Gilley v. Farmer
| Citation | 485 P.2d 1284,207 Kan. 536 |
| Decision Date | 12 June 1971 |
| Docket Number | No. 46025,46025 |
| Parties | Donnie Ray GILLEY, a minor, by and Through Franklin L. Gilley, Father and Guardian of the Estate and Person of Donnie Ray Gilley, Plaintiff-Appellant, v. William L. FARMER, Jr., et al., Defendants, National Indemnity Company, a Corporation, Garnishee-Appellee. Franklin L. GILLEY, Plaintiff-Appellant, v. William L. FARMER, Jr., et al., Defendants, National Indemnity Company, a Corporation, Garnishee-Appellee. Donnie Ray GILLEY and Cheryl Lynn Gilley, minors, by and through Franklin L. Gilley, Father and guardian of the estate and persons of said minors, and Franklin L. Gilley, individually, Plaintiffs-Appellants, v. William L. FARMERE, Jr., et al., Defendants, National Indemnity Company, a Corporation, Garnishee-Appellee. |
| Court | Kansas Supreme Court |
Syllabus by the Court
1. When issues have been joined in a garnishment action, a motion seeking summary judgment under K.S.A. 60-256 is permissible where the circumstances are appropriate.
2. In this jurisdiction a liability insurer may be held liable in excess of its undertaking under the policy if it acts negligently or in bad faith when considering offers to compromise the claim against the insured for an amount within policy limits. (Following Bollinger v. Nuss, 202 Kan. 326, 449 P.2d 502.)
3. Where a person contracts to perform work or to render a service, without an express warranty, the law implies an undertaking or contract on his part to do the job in a workmanlike manner and to exercise reasonable care in performing the work or service. (Following Crabb v. Swindler, Administratrix, 184 Kan. 501, 337 P.2d 986.)
4. Where negligence on the part of a contractor results in a breach of the implied warranty, an action accrues both in tort and in contract and the contractee may proceed on either or both theories, although his pleading need not state whether his action is based on tort or in contract.
5. A claim of indebtedness arising out of contract is subject to garnishment process even though it be unliquidated.
6. Implicit in the ordinary liability policy of insurance is the covenant by the insurer that, in defending or settling a claim against its insured, it will act in good faith and with reasonable care for his interests.
7. In garnishment proceedings, the creditor takes the place and stands in the shoes of his debtor, taking only what the latter could enforce.
8. The record is examined in garnishment proceedings against the insurance carrier of the judgment debtor, and for reasons appearing in the opinion it is held: (1) The trial court did not err in entertaining a motion to strike the plaintiff's reply to the garnishee's answer and in treating it as a motion for summary judgment under K.S.A. 60-256; (2) the trial court erred in entering summary judgment in favor of the garnishee and dismissing the garnishment.
Robert H. Bingham, of Weeks, Thomas, Lysaught, Bingham & Johnston, Chartered, Kansas City, argued the cause, and L. D. McDonald, Jr., Kansas City, was with him on the brief for plaintiffs-appellants.
Douglas Stripp, of Watson, Ess, Marshall & Enggas, Kansas City, Mo., argued the cause, and J. Milton Sullivant, of Sullivant, Rushfelt, Mueller & Lamar, Kansas City, was with him on the brief for garnishee-appellee National Indemnity Co.
Cyrus W. Long, Kansas City, was on the brief for defendants, William L. Farmer, Jr., William L. Farmer and Dorothy Farmer.
These three lawsuits, which have been consolidated for purposes of appeal, arose out of a collision in Wyandotte County, between cars driven by Franklin L. Gilley and William L. Farmer, Jr.
The details of the accident are unimportant so far as the questions now before us are concerned. It is sufficient to say that Mrs. Gilley was killed in the accident and Mr. Gilley, his minor son, Donnie Ray, and another passenger in the Gilley car, Roy Roberts, were all injured. Three lawsuits were filed by Mr. Gilley to recover damages: (1) For Donnie's injuries, (2) for his own injuries and for damage to his car and (3) for the death of Mrs. Gilley. These actions were tried and resulted in judgments against Farmer totaling $45,956.13. Farmer did not appeal from the judgments.
For convenience we shall henceforth refer to the three cases as but a single case, to Gilley either by name or as plaintiff, and to Farmer by his own name or as the defendant.
Farmer was insured by the National Indemnity Company, (hereafter referred to as National, or the insurer or garnishee) under an automobile liability policy with limits of $500/$10,000/$5,000. These limits imply, as we understand the terms, that insurance coverage was restricted to $5,000 for personal injury to any one person, to $10,000 for injuries sustained by two or more persons in a single accident, and to $5,000 property damage.
Since the judgments were entered against Farmer, the insurer paid the car damage in full, amounting to $2300, and has also paid $9,500 on the personal injury judgments, a five hundred dollar out-of-court settlement having been effected with Roy Roberts, the other passenger in the Gilley car.
After payment of the foregoing amounts, the balance due on the plaintiff's judgment-amounting to $33,656.13-remained unpaid. Garnishment proceedings were therefore initiated against the insurer. The garnishee, National, responded to the garnishment order by filing an answer conceding an indebtedness of only $75, which was admittedly due for damage to clothing that National had inadvertently overlooked and which it offered to pay on proper court order.
Gilley filed a reply, alleging that National had been guilty of negligence and bad faith in handling his claim in several particulars, and in failing to settle the same within the limits of its policy with Farmer, and that National was therefore liable for and amount of the excess judgment. Gilley demanded judgment for the excess, for its attorneys' fees and for punitive damages. Farmer also filed a reply with similar allegations of negligence and bad faith and demanded that National be ordered to pay the balance due and owing on the judgment to Gilley. National thereupon moved to strike both replies.
The trial court, treating the motion to strike as a motion for summary judgment, sustained the same and entered judgment in favor of the garnishee as a matter of law. In sustaining the motions, the court found that (1) a judgment creditor has no right to proceed by garnishment against his judgment debtor's liability insurer for a judgment exceeding the policy limits on the grounds of negligence, bad faith, and failure to settle within policy limits; (2) such claim, whether founded in tort or breach of contract, is unliquidated and not a debt subject to garnishment under § 60-724 K.S.A.; (3) once issues are joined in a garnishment action, a motion for summary judgment is not an unauthorized pleading.
Mr. Gilley has appealed from the trial court's ruling, and divides his argument into two main parts. Mr. Farmer has filed no appeal but his counsel's name appears on appellant's brief.
Plaintiff first contends the trial court erred in rendering summary judgment. The grounds on which this argument rests are (1) a motion to dismiss is an unauthorized pleading not recognized in garnishment proceedings and (2) pretrial discovery had not been completed.
K.S.A. (now K.S.A. 1970 Supp.) 60-718 provides that the garnishee shall file an answer to the garnishment order stating the facts in relation thereto, and that either the plaintiff or the defendant, or both, may file a reply to the answer. The statute further provides that if a reply is filed the court shall try the issues joined.
This statute does not mention a motion to strike the reply to the garnishee's answer, nor is reference made to such a motion elsewhere in the garnishment statutes. Accordingly, the plaintiff reasons that the trial court lacked authority to act on National's motion to strike the replies and to enter summary judgment in the garnishee's favor.
To support this position Mr. Gilley relies primarily on Domann v. Pence, 185 Kan. 702, 347 P.2d 373. This case was also an action in which the plaintiff had secured a judgment for damages arising from an auto accident for an amount exceeding the defendant's policy limits. When the excess remained unpaid, the plaintiff garnished defendant's insurance carrier, which answered, in turn, that it had paid the amount of its policy, and was not indebted to the defendant. The plaintiff excepted to the garnishee's answer, alleging bad faith and negligence on the part of the insurer in its investigation, preparation, and trial of the damage action. The insurer then filed a demurrer to the exceptions, which was overruled by the trial court.
On appeal, this court held that a garnishment proceeding was a special and extraordinary remedy whose procedures were governed by statute (then, G.S.1949, 60-940 to 60-965); that those procedures were exclusive and did not include a demurrer; hence we said the demurrer was properly overruled.
The Domann case was decided prior to the enactment of the present Code of Civil Procedure. The underlying philosophy of the Code is expressed in K.S.A. 60-102:
'The provisions of this act shall be liberally construed to secure the just, speedy and inexpensive determination of every action or proceeding.'
As we have said, the trial court treated National's motion to dismiss as a motion for summary judgment under K.S.A. 60-256 and such, we believe, was proper. The motion disclosed on its face that it was filed pursuant to 60-256 on the twin grounds that no genuine issue of material fact existed and that the garnishee was entitled to judgment as a matter of law. These are the circumstances under which the Code envisions the use of summary proceedings. (Hartman v. Stumbo, 195 Kan. 634, 638, 408 P.2d 693; Board of Satanta v. Grant County Planning Board, 195 Kan. 640, 648, 408...
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