Perry v. Johnson

• Decision Date: 05 June 1973
• Docket Number: No. 188-71,188-71
• Citation: 131 Vt. 350,306 A.2d 680
• Court: Vermont Supreme Court
• Parties: Carlyle D. PERRY v. David S. JOHNSON.

Page 680

306 A.2d 680

131 Vt. 350

Carlyle D. PERRY v. David S. JOHNSON.

No. 188-71.

Supreme Court of Vermont.

June 5, 1973.

Reargument Denied July 11, 1973.

McNamara, Fitzpatrick, Sylvester, Farrell & Maley, Burlington, for plaintiff.

Richard E. Davis, Associates, Barre, for defendant.

Before SHANGRAW, C. J., and BARNEY, SMITH, KEYSER and DALEY, JJ.

SHANGRAW, Chief Justice.

This is suit seeking damages for personal injuries and expenses resulting from an automobile accident which occurred in East Montpelier, Vermont, on December 11, 1964. Suit was commenced by the plaintiff on November 20, 1968, by a writ returnable to the Washington County Court. Following pleadings by the parties, on May 25, 1971, the court below separated the issues and heard the issue raised by defendant's plea of the statute of limitations, 12 V.S.A. § 512, and plaintiff's plea and contention that the defendant was estopped from claiming the benefit of the statute.

Lengthy findings of fact were made June 8, 1971. The court held that the defendant and his insurer, Peerless Insurance Company, were estopped from claiming the benefit of the statute of limitations. Defendant's motion to dismiss the action based on the statute was dismissed. Defendant sought permission to appeal from thig ruling by the court which was denied. The case was heard thereafter by the court on the question of damages and judgment entered on November 22, 1971, in favor of the plaintiff to recover damages of $50,000.00. Defendant has appealed to this Court for review.

No claim is made in this Court as to the absence of liability on the part of the defendant nor the propriety of damages awarded. The suit in question was brought nearly four years after the date of the accident. The statute, 12 V.S.A. § 512, upon which defendant relies provides that actions of the character such as here, shall be commenced within three years after the cause of action accrues. The decisive question for review is whether or not the record supports the plaintiff's claim that the defendant is estopped from invoking the statute of limitations as a defense to this action.

As a result of the hearing held by the trial court on May 25, 1971, on the issue as to whether or not the defendant was estopped from claiming the benefit of the statute of limitations, findings of fact were made. These findings reveal the following.

The accident occurred on December 11, 1964 and as a result thereof the plaintiff was injured, hospitalized, incurred medical bills and loss of wages. At the time of the accident plaintiff was on the business of his employer, Texas Pyrofax Gas Company. The Continental Insurance Company of New York was the workmen's compensation insurer of plaintiff's employer and paid the plaintiff sums amounting to $20,507.90. This was paid to plaintiff's attorney, Fletcher Joslin, which matter was concluded on August 30, 1967.

The defendant was insured for liability coverage by the Peerless Insurance Company. Under the policy the total limit of coverage in this accident was $10,000.00.

Pursuant to the Workmen's Compensation Laws of the State of Vermont, 21 V.S.A. § 624, the Continental Insurance Company is subrogated to the plaintiff's rights against the defendant to the extent of its payment to plaintiff.

Philip H. Butterfield, Jr., ciams manager of Continental Insurance Company, and G. W. Carruth, claims adjuster for the Peerless Insurance Company, were in correspondence with each other concerning the matter in dispute on September 12, 1966, and again on September 29, 1967.

On October 9, 1967, Mr. Carruth wrote to Mr. Butterfield stating that upon releases being signed by the plaintiff and the Continental Insurance Company, Peerless Insurance Company would forward a draft to Continental for Ten Thousand Dollars ($10,000.00).

Subsequent to October 9, 1967, Mr. Butterfield and plaintiff's attorney, Fletcher Joslin, attempted to secure signed releases from the plaintiff but never obtained the same.

The statute of limitations, as far as this particular accident was concerned, expired at midnight on December 10, 1967. Mr. Carruth contacted attorney Joslin on January 8, 1968, again on March 12, 1968, and also on April 25, 1968, in an attempt to obtain the releases. The releases were not received and on July 22, 1968, Mr. Carruth wrote to his home office indicating that the statute of limitations had expired and inquired as to whether or not payment should be made as agreed without lobtaining the release from the plaintiff.

Thereafter, on August 14, 1968, Peerless Insurance Company, in a letter from Mr. Carruth to Mr. Butterfield, denied liability by reason of the statute of limitations. This was reiterated in a letter dated October 14, 1968. Between these dates, on September 10, 1968, Peerless requested further information from Continental and stated 'We will be in touch with you.'

By finding 18 the court determined that neither the Peerless Insurance Company nor the defendant ever affirmatively told the Continental Insurance Company or the plaintiff that they would waive the statute of limitations, and no one conversed about this statute until the above referred to letter of August 14, 1968, from Mr. Carruth Mr. Butterfield, in which Peerless Insurance Company denied liability by virtue of the statute.

The findings conclude by stating:

'19. That the Peerless Insurance Company by the conduct of its claim agent, C. W. Carruth, both by correspondence and telephone contacts with Continental Insurance Company and with Attorney Fletcher Joslin, indicated at all times from October 9, 1967 to August 14th, 1968 that they would be willing to settle said claim and forward a draft of Ten Thousand Dollars ($10,000).

20. That the Peerless Insurance Company by representing that they would settle said claim for Ten Thousand Dollars ($10,000) as aforesaid induced the Plaintiff and/or the Continental Insurance Company to forbear bringing suit.

21. That the Peerless Insurance Company on the grounds of public policy, fair dealing, good faith, and in justice, and to prevent an inequitable result, and also, the Defendant, is now estopped from claiming the benefit of the Statute of Limitations, MacLaughlin v. Blake, 120 Vt. 174, 177 (136 A.2d 492); Caledonia Sand & Gravel Company v. Campbell (128 Vt. 182), 260 Atlantic 2nd, 221, 223-4.'

The instant case requires this Court once more to consider the effect of the expiration of a statute of limitations during a period of negotiations in an attempt to settle a potential law suit. This problem has recently been considered on two occasions in the cases of McLaughlin v. Blake, 120 Vt. 174, 136 A.2d 492 (1957); and Caledonia Sand & Gravel Company v. Campbell, 128 Vt. 182, 260 A.2d 221 (1969).

In the McLaughlin case, supra, cited by the trial court in finding 21, the factual situation is dissimilar to the case at bar. In that case plaintiff brought a tort action against the defendant alleging negligence on defendant's part. Plaintiff sustained injuries and permitted the statute of limitations to run out during negotiations. Plaintiff was told by the defendant's insurer that there was no question about the liability of the defendant and requested the plaintiff to defer bringing suit in order that the extent of plaintiff's injuries might better be determined for a compromise settlement. At page 180 of 120 Vt., at page 496 of 136 A.2d of the McLaughlin case, supra, this Court stated 'An estoppel is effective only so long as the plaintiff reasonably relies upon the defendant's representations as an excuse for not instituting the action.'

The test adopted by this Court in McLaughlin v. Blake, supra, 120 Vt. at 179, 136 A.2d at 496 is: '(W)hether in all the circumstances of the case, conscience and duty of honest dealing should deny one the right to repudiate the consequences of his representations or conduct; whether the author of a proximate cause may justly repudiate its natural and reasonably anticipated effect.'

In Caledonia Sand & Gravel v. Campbell, supra, also cited in paragraph 21 of the lower courts findings of fact, this Court refused to apply the doctrine of estoppel against a defendant in an automobile property damage case. There, the defendant's adjuster refused to settle the property damage claim of Caledonia Sand & Gravel until a personal injury claim in favor of its president, A. Douglas Wood, had been settled. The personal injury negotiations broke down and suit was commenced within the period of the statute by Mr. Wood. Plaintiff's property damage case was permitted to flounder and suit was not instituted until after the expiration of the statute of limitations.

In Caledonia Sand & Gravel v. Campbell, supra, Justice Keyser speaking for the Court made the following statement at page 185 of 128 Vt., at page 223 of 260 A.2d of the opinion:

'The doctrine of estoppel is based upon the grounds of public policy, fair dealing, good faith, and justice, and its purpose is to forbid one to speak against his own act, representations, or commitments to the injury of one to whom they were directed and who reasonably relied thereon. 28 Am.Jur.2d, Estoppel and Waiver, § 28. Such party is under the duty to exercise reasonable care and diligence. In the absence of either a promise or any misrepresentation or concealment of a fraudulent character, there cannot be an equitable...