Sanders v. Cole Mun. Finance, No. 3-185A24

Docket NºNo. 3-185A24
Citation489 N.E.2d 117
Case DateFebruary 24, 1986
CourtCourt of Appeals of Indiana

Page 117

489 N.E.2d 117
Albert SANDERS and Eleanore Sanders, Appellants (Plaintiffs Below),
v.
COLE MUNICIPAL FINANCE, et al., Appellees (Defendants Below).
No. 3-185A24.
Court of Appeals of Indiana,
Third District.
Feb. 24, 1986.

Page 119

Albert C. Hand, William H. Walden, Hand, Muenich & Wilk, Highland, Terrence L. Smith, East Chicago, for appellants (plaintiffs below).

Joseph Stalmack, Galvin, Stalmack, Kirschner & Clark, Hammond, for appellees (defendants below).

HOFFMAN, Judge.

Appellants Albert Sanders (Sanders) and his wife, Eleanore (Mrs. Sanders), brought suit against multiple defendants for damages attributable to injuries received by Sanders while he was employed at Youngstown Sheet and Tube Company. The injuries occurred when a section of a dust receptacle dropped through the roof and onto the floor of Sanders' work area. Dust engulfed the area and Sanders, unable to get his breath, began to run blindly trying to find fresh air. Sanders thought he was moving toward a railed area of his work area but instead fell into an open slag pit, dropping 30 to 40 feet. As a result of the fall, Sanders suffered multiple injuries alleged to result in permanent conditions of complete paralysis of his lower body and partial paralysis of his upper body. In addition to Sanders' injuries, Mrs. Sanders sued for loss of society, companionship and consortium and loss of benefit of Sanders' earnings, income and services. The couple sought $1,040,000.00 for Sanders and $300,000.00 for Mrs. Sanders.

Prior to trial, plaintiffs entered into agreements with all defendants except appellee Cole. These agreements were in the form of covenants not to sue or execute except for one which was a loan receipt agreement. No one challenges this characterization of the documents involved. All documents reserved the rights of the plaintiffs to proceed against co-defendants.

After a trial to a jury, a verdict was returned in favor of appellants in the amount of $320,000.00. The trial court thereafter credited the amount appellants had received for the covenants not to sue or execute against the $320,000.00. The appellants having received more than the verdict amount of $320,000.00 according to these calculations, the trial court entered an order of judgment for the appellee Cole. From this action, this appeal was taken.

Appellants present three issues for review, which are as restated:

(1) the trial court erred in granting appellee's alternative motion for pro-

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tanto discharge or for conforming the pleadings to the evidence;

(2) the trial court erred in denying appellants' motion for a new trial subject to additur or for a judgment for an amount greater than the verdict; and

(3) the trial court erred in entering judgment for Cole. 1

Appellants allege the trial court erred in granting appellee's motion for pro-tanto discharge. Through the discharge, the appellants assert the court has failed to give effect to the express terms of the covenants not to sue or execute which were intended to be only a partial satisfaction of their claims.

The law as to the options of a plaintiff are well settled and set out in N.I.P.S. Co. v. Otis (1969), 145 Ind.App. 159, 179, 250 N.E.2d 378, 392, reh. denied, trans. denied (NIPSCO):

"It is elementary the Appellee-Plaintiff could have chosen to sue only one of the two defendants. She could also have been chosen to levy execution on a judgment against either tortfeasor and received full satisfaction thereof against either provided she received only one full satisfaction. She could have received part satisfaction from one tortfeasor in consideration for a covenant not to execute and proceeded for the balance of the judgment against the remaining tortfeasor. Likewise, she could have executed a covenant not to sue as to one potential joint tortfeasor and proceeded against the other. Black v. Marsh, 31 Ind.App. 53, 67 N.E. 201 (1903); Parry Mfg. Co. v. Crull, 56 Ind.App. 77, 101 N.E. 756 (1913); Bedwell v. DeBolt, 221 Ind. 600, 50 N.E.2d 875 (1943); Cleveland, C.C. and St.L.Ry. Co. v. Gossett, 172 Ind. 525, 87 N.E. 723 (1909)."

Entering into an agreement of one kind or another is simply the statement of the choice as to which tortfeasors to proceed against. Cooper v. Robert Hall Clothes, Inc. (1979), 271 Ind. 63, 390 N.E.2d 155, 157. In determining the correct characterization of the agreement, the intention of the parties to the transaction is relevant. Klukas v. Yount (1951), 121 Ind.App. 160, 165, 98 N.E.2d 227. However, once the type of transaction is identified, the effect is established by law.

If the agreement is a covenant not to sue and the co-defendants are jointly and severally liable, the funds received by the plaintiff for a covenant not to sue with any defendant must be credited pro-tanto against any judgment against any co-defendant. The principle behind this credit is that the injured party is entitled to only one satisfaction for a single injury and the payment by one joint tortfeasor inures to the benefit of all. Bedwell v. DeBolt (1943), 221 Ind. 600, 50 N.E.2d 875; Scott v. Krueger et al. (1972), 151 Ind.App. 479, 280 N.E.2d 336, trans. denied; Parry Mfg. Co. v. Crull (1913), 56 Ind.App. 77, 101 N.E. 756, trans denied (1914).

If the agreement is found to be a loan receipt agreement, the funds received by the plaintiff are not to be credited against a subsequent judgment. These funds are not a partial payment of a judgment but provide the injured party with needed funds while litigation is pending and are subject to repayment. Duke's GMC, Inc. v. Erskine (1983), Ind.App., 447 N.E.2d 1118, trans. denied.

If the agreement is a covenant not to execute, the funds received for the agreement are credited as a partial satisfaction of the judgment, NIPSCO, supra. Otherwise the covenant not to execute is not relevant until the injured party tries to collect the judgment and it may then be used as a defense to collection. Barker v. Summey (N.D.Ind.1960) 185 F.Supp. 298.

In the present case, all the agreements were found to be covenants not to sue or execute except one which was found to be a loan receipt agreement. The agreements

Page 121

were not found to foreclose appellants' rights to proceed against the other co-defendants as is evidenced by this proceeding. Thus the intention of the parties to reserve their rights against the non-agreeing co-defendants has been given effect. However, in the absence of a total release of all tortfeasors in the agreement, whether the funds received are a partial or total satisfaction is determined by simply applying the amount received against the amount of the verdict rendered. Scott v. Krueger, supra, 280 N.E.2d at 357.

Appellants argue this result of reducing the judgment recoverable against the non-agreeing co-defendant is unfair to the settling co-defendants. However, the co-defendants cannot enforce contribution and are each liable for the entire amount of damages. Therefore none of the co-defendants has a legal right to complain. Parry Mfg. Co. v. Crull, supra.

Appellants also argue that the credits against the amount of the verdict were in error because the funds were received in settlement of independent rather than joint acts of negligence. Although the various co-defendants may have in fact engaged in separate and independent acts of negligence, the appellants have sustained but one injury. Where separate and independent acts of negligence combine to cause a single injury, the injured party is entitled to only one satisfaction. Westfield Gas and Milling Company v. Abernathy (1893), 8 Ind.App. 73, 35 N.E. 399. Even though each co-defendant's separate and independent act alone did not cause the injury, the acts have united to cause an injury and each tortfeasor is jointly and severally liable. The injured party may obtain several judgments against the different defendants but is still entitled to but one recompense for the single injury. Brown v. Kemp, Admx. (1919), 71 Ind.App. 281, 124 N.E. 777. See also: E.Z. Gas, Inc. v. Hydrocarbon Transp. Inc. (1984), Ind.App., 471 N.E.2d 316.

The appellants also assert that the pro-tanto credit was granted in error because the appellee failed to raise the affirmative defense of pro-tanto satisfaction.

Trial Rule 8(C) provides for the pleading of affirmative defenses:

"TRIAL RULE 8. GENERAL RULE OF PLEADING

* * *

* * *

(C) Affirmative Defenses. A responsive pleading shall set forth affirmatively and carry the burden of proving: Accord and satisfaction, arbitration and award, discharge in bankruptcy, duress, estoppel, failure of consideration, fraud, illegality, injury by fellow servant, laches, license, payment, release, res judicata, statute of frauds, statute of limitations, waiver, lack of jurisdiction over the subject-matter, lack of jurisdiction over the person, improper venue, insufficiency of process or service of process, the same action pending in another state court of this state, and any other matter constituting an avoidance, matter of abatement, or affirmative defense. A party required to affirmatively plead any matters, including matters formerly required to be pleaded affirmatively by reply, shall have the burden of proving such matters. The burden of proof imposed by this or any other provision of these rules is subject to the rules of evidence or any statute fixing a different rule. If the pleading mistakenly designates a defense as a counterclaim or a counterclaim as a defense, the court shall treat the pleading as if there had been a proper designation."

Trial Rule 12(B) provides, in pertinent part, for the manner of presenting the defenses:

"TRIAL RULE 12. DEFENSES AND OBJECTIONS--WHEN AND HOW PRESENTED--BY PLEADING OR MOTION--MOTION FOR JUDGMENT ON THE PLEADINGS

* * *

* * *

(B) How Presented. Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, shall be

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17 practice notes
  • Haderlie v. Sondgeroth, No. 91-114
    • United States
    • United States State Supreme Court of Wyoming
    • 15 December 1993
    ...claim must be credited against any remaining liability to prevent double recovery. See also Page 726 Sanders v. Cole Municipal Finance, 489 N.E.2d 117 (Ind.Ct.App.1986); Barker v. Cole, 396 N.E.2d 964 Moreover, in my opinion the majority's insistence on applying WYO.STAT. § 1-1-108 solely t......
  • Manns v. State, Dept. of Highways, No. 50S03-8907-CV-576
    • United States
    • Indiana Supreme Court of Indiana
    • 1 August 1989
    ..."consider the nature of the agreements and credit funds received against a judgment." Sanders v. Cole Municipal Finance (1986), Ind.App., 489 N.E.2d 117, 123. Payments made in partial satisfaction of a claim must be credited against the remaining liability to prevent a double recovery. Bark......
  • McDermott,Inc. v. AmClyde and River Don Castings, Ltd., 921479
    • United States
    • United States Supreme Court
    • 20 April 1994
    ...Comment b, p. 334 (1979). 29. Rose v. Associated Anesthesiologists, 501 F.2d 806, 809 (CADC 1974); Sanders v. Cole Municipal Finance, 489 N.E.2d 117, 120 (Ind.App.1986). 30. See 4 F. Harper, F. James & O. Gray, Law of Torts § 25.22 (2d ed. 1986) (injured person can recover full damages from......
  • Fort v. C.W. Keller Trucking, Inc., No. 02-1342.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • 5 June 2003
    ...receipt agreement in the first place; if so, no setoff is allowed. See American Transp. Co., 264 N.E.2d at 67; Sanders v. Cole Mun. Fin., 489 N.E.2d 117, 120 (Ind.Ct. App.1986) ("If the agreement is found to be a loan receipt agreement, the funds received by the plaintiff are not to be cred......
  • Request a trial to view additional results
17 cases
  • Haderlie v. Sondgeroth, No. 91-114
    • United States
    • United States State Supreme Court of Wyoming
    • 15 December 1993
    ...claim must be credited against any remaining liability to prevent double recovery. See also Page 726 Sanders v. Cole Municipal Finance, 489 N.E.2d 117 (Ind.Ct.App.1986); Barker v. Cole, 396 N.E.2d 964 Moreover, in my opinion the majority's insistence on applying WYO.STAT. § 1-1-108 solely t......
  • Manns v. State, Dept. of Highways, No. 50S03-8907-CV-576
    • United States
    • Indiana Supreme Court of Indiana
    • 1 August 1989
    ..."consider the nature of the agreements and credit funds received against a judgment." Sanders v. Cole Municipal Finance (1986), Ind.App., 489 N.E.2d 117, 123. Payments made in partial satisfaction of a claim must be credited against the remaining liability to prevent a double recovery. Bark......
  • McDermott,Inc. v. AmClyde and River Don Castings, Ltd., 921479
    • United States
    • United States Supreme Court
    • 20 April 1994
    ...Comment b, p. 334 (1979). 29. Rose v. Associated Anesthesiologists, 501 F.2d 806, 809 (CADC 1974); Sanders v. Cole Municipal Finance, 489 N.E.2d 117, 120 (Ind.App.1986). 30. See 4 F. Harper, F. James & O. Gray, Law of Torts § 25.22 (2d ed. 1986) (injured person can recover full damages from......
  • Fort v. C.W. Keller Trucking, Inc., No. 02-1342.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • 5 June 2003
    ...receipt agreement in the first place; if so, no setoff is allowed. See American Transp. Co., 264 N.E.2d at 67; Sanders v. Cole Mun. Fin., 489 N.E.2d 117, 120 (Ind.Ct. App.1986) ("If the agreement is found to be a loan receipt agreement, the funds received by the plaintiff are not to be cred......
  • Request a trial to view additional results

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