Employers Casualty Co. v. Moore, Civil 4512

• Decision Date: 18 October 1943
• Docket Number: Civil 4512
• Citation: 142 P.2d 414,60 Ariz. 544
• Parties: EMPLOYERS CASUALTY COMPANY, Appellant, v. JAMES R. MOORE and ELIAS M. ROMLEY, copartners in the practice of law under the firm name and style of Moore & Romley, Appellees
• Court: Arizona Supreme Court

142 P.2d 414

60 Ariz. 544

EMPLOYERS CASUALTY COMPANY, Appellant, v. JAMES R. MOORE and ELIAS M. ROMLEY, copartners in the practice of law under the firm name and style of Moore & Romley, Appellees

Civil No. 4512

Supreme Court of Arizona

October 18, 1943

APPEAL from a judgment of the Superior Court of the County of Maricopa. M. T. Phelps, Judge. Judgment reversed and cause remanded with directions to dismiss the action.

Messrs Struckmeyer & Struckmeyer, for Appellant.

Messrs Moore, Romley & Roca, for Appellees.

OPINION

ROSS, J.

George A. and Edith Damron, on June 4, 1941, employed Moore &amp Romley, a local firm of lawyers, to bring an action against Thomas E. Hudson, a resident of California, on account of personal injuries sustained by them by reason of the negligent operation of an automobile by said Hudson. The contract of employment was in writing and under it the Damrons agreed to pay said attorneys for their services "an amount equal to thirty three and one-third per cent (33 1/3%) of all sums recovered, whether by suit or compromise." In the contract was this stipulation:

"This retainer shall operate as an assignment pro tanto to said Second Parties of any claim or right of recovery insofar as such assignment may be lawful, arising out of, or incident to, the matter or matters in which Second Parties are retained to perform said services, and of anything received or collected thereon or of judgment obtained thereon."

The Damrons agreed to pay all costs of the litigation.

Pursuant to this contract attorneys, Moore & Romley, on June 21, 1941, brought an action in Maricopa County, Arizona, where the cause of action originated, against Hudson for the Damrons, alleging damages for injuries in the sum of $15,228. After the action was filed against Hudson, the Damrons, who resided in San Diego, California, without consulting their attorneys, accepted $1,1900 as a compromise and settlement of their claims for damages.

The present action was brought by Moore & Romley against the Employers Casualty Company. Hudson's insurer, to recover a fee for their legal services rendered the Damrons. As a basis of the right to recover from the company, it is alleged, in substance: That the latter, the Damrons, induced the Damrons to settle and compromise their claim for an inadequate sum, and a sum much smaller than the plaintiffs could have obtained; that the settlement was fraudulent as to the plaintiffs, and a wrongful interference with their contractual relations with their clients.

Upon the theory that the $1,900 paid the Damrons under the compromise was two-thirds of the Employers Casualty Company's admitted liability as surety on Hudson's bond, the plaintiffs alleged that they "are entitled to one-third" of $2,850, or $950, for which they prayed judgment. The court, after hearing the case, gave plaintiffs judgment for one-third of $1,900, or for $633.33. The company perfected an appeal to this court and assigns three errors, as follows:

"I. The court erred in holding that the contract of employment operated as an equitable assignment pro tanto to the appellees, for the reason that rights in actions for personal injuries are not assignable.

"II. The court erred in holding that the appellant did not have the legal right to negotiate for and effect a settlement, and that such settlement was fraudulent as to the appellees, for the reason that settlements between parties are favored in and encouraged by the law, and for the reason that the appellant, acting for and on behalf of its insured, Thomas E. Hudson, exercised a legal right to make and conclude a settlement.

"III. The court erred in entering judgment for the sum of Six Hundred Thirty Three and 33/100 Dollars ($633.33), being one-third of the amount of settlement, without any evidence of the value of the services rendered by the appellees, for the reason that George A. Damron had the right to discharge the appellees as attorneys notwithstanding the agreement, being liable only to the appellees for the value of the services rendered by the appellees, and to this amount the appellees would have been limited in an action for the recovery of their fees against the Damrons."

The first of these assignments presents the question as to whether the appellees' retainer contract gave them any interest in the Damron right of action against Hudson or his insurer, the appellant. The second assignment asserts the validity of the compromise and the right of the surety to negotiate it, and the third is to the effect that if the appellees were entitled to recover it was upon quantum meruit, and that no evidence was submitted showing the value of their services. The sufficiency of these assignments to present the questions raised is challenged by the appellees, but we are satisfied that they conform with the rules of this court and that the objections urged are without merit. They are plain, concise statements of the errors charged.

It is well settled in this jurisdiction that an action for personal injuries, such as the one here, does not survive In Deatsch v. Fairfield, 27 Ariz. 387, 397, 233 P. 887, 891, 38 A.L.R. 651, it is said:

"... The test of assignability of a chose in action is whether it will survive and pass to the personal representative. If it will survive it can be assigned...." This statement of the law was later approved in United Verde Extension Mining Co. v. Ralston, 37 Ariz. 554, 296 P. 262. The general rule is stated as follows:

"The general doctrine, both at law and in equity, is that rights of action for torts causing injuries which are strictly personal and which do not survive are not capable of being assigned...." 4 Am. Jur. 252, § 30.

"In the absence of statutory modification, a cause of action for death by wrongful act is not assignable, and it has been held that, prior to verdict or judgment, the beneficiary's claim for damages is a mere expectancy, or inchoate...