Court Opinion

ID: 9752863
Source: CourtListenerOpinion
Date Created: 2023-08-28 18:40:24.629538+00
Date Added: 2024-06-11T07:27:24.255243
License: Public Domain

*569BROSKY, Judge,
concurring.
I concur with the result reached by the majority, but write here for purposes of clarification of a few matters.
I believe the key to the present case lies in a premise made in appellee’s brief. Appellee acknowledges in its brief that one who is fraudulently induced into a contract has two distinct remedies. Appellee’s brief, p. 20. One, pursuing the voidable nature of the fraudulently induced contract he can seek recission of the contract and be placed in a status quo ante; or, two, he can affirm the contract as formed and sue for damages resulting from the fraud. National Building Leasing Inc. v. Byler, 252 Pa.Super. 370, 381 A.2d 963 (1977). In an indirect fashion the issue of fraudulent inducement was introduced into the first filed action against the defendant-tortfeasors. However, it was found that, even in the presence of fraud, avoidance of the consequences of the release and a restoration to the status quo ante required tender of the settlement proceeds. Both appellants appeared unable to meet this requirement. In the present action appellants are, perhaps by necessity, seeking the latter remedy. Since there is no desire to rescind the contract it is unnecessary to return the proceeds of the previously executed settlement. Thus, we can dispel appellee’s first argument.
Appellee has also suggested that the present action is barred by the doctrine of res judicata. However, this is not the case. Appellant’s first action was a claim for liability based upon negligent operation of a motor vehicle. The present action is a claim for fraud based upon settlement negotiations which ensued after the automobile accident. Not only are the parties different, the nature of the claims and the facts supporting them, although interrelated, are distinctly different as well. Therefore, res judicata does not bar the present action.
Perhaps appellee really wished to make a collateral estoppel argument. Appellee asserts that appellants are raising the same “claim” as earlier, that the release was procured through fraud. However, it is notable that appellants at no *570time initiated an action for recission of the contract. Rather, appellee interjected this issue by asserting the release as an affirmative defense to the liability action. Appellants countered with an assertion that the release was invalid due to fraud. The thrust of their position at that time was that the release did not prevent an action for damages resulting from the auto accident because the release was fraudulently procured. The court found, without addressing the fraud issue, that even if fraudulently procured, absent a tender of the consideration the release would bar the liability action. Thus, although the issue was presented to the court the claim was for damages as a result of the auto accident, not an action for recission of the contract.
Although, appellee argues that the procedural framework is a distinction without a difference, I cannot agree. Res judicata is a doctrine of claim preclusion. Appellants’ claim in the first action was for damages resulting from an auto accident. The claim in the second action was for damages resulting from fraud in settlement negotiations. These are distinctly different actions supported by different facts. If both actions relied upon the same facts, appellee would be correct. Appellants would have been obligated to pursue both “claims” in the original proceeding. However, that is not the case. That the issue of fraud was brought up in the first action could, at best, set up a possibility of collateral estoppel or issue preclusion. However, I see no issue decided in the previous action which would prevent the present action from proceeding. The fact of the matter is, a key issue was decided in the previous litigation, that being that notwithstanding any fraud in the inducement, absent a return of the settlement proceeds the release will bar a liability action against the original defendants. However, this fact is insufficient to prevent the hearing of the fraud claim presently before the court because such an action does not turn upon recission of the settlement contract or an avoidance of that release. The present action, in essence, assumes an affirmance of the contract and a suit for damages related to the fraud. The damages sought are *571for the perpetration of the fraud,1 and although related to the deaths occurring in the auto accident, the damages are not for those deaths. The factual issue paramount to the present action, whether or not there was a fraudulent inducement, has not yet been decided.
The above discussion should dispel appellee’s last argument, that appellants are precluded from suing for fraud because they had already elected their remedy, that being recission, in the first action. The fact of the matter is, the remedy sought by appellants in the first action was money damages for the death of their decedents. The validity of the release was an issue collateral to the first action which was interjected by appellee. Appellants did not choose a remedy of recission, but argued fraud to counter the defense asserted by the defendants. The present action seeks money damages for fraud. Thus, the only remedy which has been sought regarding the fraudulent inducement is the present action for money damages. Had appellants filed an action seeking recission while failing to also plead, alternatively, an action for damages, appellee’s position might prevail. However, that is not what transpired and that is why appellee’s argument must fail now.

. I cannot say I am in total agreement with appellants’ characterization of the measure of those damages. Appellants attempt to argue that the measure of those damages "is what plaintiffs would have recovered through a wrongful death and survival action, not limited to the limits of the respective liability policies, but could include any monies recoverable from both defendants individually as well as any underinsured coverage that would have been available had that coverage been brought into play’ by the amount of the wrongful death and survival verdict.” Appellants’ brief at p. 10. The proper measure of damages, it seems to me, would be the sum that appellants would have recovered in the absence of the fraud minus the sum actually recovered. Although the exact amount this might be must be decided by the fact finder, it appears dubious to assert that one who appeared willing to settle for the incorrectly perceived lower policy limits would have been unwilling to settle for the correct and higher sum of the actual policy limits.