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Robson v. American Casualty Co.

June 30, 1962


Author: Kiley

Before KNOCH, KILEY and SWYGERT, Circuit Judges.

KILEY, Circuit Judge.

This is a diversity suit to recover $15,000 which plaintiffs undertook to pay, and which they claim their insurer, defendant, ought to have paid, in settlement of a personal injury and property damage suit. Both plaintiffs and defendant filed motions for summary judgment.*fn1 The court granted plaintiffs' motion and defendant has appealed.

Plaintiffs' automobile collided with the automobile of Frank and Rose Santomassino in Dade County, Florida. Both Santomassinos filed claims for bodily injuries directly with defendant in Florida. Later they sued plaintiffs in Florida and defendant under its policy obligation employed an attorney to defend the suit. During the trial a settlement of $115,000 was reached, for payment of which a general release was signed by the Santomassinos. Defendant paid the limit of $100,000 under its policy for the bodily injury to "each person" in the collision.*fn2 Plaintiffs undertook to pay the $15,000. It is that sum which is sought in this suit.

On consideration of the "memorandums and exhibits" in support of the motions for summary judgment and after argument, the District Court made these findings: Following the collision both Santomassinos filed with defendant separate claims for personal injuries, and subsequently Rose sued for personal injuries and Frank for damages consequent upon injuries to Rose.*fn3 In settlement of the suit the Santomassions expressly released their individual claims for personal injuries. The total settlement of $115,000 came within the policy limit of $200,000 for "each occurrence."*fn4

The District Court decided on these findings that there was no genuine issue as to any material fact and entered the judgment in plaintiffs' favor.

The question is whether the court's finding of the absence of a genuine issue of a material fact is erroneous. The significance of the finding is this: If the release covers both Rose and Frank Santomassino's bodily injury claims, defendant's liability is $200,000 for "each occurrence," instead of $100,000 for "each person," and it, and not plaintiffs, would have the burden of paying the $15,000 sought by plaintiffs in this suit.

In support of their motion plaintiffs filed, among other exhibits, a memorandum sent by defendant's Miami branch office to the Chicago branch office: "Please note that the attorney is claiming injury to Frank Santomassino and Rose Santomassino. You will need an AL for Frank * * *." The memorandum suggested a reserve "AL for Frank Santomassino" of $1,500. Plaintiffs also filed a letter from a doctor outlining personal injuries to Frank Santomassino and a copy of defendant's draft of the release of $100,000 "in full and final settlement of any and all claims." "The endorsement * * * constitutes a release * * * in full payment of the account as stated herein."

Defendant relied upon affidavits of its Chicago and Florida attorneys and of its Florida branch manager; and on part of the transcript of the Florida proceedings, and the Stipulation and Order of Dismissal in the Florida suit.

The portion of the transcript shows that the Florida attorney for the Santomassinos stated in the Florida case that "this case has been settled for $115,000." The order of the Florida court stated "this cause having been amicably settled this action shall be dismissed with prejudice * * *."

The Chicago attorney's affidavit states that the only relevant claim of Frank Santomassino is the one made in the Florida suit. The affidavit of defendant's Florida attorney stated that "no part" of the settlement was paid on account of a personal injury claim of Frank Santomassino; that under Florida law any personal injury claim of Frank Santomassino became "totally valueless" when the cause of action in Florida was presented; that the order of dismissal of that cause was res judicata; and that no demand was made on him for any "additional sums" for injuries to Frank Santomassino. The affidavit of defendant's Florida manager stated that "no part" of the settlement was for personal injury to Frank Santomassino, and that no demand was made, while he conducted the settlement negotiations, for settlement of Frank Santomassino's personal injury claim.

The burden of defendant was to show that it had a ground of defense fairly arguable and of a substantial character. Repsold v. New York Life Ins. Co., 7 Cir., 216 F.2d 479 (1954). It relies upon the statements in the affidavits and the portion of the transcript, and the order of the Florida court, in the Florida lawsuit, to show that the General Release was not intended to release a personal injury claim of Frank Santomassino. The question is raised in this court as to whether that evidence is admissible, under Florida law, to make that showing.

In the trial court, and here, defendant relied upon Mallard v. Ewing, 121 Fla. 654, 164 So. 674, 678, for the rule that parol evidence is admissible to show a contemporaneous oral agreement which induced the General Release.

The General Release expressly releases both personal injury claims of the Santomassinos.*fn5 ...

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