Opinion ID: 2000460
Heading Depth: 1
Heading Rank: 2

Heading: Release of Brinkman

Text: We first address the contention that the plaintiffs' settlement with Brinkman operated as a release of their claims against Farm Bureau. In arguing Brinkman's release absolved it of any further liability, Farm Bureau relies on Biddle v. Sartori Memorial Hospital, 518 N.W.2d 795, 799 (Iowa 1994), a case in which we held a plaintiff's release of a malpractice claim against a physician extinguished any further claim the plaintiff may have had against the defendant hospital based on a theory of vicarious liability. Our holding in Biddle was limited to the situation in which the release of an agent operated as a release of the principal from any vicarious liability for the agent's tortious conduct. Biddle has no application to the bad faith and punitive damages claims presented in this case since they are based on Farm Bureau's own conduct and are not solely matters of vicarious liability. It does not appear we have previously addressed whether the release of an agent operates as a discharge of a principal's liability for a breach of contract. The Restatement (Second) of Agency provides in relevant part: Recovery of judgment against the agent of a disclosed or partially disclosed principal for failure of performance of a contract to which the agent is a party does not thereby discharge the principal unless the agent and principal were joint contractors. Restatement (Second) of Agency § 184(1) (1958). Decisions from other jurisdictions which follow this restatement provision include Lubbock Feed Lots, Inc. v. Iowa Beef Processors, Inc., 630 F.2d 250, 274-75 (5th Cir.1980), Clifton Cattle Co. v. Thompson, 43 Cal.App.3d 11, 117 Cal.Rptr. 500, 503-04 (1974), Wheaton Lumber Co. v. Metz, 229 Md. 78, 181 A.2d 666, 670 (1962), National Trout Festival, Inc. v. Cannon, 32 Mich.App. 517, 189 N.W.2d 69, 71 (1971), and Orrock v. Crouse Realtors, 823 S.W.2d 40, 42 (Mo.Ct.App.1991). We find the reasoning of section 184 and the above cases to be persuasive. We hold the plaintiffs' settlement with Brinkman did not operate as a release of Farm Bureau's liability on the contract claim and the district court did not err in denying Farm Bureau's motion to dismiss.