Krause v. Hartford Acc. & Indem. Co., 20

• Decision Date: 05 September 1951
• Docket Number: No. 20,20
• Citation: 49 N.W.2d 41,331 Mich. 19
• Parties: KRAUSE v. HARTFORD ACCIDENT & INDEMNITY CO.
• Court: Michigan Supreme Court

Page 41

49 N.W.2d 41

331 Mich. 19

KRAUSE v. HARTFORD ACCIDENT & INDEMNITY CO.

No. 20.

Supreme Court of Michigan.

Sept. 5, 1951.

Stanley S. Krause, in pro. per., Detroit, William J. Hamill, Detroit, of counsel.

Knight, Snider & Feikens, Detroit, for defendant and appellee.

Before the Entire Bench.

NORTH, Justice.

Plaintiff, a practicing attorney, on a contingent fee basis undertook to represent Leo Paquin and Mrs. Paquin in separate claims for damages alleged to have been suffered by them through the negligence of the driver of a motor vehicle which was covered as to liability for personal injury and property damage by a policy of insurance issued by the Hartford Accident and Indemnity Company to the owner of the vehicle. Herein we designate the defendant as the indemnity company.

Through an arrangement by plaintiff another attorney in January, 1949, brought suit in the Federal court for the eastern district of Michigan for Mrs. Paquin. Suit was not started for Mr. Paquin. As the case in Federal court was about to be reached for trial adjusters of the indemnity company, without knowledge of plaintiff, induced, according to plaintiff's claim, 'Leo Paquin and Bessie Paquin, his wife, to discharge plaintiff and and thereby break their contingent fee contract with him.' The Paquins, represented by another attorney subsequently retained, settled their damages for an agreed amount of $7,000. Plaintiff's contingent fee contract provided he should have 40% of any amount received in settlement, and 50% of any amount recovered if suit were brought. The indemnity company had notice and knowledge of the contingent fee contract with plaintiff; and evidently on that account caused $3,600 of the settlement money to be paid into court to be disposed of according to decision in a cross-bill of interpleader which the indemnity company had filed in a pending suit for an injunction brought by plaintiff herein in the circuit court in chancery in Wayne county, Michigan. In the equity suit plaintiff herein sought an injunction against the settlement of the damages alleged to have been suffered by Mr. and Mrs. Paquin 'for some amount grossly inadequate and for an amount which would reduce the value of plaintiff's lien to a mere fraction of its real worth * * *.' And plaintiff alleged that his lien on the amounts recoverable by the Paquins was 'reasonably worth $25,000.' The injunction suit was dismissed as to defendant herein. In the interpleader proceedings plaintiff filed a motion to have the funds paid to the clerk of the court turned over to plaintiff. Thereafter by stipulation of the interested parties the interpleader proceedings were dismissed, the $3,600 fund deposited in the court being disposed of as follows:

                'To Stanley S. Krause the sum of ................ $1530.00
                To Karl G. Eisele (the attorney retained by the Paquins) the sum of ............... 1350.00
                To Leo Paquin the sum of ..... 360.00
                To Bessie Paquin the sum of ... 360.00.'
                

Subsequent to dismissal of the injunction suit as to the indemnity company (March 29, 1950), but prior to the stipulated settlement of the interpleader proceedings (October 17, 1950), plaintiff by declaration instituted the instant suit against the indemnity company for damages in a substantial amount alleged to have been suffered by plaintiff as a result of defendant's adjusters having 'wilfully and maliciously' induced 'Leo Paquin and Bessie Paquin to break their contingent fee contract with this plaintiff.' The defendant appeared and on June 9, 1950, which was also prior to the stipulated settlement of the interpleader proceedings, moved to dismiss plaintiff's suit. This motion was heard and granted June 19, 1950. Subsequently the court heard and denied plaintiff's motion to set aside the order of dismissal. Plaintiff's appeal is from these two orders of the trial court.

As a ground in support of the order dismissing plaintiff's suit it is asserted in this Court by appellee that in the instant case plaintiff, by the acceptance of $1,530 incident to the stipulated settlement in the interpleader proceedings to which sum plaintiff asserted his right under his contingent fee contract, elected to assert a contractual right incident to which his remedy was in assumpsit based on his contingent fee contract; and by having done so plaintiff waived his right to proceed with his present suit in tort and thereby obtain relief, notwithstanding this suit was started prior to plaintiff's acceptance of the $1,530 in settlement of the interpleader proceedings.

Under the circumstances of the instant case, we are in accord with appellee's contention. The parties agree that notwithstanding plaintiff's contingent fee contract, Mr. and Mrs. Paquin had a right to settle their claims for damages sustained incident to the automobile accident. See Nichols v. Waters, 201 Mich. 27, 167 N.W. 1. On the basis of the settlement made plaintiff by stipulation received $1,530 in the interpleader proceedings as an amount due him under his contingent fee contract. Plaintiff thereafter could not successfully prosecute a tort action against either Mr. or Mrs. Paquin or against the defendant herein for damages which he alleges he suffered in consequence of a breach by Mr. or Mrs. Paquin of their contingent fee contract with plaintiff. Otherwise plaintiff in collecting the amount he asserts is his due under the contingent fee contract would be permitted to resort to two inconsistent remedies, one in assumpsit and the other in tort. Under the settled law in this jurisdcition resort to two inconsistent remedies is not permissible.

'Where there is an alternative right of recourse to an action based on the theory of a tort committed against the plaintiff and one based on the theory of a right of recovery upon contract or implied contract, the plaintiff by suing on either theory, elects against adopting the other.' Callaghan's Michigan Pleading and Practice, Vol 1, § 9.10, p. 217.

Our holding in Hassberger v. General Builders' Supply Co., 213 Mich. 489, 182 N.W. 27, is in accord with the prove quoted statement of law.

'Purchaser's claim that seller of corporate stock premised to purchase it back is inconsistent with claim that he induced said purchase by fraud, and therefore purchaser could not recover on both theories.' Beverly v. Richards (syllabus), 255 Mich. 508, 238 N.W. 270. See, also, Monroe v. Hoffman, 276 Mich. 281, 267 N.W. 836.

We decline to act in accord with appellant's contention, that since plaintiff did not receive the $1,530 in settlement of the interpleader proceedings until after the trial court had granted defendant's motion to dismiss, therefore this Court in reviewing the trial court's order may not consider plaintiff's acceptance of payment out of the fund deposited in court incident to the cross-bill of interpleader filed in the equity suit brought by plaintiff herein against the Paquins and the defendant indemnity company. To so proceed would only open the door for renewal of the motion to dismiss on the basis of present undisputed facts and result in unnecessary additional proceedings in the instant case. On the record before us we conclude that the order of dismissal entered in the circuit court should be affirmed.

But entirely apart from the foregoing, we think the trial judge reached the right conclusion for reasons about to be noted. In passing upon the trial court's dismissing plaintiff's suit, all properly pleaded facts alleged in plaintiff's declaration must be accepted as true. Cell v. Yale & Towne Mfg. Co., 281 Mich. 564, 275 N.W. 250; Greater Muskegon Club Bldg., Inc. v. Commons, 321 Mich. 371, 32 N.W.2d 484. Hence in this case the...