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Frank v. Volkswagenwerk

August 8, 1975

GAIL ESTHER FRANK, A MINOR BY HER PARENTS AND GUARDIAN, SHIRLEY J. FRANK AND SHIRLEY J. FRANK IN HER OWN RIGHT AND ROSARIA ANN MUCKIN, APPELLANTS,
v.
VOLKSWAGENWERK, A.G. OF WEST GERMANY, APPELLEE, V. ROSARIA ANN MUCKIN AND DONALD P. MILLER, THIRD-PARTY DEFENDANTS



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA (Civil Action No. 70-2071).

Staley, Rosenn and Hunter, Circuit Judges.

Author: Hunter

Opinion OF THE COURT

HUNTER, Circuit Judge:

This is a diversity case in which we are required to determine what effect, under Pennsylvania law, court-approved settlements reached by two separate minor plaintiffs in their respective claims against one tortfeasor would have on a subsequent attempt by those same plaintiffs to sue a second tortfeasor for injuries sustained in the same accident.

Appellants Frank and Muckin, plaintiffs below, were injured on August 5, 1968, when the Volkswagen in which they were riding collided head-on with a car driven by third-party defendant Donald Miller. Miller's car had crossed over into the left-hand lane of the highway, and he was clearly at fault. On November 18, 1968, plaintiff Frank (then a minor) instituted suit against Miller in the Court of Common Pleas of Philadelphia County. Plaintiff's mother and her counsel subsequently petitioned the court for leave to compromise Frank's claim pursuant to Rule 2039 of the Pennsylvania Rules of Civil Procedure, which requires court approval of the compromise or settlement of any action in which a minor is a party. The court approved the settlement in the amount of $9,997.50, which represented the maximum amount she could obtain under Miller's liability insurance policy. Frank settled for this amount because an investigation indicated that Miller did not have, nor was he likely to obtain, sufficient assets to satisfy an excess verdict. On February 20, 1969, the docket was marked "settled, discontinued and ended." No release was signed in the Frank case.

Muckin's claim against Miller was likewise settled for $9,997.50, but through a different procedural route since Muckin never actually instituted suit against Miller. Muckin and her parents instead petitioned the Court of Common Pleas of Bucks County for leave to compromise and settle her claims arising out of the accident, and on November 5, 1969, the petition was granted. Shortly thereafter, on November 13, 1969, Muckin's parents signed two documents, one entitled "Release of All Claims" and the other entitled "Parent-Guardian Release and Indemnity Agreement."

On July 30, 1970, appellants instituted the present suit against defendant Volkswagenwerk, alleging that they were injured as a result of the "uncrashworthiness" of their car, which defendant had manufactured. While appellants are now asserting a new theory of liability, it is clear that the injuries for which they seek recovery are identical to those which were the subject of the earlier settlements.*fn1 Defendants moved for summary judgment on the alternative grounds that the prior settlements barred the present suit and that the defendant was under no duty in 1954 to manufacture crashworthy vehicles which would withstand a head-on collision. The district court, 382 F. Supp. 1394, accepted the first theory and granted summary judgment for defendant against both plaintiffs without considering the "uncrashworthiness" issue. We reverse as to Frank but affirm as to Muckin.

I. THE FRANK SETTLEMENT

Frank contends that the marking of a docket "settled, discontinued and ended," as was done in her suit against Miller, is binding only as between the parties to that settlement, and thus does not bar suit against another defendant (in this case, Volkswagenwerk) which was not a party to the settlement. However, the principal authority on which she relies, Sale v. Ambler, 335 Pa. 165, 6 A.2d 519 (1939), is clearly distinguishable since it did not involve a situation where one plaintiff tried to sue two different defendants. Rather, it was a case in which two different plaintiffs attempted to sue the same defendant on behalf of the corporation in which they were both shareholders. The court there permitted the second suit because the settlement in the first one had been collusive and had adversely affected the second plaintiff's rights. Here there is no allegation of fraud or collusion which would warrant allowance of the second suit, and Sale v. Ambler cannot be construed as establishing a general rule that the marking of the docket "settled, discontinued and ended" is binding only as between the parties to the first lawsuit.

On the other hand, defendant's contention that the marking of that docket "settled, discontinued and ended" necessarily bars a later suit against a different tortfeasor likewise does not find support in the Pennsylvania cases. Two of the cases cited by defendant for this proposition, Barson's and Overbrook, Inc. v. Arce Sales Corp., 227 Pa. Super. 309, 324 A.2d 467 (1974), and Bollinger v. Randall, 184 Pa. Super. 644, 135 A.2d 802 (1957), were ones in which the defendant in the second suit had been a party to the earlier proceedings. Thus, despite the broad language in those cases, they cannot be taken as support for the contention that Frank's suit against Volkswagenwerk should be barred.

The more relevant line of authorities consists of those cases dealing with the question of whether the prior proceedings resulted in a satisfaction of a judgment which would bar any subsequent action against another joint tortfeasor. Under Pennsylvania common law, the cases drew a clear distinction between the consequences of recovery of a judgment and of satisfaction thereof. A plaintiff was entitled to bring suit against as many joint tortfeasors as he wanted and could recover a judgment against each. However, once he obtained satisfaction from one joint tortfeasor, whether by satisfying the judgment of record or by giving a release, he could not thereafter execute or bring suit against any other joint tortfeasor. Hilbert v. Roth, 395 Pa. 270, 149 A.2d 648 (1959). This common law rule allowing but one satisfaction applied not only where a plaintiff sued and proceeded to verdict, as in Hilbert, but also where a settlement was entered into after the first suit had been instituted and then discontinued prior to verdict, as in Thompson v. Fox, 326 Pa. 209, 192 A. 107 (1937), and Peterson v. Wiggins, 230 Pa. 631, 79 A. 767 (1911), and where a settlement had been reached even without instituting suit against the first defendant, as in Smith v. Roydhouse, Arey & Co., 244 Pa. 474, 90 A. 919 (1914). Consequently under the early Pennsylvania cases applying the common law rule, the settlement between Frank and Miller would appear to bar Frank's suit against Volkswagenwerk.

In 1951, Pennsylvania enacted the Uniform Contribution Among Tortfeasors Act (hereinafter, "Uniform Act"). Act of July 19, 1951, P.L. 1130, §§ 1-8, 12 P.S. §§ 2082-2089. This Act drastically changed the common law in some respects, but left it untouched in others. With respect to either recovery or satisfaction of a judgment, the law has been basically unchanged. Thus, just as under the common law, a plaintiff may recover as many judgments against as many tortfeasors as he wishes, but upon satisfaction of one judgment he may not sue or execute against another joint tortfeasor. That is the clear holding of Hilbert v. Roth, supra, where the plaintiff, who had satisfied a judgment of $10,000 against the first tortfeasor, was barred from bringing another suit against the second tortfeasor.

Where the Uniform Act clearly worked a substantial change in the common law was in the area of releases. Under the common law, a release of one joint tortfeasor was deemed to be a release of all, even though the release by its terms purported to release only the first tortfeasor. Union of Russian Societies of St. Michael and St. George v. Koss, 348 Pa. 574, 577, 36 A.2d 433, 434 (1944); Thompson v. Fox, supra. The Uniform Act changed this rule, so that now a release of one ...


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