Cobb v. Corbett, No. 91,395 (KS 8/20/2004)

• Decision Date: 20 August 2004
• Docket Number: No. 91,395,91,395
• Parties: ALAYNA R. COBB, <I>Appellant,</I> v. DANIEL W. CORBETT, an Individual, <I>Defendant,</I> and WESTAFF, INC., <I>Defendant/appellee.</I>
• Court: Kansas Supreme Court

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ALAYNA R. COBB, Appellant, v. DANIEL W. CORBETT, an Individual, Defendant, and WESTAFF, INC., Defendant/appellee.

No. 91,395

Court of Appeals of Kansas

Opinion filed: August 20, 2004.

SYLLABUS BY THE COURT

1. In a negligence action, when a plaintiff sues an employee, and an employer on a respondeat superior theory, and subsequently settles with, releases, and agrees to hold harmless the employee, the employer is also effectively released from the case. Following Atkinson v. Wichita Clinic, P.A., 243 Kan. 705, 763 P.2d 1085 (1988), andJacobson v. Parrill, 186 Kan. 467, 351 P.2d 194 (1960).

2. The holding in Mulroy v. Olberding, 29 Kan. App. 2d 757, 30 P.3d 1050 (2001), rev. denied 273 Kan. 1036 (2002), is discussed and distinguished.

Appeal from Sedgwick District Court; DAVID W. KENNEDY, judge. Opinion filed August 20, 2004. Affirmed.

Frank R. Cobb and Devoe G. Treadwell, of Wichita, for the appellant.

Jerald W. Rogers, of Triplett, Woolf & Garretson, LLC, of Wichita, for the appellee, Westaff, Inc.

Before GREENE, P.J., McANANY, J., and BRAZIL, S.J.

BRAZIL, J.:

Alayna Cobb appeals from the trial court's order dismissing her negligence action against Westaff, Inc. (Westaff).

Alayna Cobb was injured when she and Danny Corbett collided in a car accident in November 2000. In November 2002, Cobb brought a negligence action against Corbett, Farmer's Insurance Company, Inc. (Farmer's), and Westaff. Cobb's action against Westaff, Corbett's employer, was based on the theory of respondeat superior.

Cobb subsequently settled with Corbett and Farmer's for the sum of $50,000 and executed a release in their favor. In the release, Cobb agreed to discharge Corbett and Farmer's from "any and all rights, claims, demands and damages of any kind, known or unknown, existing or arising in the future, resulting from or related to bodily injury arising" from the November 2000 accident. Language in the release also provided that $ 50,000 was all the money Cobb would receive from Corbett and Farmer's "for any and all of my claims as a result of this accident." An addendum to the release provided that Cobb would not be prohibited from pursuing her claims against other legally responsible parties, including Corbett's employer.

In February 2003, Cobb filed an amended petition against Corbett and Westaff. Again, Cobb's action against Westaff was based on the theory of respondeat superior. In its answer to the amended petition, Westaff set forth several defenses, including that the petition failed to state a claim upon which relief could be granted and that Cobb's claims were barred by the law of release and satisfaction. In August 2003, Westaff moved to dismiss the action, alleging Cobb's petition failed to establish a claim against Westaff. Westaff asserted that releasing an employee in exchange for settlement proceeds also releases the employer when the action is based on respondeat superior. Thus, Cobb's action of releasing Corbett from the case effectively released Westaff.

The trial court conducted a hearing in August 2003. The trial court noted that the action against Westaff was based solely on a theory of respondent superior and there was no independent liability of Westaff. The trial court found as a matter of law that when a plaintiff settles with and gives an absolute release to a particular defendant, the plaintiff cannot then sue and recover from the defendant's employer based on a respondeat superior theory. The trial court relied on our Supreme Court's decisions in York v. InTrust Bank, N.A., 265 Kan. 271, 962 P.2d 405 (1998), and Atkinson v. Wichita Clinic, P.A., 243 Kan. 705, 763 P.2d 1085 (1988). The trial court granted Westaff's motion to dismiss. In November 2003, Corbett was dismissed as a defendant in the case.

We agree and affirm.

This appeal arises from the trial court's grant of Westaff's motion to dismiss. The trial court granted the motion to dismiss based on Cobb's settlement and release of her claim against Corbett. In Goldbarth v. Kansas State Board of Regents, 269 Kan. 881, 885, 9 P.3d 1251 (2000), our Supreme Court noted that when matters outside the pleading are presented to and not excluded by the court, a motion to dismiss for failure to state a claim shall be treated as one for summary judgment. Because the evidence relating to Cobb's settlement and release of her claim against Corbett was a matter outside her pleading, we apply a summary judgment standard of review.

"Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. The trial court is required to resolve all facts and inferences which may reasonably be drawn from the evidence in favor of the party against whom the ruling is sought. When opposing a motion for summary judgment, an adverse party must come forward with evidence to establish a dispute as to a material fact. In order to preclude summary judgment, the facts subject to the dispute must be material to the conclusive issues in the case. On appeal, we apply the same rules and where we find reasonable minds could differ as to the conclusions drawn from the evidence, summary judgment must be denied. Bergstrom v. Noah, 266 Kan. 847, 871-72, 974 P.2d 531 (1999)." Bracken v. Dixon Industries, Inc., 272 Kan. 1272, 1274-75, 38 P.3d 679 (2002).

The sole question on appeal is whether the trial court erred in its conclusion that the settlement and release of Cobb's claim against Corbett barred any further action against Westaff based on a respondeat superior theory. "The effect of a release or covenant not to sue is a legal question, over which we have unlimited review." York, 265 Kan. 271, Syl. ¶ 1.

In reaching its conclusion, the trial court relied on Atkinson and York. Atkinson involved facts similar to those in the instant case in that the plaintiffs sued both the doctor and the doctor's employer for medical malpractice. The suit against the employer was based solely on the theory of respondeat superior. The plaintiffs subsequently settled with the doctor but explicitly reserved their right to proceed against the doctor's employer. The plaintiffs agreed to hold the doctor harmless for any obligations of the employer to them. Upon a motion to dismiss, the trial court dismissed the claim against the clinic. In affirming the trial court's decision, our Supreme Court noted that the employer's liability was based solely on the doctor's acts and not on any independent acts of negligence. Our Supreme Court held that although the plaintiffs intended to preserve their action against the employer by executing a covenant not to sue instead of a full release, the settlement with the doctor combined with the hold harmless agreement removed any basis for imputing liability to the employer for the doctor's acts. 243 Kan. at 714.

Included within our Supreme Court's decision in Atkinson was a discussion of Jacobson v. Parrill, 186 Kan. 467, 351 P.2d 194 (1960). There, the plaintiffs were the surviving wife and children of Jacobson, who had been killed in an automobile collision. The plaintiffs brought separate suits against Cochran, who was the driver of the other car, and Parrill, who was the owner of the other car. The claim against Parrill was based solely on a respondeat superior theory. The plaintiffs subsequently settled with Cochran's estate and insurance company but reserved their right to proceed against Parrill. The plaintiffs agreed to indemnify and hold harmless Cochran's estate for any claims arising from Jacobson's death. Parrill sought dismissal of the claim against him, arguing this settlement barred any further action against him. The trial court dismissed the action. Our Supreme Court affirmed the trial court's decision, finding that the plaintiffs' acceptance of full satisfaction of the judgment against Cochran's estate effectively extinguished their claim against Parrill. 186 Kan. at 469-72, 476. In making this decision, our Supreme Court stated:

"It does not appear this court has previously decided the question, but by the weight of authority of courts of this country which have considered the matter, a judgment against an active tort-feasor establishes the full limit of liability against other persons who are only derivatively liable as under the doctrine of respondeat superior for the active tort-feasor's wrongful act [citations omitted], and the satisfaction of such a judgment extinguishes any right of action for derivative liability. [Citations omitted.]

"Clearly, under the allegations of the petition, Parrill did nothing to cause the plaintiff to suffer any more damages than were caused by the alleged active tort of Cochran, and the amount of those damages were established by the judgment against Cochran's estate. The admitted full satisfaction of that judgment fully extinguished the cause of action for Cochran's wrongful act, which is a bar to the plaintiff's prosecution of the present purely derivative liability action against Parrill. Our cases dealing with the release of joint, concurring or successive tort-feasors and the reservation of rights against the others [citations omitted] are inapplicable to the question presented in this appeal." 186 Kan. at 474-75.

Both Jacobson and Atkinson were cited in York, 265 Kan. at 284. In York, our Supreme Court set forth the rule that "[a] release or covenant not to sue an agent also releases a principal who is purely vicariously liable for imputed negligence under a theory of respondeat superior." 265 Kan. 271, Syl. ¶ 3. This rule did not apply to the facts in that case, however, because defendant InTrust had independently engaged in tortious conduct. 265 Kan. at 286-87.

The holdings in Jacobson and Atkinson, which are further supported by our Supreme Court's discussion of these cases in Yor...