Kosanic v. Preferred Automobile Insurance

The facts in this case have been stipulated. On August 30, 1940, defendant Preferred Automobile Insurance Company issued to plaintiff Anne Radakovitz, now Kosanic, a policy of automobile insurance. The coverage provided included among others, retention collision; personal liability for injury to one person up to $5,000, and, subject to the limit for each person, personal liability to all persons injured in one accident up to $10,000; and an obligation to defend any suit arising from the ownership of the insured vehicle.

On November 24, 1940, plaintiff's automobile, insured under the mentioned policy, collided with another automobile in which one Feigh Hatfield was a passenger. As a result of this collision, Feigh Hatfield was injured and the insured automobile was damaged to the extent of $510.95.

Feigh Hatfield brought action against Mrs. Kosanic, plaintiff in the case at bar. Mrs. Kosanic notified defendant insurance company of the impending action and demanded that it defend her in accordance with the terms of the policy. The insurance company declined to defend the action, claiming that the policy was not in force at the time of the collision. Mrs. Kosanic then engaged the services of Noel Fox, a Muskegon attorney, to conduct her defense at an expense to her of $275. The action was tried and resulted in a judgment for Feigh Hatfield for damages and costs of $8,072.30. On September 18, 1942, Feigh Hatfield caused a writ of garnishment to be issued which was served on defendant insurance company. Defendant disclosed that it was not indebted to Anne Radakovitz (Kosanic) in any amount. The trial resulted in a judgment in favor of Feigh Hatfield as against defendant insurance company in the sum of $5,276.56 damages and $68.60 costs. Defendant insurance company paid this judgment December 14, 1942.

On November 29, 1943, the instant case was brought by Mrs. Kosanic to recover under the mentioned policy for damages to plaintiff's automobile in the sum of $510.95 and the $275 paid to defend the Feigh Hatfield action and another arising out of the same accident. Defendant insurance company filed an answer to plaintiff's declaration and set up as an affirmative defense that the judgment in the garnishment action is a final and conclusive adjudication of the indebtedness of defendant insurance company to plaintiff as it existed on the date that the writ of garnishment was served on it.

The issue thus framed came on for trial before the court without a jury. On December 2, 1944, a judgment for plaintiff in the sum of $785.95 was entered. Defendant appeals and urges that the two items of damages were owing by defendant to plaintiff herein when the writ of garnishment was served; that the indebtedness due plaintiff arose from a single breach of contract; that the cause of action cannot be split and a portion assigned to Mrs. Kosanic either by direct assignment or failure to recover the full amount due; and that the question of defendant's liability to plaintiff herein as well as the amount thereof was in issue and adjudicated by the garnishment trial and judgment.

In coming to our conclusion in this case we have in mind that at the time the garnishment proceedings were instituted and the writ served, the garnishee defendant was indebted to plaintiff in the instant case for an attorney fee which was ascertainable and later determined to be $275 and for damage to her automobile, subsequently proven to be $510.95 as well as the sum of $5,000 provided for in the insurance policy (see 3 Comp. Laws 1929, § 14858, as amended by Act No. 182, Pub. Acts 1937 [Comp. Laws Supp. 1940, § 14858, Stat. Ann. 1945 Cum. Supp. § 27.1856]); that when a judgment was rendered against the garnishee defendant in the garnishment proceedings the items of attorney fee and car damage were not included in said judgment; and that these items could have been recovered by plaintiff in the garnishment proceedings.

We shall first discuss the claim made by defendant that the action by Feigh Hatfield in the garnishment case and action by plaintiff in the instant case result in a splitting of plaintiff's original cause of action. The rule against splitting causes of action and the reasons for such rule are well set forth in the following cases.

"It is a well-settled rule that an entire claim or demand arising out of a single transaction, whether in the nature of a contract or tort, cannot be divided into separate and distinct claims, and the same form of action brought for each, or two suits maintained, without defendant's consent." ContinentalInsurance Co. v. H.M. Loud Sons Lumber Co., 93 Mich. 139 (32 Am. St. Rep. 494).

In Jensen v. Gamble, 191 Mich. 233, 238, we said:

"There can be no doubt that the rule of law against the splitting of a single cause of action into several actions is founded upon the plainest and most substantial justice; that is, that litigation should have an end, and that no person should be unnecessarily harassed with a multiplicity of suits.

"The rule that a single cause of action cannot be split and made the subject of several actions applies, as a rule, where the cause is in favor of several persons jointly or against several persons jointly, and since a plaintiff having an entire indivisible demand cannot divide it into distinct parts, and maintain separate actions on it, so he cannot accomplish the same result by an assignment of a part of his demand, thereby enabling others to do what he could not do. 1 R.C.L. p. 341, and cases cited; 23 Cyc. p. 439 et seq."

In Kruce v. Lakeside Biscuit Co., 198 Mich. 736, 742, we said:

"We conclude that, where several claims are involved, or due and payable under one and the same contract at the time of bringing suit, such claims must be brought in one action in order that the defendant may not be harassed by a multiplicity of suits."

In A. Krolik Co. v. Ossowski, 213 Mich. 1, 7, we said:

"The law abhors multiplicity of suits. Attempts to split a claim into separate causes of action have often met with disfavor."

In Ginsburg v. McBride, 248 Mich. 221, we said:

"The rule is well established that, in the absence of an agreement to the contrary, a plaintiff cannot divide a claim against another and make it the subject of several actions. Should he do so, the judgment first recovered is a bar to a second or subsequent action for the residue of the claim."

In Loud v. General Builders Supply Co., 249 Mich. 331, we quoted the following with approval:

"``There is no principle of law which prohibits a person who has a claim against another from taking a part in satisfaction of the whole, and therefore he may maintain an action for a part only of the claim. But the rule is fully established that in the absence of an agreement to the contrary he cannot divide his claim and make it the subject of several actions. Hence if he sues for a part only of his claim a judgment obtained by him in the action is a bar to a second action for the residue of the claim, be it much or little, and irrespective of the question whether the second form of action was or was not identical with the first. The rule of law against the splitting of a single cause of action into several actions is founded upon the plainest and most substantial justice, that is, that litigation should have an end and that no person should be unnecessarily harassed with a multiplicity of suits. It is the right of every litigant to have his cause once submitted to the arbitrament of the law; when it is there decided the peace of society demands that it should be at rest forever. It is a principle on which the repose of communities depends.' 1 R.C.L. pp. 341, 342, citing many authorities from various jurisdictions."

In the case at bar defendant insurance company, by issuing its policy of insurance to plaintiff, contracted with plaintiff to do three things in the event that plaintiff had an automobile collision, i.e., to pay the cost of repairing plaintiff's car, to defend her in a suit by a third party, and to pay for any judgment up to $5,000 that might be rendered against plaintiff.

Under the garnishment proceedings Feigh Hatfield, plaintiff therein, was entitled to and could have recovered all moneys that the insurance company owed Anne Radakovitz Kosanic, but for reasons unknown she chose to omit the items heretofore mentioned and took a judgment for the claim for personal injuries. Under the cited cases Feigh Hatfield could not have successfully brought a second action against the insurance company for the omitted items, nor can plaintiff in the case at bar successfully bring a second action against the insurance company to recover for claims growing out of the insurance policy.

Under the authority of the Jensen Case, supra, Mrs. Kosanic could not assign a part of her claim to Feigh Hatfield and each bring action for their interest in the cause of action. In the case at bar, Mrs. Kosanic had three items of damages against the insurance company by virtue of her insurance policy. Under the authority of the Kruce Case, supra, such damages must be recovered in one action against the insurance company. The action of Feigh Hatfield in bringing the garnishment action against the insurance company for one of the items owing by the insurance company and the action by Mrs. Kosanic in bringing another action against the same defendant for the omitted items results in a splitting of Anne Radakovitz Kosanic's original cause of action against the insurance company and is contrary to the well-established law in this State. The judgment in the garnishment proceedings is a bar to further recovery by Mrs. Kosanic against defendant.

The judgment should be reversed, with costs to defendant.