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CAUTHORN v. BRITISH LEYLAND, U.K., LTD.
355 S.E.2d 306 (1987)
Richard Mason CAUTHORN, III Legal Guardian, etc.
v.
BRITISH LEYLAND, U.K., LTD., et al.
Record No. 840223.
Supreme Court of Virginia.
April 24, 1987.
Susan M. Danielski (Christopher C. Fallon, Jr., Philadelphia, Pa., Peter J. Judah, Hot Springs, Cozen, Begier & O'Connor, Philadelphia, Pa., on briefs), for appellants.
William B. Poff (W. Fain Rutherford, Roanoke, William H. Robinson, Jr., H. Slayton Dabney, Jr., Adele Baker, Richmond, William O. Tune, Jr., Linda Davis Frith, Woods, Rogers, Muse, Walker & Thornton, Roanoke, McGuire, Woods & Battle, Richmond, Gentry, Locke, Rakes & Moore, Roanoke, on briefs), for appellees.
Present: CARRICO, C.J., and COCHRAN,* POFF, COMPTON, RUSSELL, and THOMAS, JJ., and HARRISON, Retired Justice.
In April 1977, Eva Rebecca Cauthorn, a minor, was injured when the 1966 Triumph automobile in which she was a passenger, owned by Mary Ann Graves and operated by Ricky June Peery, collided with another vehicle. The automobile was insured under a policy of insurance issued to Graves by The Home Insurance Company. Peery was insured under a policy issued by The Hartford Insurance Company. These insurance companies petitioned the court under Code § 8.01-424 for approval of a compromise settlement of Rebecca's personal injury claim for $100,000, the maximum aggregate coverage under the policies. Rebecca's parents and legal guardian answered, requesting that the settlement be approved; her guardian ad litem responded that the settlement was in her best interests. By order dated April 27, 1978, the court approved the settlement and ordered the release of the companies "from any and all further liability under their respective policies to the respondents herein for damages arising out of the accident." In July 1982, Rebecca's guardian, Richard Mason Cauthorn, III, filed this action against the manufacturer of the automobile, the manufacturer of its wheels, and the dealer who sold the automobile to Graves,1 alleging that each defendant was guilty of negligence and breach of warranties of merchantability and fitness. In addition to other defensive pleadings, each defendant filed special pleas, contending that the court-ordered release of April 27, 1978, also released the defendants from any liability for Rebecca's personal injuries resulting from the accident. The trial court conducted three evidentiary hearings, receiving testimony concerning the intent of the parties in reaching settlement and in releasing the insurance companies. Concluding that the settlement documents were ambiguous, the court considered the parol evidence and found that the parties intended the release of the companies also to release the insured driver, Peery. Relying on Perdue v. Sears, Roebuck & Co.,523 F.Supp. 203 (W.D.Va. 1981), aff'd,694 F.2d 66 (4th Cir.1982), the court sustained the defendants' pleas of release and dismissed the action. We refused that portion of Cauthorn's petition for appeal which assigned error to the ruling that the parties released the driver and granted this appeal limited to the question "whether release of the claims for negligence bars recovery for the claims based upon breach of warranty."2 Prior to the enactment of Code § 8.01-35.1 in 1979, the rule of law in Virginia was that a release of one joint tortfeasor released all joint tortfeasors. Bartholomew v. Bartholomew, 233 Va. 86, ___, 353 S.E.2d 752 (1987); Wright v. Orlowski, 218 Va. 115, 120, 235 S.E.2d 349, 352 (1977). As we stated in Wright, this rule is derived from the doctrine of accord and satisfaction: It is a release which actuates the rule. The making of an accord and the acceptance of satisfaction will effect a release. When a tortfeasee accepts satisfaction from one tortfeasor for the part he played in the joint tort, that tortfeasor is released and his release operates to release all other tortfeasors.
* Justice Cochran prepared and the Court adopted the opinion in this case prior to the effective date of his retirement on April 20, 1987. 1. The named defendants were British Leyland, U.K., Ltd. (now BL Cars, Ltd.), and its agent, British Leyland Motors, Inc.; TPPI Engineering, Inc.; and University Motors, Ltd. 2. Numerous decisions have construed the effect of covenants not to sue or releases in product liability cases involving breach of warranty claims. In each, the court has assumed that a person who breached such a warranty was subject to the former rule that release of one joint tortfeasor releases all joint tortfeasors, although the precise question has not been before the court for decision. See, e.g., Bartholomew v. Bartholomew, 233 Va. 86, 353 S.E.2d 752 (1987); Hayman v. Patio Products, Inc., 226 Va. 482, 311 S.E.2d 752 (1984); Perdue v. Sears, Roebuck & Co.,694 F.2d 66 (4th Cir.1982); Carickhoff v. Badger-Northland, Inc.,562 F.Supp. 160 (W.D.Va.1983); Statzer v. King Kutter Corp.,550 F.Supp. 1062 (W.D.Va.1982). 3. Although there was no accord and satisfaction, we expressly ruled that the purchasers could not recover in the second action for diminution in the value of the residue to the extent that they had already received such damages in the settlement of the first. 206 Va. at 85-86, 141 S.E.2d at 676-77.
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