Maloney v. Valley Med. Facilities, Inc. - 603 Pa. 399, 984 A.2d 478 (2009)

Rule:

Certain situations may arise where a plaintiff might settle with a principal, but not intend to release the agent. For example, the settlement may represent the principal's solvency rather than the fair value of the claim; or the settlement may represent a compromise due to uncertainty as to whether the principle of respondent superior legally holds the defendant vicariously liable for the acts of the other defendant. Thus, a plaintiff should not be deprived of a cause of action against an active tortfeasor when the plaintiff has not intentionally surrendered the claim. 

Facts:

Appellee-administrator Max C. Maloney commenced the present medical malpractice action grounded on an asserted failure to timely diagnose and treat osteosarcoma in his wife, Linda Maloney. He alleged medical negligence on the part of Appellant Maurice Prendergast, M.D., an internist, as well as vicarious liability on the part of institutional defendants associated with these physicians. The superior court reversed the trial court’s judgment granting summary judgment to appellants on the issue of whether they were released from liability based on plaintiff administrator's execution of a release of liability. Appellant challenged the order. The court accepted the appeal to consider whether the administrator's release of the principals whose potential liability was vicarious also discharged his claims against the appellant, regardless of an express reservation of rights. Appellants relied upon the common law doctrine governing releases that the release of an agent followed, as a matter of law, from the release of the principal. 

Issue:

Was the plaintiff's release of principals whose potential liability was vicarious also discharges the plaintiff's claims against the agent, regardless of an express reservation of rights?

Answer:

No. The court affirmed the order.

Conclusion:

The superior court vacated the grant of summary judgment to the appellant upon stressing the application of traditional contract principles to releases, including the policy of effectuating the intention of the parties via enforcement of the ordinary meaning of the release terms. The court thus upheld the superior court's decision, distinguishing certain case law relied upon by the appellant and held that to apply an inflexible common-law rule to a complex landscape of claims was not acceptable.