Yeadon v. Pizza

Opinion

USCA1 Opinion

May 5, 1994           [NOT FOR PUBLICATION]

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

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No. 94-1125

DAVID J. YEADON,

                                Plaintiff, Appellant,

                                          v.

                             PIZZA HUT OF AMERICA, INC.,

                                 Defendant, Appellee.

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                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                 [Hon. Frank H. Freedman, Senior U.S. District Judge]
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                                        Before

                              Torruella, Selya and Cyr,
                                   Circuit Judges.
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               Dennis  P.  Powers, Katz,  Argenio  &  Powers  on brief  for
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          appellant.
               Thomas M. Elcock, Debra A.  Joyce, Carole Sakowski Lynch and
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          Morrison, Mahoney & Miller on brief for appellee.
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Per Curiam.  Appellant David Yeadon appeals the grant of
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            a motion  for summary  judgment in favor  of appellee,  Pizza

            Hut,  in  regard  to  Yeadon's   claim  that  Pizza  Hut  was

            vicariously liable for damages incurred by him in an accident

            caused by Dwight Spaulding,  an employee of Pizza Hut.   This

            diversity  action  is  governed  by Massachusetts  law.    We

            summarily affirm.

                                          I

                 In  April  1990, Yeadon  was  injured  in an  automobile

            accident  when a  vehicle driven  by Spaulding  collided with

            Yeadon's car.   At the  time of the  accident, Spaulding  was

            acting within the scope of his employment with Pizza Hut.  In

            March 1991, Yeadon, in  return for a payment of  $15,000 from

            Spaulding's  insurance  carrier,  Arbella   Mutual  Insurance

            Company, executed a release which reads as follows:

                 In consideration of  FIFTEEN THOUSAND  ($15,000.00)
                 dollars to be paid  by ARBELLA MUTUAL INSURANCE CO.
                 the receipt whereof is hereby acknowledged I hereby
                 remise,  release and  forever  discharge  the  said
                 Arbella Mutual and Dwight  J. Spaulding of and from
                 all  debts,  demands,  actions,  causes  of action,
                 suits, accounts,  covenants, contracts, agreements,
                 damages,  and  any  and  all  claims,  demands  and
                 liabilities  whatsoever of  every name  and nature,
                 both  in LAW and in  EQUITY, which against the said
                 Dwight J. Spaulding or his  heirs and assigns I now
                 have or ever had from the beginning of the world to
                 this date  and more  especially on account  of [an]
                 automobile  accident   on  April  11,  1990.    The
                 undersigned  specifically  reserves  all rights  as
                 against Pizza  Hut and  Dwight J. Spaulding  as its
                 agent.  

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The  release  was  signed  by  Yeadon and  witnessed  by  his

            attorney.      In March  1993,  Yeadon brought  suit  against

            Pizza Hut, on the  ground that it was vicariously  liable for

            the damages from the accident.  The district court found that

            Yeadon  had released  Spaulding from  all liability  and that

            under  Massachusetts law the release of  an agent precluded a

            derivative claim against the  principal.  The court therefore

            granted Pizza Hut's motion for summary judgment.  

                                          II

                 Yeadon raises two arguments  on appeal. First, he argues

            that  the district court erred in interpreting the March 1991

            contract  as an  unambiguous  release of  Spaulding from  all

            liability.  Second, he contends that, even if the contract is

            so interpreted, Massachusetts law does not bar a claim in his

            case.

                 Yeadon  asserts  that  his  intent  in  the  March  1991

            contract was to grant  an absolute release to Arbella  but to

            grant only a qualified release to Spaulding and to preserve a

            complete  right  of  action against  Pizza  Hut.   He  relies

            primarily  upon the explicit  language of the  release to the

            effect that  he "specifically reserves all  rights as against

            Pizza Hut  and Dwight J.  Spaulding as  its agent."   He also

            seeks   to  support  his   interpretation  by   reference  to

            circumstances surrounding the agreement.   Since, in spite of

            the language referred to by appellant, we find the release to

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be "unambiguous in  regard to the  question at hand,"  Hermes
                                                                   ______

            Automation Technology, Co. v. Hyundai Electronics Industries,
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            Co.,  915 F.2d 739, 747 (1st Cir. 1990) (citing cases), i.e.,
            __                                                      ___

            its  grant  of a  complete  release to  Spaulding,  we eschew

            reliance on external evidence  and limit our consideration to

            the plain  meaning  of  the  language of  the  contract,  see
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            Commercial Union Ins Co.  v. Walbrook Ins. Co., 7  F.3d 1047,
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            1052-53 (1st Cir. 1993) (applying Massachusetts law). 

                 With the  exception of the last sentence, the March 1991

            contract is a standard preprinted release form filled in with

            the information relevant  to the accident of April  11, 1990.

            The  form is entitled as a  "Release from All Demand" and its

            language grants a complete release from all liability for the

            accident  to  "Arbella  Mutual   and  Dwight  J.  Spaulding."
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            (emphasis added).   The  only possible qualification  to this

            unqualified  release is  the  last sentence  of the  contract

            which  purports to "reserve  all rights as  against Pizza Hut

            and  Dwight J. Spaulding as its agent."  Unless this sentence

            can  be  read  as   a  retraction  of  the   release  granted

            immediately above,  it must  mean that appellant  intended to

            preserve his right of action against Pizza Hut and to reserve

            a  right against Spaulding only as a means for reaching Pizza

            Hut.   However,  if Pizza  Hut were  to be  found vicariously

            liable  for any  damages  to Yeadon  due  to the  actions  of

            "Spaulding as its  agent," Pizza  Hut would have  a right  to

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seek indemnity from  Spaulding.  See  Elias v. Unisys  Corp.,
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            410 Mass. 479, 483, 573  N.E.2d 946, 949 (1991).   The effect

            of  the reference  to Spaulding  in the  final sentence  then

            would be to  subject him  to liability for  the damages  from

            which  the  contract purports  to  release  him.   Spaulding,

            therefore,  would have  paid,  through  his insurer,  $15,000

            compensation without having acquired complete protection from

            further liability.  Rather than reading the  last sentence as

            a negation of the  complete release plainly granted Spaulding

            in the remainder of  the document, we find that,  read in the

            light of  the contract  as a whole,  see Cullen  Enterprises,
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            Inc. v. Massachusetts Property  Ins. Underwriting Ass'n,  399
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            Mass. 886, 900, 507 N.E.2d 717, 725 (1987) ("contract must be

            interpreted  as  a  whole  to  give  effect  to  its  general

            purpose"), the  last sentence preserves a  right only against

            Pizza Hut and  has no effect on the release of Spaulding from

            further liability. 

                 Interpreting the contract  as an unqualified  release of

            Spaulding  from all  liability stemming  from the  April 1990

            accident,  we  further  find   that  Massachusetts  law  bars

            recovery against Pizza Hut.   In facts analogous to  those of

            this case, the Supreme Judicial Court held that "the  release

            of  an agent precludes a  claim against his  principal who is

            liable solely on the theory of respondeat superior."   Elias,
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            410 Mass.  at 484,  573 N.E.2d  at 949.   Yeadon  attempts to

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distinguish  Elias  first on  the  ground that  in  Elias the
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            plaintiff  had granted  the agent  a general  release whereas

            Yeadon explicitly reserved his right against Pizza Hut.  This

            argument is unavailing since, according to Elias, the release
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            of  Spaulding barred, as a  matter of law,  any claim against

            Pizza Hut.  Therefore,  the attempt by Yeadon to  reserve his

            rights against Pizza Hut was legally meaningless.  

                 Yeadon also asserts that the "essence" of  Elias is that
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            an injured party be "fully compensate[d for] an injury caused

            by  the act of a single tortfeasor."   Id. at 483, 573 N.E.2d
                                                   __

            at  948 (citation omitted).   Inasmuch as  Yeadon now alleges

            that he  did not receive  full compensation for  his injuries

            from  Spaulding,  he claims  that  Elias allows  him  to seek
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            further compensation directly from Pizza Hut.    

                 According to the rules of vicarious liability, "[i]f the

            ultimately responsible  agent  is unavailable  or  lacks  the

            ability to pay, the innocent victim has  recourse against the

            principal."   Id.  However,  in the instant  case, Spaulding,
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            through his insurer,  had the  ability to  pay $15,000  which

            Yeadon  accepted as  the price  of a  release.   According to

            Elias, in  a situation where  "the agent .  . . has  means to
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            pay, invocation  of the doctrine [of  vicarious liability] is

            unnecessary because the  injured party has a  fund from which

            to recover."   Id.  We find nothing in  Elias, nor has Yeadon
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            called  our  attention to  anything,  which  would limit  the

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effect  of  an  agent's   release  to  situations  where  the

            plaintiff  concedes  after the  fact  to  having been  "fully

            compensated."     Having  granted  Spaulding   a  release  in

            consideration of $15,000 compensation, Yeadon has no recourse

            under   Massachusetts  law   against   Pizza   Hut   in   the

            circumstances at bar.1

                 Affirmed.  See 1st Cir. Loc. R. 27.1.
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            1.  Of course,  this does  not mean  that the  reservation of
            rights was a nullity  or otherwise illusory.  It  sufficed to
            preserve claims  against Pizza Hut for direct  (as opposed to
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            vicarious)  liability,  e.g.,  if  Pizza  Hut  had  furnished
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            Spaulding   with  a   defective  vehicle,   and   the  defect
            contributed  to  the occurrence  of  the accident.    By like
            token, the  reservation sufficed  to preserve  claims against
            Pizza Hut  arising out of different  accidents or occurrences
            (not involving Spaulding).

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