Miller v. Grand Union Co.

512 S.E.2d 887 (1999) 270 Ga. 537

MILLER
v.
GRAND UNION COMPANY.

No. S98G1598.

Supreme Court of Georgia.

February 22, 1999.

Steven A. Cook, Steven L. Beard, Steven L. Beard, P.C., Marietta, for Lolita Miller.

Robert Lawrence Shannon, Jr., Hall, Booth, Smith & Slover, Atlanta, for Grand Union.

CARLEY, Justice.

Grand Union Company employed Richard Strickland and Frank Fox as security guards at one of its retail stores. When Fox purportedly observed a shoplifting, he and Strickland detained both Lolita Miller and Ametrius Nicely. Eventually, Ms. Nicely was convicted of theft by shoplifting, but the criminal charges against Ms. Miller were nolle prossed because of an exculpatory affidavit given by Fox. In exchange for the affidavit, Ms. Miller executed a covenant not to sue Fox. Ms. Miller brought suit against Grand Union asserting, among her other claims, false imprisonment, assault, and battery based upon a theory of vicarious liability for Fox's conduct. Grand Union moved for summary judgment on the ground that the covenant not to sue Fox absolved it of liability to Ms. Miller. The trial court denied Grand Union's motion for summary judgment, but certified its order for immediate review. The Court of Appeals granted Grand Union's application for interlocutory appeal and, relying on Posey v. Medical Center-West, 257 Ga. 55, 354 S.E.2d 417 (1987) and Harris v. Hanna Creative Enterprises, 208 Ga.App. 549(1), 430 S.E.2d 846 (1993), reversed. The Court of Appeals held that, "[w]here an employer's liability for the tortious acts of its employee rests on the doctrine of respondeat superior, a covenant not to sue the employee bars the plaintiff from maintaining an action against the employer." Grand Union Co. v. Miller, 232 Ga.App. 857, 860(2), 503 S.E.2d 49 (1998). We granted certiorari to review this holding. We conclude that the execution of either a covenant not to sue or a release in favor of an employee does not discharge an employer who is alleged to be vicariously liable for the tortious acts or omissions of that employee, unless the instrument names the employer.

1. There is a distinction between a release and a covenant not to sue. Whereas a release extinguishes the entire cause of action, a covenant not to sue merely prevents the institution of a civil action against the party named therein. See Brantley Co., v. Briscoe, 246 Ga. 310, 312(1), 271 S.E.2d 356 (1980). Because a covenant not to sue does not extinguish the entire cause of action, it has always been the law of this state that such an instrument discharges only those parties who actually are named therein. See Brantley Co. v. Briscoe, supra at 312(1), 271 S.E.2d 356. Thus, an injured party who enters into a covenant not to sue an employee does not thereby extinguish his cause of action, and he will not be barred from pursuing a claim against the unnamed employer who may be vicariously liable. Otis v. Wren Mobile Homes, 111 Ga.App. 649, 143 S.E.2d 8 (1965).

Prior to Posey v. Medical Center-West, supra, the rule was different for releases. Because it extinguishes a cause of action, a release given to one joint tortfeasor was deemed to discharge even the unnamed joint tortfeasors, including the unnamed master whose liability was based upon the principle of respondeat superior. See Giles v. Smith, 80 Ga.App. 540, 542(1)(e), 56 S.E.2d 860 (1949). However, in Posey, supra at 59, 354 S.E.2d 417, we adopted a new rule and held that "[a] valid release of one tortfeasor from liability for a harm, given by the injured person, does not discharge others for the same harm, unless it is agreed that it will discharge them. [Cit.]" Thus, Posey abolished the distinction between the effect that a release and a covenant not to sue has on the potential liability of an unnamed party. Just as in the case of a covenant not to sue, "[o]nly those parties named in the release will be discharged by that instrument." (Emphasis in original.) Lackey v. McDowell, 262 Ga. 185, 186, 415 S.E.2d 902 (1992). While the effect of a release may still be to extinguish a cause of action, under the post-Posey rule the instrument will have that effect only as against the parties actually named therein.

Accordingly, Posey did not purport to change the law regarding covenants not to sue. Posey merely changed the law as it related to releases by limiting the effect of those instruments to the named parties, as has always been the rule with covenants not to sue. Nothing in Posey indicates that its holding applies only in the limited context of traditional joint tortfeasors or that it has no applicability in a case involving vicarious liability. "Although the liability of the master and servant is joint and several, the same principles apply to them in an action based solely on the negligence of the servant as would apply in actions against joint tort-feasors. [Cit.]" Giles v. Smith, supra at 542(1)(e), 56 S.E.2d 860. Georgia courts, as well as the courts of most other states, have treated the master as if he were a joint tortfeasor with his servant. Anno., 92 ALR2d 533, 539, § 3[b] (1963). Thus, Posey requires that the master be named in a release if he is to be discharged thereby. See Lackey v. McDowell, supra. See also Saranillio v. Silva, 78 Hawai``i 1, 889 P.2d 685 (1995); Brady v. Prairie Material Sales, 190 Ill.App.3d 571, 137 Ill. Dec. 857, 546 N.E.2d 802, 807-810 (1989); Manar v. Park Lane Med. Center, 753 S.W.2d 310, 312(I) (Mo. App.1988); Knutson v. Morton Foods, 603 S.W.2d 805, 808 (Tex.1980); Alaska Airlines v. Sweat, 568 P.2d 916, 928(IV) (Alaska 1977); Anno., 92 ALR2d 533 (1963). To the extent that Harris v. Hanna Creative Enterprises, supra, or any other case suggests that a release which names only the employee has the effect of also releasing the employer from liability, such a holding is premised upon a misinterpretation of Posey and is hereby specifically overruled.

2. Because this case involves a covenant not to sue, rather than a release, Posey has no substantive bearing on its outcome. Under the law as it has always existed in this state, a covenant not to sue discharges only the party or parties actually named therein. This is entirely consistent with the rule in other jurisdictions, which "similarly allow recovery against an employer following execution of a covenant not to sue an employee, even without an express reservation. [Cits.]" Dworak v. Olson Constr. Co., 191 Colo. 161, 551 P.2d 198, 200(II) (1976). Although Posey changed the law, it did so by making applicable to releases the requirement of naming the party or parties to be discharged thereby. Because only Fox was named in the covenant not to sue executed by Ms. Miller, Grand Union was not discharged by that instrument. Therefore, the Court of Appeals erred in reversing the trial court's denial of Grand Union's motion for summary judgment as to Ms. Miller's claims of false imprisonment, assault, and battery based upon the theory of vicarious liability for Fox's conduct. However, this holding does not affect the Court of Appeals' reversal of the trial court's denial of summary judgment as to the remaining claims.

Judgment affirmed in part and reversed in part.

All the Justices concur.