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Griffin v. Westfall7/5/2005
nt on July 23, 2002, this policy is applicable as a secondary policy.
But this formal amendment to its earlier response does not change the fact that Griffin was on notice prior to the settlement that additional assets through the Cloverdale insurance policy were, at least, potentially available.
After Cloverdale moved for dismissal, the trial court reopened limited- purpose discovery on the issue of Westfall's solvency. The court subsequently held a solvency hearing to determine if Westfall was solvent at the time of settlement. It considered, among other factors, all assets available to Westfall, including his personal automobile policy and the commercial policy held by Cloverdale. The court found that Westfall had a total of $1,100,000 in liability insurance available at the time of settlement to compensate Griffin.
The court also found that the $1.1 million would have been enough to fully compensate Griffin for his injuries. As a result, the court ruled that Westfall was solvent when Griffin released him and that the settlement operated as a release of Cloverdale as a matter of law.
On appeal, Griffin contends that this case is governed by the rule announced in Finney v. Farmer's Insurance Co., not by Glover v. Tacoma Gen. Hosp., as Cloverdale argues. He contends that Finney held that a settlement for insurance policy limits with an automobile driver (agent), that expressly reserved the plaintiff's rights against the owner, did not operate as a release of the automobile owner (principal) even though the sole theory of liability against the owner was vicarious liability. However, in Finney, the agent's available assets consisted only of the single insurance policy that paid the settlement. Because the total assets available to the agent were insufficient to compensate the plaintiff, the agent was insolvent. This is not inconsistent with Glover, which specifically limited Finney to its facts. Where, as in Glover, the agent is solvent, a different rationale applies:
When a plaintiff settles with a solvent agent from whom he could have received full compensation , the very foundation of the principal's liability is undermined. A principal is only secondarily liable under a respondeat superior theory. The policy reasons underlying vicarious liability (to afford the plaintiff the maximum opportunity to be fully compensated) are inapplicable when a plaintiff has accepted a release from the primarily liable tortfeasor who was financially capable of making him whole. There is no policy reason to allow that plaintiff to then pursue a claim against the defendant who is only secondarily liable {Moreover} a release between a plaintiff and an agent would foreclose any possibility of the principal receiving contribution from his agent. It would be inequitable to allow a plaintiff to recover from a principal after destroying the principal's right to reimbursement from the actual wrongdoer.
In Glover, the plaintiff sued two physicians and Tacoma General Hospital for the alleged negligence of the doctors in administering anesthesia during surgery at the hospital. The plaintiff settled with the doctors, expressly reserving the right to proceed against the hospital. The hospital's motion to dismiss the claim based on vicarious liability was denied. On appeal, the supreme court reversed and held that the release of the doctors, who were solvent at the time of settlement, released the hospital from any claim based on vicarious liability.
The court noted that in such cases, '{p}laintiffs may protect their right to proceed against the principal by asking the judge to state on the record that full compensation was unlikely to be obtained from the se
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