Loh v. Safeway Stores, Inc.

Figinski, J., delivered the opinion of the Court. This is an appeal from a judgment entered, upon motion pursuant to Rule 610, by the Circuit Court for Anne Arundel County. Summary judgment was granted, after a hearing, upon the lower court’s determination that appellant’s claim ¹¹² had been satisfied under the principle in Scheffenacker v. Hoopes, 113 Md. 111 (1910). On appeal, appellant argues that this venerable precedent has been misapplied, and that summary judgment was granted improperly.

Alternatively, appellant argues that the court below failed to take proper account of the Uniform Contribution Among Tortfeasors Act, Article 50, §§ 16-24, Md. Code. Elizabeth C. Loh, appellant, on March 31,1977, purchased a five ounce package of "12 Beef Franks N’ Blankets” from a Safeway store on Ritchie Highway in Arnold, Maryland. The franks were produced by Garden State Kosher Provisions (hereinafter called Garden State) and sold to Safeway through Durkee Foods. Appellant went home and heated, for eating, her purchase.

Instead of a choice morsel of delight, she "felt a sharp pain in one of her teeth” resulting from a "bone or similar foreign substance” contained in one of the "Franks N’ Blankets.” Her tooth was broken. She retained counsel to seek compensation for her injury. Counsel for appellant was in contact with the insurance carrier for Garden State. On November 21,1977, the insurer sent to appellant’s counsel a check in the amount of $1,000 which the accompanying letter said was "intended to be in full payment of Mrs. Loh’s claim.” The letter acknowledged that there was no mutually agreed upon settlement figure, but the insurer stated "we want your client to have what we believe would be the full value of her claim.” The insurer did not admit liability, but, rather, sought an "amicable conclusion” to Mrs. Loh’s claim.

The insurer’s letter concluded with the comment that the check "represents the maximum value to us for settlement of this claim.” Appellant’s counsel deposited the $1,000 check and distributed its proceeds to appellant. On December 2, 1977, appellant’s counsel wrote to the insurer’s agent acknowledging receipt and deposit of the check. However, the letter stated that "we must advise you that we do not consider the $1,000 payment to be in full settlement of Mrs. Loh’s claim.” Further, the letter recited the previous settlement negotiations. Appellant’s counsel concluded the ¹¹³ letter by reiterating that the deposit of the $1,000 "does not constitute settlement or satisfaction of Mrs. Loh’s claim, nor does it bar us from commencing suit in this matter.” Gratuitously, appellant’s counsel acknowledged that the $1,000 would be applied to whatever final judgment would be rendered in the case.

Two weeks later, on December 13, 1977, appellant filed suit in the Circuit Court for Anne Arundel County. The declaration bore the denomination "implied warranty” and was brought solely against Safeway. Appellant alleged breach of warranty and recited, particularly, Sections 2-314 and 2-315, Commercial Article, Md. Code. The ad damnum clause was for $50,000.

Safeway filed a general issue plea and, subsequently, a third party claim against Garden State. The third party claim was stated in two counts. In the first count, Safeway, as third party plaintiff, demanded "that it be indemnified from any liability or damages which may be assessed in favor of [Mrs. Loh] as against [Safeway] .. . [because] the product manufactured by [Garden State] was impliedly fit for consumption and free from any foreign matter or defect.” The second count alleged that "as a result of the negligence” of Garden State "in the manufacture of said food product,” the plaintiff was injured without any contributory negligence of Safeway. On April 13,1978, Garden State filed a plea which, among other things, 1 alleged that "before the issuing of the summons, [it had] tendered to the plaintiff a sum of money in satisfaction of the plaintiffs demand.” This reference, of course, was to the $1,000 check forwarded on November 21, 1977.

On January 13, 1979, in response to a request from Safeway, Garden State admitted that "it supplied the frankfurters which were sold to Safeway stores by Durkee” and that "it supplied the meat portion for the Durkee Beef N’ Blankets.” Garden State did not admit, however, that ¹¹⁴ "there was any alleged foreign substance in the meat” supplied. After trial was twice continued, a motion for summary judgment was filed by Garden State on July 2, 1979, and, thereafter, on August 3, 1979, by Safeway. Garden State’s motion argued that the acceptance of the $1,000 check sent on November 21, 1977, "constitutes a full accord and satisfaction to any debt which the Plaintiff would be entitled to receive from [Garden State].” Safeway’s Motion also sought to take advantage of the appellant’s acceptance of the November 21, 1977 check. Safeway argued that it "constituted a full accord and satisfaction of any claim which [appellant] claims as a result of the .breach of warranty.” Further, Safeway contended: "[Appellant] having accepted the check in full accord and satisfaction of the dispute of her claim arising out of the allegedly unfit food product which was initially manufactured by [Garden State] necessarily results in a release of all alleged debtors or tort feasors in that it is a fundamental proposition of law that [appellant] is entitled to but one satisfaction of her claim and cannot after collecting money in settlement of a claim against one person allegedly responsible then, with impunity, proceed by Court action against another without even divulging the fact that [appellant] had received and put to her own use money received from the joint tort feasor or joint debtor.” After a hearing, 2 the learned judge below granted both motions.

On the<record, the court below stated that appellant had not rejected the November 21,1977 check, but deposited it and that act "constituted the acceptance, irrespective of what [appellant] may have said.” The court below believed ¹¹⁵ appellant’s claim had been extinguished and that it was immaterial whether "the defendants [i.e., Safeway and Garden State] have a right of contribution or indemnity between them.” The lower court relied wholly upon Scheffenacker v. Hoopes, 113 Md. 111 (1910) and its reasoning from it. In Scheffenacker , a printer sent a bill for $722.40 for printing certain catalogues. The consumer sent back a check for $361.20 with a letter stating that "you know my dissatisfaction with your work” and that the poor printing job had caused "great damage and injury.” The consumer, further, stated, among other things, that, rather than "require [the printer] to make my loss good,” he did "not wish a controversy” and, consequently tendered half payment "in full settlement.” The printer acknowledged the letter and check, made excuses for the job, and recited that "I am positive that you do not intend to beat me out of the balance of my bill.” The printer got the check certified. At trial and on appeal, it was held that the printer used the check and was barred, through accord and satisfaction, from recovering the remainder of the bill.

The Court of Appeals, per Judge Urner, wrote, 113 Md. at 117 : "The plaintiffs expression of dissatisfaction with the defendant’s proposal could not qualify the effect of his actual use of the check and appropriation of the defendant’s money through its certification, in view of the terms of compromise under which alone it could be used. It was the use of the check that determined the question of the acceptance of the offer and not the verbal dissent by which it was accompanied.” Chief Judge Bond, in Hodgson v. Phippin, 159 Md. 97, 99-100 (1930) explained the holding in Scheffenacker , thusly: "The ordinary understanding of a tender of a portion of an amount claimed in full satisfaction of the whole seems to be that it constitutes a conditional offer, that acceptance of the money involves accep ¹¹⁶ tance of the condition, and results in an accord and satisfaction of the whole claim, discharging the unpaid portion. Hunt, Tender, sec. 240. And this court has held that acceptance of such a tender has that result even though the claimant protests that he does not accept the terms attached, but takes the money only in part payment.

Scheffenaker v. Hoopes, 113 Md. 111, 117 .” Compare 6 Corbin, Contracts, 1962, § 1279, p. 127. See also, Stockton v. Frey, 4 Gill 406, 424 (1846); Mercantile T. & D. Co. v. Rode, 137 Md. 362, 377 (1921); Eno Cotton Mills v. Mudge, 139 Md. 302 (1921). In light of the authorities cited, we believe it is clear that, in Maryland, when one party tenders a check in settlement of a dispute, making clear that the tender will satisfy the claim against the tendering party if accepted, the party who accepts and uses the check, even though protesting against settlement, cannot make further claim against the tendering party. Here, Garden State’s letter made clear that the $1,000 check tendered on November 21, 1977 was "the maximum value to us for settlement of this claim.” Appellant accepted the settlement by depositing the check, regardless of appellant’s counsel’s protestations to the contrary.

As between appellant and Garden State, there was an accord and satisfaction. In addition, strict application of the rule that there may be only one satisfaction for a single injury, see Cox v. Maryland Elec. Rwys. Co., 126 Md. 300 (1915); Berkley v. Wilson, 87 Md. 219 (1898), would bar further recovery from any party for the injury to appellant’s tooth here.

Appellant, however, seeks to avoid judgments in favor of Garden State and Safeway by reliance upon the Uniform Contribution Among Tortfeasors Act, Article 50, Sections 16-24, Md. Code. Prior to enactment of this legislation, a release of one joint tort-feasor, or satisfaction therefrom, 3 ¹¹⁷ extinguished a person’s right to proceed against all others. As the Court of Appeals wrote in Gunther v. Lee, 45 Md. 60, 67 (1876): "All the cases, both English and American, maintain the doctrine that satisfaction from one joint tort-feasor, whether received before or after recovery, extinguishes the right as against the others. The plaintiff is not entitled to receive more than one satisfaction for and in respect of the same injury.

As was said by the Court in Lovejoy vs. Murray, when the plaintiff has accepted satisfaction in full for the injury done him, from whatever source it may come, he is so far affected in equity and good conscience, that the law will not permit him to recover again for the same damages. * * * Here the release expresses the consideration on its face, which was received in full satisfaction of the wrong complained of. The proviso in the release, by which the right to recover for the same injury against the other two defendants was attempted to be reserved to the plaintiffs, is simply void, as being repugnant to the legal effect and operation of the release itself.” This rule was severely criticized by academic writers. See e.g., Prosser, Joint Torts and Several Liability, 25 Cal. L. Rev. 413 , 421-5 (1937);* ** 4 Wigmore, Release to One ¹¹⁸ Joint-Tortfeasor, 17 111.

L.R. 563 (1923). 5 And, exceptions to the general rule were, at times, engrafted into the law. See, e.g., Murphy v. Penniman, 105 Md. 453 , 473 (1907); McShane v. Howard Bank, 73 Md. 135, 153-4 (1890). The legislature first created a limited substantive right of contribution among joint tortfeasors in 1927, 6 and, in 1941, enacted the Uniform Act. The Act applies only to joint tort-feasors. 7 It established a right to contribution, 8 expunged the common law rule of release, 9 and preserved rights of indemnification. 10 Appellant seeks to apply the Uniform Act to overturn the judgments in favor of Garden State and Safeway.

Her refuge in the Act poses substantial issues of both a definitional and conceptual nature. To get benefit of the Act, appellant must fit the parties here into the definitions of "joint tortfeasor” and "injured person” found in the Act. Even if that hurdle is overcome, appellant must bring the accord and satisfaction which occurred by the use of Garden State’s check within the concept of "release” under the Act in modification of the common law. Under the Act, joint tortfeasors are defined as "two or more persons jointly or severally liable in tort for the same injury to person ...” [emphasis added], Art. 50, § 16 (a), Md. Code.

Further, the Act defines an "injured person” as "any person having a claim in tort. ” [Emphasis added], Art. 50, § 16 (b), Md. Code. The common law rule of release 11 is abrogated, by Art. 50, § 19, Md. Code, when a "release by the injured person [is] of one joint tort-feasor.” The statutory ¹¹⁹ provision from which appellant seeks succor, when read with the definitions applicable to the Act, appears limited, on its face, to "tort” actions. In the case on appeal, appellant’s declaration was premised upon implied warranty 12 and we must consider whether such a suit is a "tort” action susceptible of coverage by the Act. Suit on implied warranty has been called "a freak hybrid born of the illicit intercourse of tort and contract.” 13 The parties have cited no Maryland case and our own research has disclosed none which has considered whether suit on an implied warranty is a tort action within the purview of the Act.

In Trieschman v. Eaton, 224 Md. 111 (1961), the Court of Appeals made footnote reference to the issue büt did not find it necessary to decide the question. 14 Our research has disclosed, however, the opinion of Judge Miller in Uppgren v. Executive Aviation Services, Inc., 326 F. Supp. 709 (D. Md. 1971), where the United States District Court for the District of Maryland considered whether, for choice of law purposes, a suit based on breach of implied warranty would be considered a tort or contract action by the Maryland courts. There, the parties urged the court to apply "contract-conflict rules” which Judge Miller found to be error, after extensive consideration of "the nature and historical background of an action for personal ... injury ¹²⁰ based upon breach of warranty.” 326 F. Supp. at 714 . Judge Miller thoroughly reviewed the writings of the leading authorities, primarily Dean Prosser, and found that "the Maryland Court of Appeals has quoted the views of Prosser with approval relative to the origin of the action for breach of implied warranty and its close kinship to tort.” 326 F. Supp. at 715 . 15 Finally, Judge Miller concluded, 326 F. Supp. at 716 : "Earlier Maryland cases discussing the requirement of privity in an implied or express warranty action indicate that privity is necessary, not because the cause of action is bottomed in contract, but because a direct contractual relationship was deemed to be required to create the warranty and the concomitant duty, the breach of which constituted a tort. State to Use of Bond v. Consolidated Gas, Electric Light and Power Company, 146 Md. 390, 396 , 126 A. 105 (1924). * * * It is believed by this court that the highest court of Maryland, if faced with the necessity to decide the question, would determine that an action based upon an implied warranty (arising from a contract or sale made prior, of course, to the July 1, 1969 effective date of the amendment to Article 95B, § 2-318, Anno.

Code of Md.) bears such a close relationship to one based upon tort that it should be subject to the rule of lex loci delicti for the same reasons as is a tort action.” Subsequent Maryland decisions 16 holding that the law of ¹²¹ the place of the sale governs the extent and effect of the warranties which attend the sale do not undercut the analysis made by Judge Miller. The essential fact remains that "warranty is a matter of toit as well as contract.” Prosser, The Assault Upon the Citadel (Strict Liability to the Consumer), 69 Yale L.J. 1099 , 1127 (1960). Although the Maryland cases continue to discuss products liability in terms of "causes of action sounding in tort... land] claims based upon breach of warranty”, Frericks v. General Motors Corp., 274 Md. 288, 300 (1975), it is clear that, "regardless of theory, a plaintiff must satisfy three product litigation basics from an evidentiary standpoint: (1) the existence of a defect, (2) the attribution of the defect to a 'seller’, and (3) a causal relation between the defect and injury.” Digges, Product Liability in Maryland Revisited, 7 U. of Blt. L.R. 1, 14 (1977).

It must be recognized, therefore, that the warranty action, albeit a "freak hybrid,” differs little in fact in products cases from "causes of action sounding in tort.” 17 For the purposes of the Uniform Contribution Among Tortfeasors Act, we conclude that appellant’s suit for breach of implied warranty can be a 'claim in tort’ which allows appellant to claim the role of an injured person under the Act. A determination that appellant had a 'claim in tort’ under the Act does not end our inquiry. Safeway and Garden State must fall into the classification only of joint tortfeasors and they may be so classified if they are 'liable in tort” [emphasis added] to the appellant. ¹²² Summary judgment below, predicated upon Scheffenacker v. Hoopes, 113 Md. 111 (1910), precluded any judicial determination of liability of Safeway and Garden State in this case. In addition, it must be recognized that the correspondence accompanying the November 21,1977 check contained a denial of Garden State’s liability and, although it admitted to supplying the meat portion of the "frank” alleged to have broken appellant’s tooth, Garden State did "not admit there was any alleged foreign substance in the meat portion.” In this context, we review Swigert v. Welk, 213 Md. 613 (1957), a case relied upon heavily by appellant.

Swigert came to the Court of Appeals after the grant of summary judgment in favor of a third party defendant, Welk, who had been impleaded in a case involving a two-car collision in Baltimore City. There, the plaintiff, not a party to the appeal, had executed a release to Welk in consideration of a $3,500 payment. The release, however, denied that Welk was a tortfeasor. When impleaded by Swigert, Welk claimed that the release was a complete bar to the cause of action and the trial court, accepting the argument, granted summary judgment.

In reversing, the Court of Appeals decided two points relevant to this case on appeal. First, the Court of Appeals addressed the effect the Uniform Contribution Among Tortfeasors Act had on the common law and, second, the Court directed its attention to the definitions of "joint tortfeasors” and "injured person.” The Court wrote, 213 Md. at 619 : "At common law, a release by the injured party of one of several joint tortfeasors released all. The Uniform Act, of course, changed this. But this Court has held both before and since the passage of the Uniform Act that if several persons be involved in an accident and one of those persons, who has been guilty of no negligence, obtains for himself alone a release from the injured party, it does not affect the liability of the others. ¹²³ The act does not specify the test of liability.

Clearly, something short of an actual judgment will suffice; we think it equally clear that a denial of liability will not.” Welk had denied liability in the release obtained from plaintiff. 18 Because Swigert claimed that Welk’s negligence contributed to plaintiffs injuries, the Court held that Swigert was entitled to have Welk’s motion for summary judgment denied regardless of Welk’s freedom from further recovery against him. Only with the third party claim in the case, could Swigert have Welk’s liability determined so that Swigert could reduce his liability under the contribution aspects of the Act. The reasoning and holding in Swigert seem peculiarly relevant to the appeal from summary judgment in favor of Garden State in this case. Further, the Swigert opinion’s reasoning on the effect of the Act on the common law would appear to point to reversal of the summary judgment in favor of Safeway.

Swigert , therefore, gives the appearance of the terminal point of this opinion. There are, however, two critical distinctions between what the Court of Appeals had before it in Swigert and what we face in this appeal. First, in Swigert , there was a release with a denial of liability; here, application of the venerable rule of Scheffenacker v. Hoopes, 113 Md. 111 (1910), required a finding of an accord and satisfaction between appellant and Garden State. Second, in Swigert the third party claim sought contribution; here Safeway sought indemnification from Garden State.

These distinctions between what we have here and what was before the Court of Appeals in Swigert cause our discussion