Holve v. Draper

• Decision Date: 19 January 1973
• Docket Number: No. 11135,11135
• Citation: 505 P.2d 1265,95 Idaho 193
• Parties: Norman E. HOLVE and Nancy Holve, husband and wife, Plaintiffs-Appellants and Cross-Respondents, v. Lawrence DRAPER and Robert Swanson, Defendants-Respondents, Robert Swanson, Respondent and Cross-Appellant.
• Court: Idaho Supreme Court

Page 1265

505 P.2d 1265

95 Idaho 193

Norman E. HOLVE and Nancy Holve, husband and wife, Plaintiffs-Appellants and Cross-Respondents, v. Lawrence DRAPER and Robert Swanson, Defendants-Respondents Robert Swanson, Respondent and Cross-Appellant.

No. 11135.

Supreme Court of Idaho.

Jan. 19, 1973.

Rehearing Denied Feb. 22, 1973.

Arthur L. Smith of Albaugh, Bloem, Smith ,& Pike, Idaho Falls, for appellants.

Morton B. Hiller of St. Clair, St. Clair, Hiller & Benjamin, Idaho Falls, for respondent Robert Swanson.

Racine, Huntley, Herzog & Olson, Pocatello, for respondent Draper. SHEPARD, Justice.

Draper was involved in an automobile accident with Mrs. Holve and the Holves brought suit against both Draper and Swanson. Draper was alleged to be the servant of Swanson. Draper's estate paid the Holves $8,000 in exchange for a covenant not to sue in favor of Draper. The district court granted Swanson summary judgment on the ground that the covenant not to sue in favor of a servant (Draper) necessarily released the master (Swanson) from any derivative liability for the tortious acts of his servant. We reverse and remand.

For apporximately ten years preceding the accident Draper had lived in a trailer located on Swanson's farm. During that time Draper performed odd jobs on the farm and periodically acted as caretaker of the farm when Swanson was absent. On the night of the accident Swanson was vacationing in California. Draper was returning home from town and had parked his truck on the highway while collecting mail which had been delivered to Swanson's mailbox.

Plaintiff-Appellant Holve was driving her car when it struck the pick-up truck parked in her lane. She suffered severe personal injuries and she and her husband filed this action against Draper and Swanson on July 12, 1971.

Swanson filed a motion for summary judgment which the district court denied on December 22, 1971, and Swanson has filed a cross-appeal from the denial of that motion.

Draper died in late 1971 and on February 22, 1972, the Holves executed a covehant not to sue in favor of Draper's estate. Therein the Holves agreed not to pursue their cause of action against Draper in exchange for $8,000 from Draper's estate. The agreement provided that the $8,000 would constitute a credit of $10,000 against any judgment subsequently recovered by the Holves in their suit against Draper and Swanson. The agreement further provided that the Holves would indemnify Draper for any liability his estate might suffer as a result of any action brought by the Holves in connection with the February 4, 1971, accident.

Thereafter Swanson filed a second motion for summary judgment which the district court granted on April 10, 1971. The court reasoned that the covenant not to sue was in fact a release which, in effect, discharged Swanson from all further liability arising out of the February 4, 1971 accident. The Holves have appealed from that order granting summary judgment for Swanson.

Obviously, the main issue in this appeal is the construction and effect of the covenant between Holve and Draper. Initially we must determine what law should be applied in construing the covenant. More specifically, we must decide whether the covenant is governed by the law in effect at the time that the cause of action arose (February 4, 1971) or by the law in effect at the time the covenant was executed (February 22, 1972).

On March 24, 1971, approximately six weeks after the accident involved herein, the Idaho Legislature adopted the Uniform Contribution Among Tortfeasors Act. Rather than adopting the current version, the Idaho Legislature saw fit to adopt the 1939 version of the Uniform Act as part of Idaho's comparative negligence statute. 1971 Idaho Session Laws, Ch. 186. The enactment of that Uniform Act substantially altered the law of Idaho concerning the effect of releases and covenants not to sue. The Uniform Act had been in effect nearly eleven months by the time the covenant involved herein was executed.

We hold that the effect and interpretation of the covenant at issue herein should be considered in light of the law in effect at the time of the execution of the covenant. We are persuaded by the reasoning of the Supreme Court of Pennsylvania in the case of Smith v. Fenner, 399 Pa. 633, 161 A.2d 150 (1960). The question before the Pennsylvania court was substantially similar to that at hand. In its unanimous opinion that court said:

'The Uniform Act changed the effect of such release, if given, but it effected no change in the cause of action nor did it increase what could have been the liability of any one or all appellees at the time the cause of action arose. None of the appellees had any vested right to be exonerated from liability at the time of securing of a release by one or the other appellees. The change effected by the Uniform Act (was one of procedure which) did not disturb any substantive right of any of appellees. When the instant release was executed the parties knew or should have known of the provisions of the Uniform Act.' 161 A.2d at p. 155 (Emphasis supplied)

We next turn to the question of whether the master and servant can be joint tortfeasors within the meaning of the 1939 version of the Uniform Act. That Act defines joint tortfeasors as follows:

'SECTION 1.

'For the purposes of this Act, the term 'joint tortfeasors' means two or more persons jointly or severally liable in tort for the same injury to person or property, whether or not judgment has been recovered against all or some of them.' See: I.C. § 6-803(4).

The commissioners' comment on the above-mentioned sction states:

'The common obligation contemplated by this Act is the common liability of the tortfeasors to suffer adverse judgment at the instance of the injured person, whether or not the injured person elects to impose it.' Handbook of the National Conference of Commissioners on Uniform State Laws and Proceedings, p. 243 (1939).

That definition of a joint tortfeasor is exceedingly broad and goes beyond the traditional meaning of the term. One commentator has analyzed the scope of this definition as follows:

'The act does not restrict its operation to joint tort-feasors who are merely negligent or who in any other way inadvertently harm others. The act clearly is open to an interpretation that would include those responsible jointly or severally for an intentional tort. And such a construction was applied in an Arkansas case.' Harper and James, I The Law of Torts, § 10.2, p. 722 (1956).

If the Act's definition includes intentional torts, then it would seem reasonable that the Act also includes vicarious liability between master and servant under the doctrine of respondeat superior. We further note that the scope of the Act is determined by joint or several liability rather than joint or concurring negligence. Lutz v. Boltz, 9 Terry, 197, 100 A.2d 647 (Del. Supr. 1953).

Our holding herein that evidence of the master-servant relationship between Swanson and Draper is sufficient to make them joint tortfeasors within the meaning of Section 1 of the Uniform Act, i.e., I.C., § 6-803(4), is in accord with the case of Mazer v. Lipschutz, 327 F.2d 42 (3d Cir. 1963). In that case, in which the Uniform Act was also under construction, a hospital and a chief operating surgeon were both held to be joint tortfeasors.

We now turn to the common law distinction between a release and a covenant not to sue and the changes in that distinction resulting from passage of the Uniform Act. Some courts have felt that a release and a satisfaction are one and the same thing. We do not agree. As stated by Prosser in his Handbook of the Law of Torts, 3d ed. 1964,...