Keyworth v. Industrial Sales Co.

Citation241 Md. 453,217 A.2d 253
Decision Date01 March 1966
Docket NumberNo. 230,230
CourtCourt of Appeals of Maryland

Bayard Z. Hochberg, Baltimore (Paul Berman, Baltimore, on the brief), for appellant.

Emanuel H. Horn, Baltimore (Delverne A. Dressel, Baltimore, on the brief), for appellee.



This case is a sequel to Keyworth v. Israelson, 240 Md. 289, 214 A.2d 168 (1965). That case involved proceedings in equity to determine the rights of various parties in a settlement fund, brought into being as a result of a verdict obtained by the appellant, Charles E. Keyworth (Keyworth) in a suit by Keyworth against third-party tort-feasors, and an additional sum obtained on behalf of Keyworth in settlement of an appeal. We affirmed a provision of the decree of the equity court providing that the clerk of the court retain the sum of $7200 from the fund, pending the final determination of a lawsuit of the appellee herein, Industrial Sales Co., Inc. (the Employer) against Keyworth, under a written agreement between the Employer and Keyworth. This appeal arises from a summary judgment in favor of the Employer in the lawsuit.

The agreement involved, and the circumstances under which it was executed, were considered in Keyworth v. Israelson, supra. Keyworth had been injured on September 29, 1959 while in the employ of the Employer when an automobile which he was operating in the course of his duties was hit by a truck. On December 31, 1959, the Employer and Keyworth entered into an agreement (the agreement) which recited that while Keyworth was then receiving $40 a week under the Workmen's Compensation Commission's order as compensation for temporary total disability, he had been earning approximately $100 a week take-home pay and wished to receive weekly advances from the Employer in the amount of $100. The agreement provided that the Employer would pay Keyworth $100 a week from the time of the accident until he returned to work on a full-time basis; that Keyworth would maintain his suit against the third-party tort-feasors and that, upon the successful conclusion of the case, he authorized his attorney (who was also the attorney for the Employer) to issue a check to the Employer for the amount to be advanced by the Employer, excluding any bonuses or presents.

The Employer filed suit against Keyworth in the Baltimore City Court on September 11, 1964, alleging that the Employer had advanced Keyworth $7200 under the agreement and that Keyworth had recovered a judgment against the third-party tort-feasors. A motion for summary judgment was filed with the narr. Keyworth pleaded the general issue, elected a jury trial and answered the motion for summary judgment. In his affidavit in support of his answer to the motion for summary judgment, Keyworth stated that while he had been awarded a verdict of $15,000 and received an additional $1600 in settlement of his appeal, the case had not been brought to a successful conclusion, because his out-of-pocket expenses and losses amounted to over $10,000, his attorneys were demanding a fee of $5,000, the Employer's workmen's compensation insurer was claiming $3200 under its right of subrogation and, therefore, that he had not received an adequate amount to compensate him for his injuries, disability, and pain and suffering. Keyworth's deposition was taken; in it, he stated that he would have considered a verdict of $30,000 a successful conclusion of the case--nothing less. After argument, Judge Cullen found that 'the words 'successful conclusion' are clear and unambiguous, offer no genuine dispute as to a material fact and do not constitute a valid defense to this action. As the pleadings show that the Defendant received a verdict of $15,000, subsequently increased to $16,600, this Court finds that the Plaintiff is entitled, as a matter of law, to a judgment in the amount of $7,200.'

Keyworth contends that whether or not his personal injury case resulted in a 'successful conclusion' requiring repayment of the $7,200 under the agreement is a matter to be determined by a jury, on all the facts and circumstances of the case. Maryland Rule 610 provides for summary judgment only when there is no genuine dispute as to any material fact and a party is entitled to judgment as a matter of law. Strickler Eng. Corp. v. Seminar, 210 Md. 93, 100, 122 A.2d 563 (1956), see also Guerassio v. American Bankers Corp., 236 Md. 500, 503, 204 A.2d 568 (1964) and authorities therein cited. Keyworth submits that, in a motion for summary judgment, the court must consider the deposition as well as the pleadings Evans v. Johns Hopkins Univ., 224 Md. 234, 239, 167 A.2d 591 (1961) and that, under the circumstances, it was for a jury to determine how much money constituted a successful conclusion of the tort case.

The construction of a written contract in this State is ordinarily for the determination of the court. Allen Eng. Corp. v. Lattimore, 235 Md. 182, 186, 201 A.2d 13 (1964) and authorities therein cited; Montauk Corp. v. Seeds, 216 Md. 491, 496, 138 A.2d 907 (1958). The questions here are whether the written agreement is susceptible of a clear and definite understanding, and what effect, if any, is to be given to Keyworth's interpretation of it.

Chief Judge Brune, for the Court, considered the theory of 'objective law' in Slice v. Carozza Prop., Inc., 215 Md. 357, 368, 137 A.2d 687, 693 (1958) and set forth the principle as follows:

'As we turn to the authorities, we may note first that the theory of 'objective law' of contracts has been almost universally adopted by this time. The written language embodying the terms of an agreement will govern the rights and liabilities of the parties, irrespective of the intent of the parties at the time they entered into the contract, unless the written language is not susceptible of a clear and definite understanding, or unless there is fraud, duress or mutual mistake. Ray v. William G. Eurice & Bros., 201 Md. 115, 93 A.2d 272. '* * * where there has been an integration of an agreement those who executed it will not be allowed to place their own interpretation on what it means or was intended to mean. The test in such case is objective and not subjective. * * * Williston * * * Sec. 94, page 294, says: 'It follows that the test of a true interpretation of an offer or acceptance is not what the party making it thought it meant or intended it to mean, but what a reasonable person in the position of the parties would have thought it meant." Ray v. William G. Eurice & Bros., supra, 201 Md. at page 127, 93 A.2d at page 279.'

See also Restatement, Contracts § 230 (1932).

In this case, Keyworth's deposition as to what he thought the phrase 'successful conclusion' of the litigation meant is not the test, nor does his interpretation cast doubt or create an ambiguity, if the language used is clear and definite. In Keyworth v. Israelson, supra, at 309, 214 A.2d at 179, we had occasion to construe the agreement in connection with our holding that, under it, the Employer had an equitable lien on the fund for the amount of its advances. We said that there was 'a clear indication that the parties to the agreement looked to the creation of a fund consisting of the proceeds of the verdict or settlement resulting from the third-party action; and that Plimack was to receive the proceeds and was to use them, in part, for the repayment of the advances made by the Employer. There was, in effect, not only a conditional promise by Keyworth to repay the Employer and to transfer property in payment of his debt but an implied contract to assign the fund resulting from the successful prosecution of his third-party action as security for his indebtedness. We think the agreement between the Employer and Keyworth, construed in the light of the facts and circumstances, meant that the source of the monies to be refunded would be the monies actually paid by the third-party defendants, Brown and Fleet Transfer Company, and that these monies were to be held as security for the repayment.'

On the undisputed facts, Keyworth, as a result of his litigation, received a total of $16,600. His out-of-pocket expenses and losses came to $10,361.55, but this total included $7,057.15 for loss in salary, which, while a proper item in his claim for damages, was more than covered by the $7200 which the Employer advanced him, on the basis of the salary he had been receiving. As the order of the equity court in connection with the distribution of the fund shows, even after the repayment to the Employer's workmen's compensation insurance carrier under its right of subrogation, the repayment of the $7200 to the Employer, and the payment of $5000 as counsel fee to Keyworth's attorneys, there was a residue for Keyworth of $686.82. Keyworth has consistently objected to the amount of the counsel fees, and, in the prior case, we remanded this question to the lower court for the...

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