counterclaim, or cross claim to any action or suit brought against Krouse. Paragraph five promises indemnification for attorneys fees, cost or damages which Krouse may sustain by reason of any further action being brought. Paragraph seven states that no liability is admitted, but the payment is made to terminate further controversy respecting `all claims for damages that we or each of us have heretofore ascertained against, or that we or each of us might hereafter ascertain\' against Krouse because of the accident."

This paragraph may very well mean, as the court below thought: "* * * that plaintiffs have retained the claim for the balance of automobile damage for the purposes of their insurer, State Farm Mutual Automobile Insurance Company."

But there can be no doubt that the instrument, regardless of paragraph two, completely releases Frank J. Krouse of any liability to the appellants. In fact, we feel that the appellants themselves tacitly admit this point. On page 13 of their brief, while arguing that paragraph seven of the covenant did not effect a full release it is said: "But, this paragraph specifically states that the payment to appellants is for the purpose of ending any further controversy respecting all claims of damage against Krank (Sic) J. Krouse." (Emphasis theirs). Certainly this is an admission that the appellants have retained no claim against Krouse.

Now, with issues No. 1 and No. 2 answered in the affirmative, we must turn our attention to issue No. 3, which presents us with a very interesting legal problem.

A...