Allianz Insurance v. Garrett

153 F.R.D. 89, 1994 U.S. Dist. LEXIS 1531, 1994 WL 45331
CourtDistrict Court, E.D. Virginia
DecidedFebruary 10, 1994
DocketCiv. A. No. 2:93cv830
StatusPublished
Cited by1 cases

This text of 153 F.R.D. 89 (Allianz Insurance v. Garrett) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allianz Insurance v. Garrett, 153 F.R.D. 89, 1994 U.S. Dist. LEXIS 1531, 1994 WL 45331 (E.D. Va. 1994).

Opinion

OPINION AND ORDER

PRINCE, United States Magistrate Judge.

Plaintiff, Allianz Insurance Company (“Al-lianz”), brought this action against defendant, Denison D. Garrett, Jr. (“Garrett”), seeking contribution, pursuant to Virginia Code § 8.01-34, for a settlement reached by Al-lianz’s insured, John Whalen (“Whalen”), a claim to which Allianz is subrogated. Garrett filed a motion to dismiss for failure to state a claim for which relief may be granted, pursuant to Fed.R.Civ.P. 12(b)(6), on the ground that the release of Whalen by the tort claimants does not release Garrett, and therefore, under Virginia Code § 8.01-35.1, neither Whalen nor Allianz may seek contribution. Allianz opposes the motion by asserting that the settlement of the claim by Allianz on behalf of Whalen did not involve a release, and § 8.01-35.1 therefore has no application. Jurisdiction is based upon diversity of citizenship. 28 U.S.C. § 1332. Each party has filed supporting documents, so under Rule 12(b) the motion will be considered one for summary judgment.1

Facts

.The facts are not in dispute. As alleged, the claim is as follows: Whalen, a New Jersey resident, was driving his car on November 23, 1988, when it was involved in an accident in Virginia. Whalen’s car collided with the rear of a tractor trailer, and immediately afterwards another ear driven by Garrett, a citizen of Delaware, negligently collided with the rear of Whalen’s car. Whalen’s minor grandchildren were in his car, and they suffered injuries as a result of Garrett’s negligence. The minors, through their guardian ad litem, later filed an action in a New Jersey state court against Whalen to recover damages as a result of Whalen’s negligence in driving his car. Allianz settled that action on behalf of Whalen, and pursuant to New Jersey law an order was entered by the New Jersey court on May 6, 1993, approving the settlement. A copy of the settlement order is attached to the complaint. Allianz made demand upon Garrett and his insurer to. contribute to the settlement, but they refused. Finally, Allianz alleges that its payment was for the injuries caused solely by Garrett’s negligence or by the joint and concurrent negligence of Whalen and Garrett for which Garrett “is liable pursuant to Virginia Code § 8.01-34 for contribution of all or part of the settlement payment.”2

[91]*91Garrett’s motion to dismiss was initially argued on November 2, 1993. At the hearing Garrett’s attorney offered as an exhibit what he represented to be a true and complete copy of the file of the New Jersey court that approved the settlement. Allianz’s attorney accepted the representation and did not object to the exhibit. (Transcript of Hearing on Motion at 11). At the November 2nd hearing, Garrett’s attorney partially based his argument on the court file and New Jersey statutory law and rules of court, which had not been mentioned in the Brief In Support Of Defendant’s Motion To Dismiss Pursuant To Rule 12(b)(6). Nor did Garrett file any response to Allianz’s Memorandum In Opposition To Motion To Dismiss. Therefore, Allianz’s attorney3 was surprised by the argument presented orally by Garrett’s attorney, and the Court granted Allianz leave to file a response, which was filed on November 16th as Plaintiffs Memorandum In Response To Defendant’s Oral Argument. On November 22nd, Garrett’s attorney filed a letter reply to Allianz’s response and attached a transcript of the settlement approval hearing in the New Jersey court. On January 6, 1994, Allianz filed a Supplemental Memorandum In Opposition To Motion To Dismiss, to which was attached a release dated December 15, 1993, on behalf of the minors by their guardian ad litem in favor of Whalen, Garrett, and others. The motion was further argued on January 11th, and neither party objected to the documents that had been filed since the initial hearing. Therefore, they will be considered as part of the facts, as the motion to dismiss is converted into a motion for summary judgment. Still, the subsequently filed exhibits leave the facts undisputed.

Arguments

Allianz’s claim for contribution is made under Virginia Code § 8.01-34. Garrett’s defense is made under Virginia Code § 8.01-35.1. The former statute provides as follows:

“Contribution among wrongdoers may be enforced when the wrong results from negligence and involves no moral turpitude.”

The pertinent parts of the latter statute provide as follows:

A. When a release ... is given in good faith to one of two or more persons liable in tort for the same injury ...:
1. It shall not discharge any of the other tort-feasors from liability for the injury ... unless its terms so provide; ... and
2. It shall discharge the tort-feasor to whom it is given from all liability for contribution to any other tort-feasor.
B. A tort-feasor who enters into a release ... with a claimant is not entitled to recover by way of contribution from another tort-feasor whose liability for the injury ... is not extinguished by the release----
C. A release ... given pursuant to this section shall be subject to the provisions of [the statutes providing for the compromise and court approval of wrongful death claims and claims of minors].
D. This section shall apply to all ... releases executed on or after July 1, 1980. This section shall also apply to all ... oral releases agreed to on or after July 1,1989, provided that any cause of action affected thereby accrues on or after July 1, 1989....

In substance, then, the last quoted statute provides that if a tort-claimant releases one of two tort-feasors without providing in the release for the discharge of the liability of the other tort-feasor, then the released tort-feasor may not claim contribution from the non-discharged tort-feasor.

Garrett contends that the settlement agreement reached in New Jersey between Whalen and his grandchildren effected a release of Whalen but not of himself, and therefore, his liability, if any, to the minor claimants is not extinguished; and being not extinguished, § 8.01-35.1B prevents Allianz from pursuing him for contribution.4 Allianz [92]*92counters by arguing that the settlement in New Jersey did not involve a release of Whalen, and § 8.01-35.1 therefore does not apply.

Discussion

Garrett asserts, and Allianz appears to concede, that all issues in the ease are controlled by Virginia law. If the court approved settlement in New Jersey between Whalen and his minor grandchildren, all of whom are citizens of New Jersey, is a release of Whalen by operation of law, as Garrett asserts, it is because New Jersey law makes it so. The underlying tort action is controlled by Virginia law, but that does not transmute the issue of whether the New Jersey settlement effected a release of Whalen into an issue of Virginia law. Neither is it made an issue under Virginia law because a subsequent issue — the right to contribution— is one of Virginia law.

In Preine v. Freeman, 112 F.Supp.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
153 F.R.D. 89, 1994 U.S. Dist. LEXIS 1531, 1994 WL 45331, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allianz-insurance-v-garrett-vaed-1994.