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Mullins v. Walker Tool & Manufacturing11/24/2003
Kenneth Mullins sued Walker Tool & Manufacturing, Inc. in the Superior Court of Jasper County, claiming that Walker Tool acted as a joint tortfeasor with Karl-Heinz Herrmann in converting property belonging to Mullins. Walker Tool filed a third party complaint against Herrmann (as well as a counterclaim and cross-claim). After Mullins instituted other litigation against Herrmann in the Superior Court of Clayton County and in a Virginia state court, Mullins and Herrmann entered into a settlement and released each other from all claims. Mullins appeals the superior court's award of summary judgment to Walker Tool on his complaint and its denial of summary judgment to him on Walker Tool's counterclaim.
There are two questions for decision: (1) whether Mullins's settlement with and release of Herrmann precludes Mullins's recovery of damages against Walker Tool in this case; and (2) whether Walker Tool and Herrmann entered into an agreement releasing Mullins from liability on Walker Tool's counterclaim. The superior court answered the first question in the affirmative and the second question in the negative. Answering both questions in the negative, we reverse the award of summary judgment to Walker Tool on Mullins's complaint but affirm the denial of summary judgment to Mullins on the counterclaim.
Mullins (a resident of Clayton County) and Herrmann (a resident of the state of Virginia) engaged in a joint venture for commercial development of a liquid filtration device known as the "Poseidon." They conducted the enterprise under the name HK Technologies (HKT). Herrmann agreed to furnish the technological expertise needed to manufacture a prototype of the device, and Mullins agreed to fund production. Walker Tool, operator of a machine shop in Jasper County, agreed to construct the prototype. Mullins paid money to Walker Tool and furnished equipment and material at a total cost or value of $35,500. Herrmann later advised Walker Tool that differences had arisen between him and Mullins and that the Poseidon could not be removed from the machine shop until those differences were resolved. Unbeknownst to Mullins, Walker Tool subsequently delivered the Poseidon to Herrmann after Herrmann paid $10,000 to Walker Tool and orally agreed to pay a balance that Walker Tool claims it is due for production of the device.
Mullins later instituted this action against Walker Tool for conversion of the Poseidon and breach of contract. Initially, Mullins sought recovery either of the device itself or of compensatory damages consisting of the $35,500 he had incurred in production expenses. Walker Tool answered and asserted as one of its defenses that the action is not being prosecuted in the name of the real party in interest, HKT. In the third party complaint, Walker Tool sought indemnification from Herrmann for any damages for which it might be held liable to Mullins. In its counterclaim against Mullins and in its cross-claim against Herrmann, Walker Tool sought to collect $17,266.27 as the balance due for its work in manufacturing the Poseidon prototype. Mullins later amended his complaint to seek recovery of a total of $45,500 in damages against Herrmann and Walker Tool for money he had spent in development of the Poseidon prototype.
In a separate complaint against Herrmann in the Clayton Superior Court, Mullins sought to recover a total of $50,500 in damages for expenses he had incurred in development of the Poseidon. Mullins also charged Herrmann with breach of a settlement agreement requiring Herrmann to pay Mullins $50,000, to satisfy the balance due Walker Tool for production of the Poseidon prototype and to obtain Walker Tool's release of Mullins from any additional liability. I
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