King v. Travelers Ins. Co.

• Decision Date: 21 August 1987
• Citation: 513 So.2d 1023
• Parties: James W. KING v. The TRAVELERS INSURANCE COMPANY, et al. Mrs. James W. KING v. The TRAVELERS INSURANCE COMPANY, et al. 86-667, 86-668.
• Court: Alabama Supreme Court

Page 1023

513 So.2d 1023

James W. KING v. The TRAVELERS INSURANCE COMPANY, et al.

Mrs. James W. KING v. The TRAVELERS INSURANCE COMPANY, et al.

86-667, 86-668.

Supreme Court of Alabama.

Aug. 21, 1987.

Stanley E. Munsey, of Munsey & Ford, Tuscumbia, for appellants.

Robert L. Gonce, of Gonce, Young & Westbrook, Florence, for appellee The Travelers Insurance Co.

John S. Key and William L. Middleton, of Eyster, Key, Tubb, Weaver & Roth, Decatur, for individual coemployee defendants.

HOUSTON, Justice.

James W. King, who was an employee of Reynolds Metals Company, sustained injuries arising out of an accident that occurred while he was performing his job for Reynolds. King and his wife filed a suit (Case No. CV 85-09 in the Circuit Court of Colbert County, Alabama) against The Travelers Insurance Company, Inc., Reynolds's workmen's compensation carrier (alleging that Travelers had negligently and wantonly failed to properly perform inspection and safety engineering services it had undertaken to perform) and against eight of King's co-employees. The accident occurred on or about October 28, 1984. In Count One, King sought to recover for the following personal injuries:

"He was bruised, contused, lacerated, and made lame and sore. His legs and feet were broken. His back was injured. He was caused to suffer much pain and suffering. He was caused to be disabled. He was caused to lose time from his employment and to lose wages. He was caused to be rendered less employable. He was caused to incur great medical expense in and about the treatment of his injuries. He was disfigured and mamed, and he will suffer the same injuries in the future."

In Count Two, Mrs. King sought to recover for her loss of King's services and consortium. After responsive pleading by the defendants, the attorney of record for the Kings hand delivered a settlement offer to an attorney of record for some of the defendants, who had authority to negotiate a settlement for all of the defendants. These attorneys had been attempting to settle this entire case for several months. This offer was accepted by the attorney for the defendants 11 days after the offer was made. After the offer was accepted, the Kings decided that they did not want to settle for the amount negotiated by their attorney of record. The defendants filed a motion for entry of judgment pursuant to a settlement agreement of the parties, attaching the September 4, 1986, offer by the plaintiffs ¹ and the September 15, 1986, acceptance by the defendants. ²

The Kings filed a response to the motion for entry of judgment pursuant to the settlement agreement of the parties, which states in part as follows:

"Comes now the plaintiffs and respond to the defendants' Motion for Entry of Judgment as follows:

"Plaintiffs did make a written offer to the defendants to settle as demonstrated in defendants' Exhibit A, that being the letter from [their attorney] to Attorney [for defendants] dated September 4, 1986, however, the defendants rejected said offer and made a counter-offer that was very similar to the plaintiffs' offer except the up front money would be increased from $150,000.00 to $180,000.00 and the first five year annual payments of $12,000.00 would be eliminated...." (Emphasis added.)

The only issue before the trial court in regard to the defendants' motion for entry of judgment pursuant to the settlement agreement of the parties was whether the offer of September 4, 1986, had been rejected.

The trial court set the defendants' motion for hearing and heard ore tenus evidence from the parties, including testimony from the Kings' attorney and the defendants' attorney. On December 4, 1986, the trial court found that the parties entered into a binding contract, ratified the settlement agreement of the parties, and ordered the parties to comply therewith. Mr. King filed a motion to reconsider. The trial court entered an order stating that the court would not hear further testimony and was treating the motion to reconsider as a motion for new trial.

Thereafter, Mrs. King filed a motion pursuant to Rule 60, Ala.R.Civ.P., for a correction of the court's judgment. Mrs. King took the position that the judgment applied only to Mr. King. The trial court dismissed the entire case with prejudice as to all defendants in accordance with the settlement agreement of the parties. The Kings filed a motion to set aside this order dismissing the case. The trial court entered an order denying the Kings' motions for new trial and for reconsideration and specifically stated that its order of December 4, 1986, included and encompassed the claims of Mr. and Mrs. King. The Kings appeal. We affirm.

The evidence in regard to whether there was a rejection of the Kings' offer or a counter-offer made by the defendants was presented ore tenus to the trial court. Our standard of review where the trial court has heard ore tenus testimony is that we will presume that the trial court's judgment is correct and that it will be reversed only if the judgment is found to be plainly and palpably wrong after a consideration of all of the evidence and after making all inferences that can logically be made from the evidence. Robinson v. Hamilton, 496 So.2d 8 (Ala.1986). The evidence was in dispute in regard to whether there was a rejection or a counter-offer made in response to the Kings' offer. The attorney for the defendants who handled the "settlement" testified that there was no rejection or counter-offer, only an inquiry as to whether the plaintiffs would consider a structured settlement with a different payment arrangement. The trial court apparently believed that testimony; it found for the defendants and granted their motion for entry of judgment pursuant to the settlement agreement. This was not plainly and palpably wrong.

Mere inquiries or suggestions will not terminate an offer. 1 Williston on Contracts, § 79 at 263 (1957). In Jaybe Construction Co. v. Beco, Inc., 3 Conn.Cir.Ct. 406, 216 A.2d 208 (1965), it was noted that a mere inquiry as to whether one proposing a contract will alter or modify its terms does not amount to a rejection. See, also, 1 Corbin, Contracts, § 93, at 388-89 (1963), which states:

"Just as 'requests' and 'suggestions' do not turn an otherwise absolute acceptance into a conditional one, so too they do not constitute counter offers. One reason for this is that they are not themselves offers of any kind. The offeree writes: 'Is this your lowest price?' or 'If I doubled the amount, I suppose you would make the price lower', or 'You may send me 800 tons as offered by you, but I trust that you will make it 1200 tons at 68 shillings.' In these cases, there is no counter offer. In the first two there is a mere request for information as to possible lower prices, no power of acceptance being created in the original offeror. They do not affect power to accept the offer previously made. In the last case, there is a valid acceptance of the offer of 800 tons; and the contract thereby consummated is not affected by the fact that the acceptor makes an additional offer to buy 400 more tons at 68 s. if the seller will accept settlement at that rate for the first 800 tons also."

We have stated that agreements made in settlement of litigation are as binding on the parties as any other contracts. Brocato v. Brocato, 332 So.2d 722 (Ala.1976). Section 34-3-21, Code of Alabama 1975, as amended, vests in an attorney authority to bind his or her client in all matters that relate to the cause, including the right to settle all questions involved in the case. Such agreements are not only authorized, but encouraged, to promote justice and fair dealing and to terminate properly or prevent litigation. Brocato v. Brocato, supra. Under the proposed settlement agreement, all of Mr. King's past and future medical expenses necessitated by his injuries will be paid and, in addition, the Kings are guaranteed $660,000 to be paid over a 30-year period, with $150,000 being paid at the time of settlement. We cannot say that this settlement was unjust or unfair for 38-year-old Mr. King and his wife.

In the September 4 settlement offer, the following appeared: "Please try to respond to this offer by tomorrow." This does not set a time limit for when an acceptance must be made. Defendants' attorney did respond by telephone the next day, and there is substantial evidence in the record that the offer was never withdrawn and remained open until the defendants' letter of acceptance was delivered to the Kings' attorney on September 15.

Seven days after the offer was made, the Kings' attorney treated the offer as still being open, for on September 11 he told defendants' attorney that if the case was to be disposed of the defendants needed to do something about the offer. The Kings' attorney testified that his written offer was never withdrawn prior to the defendants' accepting it.

The trial court found that the offer and acceptance included Mrs. King and constituted a...