Leiken v. Wilson

• Decision Date: 03 June 1982
• Docket Number: No. 80-376.,80-376.
• Citation: 445 A.2d 993
• Parties: Lawrence S. LEIKEN, Appellant, v. Marie N. WILSON and Otmous Wingate, Jr., Appellees.
• Court: D.C. Court of Appeals

445 A.2d 993

Lawrence S. LEIKEN, Appellant, v. Marie N. WILSON and Otmous Wingate, Jr., Appellees.

No. 80-376.

District of Columbia Court of Appeals.

Submitted March 25, 1981.

Decided June 3, 1982.

COPYRIGHT MATERIAL OMITTED

Lawrence S. Leiken pro se.

No brief was filed by appellees.

Before KELLY and FERREN, Associate Judges, and PAIR, Associate Judge, Retired.

FERREN, Associate Judge:

We granted this appeal from a decision of the Small Claims Branch because it presents two significant issues that are likely to recur in the administration of small claims as well as elsewhere in the Civil Division: (1) Did the trial court err in vacating a consent judgment (based on a settlement agreement) against appellee Wingate, the driver of an automobile that collided with appellant's parked car? (2) Did the court properly rule that appellees Wingate and Wilson (the car owner) were not liable for negligence since neither of them knew, or reasonably could have known, that the brakes were defective and violated local traffic regulations?

As to the first question, we conclude that the court did err in vacating the judgment because, in finding the settlement agreement unconscionable, the court misinterpreted its terms. Appellee Wingate accordingly is bound to pay appellant $490.

As to the second issue, which as a consequence of our first ruling pertains only to appellee Wilson, we decide as follows: Once appellant proved that appellees' faulty brakes violated traffic regulations enacted to protect against injury from uncontrolled vehicles and proved, further, that this violation proximately caused the damage, appellant thereby presumptively established negligence. Consequently, appellee Wilson (who was not party to the settlement agreement) could avoid liability only if she rebutted this presumption with competent evidence tending to prove that neither she nor Wingate knew, or reasonably could have known, the brakes were defective. We conclude that the trial court's ruling for appellees is consistent with the application of this standard and is supported by the evidence.

Accordingly, we reverse and remand for reinstatement of the settlement agreement as to Wingate but affirm the judgment in favor of Wilson.¹

I.

On September 19, 1979, a car driven by appellee Otmous Wingate, Jr. and owned by his fiancee, appellee Marie N. Wilson, collided with a parked car owned by appellant Lawrence S. Leiken. A week later, appellant filed a complaint in the Small Claims Branch seeking damages of $750. See D.C. Code 1973, §§ 11-1321, 16-3902. Because Wilson failed to appear for trial on October 9, 1979, the court entered a default against her. See D.C.Code 1973, §§ 16-3902(f), -3906(c); Super.Ct.Civ.R. 55(b)(2); Super. Ct.Sm.Cl.R. 2. Appellee Wingate did appear, however, and, with the aid of a law student conciliator, made the following settlement agreement with appellant:

The Clerk of the Court will dismiss this case as settled, pursuant to the following agreement. Plaintiff agrees to amend his complaint to $490.00, representing actual damages of $440.00 and inconvenience of $50.00. Defendant Wingate agrees to pay Plaintiff $90.00 on or before October 29, and $80.00 each month on the 15th beginning in November and until the balance is paid off. If all terms of this agreement are complied with Plaintiff agrees to vacate default judgment against Marie Wilson. Should Defendant miss a payment, Plaintiff will be entitled to a judgment for the remaining balance, plus costs and will be able to act on default judgment against Marie Wilson for damages alleged in the initial complaint.

The trial judge, Dyer Justice Taylor, entered judgment in accordance with the terms of this agreement. See D.C.Code 1973, §§ 11-1322, 16-3906(a); Super.Ct. Concil.R. 1-4.

After making two payments, Wingate defaulted. Appellant therefore pursued the matter once again in court, before Judge Bowers, requesting to put on ex parte proof of damages. See D.C.Code 1973, § 16-3902(f). Appellee Wilson moved to vacate her default. See Super.Ct.Civ.R. 55(c); Super.CtSm.CI.R. 2. At a hearing on April 9, 1980, the court vacated, over objection, the entry of default and granted Wilson a trial on the merits. Also over objection, the trial court on its own motion set aside appellant's settlement agreement with Wingate on the ground it was unconscionable.

After a joint trial later the same day, the court held that appellant had failed to prove negligence and entered judgment in appellees' favor. This court granted appellant's timely application for allowance of appeal. Sec Karath v. Generalis, D.C.App., 277 A.2d 650, 651 (1971); D.C.Code 1973, § 11-721(c); D.C.App.R. 6.

II.

Appellant first contends that the trial court erred in declaring unlawful his settlement agreement with Wingate. We agree that the court misconstrued the agreement and thus should not have set aside the judgment.

After vacating Wilson's default and granting her a trial on the merits, the trial court, on its own initiative, "carefully scrutinized the settlement" between appellant and Wingate, who were "not . . . represented by counsel." The court concluded that the agreement was "unconscionable and should not be enforced" because it potentially allowed appellant a double recovery and because it was "confusing and unfair." The court then set the case for trial as to both appellees.

If we assume that the Small Claims Branch has the power to set aside a consent judgment² on its own motion³ and that "unfairness" may provide a basis for relief when the parties are not represented by counsel,⁴ we must determine whether the trial court abused its discretion in setting aside the judgment here. See Western Union Telegraph Co. v. Dismang, 106 F.2d 362, 364 (10th Cir. 1939); cf. Union Storage Co. v. Knight, D.C.App., 400 A.2d 316, 318 (1979) (per curiam) (review of trial court's refusal to vacate a judgment).

Conciliation efforts in the Small Claims Branch are mandatory, and settlements are strongly favored. Potomac Small Loan Co. v. Myles, D.C.Mun.App., 34 A.2d 609, 611-12 (1943). See. D.C.Code 1973, §§ 11-1322, 16-3906(a);⁵ Super.Ct. Concil.R. 1-4. The parties entered into their agreement with the aid of a law student conciliator through the statutorily prescribed procedure, and the court approved entry of judgment according to the agreement. Wingate made payments under the agreement and never requested relief from its terms. In view of this Small Claims settlement policy, as well as the fact that the parties found settlement desirable and possible, we put our analysis in perspective by emphasizing the interpretive rule that when a contract is fairly open to two constructions, one of which makes it lawful while the other renders it unlawful, the former should be adopted. Hobbs v. McLean, 117 U.S. 567, 576, 6 S.Ct. 870, 874, 29 L.Ed. 940 (1886); Manning v. Ellicott, 9 App.D.C. 71, 81 (1896). Cf. Keystone Fuel Oil Co. v. Del-way Petroleum, Inc., 364 A.2d 826, 829 (Del.Super.Ct.1976) (court analyzing Rule 60(b) motion to vacate consent judgment).⁶

The trial court found the agreement "unconscionable" for two reasons:

[I]t potentially allows plaintiff a double recovery. The final line of the praecipe provides that if defendant Wingate misses a payment, plaintiff will be entitled to a judgment in the amount of the remaining balance and "will be able to act on default judgment against Marie Wilson for damages alleged in the initial complaint," i.e., $750.00. The Court interprets this to mean that under the terms of the agreement, plaintiff will be able to execute on the judgment against Wilson in the amount of $750.00 and, at the same time, keep what he has collected from Wingate and pursue the judgment for the remaining balance against Wingate. . . .

[T]he penultimate line of the praecipe [is] equally confusing and unfair. Under that provision, if Wingate makes all the payments agreed upon, the result is merely that the default against defendant Wilson would be vacated. Plaintiff's claim against Wilson could then, presumably, be scheduled for trial.

Viewing the agreement in its entirety, we conclude that the penultimate provision of the agreement (which the trial court referred to second) is a release or covenant not to proceed against Wilson, unless Wingate fails to observe the agreement.⁷ It cannot fairly be construed to mean that once Wingate fulfills his bargain, appellant is free to seek a second recovery against Wilson, subject only to trial in lieu of default. The trial court's interpretation is erroneous as a matter of law.⁸

The final provision of the agreement (which the trial court referred to first) states: "Should Defendant miss a payment, Plaintiff will be entitled to a judgment for the remaining balance, plus costs and will be able to act on default judgment against Marie Wilson for damages alleged in the initial complaint." The trial court interpreted this provision to mean that if Wingate fails to pay, appellant can keep all sums paid by Wingate, proceed against him for the balance due on the agreed $490, and, at the same time, obtain the full judgment of $750 against Wilson. According to this reading, Wingate could collect more than the $750 in damages he alleged in his initial complaint.

Although the language of the agreement is literally consistent with the trial court's construction, such a result would be inconsistent with general principles of tort law. If two or more tortfeasors produce a single injury, the plaintiff may sue each one for the full amount of the damage and hold the defendants severally liable; but the plaintiff can obtain only a single recovery, and each defendant will be entitled to a credit for any sum that the plaintiff has collected from the other defendant. McKenna v. Austin, 77 U.S.App. D.C. 228, 233, 134 F.2d 659, 664 (1943); W. Prosser, Handbook of the Law of Torts § 49 (4th ed. 1971). It is unlikely that appellant and Wingate intended an agreement in...