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FEDERAL INS. CO. v. PLAZA DRUGS

December 2, 1971

FEDERAL INSURANCE COMPANY, Plaintiff,
v.
PLAZA DRUGS, INCORPORATED, Defendant


Youngdahl, Senior District Judge.


The opinion of the court was delivered by: YOUNGDAHL

YOUNGDAHL, Senior District Judge.

 The present case came before this Court for trial before a jury on November 9, 1971, defendant's motion for summary judgment having previously been denied without prejudice by another judge of this District Court. In studying the record prior to trial and observing that the motion for summary judgment would be renewed, the Court carefully researched the law involving the issues raised in said motion. On the morning of the trial before calling for a jury the Court heard oral arguments on the renewal of said motion for summary judgment.

 The facts in this case indicate that a fire occurred on June 8, 1969 in an apartment building located at 2000 P Street, N.W., in the District of Columbia. The building was owned by Wade Apartments, Inc. and a portion of that building was leased to Plaza Drugs, Inc. Plaza Drugs had a lease with Wade Apartments entitling it to occupy a portion of the ground floor until December 31, 1969. Wade Apartments was evidently desirous of terminating that lease at an early date. Thus on September 20, 1968 an "Agreement For Surrender of Lease and Mutual Release" was executed between Wade and Plaza Drugs. In consideration of Plaza's agreement to surrender the premises on September 30, 1968, Wade Apartments agreed to discharge Plaza from a certain unpaid percentage rental and from any and all liability which Plaza might have for damages suffered by Wade in the June 8th fire.

 Later, on December 16, 1968, Hilbert S. Sabin, President of Wade, signed a sworn statement in proof of loss in order to receive indemnification from his insurance carrier, Federal Insurance Company. In that sworn statement he claimed the sum of $13,048.72 payable to Wade Apartments, Inc. On that same date Mr. Sabin signed a release and subrogation receipt, acknowledging payment of $13,048.72 by Federal Insurance Company.

 In part that receipt reads as follows:

 
Warranted no settlement has been made by the undersigned with any party, person, persons, property or corporation against whom a claim may lie, and no release has been given to anyone responsible for the loss, and that no such settlement will be made nor release given by the undersigned without the written consent of the said Company * * *. *fn1"

 Obviously this statement was false as Wade had previously released Plaza Drugs from any and all liability from the fire.

 On December 16, 1969 Federal Insurance Company filed suit in the United States District Court for the District of Columbia as subrogee of Hilbert S. Sabin and Wade Apartments, Inc. seeking $13,048.72 as reimbursement from Plaza Drugs, Inc., whom it claims negligently and carelessly caused and permitted to occur the aforementioned fire.

 In its answer Plaza Drugs alleges that the plaintiff's claim is barred by Plaza's release agreement with Wade Apartments; and in a separate motion Plaza Drugs moves for summary judgment.

 In its opposition to the motion for summary judgment Federal asserts that Wade's release of Plaza does not affect the subrogation interests of Federal against Plaza because Plaza had knowledge of the existing subrogation claim at the time it signed the release. To support its claim that Plaza had such knowledge Federal has produced the affidavit of Bobbie S. Collins in which she swears that prior to September 20, 1968 the office of Robert W. Green Associates, Inc., as investigating agents for Federal, "engaged in various discussions concerning the subrogation interest of Federal Insurance Company with officers/agents/servants/employees of Plaza Drugs Incorporated." *fn2"

 Moreover, Federal asserts that Wade has received a double benefit insofar as it has received both the consideration for the release from Plaza and the insurance payment from Federal. Therefore, Federal insists that equity demands Wade be made a third party defendant in this case and that Federal should receive remuneration and reimbursement from either Plaza or Wade, "depending upon the relationship between those two companies, following the signing of the Release." *fn3"

 Finally, Federal avers the existence of a factual issue in regard to whether the release was intended to be conditional, complete, or partial, and as to whether it was supported by adequate consideration.

 First, considering this final set of allegations, it is abundantly clear from the language of the release that it was the intention of the parties that the release be complete and extend to any and all ...


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