Wright v. Orlowski, 760892

• Decision Date: 10 June 1977
• Docket Number: No. 760892,760892
• Citation: 235 S.E.2d 349,218 Va. 115
• Parties: Joan E. WRIGHT et al. v. Thomas Walter ORLOWSKI et al. Record
• Court: Virginia Supreme Court

Page 349

235 S.E.2d 349

218 Va. 115

Joan E. WRIGHT et al. v. Thomas Walter ORLOWSKI et al.

Record No. 760892.

Supreme Court of Virginia.

June 10, 1977.

Wayne Lustig, Norfolk (Campbell, Lustig & Hancock, Norfolk, on brief), for plaintiffs in error.

John B. Preston, Virginia Beach (Donnell P. Davis, Virginia Beach, Charles A. McDuffie, Norfolk, William B. Smith, James A. Gorry, III, John F. Rixey, Preston, Preston, Wilson & Lambert, Furniss, Davis, Phelps & Rashkind, Guy, Cromwell, Betz, Smith & Dickerson, Broyles & Gorry, Virginia Beach, Rixey & Heilig, Norfolk, on briefs), for defendants in error.

Before I'ANSON, C. J., and CARRICO, HARRISON, COCHRAN, HARMAN, POFF and COMPTON, JJ.

POFF, Justice.

This is an appeal from a final order sustaining pleas filed by defendants alleging that they were released by accord and satisfaction consummated by plaintiffs with certain joint tortfeasors acting through their insurers.

Edward R. Wright, a student at James Barry-Robinson Home for Boys, suffered multiple injuries which left him a quadriplegic. His injuries were sustained during a "hazing" incident when he was thrown from a classroom window by fellow students. On September 18, 1972, two motions for judgment (later amended) were filed against the several defendants listed in the margin. ^* Suing in her own right, Joan E. Wright, Edward's mother, sought damages in the sum of $650,000. Suing as next friend of her minor son, she claimed damages of $2,000,000. During the pendency of the litigation and after the son had attained his majority, he and his mother entered into a written agreement with Government Employees Insurance Company (GEICO) which had issued a "homeowner's insurance policy" to the parents of Thomas Walter Orlowski, one of the named defendants.

The agreement provided that, in consideration of the payment of $25,000 (representing the maximum coverage under the policy), the Wrights "do hereby now and forever covenant and agree not to sue (GEICO) and to refrain forever from instituting . . . suits and proceedings of any kind . . . which the (Wrights) ever had, now have, or may have against (GEICO)". It was expressly agreed that "this instrument is not intended nor in fact is a release or discharge of nor an accord or satisfaction with any person whomsoever", and the Wrights reserved "the right to proceed against Thomas Walter Orlowski and any other person or persons against whom they may have or assert any claim".

Under a contemporary but separate agreement between the Orlowskis and GEICO, the Orlowskis authorized their insurer to "tender the full $25,000 coverage . . . in settlement of all claims . . . (the Wrights) may have now or in the future, known or unknown, against . . . the insurer of Thomas Walter Orlowski, or any of us" and agreed that, upon acceptance of the tender, GEICO "shall then and there be released of any further obligation under the policy contract or otherwise to pay any further sum whatever, or to further defend Thomas Walter Orlowski or any of us".

The parents of Edward Joseph Hendrix, another defendant, were insured under a "homeowner's policy" issued by Stuyvesant Insurance Company (Stuyvesant). The Wrights signed an agreement with Stuyvesant substantially the same as the Wright-GEICO agreement and the Hendrixs and Stuyvesant executed an agreement similar in all material respects to the Orlowski-GEICO agreement.

GEICO and Stuyvesant each issued a check in the sum of $25,000 payable to the Wrights and their attorney. The checks were endorsed and cashed and, after deduction of an agreed attorney's fee, the proceeds were accepted by the Wrights.

Invoking the rule that an accord and satisfaction with one tortfeasor releases all joint tortfeasors, the several defendants filed various pleas of release and motions to dismiss. Pending decision, the trial court heard the testimony of the attorneys who negotiated the agreements and prepared the documents. John Carroll Fears, Jr., was employed by GEICO to represent its interests and to defend its insured, Orlowski. Orlowski was also represented under personal contract by James A. Gorry, III, who did not testify. Prior to the execution of the several agreements, Fears had a discussion with Wayne Lustig, counsel for plaintiffs. Concerning that discussion, Fears testified as follows:

"Q. And what did (Lustig) say he would do?

"A. He advised me that he would nonsuit the case as to Mr. Orlowski prior to the time it went to the jury.

". . . .vis

"Q. And as counsel for the insurance company and Orlowski, did you so advise Mr. Gorry in writing of that understanding with Mr. Lustig?

"A. Yes, I did, sir.

"Q. And have you and Mr. Lustig had any further discussions on the subject to the contrary that that would not did you subsequently have any conversations that he would not nonsuit Orlowski in these cases?

"A. I don't recall any at the moment."

The letter to Gorry mentioned in Fears' testimony read in part as follows:

"I am still trying to get this matter resolved between Mr. Orlowski and the Wrights.

". . . .ll

"If the revised agreement is entered into between the Orlowskis and GEICO, then upon payment his clients will execute a Covenant Not to Sue running to the benefit of GEICO only. Mr. Orlowski would remain a defendant. However, he (Lustig) will take a non-suit as to Mr. Orlowski before the case is submitted to the jury. This same agreement is being entered into with Bob Winters' client (Hendrix). In this way the plaintiffs could get the money immediately and still proceed against the other defendants.

"As previously discussed, this would mean that GEICO would be released of any further liability under the policy and would not be requested to pay any further sums or to furnish Mr. Orlowski a defense from the date of payment of the money. On the other hand, it would relieve Mr. Orlowski of the exposure to a verdict for in excess of the policy limits."

Lustig did not testify, but on cross-examination, Fears acknowledged that Lustig had said, "I do not want to agree to this, but it is my intention to nonsuit the Orlowskis prior to the case going to the jury". He explained that "what I was trying to convey to Mr. Gorry . . . was that after long dealings with Mr. Lustig in the past, I felt that if he stated that it was his intention to do it, then he would do it". Fears felt that the agreement to nonsuit "may have had some consideration so far as whether the Orlowskis executed the agreement".

Robert G. Winters, employed by Stuyvesant to represent its interests and to defend Hendrix, testified that he had discussed the question of a nonsuit with Lustig and with Fears and had advised Hendrix before the agreements were signed that "there might be a possibility that a nonsuit would be taken against him". Winters said that it was his "understanding" and "hope" that if Lustig "didn't find it detrimental to his client, he would take a nonsuit as to my client."

After the agreements were executed and the checks were issued and negotiated, Winters remained as counsel of record for Hendrix but, so far as the record shows, made no further appearance in the proceedings until called to testify.

Neither Hendrix nor his parents testified. The record does contain the deposition of Thomas Walter Orlowski. Although his testimony is somewhat vague, it appears that when he and his parents signed the agreement with Stuyvesant his impression was that he or his parents might be required to pay a portion of any verdict in excess of the insurance checks. Orlowski's parents did not testify.

In a written opinion dated February 18, 1976, the trial court noted that the written agreements contained a clause "expressly reserving the right to proceed against all defendants including Orlowski and Hendrix." However, the trial court found that "(d)espite the written agreement it appears that there was at least a tacit understanding between counsel for the plaintiffs and the two defendants that a non-suit would be taken as to the two defendants before the case went to the jury." Based upon its written opinion, the trial court entered a final order on March 15, 1976 sustaining the pleas of release and awarding all defendants summary judgment.

Although courts elsewhere hold otherwise, this Court has consistently applied the strict common law rule that a release of one tortfeasor releases all joint tortfeasors. Our first definitive exposition is found in Ruble v. Turner, 12...