Great Northern Packaging, Inc. v. General Tire and Rubber Co., Docket No. 78829
| Decision Date | 02 February 1987 |
| Docket Number | Docket No. 78829 |
| Citation | 154 Mich.App. 777,399 N.W.2d 408,3 UCC Rep.Serv.2d 51 |
| Parties | GREAT NORTHERN PACKAGING, INC., a Michigan corporation, Plaintiff-Appellant/Cross-Appellee, v. GENERAL TIRE AND RUBBER CO., a foreign corporation, Defendant-Appellee/Cross-Appellant, and Colonial Packaging Corporation, a Michigan corporation, Joseph Walsh, and Kenneth Spencer, Defendants. 154 Mich.App. 777, 399 N.W.2d 408, 3 UCC Rep.Serv.2d 51 |
| Court | Court of Appeal of Michigan — District of US |
[154 MICHAPP 779] Varnum, Riddering, Schmidt & Howlett by Dennis C. Kolenda and Jeffrey L. Schad, Grand Rapids, for plaintiff-appellant/cross-appellee.
Smith, Haughey, Rice & Roegge by Lance R. Mather, Grand Rapids, for defendant-appellee/cross-appellant.
Before R.B. BURNS, P.J., and MAHER and BROUILLETTE *, JJ.
Plaintiff appeals, and defendant General Tire cross-appeals, from a judgment entered on a verdict rendered in favor of plaintiff for $112,000 following a jury trial. Against the verdict, the trial court allowed a setoff of $13,000, representing a prior settlement with Colonial. On appeal, plaintiff challenges the setoff and General Tire challenges the verdict.
Plaintiff is engaged in the business of designing, manufacturing and selling packaging materials and systems. In the fall of 1978, General Tire solicited proposals for a packaging system to transport fiberglass front-end assemblies manufactured by General Tire for Ford Motor Company. Plaintiff, through its Power Pak, Inc., division, submitted an oral proposal for a system called a "power gondola." Thereafter, several meetings were held, letters were sent to General Tire describing the system and setting out design revisions and, at one point, a prototype was submitted. The design [154 MICHAPP 780] which was eventually used took approximately one year to develop.
General Tire decided to use the system and, on May 25, 1979, issued a purchase order for 50 units, at $64.76 per unit, for a trial run. Due to engineering changes, the unit price was raised to $81.62, which was reflected in a June 13, 1979, change order. On June 19, a second change order was issued, altering the quantity from 50 units to a "Blanket Order," with no expiration date. A third change order was issued on July 12, 1979, which set an expiration date of July 31, 1980.
In August of 1979, defendant Joseph Walsh, a salesman for plaintiff who had attended many of the meetings with General Tire, left his position with plaintiff and began working for a competitor, defendant Colonial. Almost immediately, Walsh contacted General Tire on behalf of Colonial Packaging and offered to sell to General Tire a virtually identical power gondola at a lower price. Evidence at trial indicates that Walsh had taken drawings and other documents with him regarding the power gondola when he left plaintiff's employ and turned them over to Colonial. Moreover, Colonial also received an actual power gondola from General Tire.
In September of 1979, General Tire began purchasing units from Colonial as well as from plaintiff. Ultimately, General Tire began using returnable racks supplied by Ford and no longer used the gondolas. By that time, General Tire had purchased 1,831 units from plaintiff and 5,478 units from Colonial.
In December, 1980, plaintiff filed a six-count complaint in circuit court. Two counts were later dismissed by stipulation. Plaintiff filed an amended four-count complaint. Count I alleged unfair competition against Colonial and its president, defendant[154 MICHAPP 781] Kenneth Spencer. Count II alleged breach of contract by General Tire. Count III alleged tortious interference with contractual relations against Walsh, Spencer and Colonial. Finally, Count IV alleged unjust enrichment against Colonial and General Tire.
The case was submitted to mediation and, as a result, the claims against Colonial were resolved in the amount of $13,000. Thereafter, the claims against Spencer and Walsh were dismissed. The breach of contract and unjust enrichment claims against General Tire then proceeded to trial, resulting in the above-mentioned verdict.
On appeal, plaintiff argues that the trial court erred in allowing the $13,000 setoff against the verdict. We disagree. As a general rule, only one recovery for a single injury is allowed under Michigan law. The amount that a plaintiff recovers from one defendant is set off against a subsequent verdict obtained against a codefendant. Stitt v. Mahaney, 403 Mich. 711, 272 N.W.2d 526 (1978). See also Hall v. Citizens Ins. Co. of America, 141 Mich.App. 676, 368 N.W.2d 250 (1985).
In Stitt, supra, a majority of the Michigan Supreme Court agreed with the opinion of dissenting Justice (now Chief Justice) Williams as to the deductibility of an amount recovered from a codefendant. According to that opinion, however, in order to avoid double recovery and yet properly compensate the plaintiff, only the amount of the overlapping damages is set off; i.e., where recovery is had for an injury identical in nature, time and place, that recovery must be deducted from plaintiff's other award.
In Stitt, the plaintiff, who was riding a motorcycle at the time, was injured in an automobile accident. The plaintiff was taken to the hospital where he was negligently treated for his injuries. The plaintiff brought suit against the driver of the [154 MICHAPP 782] automobile and against those responsible for his medical treatment. The plaintiff received a settlement on his claim against the driver. The issue before the Court was the deductibility of that settlement from the recovery obtained against the remaining defendants.
Justice Williams noted that, under Michigan law, the original tortfeasor (i.e., the driver) was liable and responsible for the damages resulting from two separate torts: the one caused by him in the initial tortious act (i.e., the accident), and the subsequent separate tort when the original injuries were negligently treated. The successive tortfeasors (those administering medical treatment) were liable only for the damages proximately caused by their own negligence. Justice Williams concluded that, to the extent the settlement represented recovery for the damages caused by the negligent medical treatment (the "overlapping" damages), the settlement was deductible from the amount recovered from the successive tortfeasors who administered medical care.
The issue regarding the deductibility of the amount of the deduction, if any, is a question of fact to be determined by the trier of fact.
"... If the jury finds one or more of these defendants were negligent and their negligence proximately caused injuries to plaintiff, there are two different means by which they might determine damages. If the jury can determine a separate amount of damages which would compensate plaintiff for the injuries attributable solely to the negligent acts of these defendants, it must then determine whether the $7,021.41 settlement with the original tortfeasor represented not only compensation for the original injuries, but also compensation in whole or in part for the subsequent [154 MICHAPP 783] injuries. If the jury so finds, it must, before returning a verdict, deduct from any damages for which these defendants are found liable the portion of the original settlement which is found to compensate plaintiff for the subsequent injuries. If the jury finds that the amount of the original settlement compensated plaintiff solely for the original injuries and not the subsequent injuries caused by these defendants, it must return a verdict against these defendants for the total amount of damages due plaintiff for the injuries they caused.
Stitt, supra, pp. 737-738, n. 13, 272 N.W.2d 526.
Stitt is not on all fours with the case at bar. Stitt involved a setoff as between tortfeasors, while the case at bar involves the setoff of a mediation award on a contract claim. However, 4 Restatement Torts, 2d, Sec. 774A(2), p. 55 suggests that there should be a setoff between judgments for breach of contract and the tortious interference with the contract:
[154 MICHAPP 784] "In an action for interference with a contract by inducing or causing a third person to break the contract with the other, the fact that the third person is liable for the breach does not affect the amount of damages awardable against the actor; but any damages in fact paid by the third person will reduce the damages actually recoverable on the judgment."
Comment "e" to that section further addresses the issue:
"The fact that the plaintiff may have a cause of action against the person who has broken his contract does not prevent recovery against the defendant who has induced or otherwise caused the breach, or reduce the damages recoverable from him. The defendant and the contract breaker are both wrongdoers (compare Sec. 875), and each is liable for the entire loss that he...
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