McDonnell v. Ford Motor Co.

• Decision Date: 30 June 1994
• Citation: 434 Pa.Super. 439,643 A.2d 1102
• Parties: Mary T. McDONNELL, individually and as Administratrix of the Estate of David J. McDonnell, deceased, and David J. McDonnell, Jr., Appellees, v. FORD MOTOR COMPANY and Springfield Ford, Inc. Appeal of SPRINGFIELD FORD, INC.
• Court: Pennsylvania Superior Court

Page 1102

643 A.2d 1102

434 Pa.Super. 439

Mary T. McDONNELL, individually and as Administratrix of the Estate of David J. McDonnell, deceased, and David J. McDonnell, Jr., Appellees, v. FORD MOTOR COMPANY and Springfield Ford, Inc Appeal of SPRINGFIELD FORD, INC.

Superior Court of Pennsylvania.

Argued Jan. 20, 1994.

Filed June 30, 1994.

Robert M. Britton, Philadelphia, for appellant.

Robert E. Slota, Bryn Mawr, for McDonnell, appellee.

Before WIEAND, HUDOCK and SAYLOR, JJ.

HUDOCK, Judge:

This is an appeal by Springfield Ford, Inc. (Appellant) from an order entered by the Court of Common Pleas of Philadelphia County approving a settlement agreement between Appellant and Mary T. McDonnell, individually, and as Administratrix of the Estate of David J. McDonnell, deceased, and David J. McDonnell, Jr. (Appellees). For the reasons which follow, we vacate the order and remand for proceedings consistent with this opinion.

The relevant facts and procedural history are ably summarized by the trial court as follows:

[Appellees] filed suit against defendants Ford Motor Company and [Appellant] for damages in the death of David McDonnell, Sr., and injuries to David McDonnell, Jr., resulting from a motor vehicle accident which occurred on July 25, 1984.

[Appellees] and [Appellant] began settlement negotiations in 1991. These negotiations included a private mediation by Judith P. Meyer on April 7, 1992, which was arranged and paid for by [Appellant].

On June 10, 1992, [Appellant] made a settlement offer of $350,000 to [Appellees]. On August 24, 1992, [Appellees] made a demand for an additional $50,000.

Counsel for [Appellees] and [Appellant] orally settled the case on September 18, 1992, for $350,000 on a joint tortfeasor basis. This was confirmed in a letter dated September 23, 1992. Both parties then executed a Joint Tortfeasor Release on October 12, 1992.

On October 21, 1992, [Appellees] filed a Petition with the Court seeking Leave To Compromise Wrongful Death And Survival Action with [Appellant] and requesting that [Appellant] be dismissed. [Appellant] then filed an Answer to the Petition which opposed the approval of the settlement.

On November 9, 1992, [Appellant] filed a Petition To Rescind Or Vacate Settlement Agreement And Release.

On February 25, 1993, [Appellees] filed a Petition For Approval Of Settlement Between [Appellees] And [Appellant].

On May 4, 1993, after due consideration of [Appellant's] Petition To Rescind, [Appellees'] Petition For Approval, and the opposing parties' responses to both motions, this Court granted [Appellees'] Petition For Approval Of Settlement Between [Appellees] And [Appellant].

On May 27, 1993, [Appellant] filed a Petition For Reconsideration.

On June 1, 1993, [Appellant] filed Notice of Appeal to the Superior Court.

Trial Court Opinion, 9/14/93, at pp. 1-2. As directed by the court, Appellant filed a statement of matters complained of on appeal. The trial court's 1925(a) opinion followed. See Pa.R.A.P.1925, 42 Pa.C.S.

On appeal, Appellant presents the following issues for review:

1. Whether the trial court erred in approving the settlement and directing [Appellant] to pay to [Appellees] forthwith the settlement amount despite the evidence of mutual mistake of fact and fraud raised in [Appellant's] Petition to Vacate or Rescind the Settlement Agreement.

2. Whether the trial court erred in denying the Petition to Vacate or Rescind the Settlement Agreement without first conducting an evidentiary hearing on the factual issues raised in the Petition.

Appellant's Brief at p. 3.

Appellant, in support of its first issue, argues that mutual mistake existed as to the terms of the settlement agreement and, as such, the agreement should be rescinded, or, in the alternative, that Appellant was induced by fraud to enter the agreement and that rescission should result. Specifically, Appellant contends that crucial to its entering the settlement agreement was the fact that Appellees had identified Carl Thelin, P.E., as their sole liability expert, and that Mr. Thelin had produced a report stating that improper maintenance and service of the subject vehicle by Appellant was the cause of the accident at issue. Appellant contends that it was primarily as a result of this report that its insurance carrier decided to settle the case. Appellant further alleges that Appellees' counsel knew or should have known at the time of the settlement agreement that Mr. Thelin, after an inspection of the vehicle on March 12, 1992, and review of the depositions by Appellant's employees, had changed his opinion and was issuing a separate report as to causation, namely that defective design or manufacture of the van's steering and suspension system were solely responsible for the loss of control of the vehicle in question. Appellant concludes that this modification of the expert's report amounts to mutual mistake of a material fact or, in the event Appellees or their counsel were aware of the revised opinion prior to execution of the settlement agreement, that the agreement was entered pursuant to fraudulent representations. Appellees counter that Appellant's allegations of fraud and mutual mistake are, in fact, unsubstantiated claims used by Appellant, as a disgruntled party, to avoid the settlement agreement. Appellees also contend Appellant's assertions are mischaracterizations of the facts. Appellees further allege that Appellant was aware that their theories of liability would change subsequent to settlement with Appellant. In addition, Appellees assert that they were not aware of Mr. Thelin's change of opinion until after final execution of the settlement agreement.

The record indicates that Appellees' expert issued a report, dated January 4, 1991, which concluded:

It is our technical opinion, based on the evidence available to us, that defective design or manufacture of this van's steering and suspension system, or negligent service and maintenance by Springfield Ford are responsible for the loss of control that lead to the death of Mr[.] McDonnell, Sr.

Report of Carl F. Thelin, P.E., 1/4/91, at p. 1. The evidence Mr. Thelin had available for analysis included: (1) a copy of the Pennsylvania State Police accident report; (2) color photographs of the scene of the collision, taken by the police; (3) black and white photographs of the scene of the collision; (4) the depositions of David McDonnell, Jr.; (5) the deposition of Trooper Reidenbach, who investigated the accident; (6) the deposition of Mr. and Mrs. Rozich, eyewitnesses to the collision; (7) portions of the service shop manuals for the 1983 Ford light truck front suspension and steering systems; (8) copies of the purchase order and service work order documents for the subject vehicle; (9) copies of selected pages of the owner's manual for the subject vehicle; and (10) copies of pages from a booklet that contains service specifications for the 1983 F-100--F-350 Ford light trucks. See Report of Carl F. Thelin, P.E., 1/4/91, at pp. 1-2. On October 9, 1992, subsequent to the settlement agreement (September 18, 1992) but prior to the execution of the formal agreement and the joint tortfeasor release (October 12, 1992), Mr. Thelin revised his report as follows:

It is our technical opinion, based on the evidence available to us, that defective design or manufacture of this van's steering and suspension system are responsible for the loss of control that lead to the death of Mr[.] McDonnell, Sr.

* * * * * *

Because the van was only eleven months old, had been driven less than 20,000 miles, and had been serviced exclusively by Springfield Ford, and accepting the accuracy of the statements by David McDonnell, Jr., and the many eyewitnesses, the defects in the controllability and stability can only be attributable to a design and/or a manufacturing defect.

[Please note that in the original report, the above underlined word: manufacturing had been maintenance. That was not consistent with the paragraph, CONCLUSIONS. Now that I have had the opportunity to inspect the wrecked van and to review the transcripts of the depositions of the people from Springfield Ford, I believe that there is no evidence of their failure to adequately maintain this vehicle.]

Report of Carl E. Thelin, P.E., 10/9/92, at pp. 1, 4 (emphasis in original). In addition to the above listed materials used in reaching his January 4, 1992, conclusion, Mr. Thelin had available to him copies of the depositions of personnel from the Appellant's dealership and he had conducted a personal inspection of the vehicle on March 30, 1992. See Report of Carl E. Thelin, 10/9/92, at p. 2.

The trial court, based on this evidence and the petitions of the parties, found that Appellant had proven neither fraud nor mutual mistake. The court reasoned that Appellant had failed to prove that there had been a fraudulent misrepresentation or, in the event there had been a misrepresentation, that Appellant had justifiably relied on the...