Cunningham v. Hardware Mut. Cas. Co., 7895

• Court: Court of Appeal of Louisiana
• Writing for the Court: LANDRY
• Citation: Cunningham v. Hardware Mut. Cas. Co., 228 So.2d 700 (La. App. 1969)
• Decision Date: 17 November 1969
• Docket Number: No. 7895,7895
• Parties: A. P. CUNNINGHAM, Individually, etc. v. HARDWARE MUTUAL CASUALTY COMPANY et al.

Page 700

228 So.2d 700

A. P. CUNNINGHAM, Individually, etc. v. HARDWARE MUTUAL CASUALTY COMPANY et al.

No. 7895.

Court of Appeal of Louisiana, First Circuit.

Nov. 17, 1969.

Rehearing Denied Dec. 22, 1969.

John Parker and Julian Clark Martin, of Sanders, Miller, Downing & Kean, and Roger Fritchie, of Durrett, Hardin, Hunter, Dameron & Fritchie, Baton Rouge, for appellant.

Frank Coates, Jr., of Taylor, Porter, Brooks & Phillips, and Horace Lane and John White, Jr., of Kennon, White & Odom, Baton Rouge, for appellees.

Before LANDRY, SARTAIN and ELLIS, JJ.

LANDRY, Judge.

This matter is before us on motion of defendant, Hardware Mutual Casualty Company, to dismiss the appeal taken against movant by its co-defendants, Cenla Asphalt Corporation and its insurer, Employers' Liability Assurance corporation. The issue presented is whether one alleged co-tortfeasor may institute a third party demand by appeal against a fellow tort-feasor's insurer which has compromised with the injured plaintiff on behalf of itself and its insured, and obtained full release from liability when no third party demand was filed against the released defendant in the trial court.

Urging exceptions of no cause of action and res judicata, another defendant, Aetna Casualty and Surety Company, has moved to dismiss the appeals taken by plaintiffs, Mr. and Mrs. Cunningham. These exceptions are based on the contention the antecedent release of Aetna's insured, Ware, released Aetna from any and all liability to plaintiff in the main demand. On these same grounds, Aetna has moved to dismiss the third party demand asserted against it by its co-defendants, Cenla and Employers.

We find Hardware's motion to dismiss the appeals taken against it by Cenla and Employers well founded and grant this particular motion. We find no merit in Aetna's motions to dismiss the appeal taken by the Cunninghams and the third party demands of Cenla and Employers and deny these motions.

Plaintiffs A. P. and Mary M. Cunningham filed this action for damages against Cenla Asphalt Corporation and its insurer, Employers' Liability Assurance Corporation, Charles R. Ware and his insurers, Hardware Mutual Casualty Company and Aetna Casualty and Surety Company, and Foster and Creighton and its insurer, The Travelers Indemnity Company. The petition alleges Cenla, Ware, and Foster and Creighton were co-tortfeasors as regards an automobile accident which resulted in injuries to plaintiffs. Before trial plaintiffs dismissed their action against Ware without prejudice. Trial on the merits before a jury resulted in a verdict of dismissal of plaintiffs' suit against all remaining defendants. Notwithstanding Ware's prior dismissal, the jury concluded his negligence was the sole proximate cause of the accident. The jury also found facts from which the trial court concluded neither Hardware nor Aetna provided Ware with insurance coverage. Thereafter plaintiffs entered into a $6,500.00 compromise settlement with Ware and his insurer, Hardware. The agreement released Ware and Hardware from all liability but expressly reserved plaintiffs' rights against all remaining defendants, Aetna included. Plaintiffs then appealed devolutively against all defendants save Ware and Hardware. Cenla and Employers expressly appeal the finding of no coverage of Ware by Aetna and Hardware. Appellants Cenla and Employers also assert a third party demand seeking contribution from defendants Hardware and Aetna in the event third party plaintiffs are cast in judgment in the appeals taken by the Cunninghams.

Hardware has moved to dismiss the third party demands asserted against it by virtue of the appeals taken by Cenla and Employers. Hardware maintains the release granted it and its insured, Ware, by Mr. and Mrs. Cunningham discharged it from all further liability. On this basis, it is urged Cenla and Employers have no right of appeal insofar as Hardware is concerned. In substance, Hardware urges the Cunninghams no longer have ground for recovery of any sum from either Hardware or Ware. Hardware also maintains the compromise by Mr. and Mrs. Cunningham operated a division of the debt as regards one of the alleged co-debtors. Consequently, it is urged on authority of LSA-C.C. Articles 2100, 2103 and 2203 and Harvey v. Travelers Insurance Company, La.App., 163 So.2d 915, the Cunninghams presently have a claim against Cenla and Employers but with deduction therefrom of the part of the discharged debtor Ware. On this basis, Hardware contends that assuming the Cunninghams obtain reversal on appeal, against either or both Cenla and Foster and Creighton, deduction must be made of Ware's part (either one-half or one-third, depending on the ultimate determination either Cenla or Foster and Creighton, or both, are held on appeal to be solidarily liabl with Ware).

In moving to dismiss the appeal taken by the Cunninghams, Aetna argues the unconditional release granted its alleged insured, Ware, discharged Aetna from all liability as Ware's alleged insurer, notwithstanding reservation therein of the Cunninghams' rights against Aetna. On this basis, Aetna pleads the exceptions of no cause of action and res judicata as regards the appeals taken by Mr. and Mrs. Cunningham and the third party demand of Cenla and Employers. In answer to the Cunninghams' appeal, Aetna urges affirmaton of judgment dismissing the Cunninghams' action against it . Alternatively, Aetna maintains that should judgment be rendered against it on appeal, judgment should also be rendered against all alleged co-tortfeasors.

We consider first Aetna's exceptions to plaintiffs' appeal and to Cenla's and Employers' third party demand. Plaintiffs expressly reserved their rights against Aetna when they compromised with Aetna's insured, Ware, and Ware's other insurer, Hardware Mutual Casualty Company.

It is settled law that under LSA-R.S. 22:655, our Direct Action Statute, a liability insurer is obligated in solido with its insured and is therefore amenable to a claim for contribution upon demand of the insurer of a joint tortfeasor. In Shaw v. New York Fire & Marine Underwriters, Inc., 252 La. 653, 21i So.2d 416, the Supreme Court stated the rule thusly:

'Under the Direct Action Statute, the insurer is liable to the claimant in solido with its insured. LSA-R.S. 22:655. When the insurer is sued alone, it stands in the shoes of its insured for purposes of contribution. Thus, the insurer of a tort feasor may by third party demand enforce contribution against a joint tort feasor. LSA-C.C.P. Art. 1111; LSA-C.C. Art. 2103; Smith v. Southern Farm Bureau Casualty Ins. Co., supra (247 La. 695, 174 So.2d 122). By the same token, the insurer may also demand contribution of the insurer of a joint tort feasor.'

The effect of a reservation of rights against a solidary obligor is set forth in La.R.C.C. Article 2203, as follows:

'The remission or conventional discharge in favor of one of the codebtors in solido, discharges all the others, unless the creditor has expressly reserved his right against the latter.'

Since Aetna is bound in solido with its insured, Ware, La.R.C.C. Article 2203 renders Aetna amenable to an appeal by plaintiffs who have expressly reserved their rights against Aetna as an alleged solidary obligor. Additionally, Aetna being allegedly liable to plaintiffs solidarily with the remaining defendants in amenable to a third party action for contribution by its co-obligors, Cenla and Employers. Shaw v. New York Fire & Marine Underwriters, Inc., above . This brings us to the issue whether Cenla and Employers' third party demand against Aetna may be instituted on appeal when no such third party action was initiated in the trial court.

In Emmons v. Agricultural Insurance Company, 245 La. 411, 15, So.2d 594, a case similar to but distinguishable from the instant matter, the Supreme Court considered the right of a defendant to appeal against a co-defendant where no third party demand was filed in the trial court by the appealing defendant. As in the case at hand, the co-defendant sought to be third partied in Emmons, supra, had been dismissed from the action. In concluding the appeal of defendant constituted a third party action against the co-defendant who had been dismissed from the action, the Supreme Court in Emmons, supra, held:

'An examination of Article 2103 discloses that its terms are directory and not mandatory. It recites that a defendant may seek to enforce contribution by making his solidary co-debtor a third party. There is no penalty imposed for failure to follow its provisions. A defendant who does not call in his co-debtor as a third-party defendant maintains rights under Articles 1111--1116, LSA-C.C.P. Cf. Perot v. United States Casualty Co., La.App., 98 So.2d 584.

'We conclude that the appeal taken by Bertucci and Agricultural brings their co-defendant General Accident before the appellate court; such appeal was tantamount to filing a third-party action.'

We deem the above cited pronouncement of the Supreme Court decisive of the question whether one solidary obligor may third party another on appeal even though no third party demand was filed in the trial court. Thus, Aetna is subject to third party action instituted for the first time on appeal.

We consider next the question whether defendants Cenla and Employers may successfully bring a third party action on appeal against defendant Hardware which has settled with and been released by initial plaintiffs. Emmons, above, is distinguishable from the case at bar insofar as Hardware in concerned, in that in Emmons defendant, though dismissed from the action, had not been granted a full release as has Hardware in this case.

We note likewise, Harvey v. Travelers Insurance Company, La.App., 163 So.2d 915, wherein our brothers of the Third Circuit, Hood, Judge, organ of the Court, specifically considered the right of a co-defendant to third party on appeal a co-defendant holding a prior...