Holmgren v. Heisick

• Decision Date: 26 June 1970
• Docket Number: Nos. 41367,42205,s. 41367
• Citation: 178 N.W.2d 854,287 Minn. 386
• Parties: Winton HOLMGREN, a minor, by Herbert Holmgren, his father and natural guardian, and Herbert Holmgren, Respondents, v. Edmund HEISICK and Edmund Heisick, as Spec. Admr. of the estate of AllanHeisick, decedent, Appellant, Lawrence B. Schmit, et al., representatives of the Estate of David Schmit, Respondents. NORTHWESTERN NATIONAL INSURANCE GROUP, Respondent, v. Edmund HEISICK and Edmund Heisick, as Spec. Admr. of the estate of AllanHeisick, deceased, Appellant.
• Court: Minnesota Supreme Court

Page 854

178 N.W.2d 854

287 Minn. 386

Winton HOLMGREN, a minor, by Herbert Holmgren, his father and natural guardian, and Herbert Holmgren, Respondents, v. Edmund HEISICK and Edmund Heisick, as Spec. Admr. of the

estate of AllanHeisick, decedent, Appellant,

Lawrence B. Schmit, et al., representatives of the Estate of

David Schmit, Respondents.

NORTHWESTERN NATIONAL INSURANCE GROUP, Respondent, v. Edmund HEISICK and Edmund Heisick, as Spec. Admr. of the

estate of AllanHeisick, deceased, Appellant.

Nos. 41367, 42205.

Supreme Court of Minnesota.

June 26, 1970.

Syllabus by the Court

A car owned by Lawrence B. Schmit and covered by a policy of liability insurance issued by Northwestern National Insurance Group, with limits of $25,000 on account of one injury and $50,000 on account of one accident, collided with a car owned by Edmund Heisick and covered by a policy of liability insurance issued by Milbank Mutual Insurance Company. Northwestern National Insurance Group, as insurer of Schmit, settled three death claims--the driver of the Heisick car and two of his passengers--by payment of $10,000 on each claim. In an action (Appeal No. 41367) brought to recover for injuries sustained by Winton Holmgren, a third passenger in the Heisick car, the jury found both drivers liable for damages approximating $86,000. After this award was reduced to judgment, it was settled for $63,750 of which sum Northwestern, as insurer of Schmit, paid $20,000, and Milbank, as insurer of Heisick, paid $43,750.

At about the same time the Holmgren action was commenced, Northwestern instituted a contribution action (Appeal No The trial court in the contribution action also found the drivers of both vehicles liable for the damages caused by the collision; allowed Northwestern's claim for contribution; but disallowed the offset entirely.

42205) against Heisick to recover 50 percent of the $20,000 paid to settle the passenger death claims. Following the settlement of the Holmgren claim Heisick asserted as a setoff in behalf of his insurer, Milbank Mutual Insurance Company, the real party in interest, $11,875, the amount paid by it to satisfy the Holmgren judgment which should have been paid by or on behalf of the estate of David Schmit, which is insolvent. The computation: $63,750 (total paid) divided by two equals $31,875, less $20,000 (paid by Northwestern for Schmit to Holmgren), leaves $11,875 remaining.

On appeal, it is held:

(1) The offset claimed in the contribution action on account of the settlement of the Holmgren judgment should have been allowed to the extent of the difference between Northwestern National Insurance Group's policy limit of $25,000 on account of one accident and the amount previously paid by it on account of the Holmgren judgment, i.e., $20,000. The computation: $25,000 (limit for any one injury); less $20,000 (paid on Holmgren judgment); leaves $5,000 (amount subject to offset).

(2) In a contribution action involving a tort claim, interest on the amount recovered runs from the date that common liability for the payment of a fixed sum is determined.

(3) The issues of the negligence of each driver were properly submitted to the jury in the personal injury action, and the evidence sustains the jury findings that both drivers were causally negligent and that the negligence of the driver of the Schmit automobile was not willful and wanton.

Cragg & Bailly, Minneapolis, for appellant.

Rosenmeier & Simonett, Little Falls, for Winton Holmgren.

Quinlivan, Quinlivan & Williams, St. Cloud, for Lawrence B. Schmit and others and N.W. Nat. Ins. Group.

Heard before KNUTSON, C.J., and ROGOSHESKE, SHERAN PETERSON, and FRANK T. GALLAGHER, JJ.

OPINION

SHERAN, Justice.

These appeals in two actions arising out of the same automobile accident were consolidated for hearing and decision in this court.

In the first action, involving personal injury claims brought on behalf of Winton Holmgren, defendant Edmund Heisick, individually, and as special administrator of the estate of Allan Heisick, appeals from the denial of his post-trial motion for judgment notwithstanding the verdict or a new trial. The basic issue raised on this appeal is whether the negligence of one of the drivers, David Schmit, was willful and wanton.

In the second action, involving a claim for contribution made by the insurer of the car Schmit was driving, defendant Heisick appeals from the judgment. The issues raised by this appeal are considerably more complex and will therefore be considered first. In this action, instituted by the Northwestern National Insurance Group, an automobile liability insurance carrier, to recover $10,000 by way of contribution on account of the discharge of liability common to defendant Heisick, on the one hand, and plaintiff's insured, on the other, the trial court found in plaintiff's favor. In doing so, it disallowed entirely an offset asserted by defendant. The principal issue on the appeal is whether this disallowance of the offset was in accordance with law. While the issue for decision is precise enough, the factual background in which it occurs is complicated and requires an outline of facts concerning:

(1) A collision which occurred on June 26, 1964, on a public highway in Anoka County between a car owned by Lawrence B. Schmit and a car owned by Edmund Heisick.

(2) The coverage afforded by policies of automobile liability insurance on each of the vehicles involved--one issued by Northwestern National Life Insurance Group to Schmit, and the other by Milbank Mutual Insurance Company to Heisick.

(3) Settlements made on December 14, 1964, whereby Northwestern, as insurer of the Schmit car, secured the release and discharge of three death claims arising out of the accident. Ten thousand dollars was paid on account of each death. It has since been established that two of these death claims constituted a common liability of the owners and operators of the two vehicles involved in the collision. (These latter two settlement payments by Northwestern constitute the basis of its claim for relief in the contribution action.)

(4) A settlement in June 1968 of a judgment in the amount of approximately $86,000 which had been obtained on account of injuries sustained by Winton Holmgren, the only survivor of the collision, against both owners and the representatives of the estates of both drivers. Northwestern paid $20,000 in behalf of the owner and driver insured by it. Milbank paid $43,750 on behalf of the owner and driver insured by it. (The disproportion between these payments in discharge of a joint and several liability constitutes the basis of the claimed offset.)

(5) A stipulation making the determination of the issues of causative negligence made in the action for damages instituted by Winton Holmgren against both owners and the representatives of both drivers binding in the action by Northwestern for contribution on account of the settlement of the death cases.

(3) The trial court's disposition of the contribution action.

(1) JUNE 26, 1964, ACCIDENT

On June 26, 1964, on a public highway in Anoka County, Minnesota, a head-on collision occurred between an automobile owned by Lawrence B. Schmit and operated with his permission and consent by his son, David Schmit, and an automobile owned by Edmund Heisick and operated with his permission and consent by his son, Allan Heisick. At the time of the collision, there were three passengers in the Heisick car: Van Heisick, Joseph Ord, and Winton Holmgren. Everyone was killed except Winton Holmgren, who survived notwithstanding serious personal injuries. The highway where the accident occurred (U.S. Highway No. 10) is a divided highway running in a general easterly and westerly direction with two eastbound lanes and two westbound lanes separated by a median strip. When the vehicles met head on, the Schmit car was eastbound in the portion of the highway reserved for westbound traffic.

(2) INSURANCE COVERAGE

The automobile liability insurance applicable to the Schmit car was a policy issued by Northwestern affording coverage for liability arising out of the maintenance, use, and operation of the vehicle, with limits of $25,000 on account of injury to any one person and $50,000 on account of any one accident.

The automobile liability insurance applicable to the Heisick car was a policy issued by Milbank affording coverage for liability arising out of the maintenance, use, and operation of the vehicle, with limits of $50,000 on account of injury to any one person and $100,000 on account of any one accident.

From the outset, the insurers assumed the responsibility for the investigation, adjustment, settlement, and defense of any claims arising out of the accident for which persons insured by the respective policies could be held liable.

(3) THE DECEMBER 14, 1964, SETTLEMENTS

On or about December 14, 1964, Northwestern, acting pursuant to the obligations of its insurance contract covering the Schmit car, secured releases and effected a discharge of any claims arising out of the described accident on account of the deaths of Allan Heisick, Van Heisick, and Joseph Ord. In each instance, the amount paid was $10,000. It is evident that the release of claims arising out of the death of Allan Heisick was not intended to and did not discharge a liability common to both drivers. Allan Heisick's next-of-kin had no claim which could be asserted against him or his estate. But claims for death by wrongful act on account of the deaths of Van Heisick and Joseph Ord, both passengers, could be asserted against the owners and drivers of both cars. Therefore, the $20,000 paid by Northwestern on behalf of the Schmits discharged a potential common liability of the owner and operator of the Heisick car. A release of one joint tortfeasor releases the other. Muggenburg v. Leighton, 240 Minn. 21, 60 N.W.2d 9. It is undisputed that these settlements gave rise to a good claim for contribution...