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First State Staffing Plus9/6/2005
ointly or severally liable in tort for the same injury to the person or property." Section 6304(a) of the UCATL provides: "A release by the injured person of one joint tort-feasor, whether before or after judgment, does not discharge the other tort-feasor unless the release so provides . . . ."
In Blackshear v. Clark, the Delaware Supreme Court applied § 6304(a) to allow a plaintiff to proceed against her doctor for medical malpractice after settling with the doctor's principal, the hospital. In applying § 6304(a) to the situation where a master is released but not the servant, the Court specifically refrained from expressing an opinion on whether the statute would also apply where the servant is released but not the master.
Where the sole basis of liability of a principal is the negligence of an agent, the principal cannot be held liable unless the agent is shown to be liable. For that reason, some courts have held that a release given to the agent without reserving rights against the principal discharges the latter. This situation is logically distinct from that addressed in Blackshear v. Clark-where the plaintiff released the principal-because the agent's liability is not dependent on negligence of the principal. It remains undetermined under Delaware law, however, whether a plaintiff may pursue claims against a principal whose only basis of liability derives from the alleged negligence of an agent that has been released from liability.
Montgomery Mutual argues that First State's settlement with its agent, TIM, released it as a principal. First State contends that the TIM settlement does not affect its claims against Montgomery Mutual because the claims against TIM were distinct from those asserted against Montgomery Mutual. In essence, First State contends that it only settled its claim against TIM for breach of contract to "procure and maintain" insurance and that it did not release TIM from liability for negligence or fraud. I find this contention dubious because First State stipulated to the dismissal of its claims against TIM, but am unable to test First State's argument because neither party introduced the settlement into evidence. Under these circumstances, I do not have a sufficient basis to determine what claims against TIM were actually released or what rights, if any, First State reserved against Montgomery Mutual. Because the purported release is an affirmative defense of Montgomery Mutual, it bears the burden of proof on that issue. Based on the record presented, I conclude that Montgomery Mutual has failed to prove its release defense, and that it therefore still may be liable for the acts of TIM.
D. TIM's Negligence
First State argues that TIM negligently allowed the workers' compensation policy to be canceled. First State asserts two primary grounds for this position: (i) that First State entered into an oral agreement with TIM to avoid cancellation after issuance of the cancellation notice and TIM failed to communicate that fact to Montgomery Mutual; and (ii) that TIM failed to either explain the effect of the cancellation notice or timely inform First State of the actual cancellation.
First State contends that TIM negligently canceled the insurance after reaching an oral agreement with Passwaters to avoid cancellation by making two $5,000 payments. Under the purported agreement, First State promised to immediately make a $5,000 payment and to make an additional payment within 30 days and TIM was to prevent cancellation of the insurance. First State contends that it performed its obligations under the oral agreement and that TIM was negligent in not informing Montgomery Mutual of the agreement and in failing to stop the ca
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