Nelson Ex Rel. Hirschfeld v. Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter-Day Saints

935 P.2d 512, 313 Utah Adv. Rep. 22, 1997 Utah LEXIS 27, 1997 WL 136426

• Court: Utah Supreme Court
• Decided: March 25, 1997
• Docket: 950259
• Status: Published

Opinions

DURHAM, Justice:

This case requires us to decide whether the release of a tort-feasor in a negligence action automatically releases the tort-feasor’s “master” under principles of vicarious liability. We hold that it does not.

Plaintiff Mark Hirschfeld was seriously injured at a church youth activity when his adult supervisor, Darrin Crabtree, fell on him. Plaintiff brought suit against Crabtree, alleging negligence, and also against the Church of Jesus Christ of Latter-day Saints (the Church) under the doctrine of responde-at superior. The parties have stipulated that at the time the injury occurred, Crabtree was acting within the scope and course of his authority as a volunteer agent of the Church.

Plaintiff subsequently settled with Crab-tree by entering into a “General Release and Hold Harmless Agreement” (the agreement), which required Crabtree to pay plaintiff $100,000. The agreement stated that plaintiff did not intend to release the Church and specifically reserved all claims against the Church, but acknowledged that plaintiff assumed the risk that a court would decide, as a matter of law, that the release of Crabtree also immunized the Church from claims of respondeat superior. The agreement also included the following clause: “The Parties further agree that this entire agreement is contingent upon the enforceability of the promise by the L.D.S. Church that it will not pursue indemnity against Darrin Crabtree.”

Following the release of Crabtree, the Church moved for summary judgment, arguing that the agreement released it, as a matter of law, from vicarious liability. The trial court granted the motion, and plaintiff appeals.

Plaintiff argues that the trial court erred in holding that the release of a tort-feasor servant automatically releases a master from vicarious liability. Plaintiff cites primarily section 78-27-42 of the Liability Reform Act (the LRA), which provides, “A release given by a person seeking recovery to one or more defendants does not discharge any other defendant unless the release so provides.” Plaintiff contends that this language, combined with our prior ruling in Krukiewicz v. Draper, 725 P.2d 1349 (Utah 1986), interpreting a similar section under the prior Comparative Negligence Act (the CNA), allows plaintiff to maintain his claim against the Church. In Krukiewicz, we interpreted section 78-27-42 of the CNA: “A release by the injured person of one joint tort-feasor ... does not discharge the other tort-feasors.” Id. at 1350. We ultimately held that a vicariously hable employer was a “joint tort-feasor” under the statute, such that the release of the employee did not release the employer. Id. at 1351.¹ We recognized that an employer’s liability under respondeat superior “arises not as a result of any actual neghgence by the employer,” but because the employer reaps the benefits of the employee’s acts and may more easily spread the cost of accidents. Id. at 1351. Therefore, “ ‘[although the employer and employee are not [common law] tort-feasors, they are nonetheless each obligated for the same thing — total reparation of the damages to the victim.’” Id. (quoting Sampay v. Morton Salt Co., 395 So.2d 326, 328 (La.1981)). As a result, we held that because the master and the servant are equally hable, both are tort-feasors under the statute and the servant’s release does not release the master.

The Church, however, points out that the LRA, which replaced the CNA, no longer refers to hable parties as joint tort-feasors, but as “defendants.” Section 78-27-37 defines defendant:

(1) “Defendant” means a person, other than a person immune from suit ..., who is claimed to be hable because of fault to any person seeking recovery.

(Emphasis added.) The section then defines fault:

(2) “Fault” means any actionable breach of legal duty, act, or omission proximately causing or contributing to injury or damages sustained by a person seeking recovery, including neghgence in ah its degrees, contributory neghgence, assumption of risk, strict liability, breach of express or implied warranty of a product, products liability, and misuse, modification, or abuse of a product.

The Church therefore argues that it is not a “defendant” because vicarious liability does not attach “because of fault.” It cites passages from Krukiewicz, 725 P.2d at 1351, and Holmstead v. Abbott G.M. Diesel, Inc., 27 Utah 2d 109, 493 P.2d 625, 627 (1972), where we stated that a master hable solely on the basis of respondeat superior is not personally at fault. The Church argues that we must follow the Holmstead decision, which held that under the common law, a plaintiffs release of a tort-feasor employee released the vicariously liable employer despite the fact that the plaintiff reserved the right to sue the employer. Id. 493 P.2d at 628. Holm-stead was based primarily on the notion that the employer and the employee were not joint tort-feasors because the employer’s liability to the plaintiff was “derivative and secondary,” and thus the “exoneration of the servant removes the foundation upon which to impute negligence to the master.” Id. 493 P.2d at 627.

Notwithstanding the reliance of the parties in their briefs on competing interpretations of the LRA,² we conclude that this case may be resolved pursuant to the Joint Obligations Act, Utah Code Ann. §§ 15-4-1 to -5. That provision operates to preserve plaintiffs claim against the Church.³

Section 15-4-4 of the Joint Obligations Act, similar to section 78-27-42 of both the CNA and the LRA, provides that the release of one obligor does not discharge co-obligors against whom the obligee in writing expressly reserves his rights.⁴ Section 15-4-1 defines an “obligor” as “a person liable for a tort” and an “obligee” as “a person having a right based on a tort.” Plaintiff claims that both Crabtree and the Church are liable to him for a tort: Crabtree for his harmful acts conducted within the scope of his authority as a volunteer for the Church, and the Church under the doctrine of respondeat superior for Crabtree’s actions. Indeed, the main import of our decision in Krukiewicz was that a vicariously liable employer is liable for a tort and thus is considered a joint tort-feasor. Accordingly, both Crabtree and the Church are “obligors.” Therefore, because the release given Crabtree by plaintiff expressly reserved all claims against the Church, section 15-4-4 of the Joint Obligations Act governs, and plaintiff may still pursue this action against the Church.

Although plaintiff still has a claim against the Church, plaintiff may not recover a windfall by receiving more than his actual damages. Generally, if the servant is released after paying the full amount of plaintiffs damages, all liability is satisfied and there is no cause of action against the master. See Knutson v. Morton Foods, Inc., 603 S.W.2d 805, 807 (Tex.1980) (“The fact that an employee has been released in a settlement has no bearing on the continued liability of the employer unless the settlement is in full satisfaction of plaintiffs claims against both the employee and the employer.” (footnote omitted)). Moreover, under section 15-4-3 of the Joint Obligations Act, any amount received by one obligor is to be credited against any amount owed by the rest. See Green v. Lang, 115 Utah 528, 206 P.2d 626 (1949). In the instant case, however, plaintiff asserts that his damages have not been satisfied. Until both sides present evidence on this issue and a jury determines the amount of damages, that question remains open. If a jury does hear the facts of this case and finds negligence and damages of more than $100,000, the Church, if found liable pursuant to respondeat superior, will be responsible for only the difference between the total damage figure and the amount Crabtree paid pursuant to the agreement with plaintiff. If the jury finds damages in an amount less than $100,000, the Church mil owe nothing, regardless of its liability.

ZIMMERMAN, C.J., concurs in Justice DURHAM’S opinion.

1 . Section 78-27-40(3) defined "joint tort-feasor” in terms of traditional joint and several liability law:

As used in this section, "joint tort-feasor” means one of two or more persons, jointly or severally liable in tort for the same injury to person or property, whether or not judgment has been recovered against all or some of them.

2 . Plaintiff argues that the Church’s fault, for purposes of the LRA, is imputed from the acts of Crabtree. Thus, they contend that the Church is a "defendant” under the LRA. Because we find, however, that the Joint Obligations Act specifically addresses this issue, we need not determine the merits of plaintiff's interpretation.

3 . We recognized in Krukiewicz that section 78-27-A2 of the CNA was a “pro tanto ” repeal of section 15- 4- 4 of the Joint Obligations Act. To the extent that the LRA still addresses regular co-defendants who are liable because of fault, the LRA will supersede or act as a pro tanto repeal of section 15-4 — 4 as to those defendants. However, since the LRA does not address vicariously liable parties, section 15 4 4 now applies to those parties.

4 .Section 15-4-4 specifically provides:

[T]he obligee’s release or discharge of one or more of several obligors, or of one or more of joint or of joint and several obligors, shall not discharge co-obligors against whom the obli-gee in writing and as part of the same transaction as the release or discharge expressly reserves his rights; and in the absence of such a reservation of rights shall discharge co-obli-gors only to the extent provided in Section 15-4-5.