Gray v. Chacon

• Decision Date: 06 May 1988
• Docket Number: No. IP 87-393-C.,IP 87-393-C.
• Citation: 684 F. Supp. 1481
• Parties: Forester GRAY, Plaintiff, v. Gil CHACON, Meineke Discount Mufflers, Jartran, Inc., Truck & Trailer Rentals, Defendants.
• Court: U.S. District Court — Southern District of Indiana

684 F. Supp. 1481

Forester GRAY, Plaintiff, v. Gil CHACON, Meineke Discount Mufflers, Jartran, Inc., Truck & Trailer Rentals, Defendants.

No. IP 87-393-C.

United States District Court, S.D. Indiana, Indianapolis Division.

May 6, 1988.

Larry R. Champion, Indianapolis, Ind., for plaintiff.

Phillip R. Scaletta, Ice Miller Donadio & Ryan, Indianapolis, Ind., for defendants Chacon and Meineke Discount.

Dennis M. Owens, Smith Maley & Douglas, Indianapolis, Ind., for defendant Jartran, Inc.

ENTRY

BARKER, District Judge.

Only recently this court was asked to consider Indiana's common law rules regarding the release of joint tortfeasors. At that time the court found that "Indiana courts continue to cling to the rule that the release of one joint tortfeasor necessarily functions as a release of all joint tortfeasors regardless of the parties' manifest intention to preserve the victim's claim against other joint tortfeasors." Fetz v. E & L Truck Rental Co., 670 F.Supp. 261, 263 (S.D.Ind.1987) (emphasis omitted). With this case the court is asked to consider what impact the adoption of Indiana's Comparative Fault Act, Ind. Code §§ 34-4-33-1 to -14, might have had upon this antiquated rule. Because no Indiana state court has addressed this issue in a published opinion, this federal court is asked to determine as a matter of first impression how the highest court of Indiana would decide this issue if it were presented with the question. For the reasons set out below, this court finds that Indiana's Comparative Fault Act has undermined Indiana's judicially-created release rule and that, at least in those cases to which the Act is directly applicable, the release of one joint tortfeasor no longer functions as the release of all joint tortfeasors.

I. Background

The facts of this case are remarkably straightforward. On June 27, 1985, the defendants, Gil Chacon and Meineke Discount Mufflers, sold to Vittorio Bavuso a trailer hitch which the defendants also installed on Mr. Bavuso's automobile. Later that same day Mr. Bavuso rented from the third defendant, Jartran, Inc. Truck & Trailer Rentals, a trailer which was attached to Mr. Bavuso's vehicle by means of the newly installed trailer hitch. Two days later, on June 29, 1985, Mr. Bavuso was driving his automobile in a westerly direction on I-465 in Marion County, Indiana. At that time the hitch came off of his automobile and, as a result, the trailer became lodged under the rear of his vehicle. Because of the manner in which the trailer came to a rest under his vehicle, Mr. Bavuso was unable to move his automobile and was forced to abandon both his vehicle and the rented trailer in a traveled lane of I-465.

The plaintiff in this action, Forester Gray, was unlucky enough to be driving his truck westbound on I-465 at about this time. Mr. Gray's truck collided with the rear of Mr. Bavuso's rented trailer while the trailer was still resting in a traveled lane of the highway. As a result of the accident Mr. Gray claims that he received serious injuries to his body and that he incurred substantial medical expenses, property damage, loss of income, pain and suffering, and permanent bodily injury.

Following the collision Mr. Gray brought suit against Mr. Bavuso. That claim was settled out of court. Mr. Gray received payment from Mr. Bavuso, in exchange for which Mr. Gray executed a release of all of his claims against Mr. Bavuso. See Brief in Support of Defendant Jartran, Inc.'s Motion for Summary Judgment Defendant's Brief in Support, Exhibit A. The plaintiff admits that this document is in fact a release of Mr. Bavuso and does not now claim that it is a covenant not to sue or some type of loan receipt agreement. See Response to Defendant's Motion for Summary Judgment Plaintiff's Response at 2.

On April 14, 1988, Mr. Gray filed this federal diversity suit against the defendants Gil Chacon, Meineke, and Jartran. The plaintiff alleges that the defendants Mr. Chacon and Meineke were negligent in the manufacturing, selling, and installing of Mr. Bavuso's trailer hitch. He further alleges, inter alia, that the defendant Jartran was negligent in failing to provide either Mr. Bavuso or the rented trailer with adequate warning lights, reflectors, or flares. Mr. Gray claims that all of his injuries were caused, either in whole or in part by these various acts of negligence.

All three defendants have now moved for summary judgment. The two-page argument made by the defendants¹ in support of their motion is admirably succinct: Mr. Gray executed a release of Mr. Bavuso and, in Indiana, the release of one joint tortfeasor necessarily functions as the release of all joint tortfeasors. See Defendants' Brief in Support at 1-2 (citing Cooper v. Robert Hall Clothes, Inc., 271 Ind. 63, 390 N.E.2d 155 (1979)). The plaintiff counters by urging that the release rule reiterated in Cooper is inappropriate for cases arising under Indiana's Comparative Fault Act.² Mr. Gray correctly points out that every reported state court decision professing Indiana's continued adherence to that state's out-dated release rule involved a cause of action that arose prior to the Comparative Fault Act's effective date.³See, e.g., Young v. Hoke, 493 N.E.2d 1279 (Ind.Ct.App.1986); Flagg v. McCann, 498 N.E.2d 76 n. 1 (Ind.Ct.App.1986). The plaintiff further asserts that the primary motivation underlying Indiana's release rule was the fear that "if the release of one tortfeasor did not release all joint tortfeasors then an injured party could receive more than 100% of his damage and loss." Plaintiff's Response at 3. Because the Comparative Fault Act abolished joint and several liability and substituted a scheme of liability proportionate to fault, the plaintiff argues, the stated justification for Indiana's release rule is no longer valid. Therefore, the plaintiff concludes, the intervening legislative development of Indiana's Comparative Fault Act makes it clear that Indiana's highest court—if it were presented with the issue—would no longer apply the release rule most recently reiterated in Cooper. The defendants filed no reply.

II. The Role of This Court in Determining State Law

Given that Indiana state law applies to this case, the first problem the court must address is the question of how this federal court should make the determination of what the applicable state law is. The deceptively simple formulation enunciated in Erie v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), mandates that the federal court merely apply that state law "declared by the state's legislature in a statute or by its highest court." Id. at 78, 58 S.Ct. at 822. A difficulty arises, of course, when a change in state law is not patent in the language of legislation and has not yet been authoritatively announced by the state court. Such a situation raises the question of whether a federal court can properly anticipate such a change in state law. The answer to this question is clearly yes. See, e.g., Commissioner v. Estate of Bosch, 387 U.S. 456, 465, 87 S.Ct. 1776, 1782, 18 L.Ed.2d 886 (1967) (declaring that "the State's highest court is the best authority on its own law. If there be no decision by that court then federal authorities must apply what they find to be the state law after giving `proper regard' to relevant rulings of other courts of the State. In this respect, it may be said to be, in effect, sitting as a state court.")

Even in those cases—such as the one at bar—wherein the matter to be addressed by the federal court has not been ruled on by any state court, the federal court must still endeavor to ascertain what the state law would be. "In the absence of a state court ruling, our duty is tolerably clear. It is to decide, not avoid, the question." Daily v. Parker, 152 F.2d 174, 177 (7th Cir. 1945) quoted in C. Wright, Law of Federal Courts § 58 at 375 (1983). Even then, however, the role of the federal court is carefully circumscribed:

The federal court must keep in mind ... that its function is not to choose the rule that it would adopt for itself, if free to do so, but to choose the rule that it believes the state court, from all that is known about its methods of reaching decisions, is likely in the future to adopt.

C. Wright, Law of Federal Courts § 58 at 375 (1983). With these guidelines in mind, the court now proceeds to address the issues presented by the motion presently before the court.

III. Analysis

A. State Law Prior to the Comparative Fault Act

As noted earlier, it is well-settled that, prior to enactment of the Comparative Fault Act, the Indiana rule was that the release of one joint tortfeasor functioned as the release of all joint tortfeasors without regard to even the express intent of the parties to preserve the victim's claim against other tortfeasors. See Cooper v. Robert Hall Clothes, Inc., 271 Ind. 63, 390 N.E.2d 155 (1979); Bellew v. Byers, 272 Ind. 37, 396 N.E.2d 335 (1979); Geyer v. City of Logansport, 346 N.E.2d 634 (Ind. Ct.App.1976) (citing Bedwell v. DeBolt, 221 Ind. 600, 50 N.E.2d 875 (1943); Scott v. Krueger, 151 Ind.App. 479, 280 N.E.2d 336 (1972)). Indiana courts continued to adhere to their release rule despite intense criticism. See, e.g., Wigmore, Release to One Joint-Tortfeasor, 17 Ill.L.Rev. 563 (calling the rule a "surviving relic of the Cokian period of metaphysics") quoted in Young v. Hoke, 493 N.E.2d 1279, 1281 (Ind.Ct.App. 1986) (Garrard, J., dissenting); Prosser & Keeton on Torts, at 333 (5th ed.1984) (calling the rule "an antiquated survival of an arbitrary common law procedural concept, arising out of long forgotten semi-criminal forms of action"); Fetz v. E & L Truck Rental Co., 670 F.Supp. 261, 263 n. 1 (S.D. Ind.1987) (finding that Indiana's traditional release rule had "little persuasive justification"). These criticisms were dismissed by the Indiana Supreme Court, however, as it put forth two overlapping justifications for Indiana's release rule:

The

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