Court Opinion

ID: 9707784
Source: CourtListenerOpinion
Date Created: 2023-08-26 02:21:06.425654+00
Date Added: 2024-06-11T18:22:38.101880
License: Public Domain

Taylor, J.
(dissenting). I respectfully dissent.
The majority correctly recognizes that the common-law doctrine that release of an agent discharges the principal from vicarious liability is still recognized in Michigan. However, its opinion goes awry because it has misunderstood that this doctrine is a doctrine of law and, therefore, is not dependent on the facts of the individual case. I would hold that the parties’ dismissal with prejudice constituted a release.
Under the holding in Theophelis v Lansing Gen*397eral Hosp, 430 Mich 473; 424 NW2d 478 (1988), our task is to analyze the instrument and determine if it is a release or a covenant not to sue. We must determine whether the instrument effected "a present abandonment or relinquishment of the right or claim,” or whether it merely constituted "an agreement not to sue on an existing claim.” Id. at 492, n 14. The issue, then, is purely legal.
At common law a valid release of an agent for tortious conduct operates to bar recovery against the principal on a theory of vicarious liability, even though the release specifically reserves claims against the principal. 53 Am Jur 2d, Master and Servant, § 408, pp 416-418; 126 ALR 1199; 76 CJS, Release, § 50, p 689. See Bacon v United States, 321 F2d 880 (CA 8, 1963); Max v Spaeth, 349 SW2d 1 (Mo, 1961). Michigan courts have adhered to this common-law rule. Geib v Slater, 320 Mich 316; 31 NW2d 65 (1948), overruled on other grounds Moore v Palmer, 350 Mich 363; 86 NW2d 585 (1957); Lincoln v Gupta, 142 Mich App 615; 370 NW2d 312 (1985); Willis v Total Health Care, 125 Mich App 612; 337 NW2d 20 (1983); Drinkard v William J Pulte, Inc, 48 Mich App 67; 210 NW2d 137 (1973). [Theophelis, supra at 480-481.]
It makes no difference what the parties to the agreement intended. The courts must only look to the effect of the instrument.
In the cases after Theophelis, our courts have understood this determination to be a question of law. Accordingly, courts have looked to the effect of the instrument and not at what the parties may have said either in the instrument or in other documents that they filed. In Felsner v McDonald Rent-A-Car, 193 Mich App 565; 484 NW2d 408 (1992), the defendant contended that the plaintiffs acceptance of the mediation evaluation against the *398operator of the McDonald-owned car also released McDonald from any claim of vicarious liability. This Court agreed and held that the acceptance of the mediation evaluation was in the nature of a release rather than a covenant not to sue. Id. at 570. The Felsner Court’s reasoning provides insight into how we determine these matters.
Plaintiff also contends that the judgment entered pursuant to the mediation evaluation does not constitute a release, but is, instead, a covenant not to sue. This Court has held that acceptance of a mediation award is the equivalent of a consent judgment, Reddam v Consumer Mortgage Corp, 182 Mich App 754, 756-757; 452 NW2d 908 (1990); Pelshaw v Barnett, 170 Mich App 280, 286; 427 NW2d 616 (1988), and that a consent judgment operates as a release. Rzepka v Michael, 171 Mich App 748, 757; 431 NW2d 441 (1988). The judgment entered pursuant to the mediation award in this case therefore constitutes a release. [Felsner, supra at 569-570.]
My conclusion that the stipulation and order to dismiss constitutes a release is also supported by this Court’s handling of Rzepka, supra, where the Court held that a consent judgment was a release that invoked the principal-agent release rule. In Rzepka, the plaintiff had agreed to a consent judgment that stated:
It is hereby ordered that the remaining counts against Personnel Recruiters Corporation International be and they are dismissed with prejudice, but without costs or attorneys fees. [171 Mich App 754.]
The Court concluded:
The consent judgment acted as a release against *399the corporation on all counts except the breach of contract count. The corporation’s liability on the other counts was derivative, and so the release of the corporation releases the employees. [Id. at 757.]
The acceptance of the mediation evaluation with entry of judgment in Felsner and the consent judgment in Rzepka were recognized by this Court to be the equivalent of releases. They could not be otherwise; both effected current relinquishment of claims, and, thus, the common-law rule that release of the principal is release of the agent applied in both cases.
There is no meaningful distinction between the stipulated dismissal with prejudice in this case and the judgments in Felsner and Rzepka. By definition, a dismissal with prejudice constitutes a relinquishment of the suit rather than merely an agreement not to sue on an existing claim. A dismissal with prejudice is
[a]n adjudication on the merits, and final disposition, barring the right to bring or maintain an action on the same claim or cause. It is res judicata as to every matter litigated. [Black’s Law Dictionary (5th ed).]
Indeed, in Brownridge v Michigan Mutual Ins Co, 115 Mich App 745, 748; 321 NW2d 798 (1982), this Court held that a voluntary dismissal with prejudice is a final judgment on the merits, with res judicata effect. This Court again emphasized the meaning of a dismissal "with prejudice” in In re Koernke Estate, 169 Mich App 397; 425 NW2d 795 (1988). The Koernke Court held that because an order did not state that it was without prejudice, *400the order was a judgment on the merits.1 Id. at 400. Applying the reasoning in these cases, which have put flesh on the bones of Theophelis, and the legal definition of the term "dismissal with prejudice,” it is apparent that the stipulation and order to dismiss with prejudice is the equivalent of a consent judgment, and, as the Court in Felsner held, a consent judgment operates as a release.
The majority relies significantly on Boucher v Thomsen, 328 Mich 312; 43 NW2d 866 (1950). I do not feel Boucher is inconsistent with Theophelis for the simple reason that in Boucher the voluntary dismissal was not the operative agreement that the Court focused on. Rather, the plaintiff and the settling defendants entered into an agreement before the dismissal that was, as all parties’ agreed, a covenant not to sue. The Boucher Court did not discuss whether the order of dismissal constituted a release. Frankly, it does not appear that it was ever argued, because the Court did not address it. Thus, the issue in this case and in .Theophelis was not addressed by the Court in Boucher, and Boucher should be understood in that light.
In summary, what we have in this case is the classic circumstance of difficult and compelling facts making bad law. At the very least, the majority confuses the distinctions between releases and covenants not to sue. This makes murky what was clear. The majority’s decision in this case is also an improper usurpation of our Supreme Court’s *401power, inasmuch as we have robbed the Theophelis decision of its clear import. As the Supreme Court pointed out in Boyd v W G Wade Shows, 443 Mich 515, 523; 505 NW2d 544 (1993), such presumption is inappropriate. Finally, I believe the majority’s opinion scrambles traditional notions of what constitutes an "adjudication on the merits.” The unfortunate effects of this decision will be apparent when our courts attempt to apply the novel doctrine that dismissals with prejudice are not final dispositions. The majority’s holding is lamentable and, as I outlined above, unnecessary.

 The majority dismisses Koemke and Brownridge as pertaining only to the parties to the agreements, i.e., the plaintiffs against the previously dismissed defendants. Irrespective of whether that is the case, it in no fashion reduces the merit of the legal conclusion concerning a voluntary dismissal with prejudice being a judgment on the merits (Brownridge), or concerning the effect of an order of dismissal that does not indicate whether it is with or without prejudice (Koemke). Accordingly, it is inappropriate to make these cases inconsequential for the reason the majority gives.