Witucke v. Presque Isle Bank

• Citation: 243 N.W.2d 907,68 Mich.App. 599
• Decision Date: 27 April 1976
• Docket Number: Docket No. 24311
• Parties: Eugene WITUCKE, Plaintiff-Appellee, v. PRESQUE ISLE BANK, a State Banking Corporation, Defendant-Appellant, and Midwest Auto Recovery and Adjustment Service, and Richard H. Austin, Secretary of State, and Director of the Michigan Motor Vehicle Accident Claims Fund, Defendants. 68 Mich.App. 599, 243 N.W.2d 907
• Court: Court of Appeal of Michigan (US)

Page 907

243 N.W.2d 907

Eugene WITUCKE, Plaintiff-Appellee, v. PRESQUE ISLE BANK, a State Banking Corporation Defendant-Appellant and Midwest Auto Recovery and Adjustment Service, and Richard H Austin, Secretary of State, and Director of the Michigan Motor Vehicle Accident Claims Fund, Defendants.

Docket No. 24311.

68 Mich.App. 599, 243 N.W.2d 907

Court of Appeals of Michigan.

April 27, 1976.

Released for Publication July 19, 1976.

Leave to Appeal Denied Aug. 18, 1976.

[68 MICHAPP 601] Sommers, Schwartz, Silver, Schwartz, Tyler & Gordon by David M. Tyler, Detroit, for defendant-appellant.

Neal Grossman, Bloomfield Hills, for plaintiff-appellee.

Before McGREGOR, P.J., and BASHARA and ALLEN, JJ.

BASHARA, Judge.

Defendant bank appeals a jury verdict of $225,000 entered against it in Oakland [68 MICHAPP 602] County Circuit Court. Defendant alleges the trial judge erroneously denied its summary judgment motion, improperly issued a directed verdict on liability in plaintiff's favor, and mistakenly severed from the main suit its third-party complaint.

The facts precipitating this law suit are readily stated. Plaintiff claimed serious injury occurred on December 31, 1972, when he attempted to prevent the apparent repossession of his automobile. Defendant had financed the purchase of the car and had authorized Midwest Auto Recovery to repossess the car after plaintiff fell behind in payments. Four persons who allegedly identified themselves to plaintiff as Midwest employees--but who were not produced at any of the proceedings below--allegedly ran over the plaintiff as they drove off with the repossessed auto.

In April, 1973, plaintiff filed a complaint against the bank, Midwest, and the Michigan Secretary of State seeking damages for his extensive injuries. Subsequently the claim against the Secretary of State was dismissed. Plaintiff and Midwest reached an out-of-court settlement, in which plaintiff received $50,000 and agreed not to sue Midwest directly, or to enforce any indirect rights in the event plaintiff successfully sued the bank, ¹ and the [68 MICHAPP 603] bank recovered indemnification or contribution from Midwest.

There followed a blizzard of pleadings: amended complaints, amended answers, and cross claims. At the conclusion of the pleadings, plaintiff had advanced a hodgepodge of theories under which the defendant was alleged to be liable: (1) the bank and Midwest were joint venturers and hence joint tortfeasors; (2) the bank was negligent in selecting Midwest to repossess plaintiff's car; (3) the bank was liable under a Res ipsa loquitur theory; (4) the bank was liable because Midwest, as an independent contractor, negligently performed the inherently dangerous activity of auto repossession; and (5) the bank was vicariously liable for the acts of its agent, Midwest.

Defendant denied liability under all of these theories, asserting that Midwest was an independent contractor performing a delegable duty that was not inherently dangerous and asserting that the release barred plaintiff from suing the bank. The bank filed a cross claim against Midwest, seeking indemnity and contribution in the event that plaintiff recovered from the bank.

The bank then filed a motion for summary judgment claiming that plaintiff's release of Midwest barred plaintiff's action against the bank. The judge denied the motion, allowing plaintiff to proceed on all his theories. After a seven day trial, [68 MICHAPP 604] the trial judge issued a directed verdict as to liability, holding that the issues presented no question of fact. He instructed the jury to consider only the amount of damages. At the same time, he severed the bank's cross claim against Midwest from the case, on the grounds that plaintiff would be prejudiced were the jury to consider the cross-claim.

The jury returned a verdict of $225,000 against the bank. The trial court denied defendant's motion for a new trial.

I. SUMMARY JUDGMENT RULING

It is our opinion the trial judge erred in allowing plaintiff to proceed on all of his theories. The court should have granted partial summary judgment for defendant, weeding out any theory that, given the existence of the release, was untenable as a matter of law. ²

Under common law, the release of one joint tortfeasor released all other joint tortfeasors. See McBride v. Scott, 132 Mich. 176, 93 N.W. 243 (1903). [68 MICHAPP 605] At least one Michigan case extended this principle by stating the release of one tort-feasor releases all concurrently negligent tortfeasors. Lindsay v. Acme Cement Plaster Co., 220 Mich. 367, 374, 190 N.W. 275 (1922).

In Lindsay the Court found that two railroads had independent and separate duties to maintain railroad tracks in a safe and operable condition. Both railroads breached their independent duties to maintain the tracks, which constituted concurrent negligence, resulting in the death of the plaintiff's decedent. The Court erroneously concluded that concurrently negligent tortfeasors were joint tortfeasors, and therefore, incorrectly applied to the Lindsay factual situation the doctrine that the release of one joint tortfeasor released all joint tortfeasors.

However, as explained in Prosser on Torts (4th ed.), § 49, p. 301, 302, at common law the release doctrine was not intended to apply to concurrently negligent tortfeasors:

'(A) release to one of two tortfeasors who had acted in concert necessarily released the other, since there was in the eyes of the law but one cause of action against the two, liable for the same acts, which was surrendered. But as to independent wrongdoers, not acting in concert, who were liable for the same loss, there seems to be no reason to conclude that a release of one would release the others, except in so far as it was based upon actual satisfaction of the claim.

'(C)auses of action against mere concurrent tortfeasors not acting in concert have always been separate, and their separate character should not be affected by the possibility of joinder for procedural convenience. A surrender of one therefore should not on any logical or reasonable basis discharge the other, except to the extent that there has been full compensation. Even as [68 MICHAPP 606] applied to cases of concerted action, the rule seems at best an antiquated survival of an arbitrary common law procedural concept, arising out of long forgotten semi-criminal forms of action; and it has no reasonable application at all to cases of mere concurrent negligence. The fear of double recovery is meaningless, since the amount paid under the release must be credited to the second tortfeasor in any case; and the argument that the plaintiff should not be permitted to make piecemeal collections from different defendants is quite pointless when he is allowed to do precisely that after judgment.' (Footnotes omitted.)

The next important historical progression was the enactment of P.A.1941, No. 303; 1948 C.L. § 691.562; M.S.A. § 27.1683(2). It provided in material part:

'Sec. 2. It shall be lawful for all persons having a claim or cause of action against 2 or more Joint tort-feasors to compound, settle with, and discharge, at any time prior to rendition of a judgment in said action, any and everyone or more of said Joint tort-feasors for such sum as such person may deem fit, without impairing the right of such person or persons to demand and collect the balance of said claim or cause of action from the remaining Joint tort-feasors, against whom such person, or persons, has such claim or cause of action, and not so released.' (Emphasis supplied.)

In Conover v. Hecker, 317 Mich. 285, 26 N.W.2d 774 (1947), the Court relied on the above statute in holding that the release of one independent concurrently negligent tortfeasor did not release the other similar tortfeasors. Apparently, the Court believed a 'joint tortfeasor' included an independent concurrently negligent tortfeasor.

One year later the Michigan Supreme Court had occasion in Geib v. Slater, 320 Mich. 316, 31 N.W.2d [68 MICHAPP 607] 65 (1948), to consider the definition of joint tortfeasor, as it appeared in the aforementioned statute on release. In Geib the defendant left his car at a garage for repair. An employee of the garage negligently backed the car into the plaintiff seriously injuring him. The plaintiff reached a settlement with the garage owner, and released both the garage owner and his employee. The plaintiff proceeded against the defendant on the basis of the owner's liability statute.

The Court relied on Frye v. Detroit, 256 Mich. 466, 239 N.W. 886 (1932), which determined whether the common law definition of 'joint tortfeasor' included persons concurrently committing two separate torts. Frye had quoted approvingly Dickson v. Yates, 194 Iowa 910, 188 N.W. 948; 27 A.L.R. 533 (1922), as follows:

"It is not the injury, but the wrongful act, which creates the liability. If the acts of the different persons are different and separate when done, they may not be called joint acts because they happen to occur at the same time or at different times and affect the same person; neither party having any design in the matter or any control or influence over the acts of the other." 256 Mich. 466, 471, 239 N.W. 886, 887.

The Court determined the defendant was not a joint tortfeasor because his liability arose by operation of law, that is the owner's liability statute. Since the defendant's liability was merely derivative, release of the negligent garage employee operated to release the defendant.

Moreover, Geib called attention to the frequently careless use of the term 'joint tortfeasor'. The Court pointed to Conover v. Hecker, supra, as neither presenting nor considering the definition of joint tortfeasor. The implication is that Conover's[68 MICHAPP 608] reliance on the release statute, 1948 C.L. § 691.562; M.S.A. § 27.1683(2), was incorrect.

If Geib left any doubt that the release statute only applied to joint tortfeasors,...