Hawkeye-Security Ins. Co. v. Lowe Const. Co.

• Decision Date: 17 November 1959
• Docket Number: No. 49793,HAWKEYE-SECURITY,49793
• Citation: 99 N.W.2d 421,251 Iowa 27
• Parties: INSURANCE COMPANY, Inc., a Corporation, Appellee, v. LOWE CONSTRUCTION CO., a Corporation, Appellant.
• Court: Iowa Supreme Court

Page 421

99 N.W.2d 421

251 Iowa 27

HAWKEYE-SECURITY INSURANCE COMPANY, Inc., a Corporation, Appellee, v. LOWE CONSTRUCTION CO., a Corporation, Appellant.

No. 49793.

Supreme Court of Iowa.

Nov. 17, 1959.

Kopf & Christiansen, Clarence H. Christiansen, and Howard E. Petersen, Davenport, for appellant.

O'Connor, Thomas, McDermott & Wright, and Eugene D. Wright, Dubuque, for appellee.

GARFIELD, Justice.

This is a law action by plaintiff company, insurer of Marvin Nickol, to recover from defendant, Lowe Construction Co., contribution of half the amount paid by plaintiff in settlement of claims for death of a Mr. Leyendecker, personal injuries to his wife, and damage to his automobile resulting from a collision between a truck owned by plaintiff's insured and the automobile owned and driven by Leyendecker. The petition alleges the collision was caused by the combined negligence of an employee of Nickol and employees of defendant. Defendant moved to dismiss the petition as not stating a cause of action. The motion was overruled and we granted defendant an appeal, under rule 332, Rules of Civil Procedure, from the ruling.

The petition as amended alleges plaintiff issued a public liability insurance policy to Nickol covering operation of a truck owned by him; just prior to July 14, 1958, defendant's employees negligently dropped dirt, clay and mud on the traveled part of Highway 20 near Dubuque and it became slippery and hazardous; an employee of Nickol, driving the latter's truck at that place, lost control of it because of the slippery and hazardous condition and it invaded the travel lane of Leyendecker, demolishing his automobile, causing his death and injuries to Mrs. Leyendecker, a passenger in the car; defendant's employees were negligent in five respects and, as stated, their negligence combined with that of Nickol's employee to cause the collision and resulting damages; Leyendecker and wife were free from contributory negligence; both Nickol and defendant were promptly notified of the collision and settlement negotiations were commenced; the interested claimants offered to settle all claims for $23,598, of which $19,000 was for Leyendecker's death, $2,500 was for Mrs. Leyendecker's injuries, and $2,098 was for the subrogation claim of Allied Mutual Casualty Co. which issued a collision insurance policy on the Leyendecker car; from investigation it was determined these offers were fair, reasonable and just; plaintiff and Nickol demanded that defendant contribute 50 per cent to the settlement; after placing defendant on notice plaintiff paid said claims in the total sum of $23,598, they were released and defendant and Nickol were discharged. Prayer of the petition is for judgment for half the amount paid, plus interest and costs.

Defendant's motion to dismiss the petition asserts plaintiff's action would deprive defendant of a jury trial on the Leyendecker claims and plaintiff proposes to substitute its judgment for that of a jury; the release of one joint tort-feasor is the release of all, including defendant; plaintiff's petition alleges active negligence on the part of its insured and passive negligence on the part of defendant; plaintiff was a volunteer in making settlement of the claims, not a joint tort-feasor; the part of plaintiff's policy providing for subrogation to Nickol's rights is contrary to public policy in certain respects; the petition shows the collision was due solely to failure of Nickol's employee to have control of the truck; the releases attached to the petition show that Nickol and his employee denied liability for the collision.

We hold it was not error to overrule the motion to dismiss.

As defendant concedes, of course the motion admits all well-pleaded facts in the petition for the purpose of testing their legal sufficiency. Herbst v. Treinen, 249 Iowa 695, 699, 88 N.W.2d 820, 823, and citations.

I. Best v. Yerkes, 247 Iowa 800, 810, 77 N.W.2d 23, 29, 60 A.L.R.2d 1354, 1362, after thorough consideration, holds there is at least a right of equitable contribution between joint tort-feasors where there is no intentional wrong, moral turpitude or concerted action between them. Comment on the decision in 42 Iowa Law Review 450, 454, states: 'The logic of permitting contribution is that it is obviously unfair to force one defendant to bear an entire loss for which two defendants are equally, unintentionally responsible. The Iowa Court has now taken a stand advocated by legal scholars.'

The annotation to Best v. Yerkes in 60 A.L.R.2d 1366, 1377, says: 'The minority--and, it seems, growing--view * * * is this: the rule which bars contribution among joint tortfeasors is not appropriately applied to joint tortfeasors guilty of nothing more than negligence; hence, there is a common-law right of contribution as between such joint tortfeasors.'

Best v. Yerkes, supra, is followed in Constantine v. Scheidel, 249 Iowa 953, 90 N.W.2d 10, where equal contribution was enforced in a suit in equity by one joint tort-feasor against another after plaintiff had been compelled to pay the full amount of a judgment in favor of an injured third party against them both.

We have no desire to retreat from our decision in Best v. Yerkes, reaffirmed as it is in Constantine v. Scheidel.

II. Plaintiff's right to bring this action at law, rather than in equity, is not properly challenged by a motion to dismiss. A motion to transfer to the proper docket would be the correct mode of raising the question. Sections 611.7 to 611.9, Code 1958, I.C.A.; Riter v. Keokuk Electro-Metals Co., 248 Iowa 710, 716, 82 N.W.2d 151, 155, and citations; Newton v. City of Grundy Center, 246 Iowa 916, 70 N.W.2d 162; In re Estate of Pierce, 245 Iowa 22, 30, 60 N.W.2d 894, 899-900, and citations. Since no motion to transfer to equity was made we may assume there was no impropriety in bringing it at law rather than in equity.

III. There is no merit to the ground of defendant's motion that plaintiff's action would deprive defendant of a jury trial on the Leyendecker claims. It has the same right to a jury trial on these claims as if the action had bene brought against it by the original claimants. Although it is not shown plaintiff demanded a jury trial, defendant may do so according to rule 177, Rules of Civil Procedure.

Plaintiff has alleged the injuries and damage to the Leyendeckers were caused by the combined negligence of its insured's employee and defendant's servants in certain respects, the Leyendeckers were free from contributory negligence, defendant was given notice of the offers of settlement and demand was made that it contribute thereto, the negotiated settlements were fair, reasonable and just, the money was paid and releases of both joint tort-feasors were obtained. Upon the trial plaintiff will have the burden to prove these allegations and defendant may rebut them. As stated, upon the present appeal they stand admitted. These allegations include all those the original claimants would be required to make and prove if they had brought the action.

It is true plaintiff is an insurance company rather than the widow of Mr. Leyendecker. (She was also executrix of her husband's estate.) It would seem defendant's chance of a favorable verdict is not lessened by this circumstance. And in the present action judgment is sought for only half the amount paid in settlement.

See in support of our conclusion on this point: Consolidated Coach Corp. v. Burge, 245 Ky. 631, 54 S.W.2d 16, 18, 85 A.L.R. 1086, 1090, and citations; Duluth, M. & N. R. Co. v. McCarthy, 183 Minn. 414, 236 N.W. 766, 768; Western Casualty & Surety Co. v. Milwaukee Gen. Const. Co., 213 Wis. 302, 251 N.W. 491, 493.

IV. Nor do we find merit in the ground of the motion to dismiss that defendant has been released from liability to the Leyendeckers and their collision insurer, Allied Mutual. The releases relied upon are those procured by plaintiff from the original claimants upon payment of the sum agreed upon in settlement of their claims. It is true, generally, that the release of one joint tort-feasor is the release of all. Resort need not be had to this rule here because the releases themselves, attached to the petition, recite that they release all persons claimed to be liable for the Leyendecker and Allied Mutual claims. But these releases constitute no defense to this action for contribution to the sum plaintiff paid in procuring them.

Ordinarily the right to contribution becomes complete and enforceable only upon payment by a claimant which discharges more than his just share of the common obligation. Consolidated Coach Corp. v. Burge, supra, 245 Ky. 631, 54 S.W.2d 16, 85 A.L.R. 1086, 1090; McKay v. Citizens Rapid Transit Co., 190 Va. 851, 59 S.E.2d 121, 20 A.L.R.2d 918; Western Casualty & Surety Co. v. Milwaukee Gen. Const. Co., supra, 213 Wis. 302, 251 N.W. 491, 492; State Farm Mutual Automobile Ins. Co. v. Continental Cas. Co., 264 Wis. 493, 59 N.W.2d 425, 427; 13 Am.Jur., Contribution, section 10; 18 C.J.S. Contribution § 4. It seems to us the effect of defendant's contention is that part of the transaction which made plaintiff's cause of action enforceable is fatal to its right to recover.

See in support of our holding in this division the precedents cited last above; also Henry Fuel Co. v. Whitebread, 99 App.D.C. 9, 236 F.2d 742; Leitner v. Hawkins, 311 Ky. 300, 223 S.W.2d 988; Duluth, M. & N. R. Co. v. McCarthy, supra, 183 Minn. 414, 236 N.W. 766; Rusch v. Korth, 2 Wis.2d 321, 86 N.W.2d 464, 468 ('All parties stipulated that such release should not prejudice Korth's cause of action for contribution. It would not have done so in the absence of stipulation.').

V. The contention the action will not lie because, it is said, the negligence of plaintiff's insured was active and that of defendant passive seems to be inconsistent with our decision in Best v. Yerkes, supra, 247 Iowa 800, 810, 77 N.W.2d 23, 29, 60 A.L.R.2d 1354, 1362, tha...