The opinion of the court was delivered by: Robson, District Judge.
MEMORANDUM AND ORDER ON RELEASE ISSUES
Defendant Boeing Company has filed what is deemed by this court
to be a motion for summary judgment in each of four of the cases
arising out of the Rome, Italy, air crash disaster: Schanke v.
Boeing Co. (66 C 1586), Gartley v. Boeing Co. (66 C 1587),
Nessler v. Boeing Co. (66 C 1588), and McCarthy v. Boeing Co. (66
C 1589). In each of these four cases, documents were signed which
amount to limited or general releases. Boeing, through its
counsel in New York, alleges that there are other cases in which
similar releases were signed. These other cases, of course,
cannot be considered at this time. With respect to the four cases
presently before the court, this court is of the opinion that the
motions for summary judgment should be denied.
In McCarthy, Boeing agrees that there was a release only as to
T.W.A. Boeing argues that federal law (as set forth in an
antitrust case) supports its position that this plaintiff should
have reserved his rights against Boeing. Dura Electric Lamp Co.,
Inc. v. Westinghouse Electric Corporation, 249 F.2d 5 (3rd Cir.
1957). Also see Twentieth Century-Fox Film Corporation v.
Winchester Drive-In Theatre, Inc., 351 F.2d 925 (9th Cir. 1965).
However, state law would apply in this instance, and both
California and the District of Columbia laws (the two possible
jurisdictions whose law would apply) make it clear that a release
of only one tortfeasor does not release any other tortfeasor. See
discussion below, and McKenna v. Austin, 77 U.S.App.D.C. 228,
134 F.2d 659, 664, 148 A.L.R. 1253 (1943). The McCarthy
case, therefore, must withstand a motion for summary judgment.
In Schanke, Boeing agrees that the signed "Stipulation for
Settlement" does not amount to a general release, but asserts
that there are other documents yet to be forwarded from New York
(or yet to be discovered in certain warehouses) which show that a
general release was entered into. In short, pending further
documentation, the Schanke case cannot be dismissed under
California law, as discussed more fully below.
In Gartley and Nessler, however, general releases were signed.
Both sides agree that the Illinois conflict of laws principle
should govern, Klaxon Co. v. Stentor Electric Manufacturing Co.,
Inc., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941), although
they disagree as to what that principle is. The plaintiffs cite
the older Illinois cases which hold that the law of the place
where the release was executed governs. E.G., Woodbury v. United
States Casualty Co., 284 Ill. 227, 120 N.E. 8 (1918). In Gartley,
this place is Kansas; in Nessler, it is California. However,
Boeing points out that the plaintiff in Gartley is a citizen,
resident and domiciliary of California, was employed by T.W.A. in
California, and voted and filed her income tax returns in
California. After her release from the hospital in Rome (where
she stayed for over three months), she stopped to convalesce at
her brother's home in Kansas, and there signed the release. In
Nessler, the five decedents (a husband and wife, and their three
children) were all citizens, residents and domiciliaries of
Arizona, the wills were probated in Arizona, and administered by
the Valley National Bank of Tucson, Arizona. There was a
settlement reached in a suit brought only against T.W.A. in the
Federal District Court in Arizona and, merely for the convenience
of the mother and half-sister, the releases were signed in
California, since they were California residents. The father, a
resident of Washington, also signed a release in settlement of
the Arizona suit, but neither side has disclosed where he signed
Boeing argues from these facts that the law of California
should apply in Gartley (the plaintiff says Kansas) and that
Arizona law should apply in Nessler (the plaintiff says
California). Boeing bases its argument on its reading of what the
Illinois conflict of laws rule is, as evidenced by two recent
cases. Graham v. General U.S. Grant Post No. 2665, 97 Ill. App.2d 139,
239 N.E.2d 856 (2nd Dist. 1968); and Wartell v. Formusa,
34 Ill.2d 57, 213 N.E.2d 544 (1966). These cases, contends Boeing,
show that Illinois has adopted the more modern view of the
conflict of laws: the "most significant contacts" doctrine. In
Graham, the court applied the Illinois Dram Shop Act where the
accident occurred in Wisconsin, thereby overruling the doctrine
that the law of the place of the accident (lex loci delicti)
should govern. The court said that the wrongful conduct (selling
liquor to an already intoxicated man) was completed with the
sale, and that "the location of any injury caused by the
intoxication, either within or without the State, is irrelevant."
Id., 94 Ill.App.2d at 148, 239 N.E.2d at 861. This statement was
completely in line with the opinion's severe criticism of the old
lex loci delicti rule.
In Wartell v. Formusa, supra, the Illinois Supreme Court ruled
that the Illinois law as to interspousal immunity (from torts
committed during coverture) should apply, even though the
accident occurred in Florida. The court did resolve this issue,
even though it was presented with almost identical laws, and thus
confronted what has been called a "false conflict." Cavers, The
Choice-of-Law Process (1965), at 89. The court said, at 59, 213
N.E.2d at 545:
The Illinois Supreme Court, through this opinion and the cases it
cited therein, has indicated that, in certain situations, the
interests of one state will be such as to override the inflexible
lex loci delicti rule. Boeing urges that since, in Gartley, she
was in Kansas only temporarily, and since, in Nessler, the
survivors' convenience was the only interest served which caused
the signing of the releases outside of Arizona, the places of
execution of the releases were entirely fortuitous, and bear no
relation to the true interests to be served. Cf. Pearson v.
Northeast Airlines, Inc., 309 F.2d 553 (2d Cir. 1962).
This court agrees that in both cases the place of execution of
the releases was fortuitous. The suit in Nessler was brought by
the heirs and next-of-kin of the five decedents. This shows at
least a colorable interest on the part of the states in which
they lived, at least in the amount due these survivors. Cf. Watts
v. Pioneer Corn Company, Inc., 342 F.2d 617, 620 (7th Cir. 1965).
In Nessler especially, though, the action that was settled by the
releases was an Arizona action, and the releases were signed
outside of Arizona only to save the next-of-kin (who were parties
to the Arizona action) from making the long trip to Tucson. In
effect, therefore, the releases were really "executed" in
Arizona, and thus Arizona law would apply in the Nessler case
whether the "most significant contacts" standard or the lex loci
delicti rule is used. Cf. Restatement, Conflict of Laws §§ 312,
321 (1934) with Restatement, Second, Conflict of Laws, Tentative
Draft No. 6 (1964).
In Gartley the suit was brought, not by the heirs or the
next-of-kin, but by the injured party herself. There is,
therefore, no interest that a Kansas heir could assert as a cause
of action as a result of the injuries sustained in Gartley.
Kansas was merely a stopping-off point on the plaintiff's journey
from the Rome hospital to her home in California. The "fortuity"
of her signing the release in Kansas is thus only further
emphasized. Cf. Dym. v. Gordon, 16 N.Y.2d 120, 262 N.Y.S.2d 463,
209 N.E.2d 792 (1965).
It is this court's opinion that were the Illinois Supreme Court
presented with the instant cases, in the light of Wartell v.
Formusa, supra, and the citations and decision in Graham v.
General U.S. Grant Post No. 2665, supra, it would not apply the
law of the place of the execution of the releases in Gartley and
Nessler. It now remains to determine the effect of a general
release under the laws of California and Arizona.
In California, the law applicable to the Gartley case, a
statute governs the effect to be given a release. A release or
dismissal of one tortfeasor is not a discharge of any other
tortfeassor "unless its terms so provide." West's
Ann.Calif.Civ.Proc.Code, § 877(a) (1957). There is no explicit
exclusion for a general release given by an employee to his
employer, if the release by its terms operates to relieve other
tortfeasors from liability. But cf. Wendel v. Chicago, Rock
Island & Pacific Railroad Co., 170 Kan. 68, 223 P.2d 993 (1950).
In the document signed in Gartley, "as part of the consideration
of this release, all other persons, firms or corporations
whatsoever" were also released. Plaintiffs' Brief, Gartley
Exhibit A. The amount paid for the plaintiff's injuries was only
$7,000. This amount was apparently a result of the operation of
the Warsaw Convention, which limited the maximum liability of
T.W.A. to about $8,291.87. Even though there was general language
in the release, the size of the settlement and the fact that
Boeing was not named specifically cast more than a shadow of
on the intentions of the signing parties to compromise a
potentially very large recovery against Boeing. This approach was
set forth by Mr. Justice Rutledge (then on the Court of Appeals
for the District of Columbia) in McKenna v. Austin, supra, 134
F.2d at 664:
"* * * Whether the settlement is made and accepted
as full satisfaction or merely as the best obtainable
compromise for the settler's liability is the crucial
issue, and ordinarily one of fact. If however the
agreement's terms leave no ...