Clarke v. Burkle, s. 77-1205 and 77-1206
| Decision Date | 21 February 1978 |
| Docket Number | Nos. 77-1205 and 77-1206,s. 77-1205 and 77-1206 |
| Citation | 570 F.2d 824 |
| Parties | William CLARKE, Jr., by and through William Clarke, Sr., his father and next friend, Appellant, v. George A. BURKLE, Appellee. William CLARKE, Jr., by and through John T. Carpenter, his attorney and next friend, Appellant, v. VOLKSWAGEN OF AMERICA, Appellee. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Martin A. Cannon, Omaha, Neb. (argued), and Raymond Pogge, Council Bluffs, Iowa, on brief, for appellant.
Philip Willson (argued), Smith, Peterson, Beckman & Willson, Council Bluffs, Iowa, on brief, for appellee.
Before HEANEY, WEBSTER and HENLEY, Circuit Judges.
We have before us consolidated appeals in two separate cases commenced by the same plaintiff in the United States District Court for the Southern District of Iowa; both cases arose out of an automobile accident that occurred in Iowa in 1968 and as a result of which plaintiff sustained injuries that have resulted in his total and permanent disability. Both suits were prosecuted on behalf of plaintiff by next friends. Jurisdiction of the district court was properly invoked in both cases on the basis of diversity of citizenship and requisite amount in controversy.
The first suit was filed in 1970 and named George A. Burkle as sole defendant. The second suit was commenced in 1973 and named Volkswagen of America as a defendant; Burkle was not made a defendant in that suit. 1
The first, or Burkle, case was disposed of by a stipulated judgment entered some months after the suit was filed. The judgment was in the principal amount of $50,000 and that amount, plus costs, was paid in full by the liability insurance carrier of the defendant. 2
The second, or VW, case was disposed of by summary judgment in favor of the defendant that was entered after the district court had denied a motion filed on behalf of plaintiff under Fed.R.Civ.P. 60(b) to amend the stipulated judgment that had been entered in the Burkle case so as to reflect the alleged intention of plaintiff or his representative to preserve any existing right of action that plaintiff might have against VW.
The district court was of the opinion that plaintiff was not entitled to have the judgment in the Burkle case amended, and that the judgment in question, as written, precluded plaintiff from maintaining his action against VW.
Our No. 77-1205 is plaintiff's appeal from the order denying his Rule 60(b) motion in the Burkle case, and our No. 77-1206 is plaintiff's appeal from the summary judgment entered by the district court in the VW case. 3
The procedural history of the litigation is involved and needs to be stated in considerable detail.
On June 15, 1968 plaintiff, William Clarke, Jr., a domiciliary of Connecticut and a minor at the time, was riding in a Volkswagen automobile that was being operated by George A. Burkle along Interstate Highway 80 near Avoca, Iowa. Burkle lost control of the car which left the main travelled portion of the highway and overturned. As a result of the accident plaintiff has been rendered a quadriplegic and he may have become mentally incompetent. There is no question about the extent of his injuries, and it may be assumed that fair and reasonable compensation for those injuries would be a sum far in excess of the $50,000 that was paid in settlement of the Burkle case.
Plaintiff's father, a citizen of Connecticut, commenced this action in the district court as the next friend of his son on February 20, 1970. 4 The complaint alleged that plaintiff's injuries had been directly and proximately caused by the recklessness and intoxication of Burkle; the injuries were described, and it was alleged that as a result of his injuries plaintiff had become incapacitated and permanently disabled. Damages in the sum of $1,000,000 were sought and plaintiff demanded a trial by jury.
On March 1, 1970 an answer was filed in which pleading Burkle denied liability and took issue as to damages. It seems to be undisputed that Burkle's insurance carrier assumed the defense of the suit, as it was required to do under its policy, and that Burkle's answer was prepared and filed by counsel for the insurance company.
After some discovery had been had, and obviously after negotiations had been conducted, a settlement was reached under the terms of which a judgment in the sum of $50,000, plus costs, was to be entered against Burkle, which judgment would be paid in full by Burkle's insurance carrier.
On November 16, 1970 the parties filed a formal stipulation for the entry of judgment which was signed by counsel on both sides. On the same day a precedent for judgment in favor of the plaintiff and against Burkle was signed by one of the judges of the district court. No hearing was held with respect to the propriety of the settlement, and it was never judicially approved except to the extent that the judgment was signed by a district judge.
On November 19, 1970 the insurance company paid off the judgment and counsel for plaintiff filed with the clerk of the district court a formal Satisfaction of Judgment which recited full payment thereof and authorized the clerk "to enter satisfaction of record of said judgment."
It will be noted that neither the stipulation for judgment, nor the judgment, nor the satisfaction of the judgment purported to undertake to preserve any rights of the plaintiff against any other party possibly liable to him as a result of the Burkle accident, although materials before us indicate that when the Burkle suit was filed, counsel for plaintiff was aware of the possibility of liability on the part of VW on a products liability theory and may have given some consideration to the filing of a separate suit against VW in Connecticut. In any event, VW was not joined with Burkle as a defendant in the 1970 suit, although such joinder would clearly have been proper.
It seems that in 1972 counsel for plaintiff attended a products liability seminar and learned that the model Volkswagen involved in the 1970 Burkle accident may have been improperly designed, and counsel may have concluded that plaintiff had a better case against VW than counsel may have thought in 1970.
On June 8, 1973, nearly five years after the happening of the accident, plaintiff, again appearing by a next friend, filed his suit against VW. We observe at this point that the same attorneys who represented plaintiff in the Burkle case represented plaintiff in the VW case, and that one of those attorneys is the next friend who appears for plaintiff in the VW case. We also observe that the same attorneys who appeared for Burkle in the 1970 case appear for VW in the suit against it.
In an amended complaint plaintiff charged that VW is liable to him on theories of negligence in the design and manufacture of the automobile involved in the litigation, breach of warranty, and strict liability in tort. Damages in the sum of $10,000,000 were claimed, and plaintiff demanded a jury trial.
Counsel for VW filed an elaborate answer to the amended complaint which set out seven separate defenses including a claim that the suit was barred by the Iowa two year statute of limitations that appears as § 614.1(2), Iowa Code Annotated, Cum.Supp. No reference whatever was made to the earlier Burkle suit, or to the judgment entered therein, or to the satisfaction of that judgment, although defense counsel who prepared and signed the answer could hardly have been unaware of the previous suit since he was the lawyer who settled it.
Extensive pretrial proceedings were had, and the case was ultimately set for trial on the merits on April 12, 1976. However, on February 6, 1976 counsel for VW filed a motion for summary judgment based on the plea of limitations. Counsel for plaintiff resisted the motion claiming that plaintiff was mentally incompetent, and that the statute had for that reason been tolled. Section 614.8, Iowa Code Annotated, Cum.Supp.
On March 15, 1976 the district court dealt with the motion in a memorandum order; the court found that a genuine issue of fact existed as to the mental competency of plaintiff, and that the motion for summary judgment should be denied. The district court concluded its memorandum order by saying:
The Court notes that this case is presently set for trial in Council Bluffs, Iowa on Monday, April 12, 1976. Prior to that date, the Court will expect to receive a pleading from counsel for both parties as to the effect they deem the prior judgment of this Court in Civil No. 8-837-W might have on any judgment that should be rendered in this case.
Thus, the district court on its own motion raised the issue that later it was to find dispositive of the VW case. We do not know whether the action of the district court took counsel for VW by surprise, but counsel wasted no time in taking advantage of the invitation of the district court.
On March 25, 1976 VW filed its First Amendment to Amended Answer which pleading set up an Eighth Defense and a Ninth Defense to plaintiff's claim against VW. In essence those defenses were that the entry and satisfaction of the judgment in favor of plaintiff in the Burkle case barred the plaintiff from maintaining his subsequent action against VW. And a few days later counsel for VW filed another motion for summary judgment, this one based on the disposition of the Burkle case.
On April 1, 1976 plaintiff filed his "Response To Court's Order of March 15, 1976." In that pleading counsel for plaintiff denied that the suit against VW was barred by the Burkle judgment but offered to credit against any judgment in plaintiff's favor against VW the $50,000 received as a result of the settlement in the Burkle case.
In view of those pleadings the trial setting of the VW case was cancelled, and on September 7, 1976 the district judge filed a memorandum opinion dealing with the question raised by VW's motion for summary judgment. As noted, that opinion...
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