UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
MIDWEST CITY REGIONAL
HOSPITAL,
Plaintiff-Appellant,
Nos. 95-6434
v. 95-6461
GENERAL INSURANCE COMPANY
OF AMERICA; AON DIRECT
GROUP, INC.; JOHN L. WORRALL;
WILLIAM E. BAUER; WOBAR,
INC.,
Defendants-Appellees.
ORDER
Filed March 18, 1997
Before ANDERSON, KELLY, and LUCERO, Circuit Judges.
This matter is before the court on appellant’s petition for rehearing. The
materials submitted by appellant have been reviewed by the members of the
hearing panel, who conclude that the original disposition was correct. Therefore,
the petition for rehearing is denied on the merits.
By this order, however, please be advised of the following amendment to
the order and judgment filed January 28, 1997. Footnote one on page two of the
order and judgment is amended to read:
In its order granting summary judgment to General, the district
court directed Midwest to show cause as to why summary judgment
should not be entered in favor of the remaining defendants. Midwest
failed to respond and the district court subsequently entered summary
judgment for the remaining defendants. Although Midwest referred
to this second order in its notice of appeal, it failed to brief the issues
presented by the second order. Therefore, this court considers these
issues abandoned and waived on appeal. See, Phillips v. Calhoun,
956 F.2d 949, 954 (10th Cir. 1992) (issues designated for review are
waived if not actually argued in the party’s brief); Abercrombie v.
City of Catoosa, 896 F.2d 1228, 1231 (10th Cir. 1990) (failure to
argue issue in appellate brief constitutes waiver, even when issue is
listed in appellant’s notice of appeal).
The amended order and judgment will reissue this date.
Entered for the Court
PATRICK FISHER, Clerk
By /s/
Deputy Clerk
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F I L E D
United States Court of Appeals
Tenth Circuit
MAR 18 1997
UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT PATRICK FISHER
Clerk
MIDWEST CITY REGIONAL
HOSPITAL,
Plaintiff-Appellant,
Nos. 95-6434
v. 95-6461
(D.C. No. CIV-95-445-C)
GENERAL INSURANCE COMPANY (W.D. Okla.)
OF AMERICA; AON DIRECT
GROUP, INC.; JOHN L. WORRALL;
WILLIAM E. BAUER; WOBAR,
INC.,
Defendants-Appellees.
ORDER AND JUDGMENT *
Before ANDERSON, KELLY, and LUCERO, Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1.9. The case is therefore
ordered submitted without oral argument.
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
Plaintiff, Midwest City Regional Hospital (Midwest), appeals the district
court’s order granting summary judgment to defendant, General Insurance
Company of America (General). 1 The district court concluded that although the
claims against General were not res judicata, they were precluded by a general
release and a release and satisfaction of judgment in a prior action brought by
Midwest against Ben Kennedy & Associates, Inc. (Kennedy). We hold that the
grant of summary judgment to General was error, and we reverse.
We review the grant of summary judgment de novo and apply the same
standard used by the district court. Applied Genetics Int’l, Inc. v. First Affiliated
Sec., Inc., 912 F.2d 1238, 1241 (10th Cir. 1990). Summary judgment is
appropriate where “‘there is no genuine issue as to any material fact and . . . the
moving party is entitled to a judgment as a matter of law.’” Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986) (quoting Fed. R. Civ. P. 56(c)).
1
In its order granting summary judgment to General, the district court
directed Midwest to show cause as to why summary judgment should not be
entered in favor of the remaining defendants. Midwest failed to respond and the
district court subsequently entered summary judgment for the remaining
defendants. Although Midwest referred to this second order in its notice of
appeal, it failed to brief the issues presented by the second order. Therefore, this
court considers these issues abandoned and waived on appeal. See Phillips v.
Calhoun, 956 F.2d 949, 954 (10th Cir. 1992) (issues designated for review are
waived if not actually argued in the party’s brief); Abercrombie v. City of
Catoosa, 896 F.2d 1228, 1231 (10th Cir. 1990) (failure to argue issue in appellate
brief constitutes waiver, even when issue is listed in appellant’s notice of appeal).
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FACTS AND PROCEDURAL HISTORY
The basic facts of this case are undisputed. Kennedy, an insurance broker,
issued a liability insurance policy to Midwest for the period of July 1, 1990
through July 1, 1991. The policy stated that it provided coverage for prior acts
from January 1, 1976 to July 1, 1990. In August 1990, Kennedy became aware
that the policy was issued on a nonexistent insurance company and was bogus.
Allegedly on instructions from General, Kennedy delayed notifying Midwest until
April, 1991, at which time Kennedy replaced the bogus policy with a legitimate
policy, but without the prior acts coverage. Midwest subsequently filed suit
against Kennedy asserting gross negligence, fraud, the tort of outrage, and breach
of contract.
Following trial, a jury awarded Midwest damages in the amount of
$1,675,000. The parties subsequently entered into a settlement agreement
wherein Midwest received $800,000 which was paid by General as Kennedy’s
errors and omissions carrier. In return, Midwest executed a general release and
filed a satisfaction of judgment and release, acknowledging full satisfaction of the
judgment.
Midwest then brought a second suit against defendants, claiming gross
negligence, bad faith, intentional interference with a business contract, conspiracy
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to defraud, and ratification based on Midwest’s allegation that on the instructions
of E & O Professionals, an agent of General, Kennedy delayed advising Midwest
of the bogus policy. Midwest claimed that this delay prevented it from obtaining
comparable coverage for the same premium.
Defendants moved for dismissal claiming that any action against them was
barred by the terms of the general release executed by Midwest and the
satisfaction of judgment and release filed in the action against Kennedy, and that
Midwest was attempting impermissibly to split a cause of action. Midwest
asserted that the claims against General were separate and distinct from those
brought against Kennedy, and that the releases did not purport to release General
from individual torts. Midwest further asserted that because the amount received
from Kennedy only partially satisfied the judgment, the rule against splitting a
cause of action did not apply.
The district court converted defendants’ motion to dismiss under Fed. R.
Civ. P. 12(b)(6) to a motion for summary judgment. See Fed. R. Civ. P. 12(b).
The court determined that because Midwest was asserting separate and distinct
claims against General, its claims were not barred by res judicata, but were barred
by the language of the releases. On appeal, Midwest does not contest the res
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judicata determination, 2 but only challenges the district court’s grant of summary
judgment based on its determination that the satisfaction of judgment and release
and general release bar the claims against General.
DISCUSSION
Following settlement in the suit against Kennedy, Midwest filed a
satisfaction of judgment and full release which stated in part:
WHEREFORE, Satisfaction of the Judgment is hereby
acknowledged and the Clerk of the Court is authorized and directed
to make an entry of the satisfaction on the judgment docket.
Midwest City Regional Hospital hereby fully releases Ben
Kennedy & Associates, Inc., its officers, directors, shareholders,
agents, employees, representatives and errors and omissions carriers
from any liability related to or arising from the causes of action set
forth in the above-styled case.
Appellee’s Supp. App. at 15-16. In addition, although not filed, Midwest
executed a general release which stated:
Midwest City Regional Hospital Authority, d/b/a the Midwest
City Regional Hospital, does hereby acknowledge receipt in hand of
Eight Hundred Thousand Dollars ($800,000.00) from Ben Kennedy &
Associates, Inc., and in consideration of said sum, Midwest City
Regional Memorial Hospital Authority, d/b/a Midwest City Regional
2
In its answer brief, General attempts to appeal the district court’s res
judicata determination. Although an appellee may defend a judgment without
filing a cross appeal, an appellee may not attack a lower court judgment with a
view toward enlarging its own rights or lessening the rights of appellant without
filing a cross appeal. Hansen v. Director, OWCP, 984 F.2d 364, 367 (10th Cir.
1993). Therefore, we do not address General’s arguments on the res judicata
issue.
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Hospital, does hereby release Ben Kennedy & Associates, Inc., its
officers, directors, shareholders, agents, employees and
representatives . . . and Ben Kennedy & Associates, Inc.’s insurers
and their agents, representatives and employees, together with their
heirs, successors, estates or assigns, from liability as surety and
indemnitor of Ben Kennedy & Associates, Inc., for any and all
allegations, claims, causes of action and damages asserted in the case
styled Midwest City Regional Hospital v. Ben Kennedy & Associates,
Inc., Case No. CJ-91-7272, filed in the District Court of Oklahoma
County, Oklahoma and in the counter-appeal styled Midwest City
Hospital v. Ben Kennedy & Associates, Case No. 83,955 in the
Supreme Court of Oklahoma.
Id. at 17-18.
Prior to Oklahoma’s adoption of the Uniform Contribution Among
Tortfeasors Act (UCATA), Okla. Stat. Ann. tit. 12, § 832, under Oklahoma law,
“where a release contained broad language . . . seemingly releasing the entire
world,” interpretation was limited to the plain language of the release, and all
other potential tortfeasors were discharged from liability. Moss v. City of
Oklahoma City, 897 P.2d 280, 284 (Okla. 1995) (citing Brown v. Brown, 410
P.2d 52 (Okla. 1966)).
In Moss, the Oklahoma Supreme Court, considering the applicability of
section 832(H)(1) 3 of the UCATA to the question, adopted the “specific identify
3
At times relevant to this case, Okla. Stat. Ann. tit. 12, § 832(H)(1) and (2)
provided:
H. When a release, covenant not to sue or a similar agreement is
given in good faith to one of two or more persons liable in tort for
(continued...)
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rule” that in order for a general release to discharge potential tortfeasors not
parties to the release from liability, “the language contained in the release must
expressly designate by name or otherwise specifically identify such other
potential tortfeasors.” 4 Id. at 286, 288.
Oklahoma has published a line of cases following Moss which further
define and refine its policy regarding the effect of a release given to one or more
tortfeasors on other potential tortfeasors. In Hoyt v. Paul R. Miller, M.D., Inc.,
921 P.2d 350 (Okla. 1996), the court considered an action brought for wrongful
death against the health care providers providing medical attention to the
deceased after an automobile accident. The court held that there were genuine
issues of fact precluding summary judgment as to whether two releases filed in
cases against the driver of the automobile and the driver’s insurer were intended
to represent full compensation for the plaintiff’s death.
3
(...continued)
the same injury or the same wrongful death:
1. It does not discharge any of the other tort-feasors from liability
for the injury or wrongful death unless its terms so provide; but it
reduces the claim against others to the extent of any amount
stipulated by the release or the covenant, or in the amount of the
consideration paid for it, whichever is the greater; and
2. It discharges the tort-feasor to whom it is given from all liability
for contribution to any other tort-feasor.
4
We note that in 1995, section 832(H)(1) was amended to read, “[i]t does
not discharge any other tort-feasor from liability for the injury or wrongful death
unless the other tort-feasor is specifically named.” Okla. Stat. Ann., tit. 12,
§ 832(H)(1).
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The Hoyt court stated that the Oklahoma Supreme Court’s recent decisions
in Kirkpatrick v. Chrysler Corporation, 920 P.2d 122 (Okla. 1996), Shadden v.
Valley View Hospital, 915 P.2d 364 (Okla. 1996), and Carmichael v. Beller, 914
P.2d 1051 (Okla. 1996) recognized that the amendment to the UCATA, section
832(H), served to overrule the rule that there cannot be recovery in a malpractice
suit by one who has sustained personal injuries in consequence of a third person’s
negligence, against a physician for injuries resulting from improper treatment,
after settlement with full release of the tortfeasor who caused the injuries. Hoyt,
921 P.2d 355-56. Relying on Moss, the court then set forth the new rule that a
release given to an original tortfeasor will not discharge any subsequent health
care provider unless the health care provider is named or otherwise specifically
identified in the release. 921 P.2d at 356-57.
In Jones v. Wilson Industries, Inc. (In re Jones), 804 F.2d 1133, 1142-43
(10th Cir. 1986), we held that section 832(H) did not require that the parties be
joint tortfeasors to be applicable, but only that the multiple tortfeasors cause or
contribute to the same injury sustained by the plaintiff. The applicability of
section 832(H) thus turns, not on whether the parties are joint tortfeasors, but
whether there is a common liability. Carmichael, 914 P.2d at 1056. Although it
is unclear from the record whether common liability exists between Kennedy and
General or whether General’s actions constitute an independent and separate
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cause of action, because we ultimately conclude that under either theory the
releases cannot be interpreted as discharging General from liability as a potential
tortfeasor, we do not need to make this determination here.
General wears two hats in this case, one as the errors and omissions carrier
for Kennedy, and one as a potential tortfeasor allegedly causing Midwest to incur
damages. The satisfaction of judgment and release contains language releasing
“Ben Kennedy & Associates, Inc., its officers, directors, shareholders, agents,
employees, representatives and errors and omissions carriers from any liability
related to or arising from the causes of action set forth in the above-styled case.”
Appellee’s Supp. App. at 15-16 (emphasis added). Therefore, assuming the
existence of common liability, the UCATA is applicable, and General is released
from all further liability as Kennedy’s errors and omissions insurer. Our question
thus becomes whether the release proports to release General as an additional
tortfeasor as well.
Our reading of the releases indicates that General, as a potential tortfeasor,
was neither named nor otherwise specifically identified as a discharged party.
Therefore, if it is determined that common liability exists and the UCATA
applies, we must reverse on the basis that the release fails to properly identify
General as a discharged party. See Moss, 897 P.2d at 282.
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If it is determined that there is no common liability, an independent cause
of action may exist against General for the separate harm caused by its alleged
actions in instructing Kennedy to delay a disclosure of the bogus policy to
Midwest. No language in the releases can be reasonably construed to discharge
General under this theory either. Cf. Shadden, 915 P.2d at 370.
We have carefully reviewed the record on appeal and in particular, the
satisfaction of judgment and release and general release at issue. In that General
was not named or specifically identified in any other capacity other than as
Kennedy’s errors and omissions carrier, the releases were not sufficient to
discharge General from the liability asserted by Midwest in its suit. Summary
judgment in General’s favor was therefore, improper. See Wolf v. Prudential Ins.
Co., 50 F.3d 793, 796 (10th Cir. 1995) (summary judgment is appropriate only
when there is no substantial dispute as to any material fact, and the movant is
entitled to judgment as a matter of law).
Finally, we briefly address General’s argument that Midwest’s second suit
would constitute an impermissible splitting of the cause of action. In Kirkpatrick,
the Oklahoma court considered and altered the existing law regarding what
constitutes impermissible splitting of a cause of action. The court concluded that
when the amount of damages has been determined by an adjudication on the
merits, or when the parties agree on a settled amount as full compensation for the
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plaintiff’s injuries, a plaintiff is precluded from proceeding against other
tortfeasors. 920 P.2d at 129. In such circumstances, allowing the plaintiff to
proceed against other potential tortfeasors would “breed inefficiency and thwart
the beneficial goal of bringing finality to litigation.” Id. at 130. On the other
hand, when “the agreed or consent judgment is merely part of a settlement of the
case never intended to discharge absent tortfeasors and never intended to
represent full compensation . . . a different result should obtain.” Id.
Here we are confronted with the unique situation where an amount of
damages has been determined by actual adjudication, and also where the lesser
amount paid in satisfaction of the judgment was a result of settlement by the
parties. Because the adjudicated amount was never paid, and we are still faced
with the question of whether the $800,000 was intended as full compensation for
Midwest’s damages, we see no reason to deviate from the Kirkpatrick reasoning.
In Hoyt, the court held that summary judgment was improper because,
although the language in the releases acknowledged full payment and satisfaction
for any claim raised in the suit against the original tortfeasor, there was no
evidence in the record showing that the amounts paid were intended to be full
compensation for the plaintiff’s death. 921 P.2d at 354, 358. We find no
evidence in the record here upon which to base a conclusion that the amount of
settlement was intended to represent full compensation for Midwest’s injury.
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Indeed, the discrepancy between Midwest’s formally adjudicated damages of
$1,675,000 and its settlement with Kennedy for $800,000 strongly suggests the
contrary. We therefore hold that Midwest’s suit against General would not
constitute an impermissible splitting of its cause of action. 5
Accordingly, the November 8, 1995, judgment of the United States District
Court for the Western District of Oklahoma, granting summary judgment to
General Insurance Company of America, is REVERSED, and this matter is
REMANDED to the district court for further proceedings. 6
Entered for the Court
Paul J. Kelly, Jr.
Circuit Judge
5
We note that Midwest asserts that it entered into the settlement agreement
due to Kennedy’s insolvency and pending bankruptcy. Midwest contends that the
bankruptcy court lifted the automatic stay only to the extent of the errors and
omissions policy limits, of which only $800,000 of the $1,000,000 limit available
during a policy period still remained.
6
Because the issue is not before us for decision, in reversing and remanding
this case, we make no determination as to any possible deduction of the amount of
settlement against Kennedy from any judgment that might be forthcoming as a
result of Midwest’s suit against General.
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