Title: Poggi v. Kates
Citation: 115 Ariz. 157, 564 P.2d 380
Docket Number: 12820
State: Arizona
Issuer: Arizona Supreme Court
Date: April 11, 1977

115 Ariz. 157 (1977) 564 P.2d 380 Loretta Jean POGGI, Appellant, v. Michael J. KATES and Elaine Kates, his wife, Barry R. Kaplan and Sheila Kaplan, his wife, Appellees. No. 12820. Supreme Court of Arizona, In Division. April 11, 1977. Rehearing Denied May 24, 1977. *158 Herring &amp; Stephan by Norman Herring and Robert Stephan, Jr., Phoenix, for appellant. Browder &amp; Gillenwater, P.C. by Robert W. Browder, Phoenix, for appellees. CAMERON, Chief Justice. Loretta Jean (Marconi) Poggi, plaintiff below, appeals from an order of the trial court granting the motion of the defendants for summary judgment. We have only one question on appeal and that is whether the plaintiff had the right to cancel or rescind a settlement of a personal injury suit when the defendants failed to pay the amount agreed upon within a reasonable length of time. In reviewing the action of the trial court in granting a motion for summary judgment, the evidence and all reasonable inferences drawn therefrom will be viewed in a light most favorable to the party against whom the judgment was rendered. Sax v. Kopelman, 96 Ariz. 394, 396 P.2d 17 (1964); Serna v. Statewide Contractors, Inc., 6 Ariz. App. 12, 429 P.2d 504 (1967). The following facts are necessary for a determination of this matter on appeal. Loretta Poggi sued the defendants, Drs. Kates and Kaplan, podiatrists, for malpractice arising out of an operation on her foot. This suit was filed in November of 1970. On 17 December 1971, after extended negotiations and three days prior to trial, an oral agreement was entered into whereby the plaintiff agreed to accept $2,500 in exchange for dismissal of the action with prejudice and a release. A notice of settlement was filed with the court and the judge vacated the trial setting and placed the cause on the inactive calendar pursuant to Rule XIX(c), Local Rules of Practice for the Superior Court of Maricopa County, 17A A.R.S. More than thirty days later, on 25 January 1972, plaintiff's attorney wrote defendants' attorney complaining of the delay and demanding immediate compliance. The record indicates the defendants' attorney was making an attempt to obtain the settlement draft from the corresponding law firm in New York. Nevertheless the draft was not forthcoming and on 14 February 1972 plaintiff's counsel wrote the defense counsel as follows: On 21 February 1972, defense counsel sent a $2,500 settlement draft and release with stipulation for dismissal which the *159 plaintiff rejected. On 29 March 1972, the cause was dismissed without prejudice by the court pursuant to rule. Plaintiff engaged a new attorney and filed a complaint alleging the same claim and the defendants answered with the affirmative defense of settlement. After various motions, the trial judge set aside the dismissal of the first case, restored the matter to the active calendar, and granted defendants' motion to compel settlement. This was followed by a written judgment dismissing the action of the plaintiff with prejudice. An appeal followed and we held: On remand, the defendants moved for summary judgment claiming the defense of accord and satisfaction was an absolute bar to plaintiff's complaint which motion was granted and the appeal followed. It is not questioned that plaintiff's attorney had the authority to settle the claim. Arizona Title Insurance and Trust Co. v. Pace, 8 Ariz. App. 269, 445 P.2d 471 (1968). Neither is there any question that the defendants unreasonably delayed in paying the amount agreed upon. The defendants assumed this for the purpose of their motion for summary judgment. Also, the conclusion that by this unreasonable delay the agreement was breached is amply supported by the facts. Defendants' trust, however, is that the settlement agreement extinguished the unliquidated tort claim and a new contract claim was substituted in its place. Defendants contend that plaintiff can only sue for breach of the settlement agreement and not the original tort claim. Defendants cite Restatement of Contracts §§ 418, 419 (1932) in support of this contention: While it is true that § 418 provides that a contract may be accepted in satisfaction and discharge of a pre-existing obligation, the facts in the instant case indicate just the opposite. The attorney for the plaintiff at his deposition stated: And: Defendants contend the tort claim is "of another kind," and that § 419 applies. We would call defendants' attention, however, to § 417 of the Restatement which reads: And the Arizona Court of Appeals has stated: This interpretation of the law is not only more logical since it does not require the plaintiff to give up her right of action in tort until the defendants have complied with the terms of the new agreement, but it also comports with the intention of the plaintiff as testified to by plaintiff's attorney. It is unreasonable to assume that an attorney would give up his client's tort claim for a promise to pay without specifically indicating the intention to do so. It is doubtful that the plaintiff's attorney would have agreed to the settlement unless he believed the settlement funds would be forthcoming. The facts do not support a finding that the settlement agreement operated to extinguish the tort claim before the agreement was performed. But defendants further contend that even if there was an unreasonable delay it was not a material breach of the agreement because there was no provision that time was of the essence. Defendants cite 17A C.J.S. Contracts § 422(1): Even if we apply this rule to the facts of this case, it would be of no help to the defendants. All this authority indicates is that a reasonable delay in the performance of a contract will not be considered a material breach when time is not of the essence. An unreasonable delay is still a material breach. The order of the trial court in granting the motion of the defendants for summary judgment is set aside and the matter remanded for trial on the merits. HAYS and GORDON, JJ., concur.