Court Opinion

ID: 9738043
Source: CourtListenerOpinion
Date Created: 2023-08-26 19:41:17.483304+00
Date Added: 2024-06-11T07:24:03.384239
License: Public Domain

Boslaugh, J.,
dissenting.
The majority relies on the rule announced in Ericksen v. Pearson, 211 Neb. 466, 319 N.W.2d 76 (1982). The rule in that case provides that where liability is based upon the doctrine of respondeat superior, “a valid release of either of the parties to the principal-agent relationship releases the other.” Id. at 478, 319 N.W.2d at 82.
The rule is illogical in the context of a third party’s release of the principal, and should not be applied in this case. As stated in Hill v. McDonald, 442 A.2d 133, 138 n.5 (D.C. 1982):
Certainly, as a matter of logic, it is hard to see how a principal could still be held vicariously liable after the release of its agent, the only real wrongdoer. But the converse is not at all obvious. It is thus that a growing minority of courts hold that the release of a principal does not bar suit against the agent for the underlying tort unless the release is so intended. [Citations omitted.]
The original and primary justification behind the rule adopted in Ericksen, supra, was the desire to prevent unjust enrichment of the injured party, rather than consideration of the relationship between those with potential liability to the injured party. Clark v. Brooks, 377 A.2d 365 (Del. Super. 1977), aff’d sub nom. Blackshear v. Clark, 391 A.2d 747 (Del. 1978). The Brooks court indicated that the rule should not apply in situations such as that in the present case:
Since the liability of the employer in such cases [where the sole basis of liability of an employer is the negligence of an employee] is dependent upon at least a showing of tort on the part of the employee, it is understandable that some courts have held that where no liability exists on the part of the employee there cannot be liability on the part of *393the employer and hence they have extended this reasoning to apply to a release of the employee’s liability by the injured person. [As in Dickey v. Meier, 188 Neb. 420, 197 N.W.2d 385 (1972).] However, rationally the converse does not apply. The employee’s liability for his own negligence is not dependent on negligence of the employer nor is the employee entitled to reimbursement by the employer. The ability to sue the employee who committed the tort is not contingent on the ability to sue the employer. Based upon the relationship of the parties no justification exists for extending nonliability of the employer to benefit the employee unless that benefit was created by contract intended to benefit the employee. Hence, the liability of the negligent employee should not be affected by a transaction between the injured party and the employer unless the parties intended the benefit to extend to the employee. The result should not, of course, permit dual recovery by the injured person.
Clark v. Brooks, supra at 371-72.
The Ericksen court cited the case of Dickey v. Meier, 188 Neb. 420, 197 N.W.2d 385 (1972), as support for the rule that release of either of the parties to the principal-agent relationship releases the other. In that case, the court held that a valid release of the employee-agent releases the employer-principal from liability, where the tort action is based exclusively on the alleged negligence of an employee or agent. In so holding, the court indicated that where a master’s liability is based upon the doctrine of respondeat superior, the master should be held blameless, where the servant whose misdeeds gave rise to the suit has been released from liability. As previously noted, this view is consistent with those expressed in Clark v. Brooks, supra, and does not suggest that the release of the principal alleged to be liable exclusively on the theory of respondeat superior should serve to release the agent, regardless of the parties’ intentions. See Busick, Pleading and Procedural Considerations in Nebraska in Subrogation, Contribution, and Indemnity Actions, 19 Creighton L. Rev. 278 (1986). Instead, the decision in Dickey v. Meier, supra, suggests that the release of the primarily liable agent should serve to release the *394secondarily liable principal, because the latter’s liability is merely vicarious. Such considerations are not involved where the person who is secondarily liable is released.
Further, the cases cited in support of the rule announced in Ericksen v. Pearson, 211 Neb. 466, 319 N.W.2d 76 (1982), do not provide strong support for the rule, because they either did not consider the effect of releasing the principal or did not support the proposition for which they were cited. See, e.g., Spradley v. McCrackin, 505 S.W.2d 955 (Tex. Civ. App. 1974), disapproved, Knutson v. Morton Foods, Inc., 603 S.W.2d 805 (Tex. 1980); Smith v. Lincoln, 52 Misc. 2d 66, 275 N.Y.S.2d 74 (1966). Thus, the rule expressed in Ericksen v. Pearson is illogical and should not provide the basis for the decision in this case.
Additionally, if the justification for the rule is to prevent a double recovery or unjust enrichment of the plaintiff, it can hardly be said that those considerations are present in the case at bar. The money sought from Taylor & Martin would do nothing more than place the Mallettes in the position they were in prior to the alleged misrepresentations and the subsequent signing of the contract.
In fact, the pleadings seem to be more in the nature of an action for money had and received than for an action in tort. The former cause is based upon the notion that where one person has money to which in equity and good conscience another is entitled, the law creates a promise by the former to pay it to the latter. Village of Morrill v. Roosevelt P.P. Dist., 215 Neb. 41, 337 N.W.2d 125 (1983).
The fact that the money held by Taylor & Martin was retained as a commission on the sale should not negate such a claim by the Mallettes because, as is noted in the Restatement (Second) of Agency § 339 at 97-98 (1958):
An agent who has received things from another for a disclosed . . . principal in a transaction conducted by him has a duty to return them or their proceeds if the other rescinds the transaction for a cause existing at the time of their receipt, to the extent that the agent has not, before notice of rescission and in good faith, changed his position.
*395Comment /. to this section indicates that a change in position, such as paying the money over to the principal, is no defense to an action for the return of the money where there has been a fraudulent inducement by either the principal or the agent for the third party to enter into the transaction.
Thus, even if the rule of Ericksen v. Pearson, supra, were considered to be sound, it should not apply in this case.
Hastings and Grant, J J., j oin in this dissent.