Opinion
September 30, 1963 —
October 29, 1963.
APPEAL from an order of the circuit court for Milwaukee county: BRUCE F. BEILFUSS, Circuit Judge of the Seventeenth circuit, Presiding. Affirmed.
For the appellant there were briefs and oral argument by Ed Rudolph of Milwaukee.
For the respondent there was a brief by Kluwin, Dunphy, Hankin Hayes of Milwaukee, and oral argument by Gerald T. Hayes, Jr.
This is an appeal from an order sustaining a demurrer to both the amended complaint and a "most recent amended complaint." The history of the litigation leading to the instant appeal is as follows:
In Hansen v. Schmidman Properties (1960), 12 Wis.2d 1, 106 N.W.2d 328, this court affirmed an order of the circuit court for Milwaukee county, MICHAEL T. SULLIVAN, circuit judge, which denied a motion for summary judgment made by the defendant property owner. This was a tort action brought by the same party who is a plaintiff in the instant litigation.
The first action was under the safe-place statute, and the plaintiff contended that the defendant property owner was liable for negligence in allowing ice and snow to accumulate on the driveway beside its premises, a tavern. The defendant in the first action was insured by the defendant in the instant litigation.
Then, in Hansen v. Schmidman Properties (1962), 16 Wis.2d 639, 115 N.W.2d 495, the case came here on an appeal from a judgment of the circuit court for Milwaukee county, ELMER W. ROLLER, circuit judge. There the jury found for the plaintiff and awarded damages of $10,120.77, but the defendant had made a motion for a directed verdict, and the trial court, having reserved its ruling on it, granted the motion, set aside the verdict and by judgment dismissed the plaintiff's action on the merits. Judge ROLLER ruled that as a matter of law there was no liability either under the safe-place statute or on common-law principles of liability. This judgment for the defendant was affirmed by this court.
The instant case is in contract and is here on an appeal from an order sustaining a demurrer to the last two complaints. The procedural history preceding this order is as follows. The plaintiff filed his original complaint. The defendant successfully demurred to it. Judge MICHAEL T. SULLIVAN in the order sustaining the demurrer gave the plaintiff the opportunity to plead over. The plaintiff did serve an amended complaint. The defendant demurred and sent notice to the plaintiff of a hearing on the demurrer to such amended complaint. The notice was sent to the plaintiff on October 30, 1962, and the plaintiff admitted service on November 1, 1962. On October 31, 1962, the plaintiff delivered to the defendant another amended complaint (denominated "most recent amended complaint"). The plaintiff did not secure leave of the court to serve this third version of the complaint. On November 20, 1962, Judge BEILFUSS heard arguments relative to both amended complaints and sustained a demurrer to both. There is no written decision in the record in support of the order sustaining this demurrer. There was no stenographic record made at the hearing on November 20, 1962.
The demurrer was based on the contention that the plaintiff stated no cause of action in his amended complaint. The "most recent amended complaint" contains more detailed allegations, but it includes the substance of the previous amended complaint.
In his last complaint, the plaintiff alleges the facts surrounding his accident — the fall outside the tavern of the property owner insured by the defendant insurer here. The plaintiff further avers that "within a short time after the accident," he was visited by an insurance adjuster representing the defendant insurer, and that this adjuster obtained information from the plaintiff including the details of the accident and plaintiff's injuries. The plaintiff then goes on to allege what he contends constitutes a binding contract on the part of the defendant to pay damages resulting from the personal injuries sustained in the fall. Certain portions of the last complaint are reproduced herein:
"6. During said visit the plaintiff inquired of said adjuster as to the intentions of said insurance company concerning the liability of Schmidman Properties, Incorporated, and the defendant insurance company; particularly with regard to payment of the plaintiff's damages. In response to such inquiry, the said adjuster indicated that the insurance company intended to settle with the plaintiff and promised to pay the following in settlement: the medical bills and expenses, the loss of wages, and a reasonable sum for pain and suffering;
"7. In exchange for these promises of the Insurance adjuster, the plaintiff indicated that he would refrain from obtaining the services or advice of any attorney or investigator who might act in his behalf in conducting an investigation of said accident, preserving what evidence was available, and in any way represent the plaintiff's rights; and further promised his full cooperation with said insurance company in providing them with any and all information they desired, including the signing of any papers or authorizations that might be presented to him.
"8. Subsequent to that initial visit, and over the months that followed the plaintiff cooperated completely in accordance with the above agreement, and when he inquired as to the performance by the insurance company, the insurance adjuster indicated that settlement as agreed upon, would be completed when the plaintiff returned to work at Allis-Chalmers Manufacturing Company.
"9. That when the plaintiff returned to work in June, 1958 he contacted said adjuster and requested performance on their part of the aforesaid bargain.
"10. That said insurance adjuster and insurance company defendant, breached and violated their previous promises by refusing to offer the plaintiff the settlement promised; and that the insurance adjuster had received word from someone in the company that they were changing their position and would not pay as promised, and further indicated, that the plaintiff's only alternative at this stage was to sue.
"11. That immediately upon being advised of the defendant's refusal to fullfill [sic] their part of the bargain, the plaintiff sought legal advice in July, 1958 for the first time and approximately five months after the date of the subject accident.
"12. That as a result of the plaintiff's reliances upon the promises of the defendant insurance company, the plaintiff did in fact refrain from obtaining the services or advice of any attorney or investigator who might act in his behalf; which change of position on the part of the plaintiff was to his detriment not only to the extent that it hampered the investigation conducted on behalf of this plaintiff, but also it permitted the running of the time requirement of Section A 1.15 [81.15 sic] of the Wisconsin Statutes providing that thirty (30) days written notice be given to the Mayor or City Clerk of Milwaukee within thirty (30) days after the happening of the subject accident."
The plaintiff next alleges that he had no alternative but to start the civil action in negligence in the circuit court for Milwaukee county which has been here twice before. Hansen v. Schmidman Properties (1960), 12 Wis.2d 1, 106 N.W.2d 328, and Hansen v. Schmidman Properties (1962), 16 Wis.2d 639, 115 N.W.2d 495. The plaintiff alleges as damages from the claimed breach of contract the sum of $10,120.77, which was the same amount as the jury awarded him as damages in Hansen v. Schmidman Properties (1962), 16 Wis.2d 639, 115 N.W.2d 495.
The trial court sustained the defendant's demurrer, and the plaintiff has brought this appeal from such order.
On this appeal, the parties have argued the procedural problem which attended the filing of a third version of the complaint. The third, or last, complaint was entitled "most recent amended complaint." The record is somewhat contradictory as to the circumstances surrounding the filing of such complaint.
An amended complaint (the second version) was filed pursuant to leave granted by the circuit court. There was no specific authorization to file the third complaint. However, the trial judge indicated that the defendant's demurrer would be considered as applying to both the amended complaint and the "most recent amended complaint."
The defendant had filed a motion in this court to strike this third version of the complaint; we denied such motion but granted the defendant the right to renew its contention by a motion to review. We believe that the action of the trial judge in treating the demurrer as applicable to both the amended complaint and the subsequent one constituted a tacit assent to the filing of the later document. The defendant has failed to convince us that Judge BEILFUSS erred in refusing to regard the third complaint as a fugitive document. We consider that the real issue of this appeal can be resolved by testing the demurrer as applied to either of the last two versions of the complaint. We conclude that the motion to strike the "most recent amended complaint" should be denied.
It is claimed that the promises of the defendant caused the plaintiff to permit the running of the time requirement under the Wisconsin statutes with reference to giving a thirty-day notice to a municipality after an accident.
It is alleged that the plaintiff was induced to exercise forbearance by reason of the defendant's promise to pay the plaintiff's expenses and "a reasonable sum for pain and suffering." It is also averred that the plaintiff sustained a change of position to his detriment by being induced to refrain from retaining counsel and investigators.
I. The Thirty-day Notice.
The third version of the complaint alleges that the plaintiff was visited by the defendant's adjuster "within a short time after the accident." This language of- the pleading does not make it clear that the alleged broken promise was made within thirty days after the accident. However, under our liberal rules of construction of pleadings upon the challenge of a demurrer, we shall assume that the agent's promise was in fact made within thirty days.
The plaintiff did not sue the municipality and argues on this appeal that it was the defendant's broken promise which induced him to fail to meet the thirty-day requirement of sec. 81.15, Stats. Assuming it was the defendant's promise which caused the thirty days to run, it must be noted that such forbearance was in favor of neither the defendant nor its insured; it was in favor of the municipality.
There is a gap in the necessary causal chain to support the plaintiff's contention of forbearance or detriment by his loss of a possible cause of action against the city of Milwaukee. Clearly, any forbearance against the city was not the sort of detriment requested by the defendant as consideration. The defendant had no pecuniary interest whatsoever in inducing the plaintiff to forgo a possible cause of action against the municipality. On the contrary, the defendant was interested in having the plaintiff refrain from any steps that might lead to an action against the defendant or its insured.
An enforceable claim could have been alleged if the defendant's promise would have induced the plaintiff to desist from suing the defendant or its insured until a limitations period had passed. Will v. Jessen (1956), 273 Wis. 495, 499, 78 N.W.2d 905. However, paragraphs 13, 14, and 15 of the third version of the complaint make it clear that this was not the forbearance which is claimed. Paragraph 12 alleges that as a result of his reliance on the defendant's promises, the plaintiff failed to give timely notice to the city of Milwaukee. In 1 Williston, Contracts (3d ed.), p. 606, sec. 139, the author states the rule that a detriment incurred in reliance on a promise is not sufficient consideration unless the detriment was requested as consideration.
Paragraph 16 of the complaint alleges that the defendant's agent "knew or should have known" of the plaintiff's cause of action against the city of Milwaukee "but failed to so advise him of such rights." In our opinion, this allegation is meaningless because of the absence of any duty on the part of the defendant's adjuster to so advise the plaintiff.
II. Forbearance in Investigating.
The balance of this opinion will consider the complaint from the standpoint of forbearance on the part of the plaintiff in relationship to his claim against the property owner and its insurance carrier.
If Mr. Hansen or his attorney were delayed in making a timely investigation of the factual circumstances of the accident by reason of the inducement contained in the defendant's promise, a valid cause of action might be asserted. However, from paragraph 15 it can be seen that the claim against the defendant's insured failed upon a proposition of law. In Hansen v. Schmidman Properties (1962), 16 Wis.2d 639, 115 N.W.2d 495, we affirmed the judgment of the trial court which had ruled as a matter of law that the defendants were not liable since the area where the plaintiff fell was either a part of the public highway dedicated and actually used by vehicles, or, at best, the place where he fell was the public sidewalk.
Since the claim against Schmidman Properties and its carrier turned on a question of law, it is apparent that the allegation that the investigation was hampered must be immaterial.
III. Vagueness of the Promise.
The defendant contends that the portion of the adjuster's promise to pay "a reasonable sum for pain and suffering" is too vague to be enforceable.
The promise to pay for medical bills and loss of wages would surely not be too indefinite. The case of Brennan v. Employers' Liability Assur. Corp. (1913), 213 Mass. 365, 100 N.E. 633, involved a verbal agreement by an agent of an insurer to obtain a release from a claimant and to "make it right" in case the claimant failed to recover within a certain period of time. The Massachusetts court ruled that it was error to direct a verdict for the defendant insurer on the ground that this contract was void for indefiniteness. Similarly, we believe that the claim of indefiniteness would not justify sustaining the demurrer.
IV. Equitable Estoppel.
The circumstances of the long course of litigation between these parties are somewhat unusual. The plaintiff has in effect kept two related, but different, causes of action moving through the courts of this state for a period of four years. The plaintiff started the litigation on his cause of action on the tort for negligence. The defendant successfully demurred. Then he started his cause of action in contract based on the alleged repudiation of the settlement agreement by the insurer. The defendant's demurrer was sustained. The plaintiff then went back to his tort action, amended his complaint, and prosecuted such cause of action, unsuccessfully, to judgment.
The instant complaint in contract alleges as the consideration that the plaintiff forbore to prosecute his claim deriving from the tort up to the time that the defendant allegedly repudiated the settlement agreement. In view of the plaintiff's having pursued his tort action through the highest court of this state, can it reasonably be said that he has exercised forbearance by reason of an alleged repudiation of a promise to settle? In our opinion, the answer must be in the negative. Under all the facts and circumstances, we think that the plaintiff should be estopped in equity to prosecute this contract action. An equitable estoppel is applicable to bar the plaintiff from first pursuing his tort remedy to the bitter end and then attempting to pursue a remedy for the breach of a contract in which the consideration he gave was, of all things, a promise not to sue.
Equitable estoppel is a recognized doctrine appropriate for application in such a case as we have here. In Rowell v. Smith (1905), 123 Wis. 510, 521, 102 N.W. 1, this court said:
"Doubtless, if a person with knowledge of the facts invokes a judicial remedy upon one theory, as regards a particular subject-matter, — for example, that it produced a contract of one character, — and compels his adversary, at considerable expense, to successfully defend against such theory, it would be inequitable, at least, to permit such person to again use a judicial remedy, though consistent with the other, to recover on a different cause of action than at first alleged, — one not affected by the doctrine of res adjudicata or the election of remedies, but proceeding upon the theory that the transaction in question produced a contract differing somewhat from that first alleged."
Everything must have an end, and for the purposes of this litigation we think the end has arrived. In view of the peculiar circumstances of this case, we hold that the plaintiff is estopped in equity from prosecuting this contract action.
By the Court. — Order affirmed.