From the Desk of Kyle Riley: This case discusses whether paying the total amount owed in a confession of judgment constitutes a fully satisfied judgment, not a partially satisfied judgment, when breach of the implied covenant of good faith and fair dealing was alleged.
Claims Pointer: When a party received full payment of the amount owed under a confession of judgment, the judgment was fully satisfied, not partially satisfied.
Sharbono et al. v. Universal Underwriters Ins. Co. et al., in the Court of Appeals of the State of Washington, Division II, No. 41931-9-II, — P3d —- (October 2, 2012) (unpublished).
Cassandra Sharbono, a minor at the time, swerved her car into oncoming traffic colliding head-on with Cynthia Tomyn’s car. Cynthia was killed in the accident. Cynthia’s family (the Tomyns) sued Cassandra and her parents (the Sharbonos) and they settled the lawsuit. As part of the settlement agreement, the Sharbonos confessed judgment in the amount of $4,525,000. The Sharbonos also agreed to file a lawsuit against their insurer, Universal Underwriters Insurance Company, and if they prevailed, to give certain awards against the insurance company to the Tomyns. After over a decade of various legal proceedings, the trial court entered partial satisfaction of the judgment by confession and entered full satisfaction of the judgment in the Sharbonos’ lawsuit against the insurance company. The Sharbonos appealed.
On appeal, the Sharbonos argued the judgment by confession had been fully rather than partially satisfied. The Tomyns received the amount owed to them under the judgment, $4,525,000 plus interest. Despite receiving the total amount owed, the Tomyns alleged the Sharbonos breached the covenant of good faith and fair dealing by filing a cross-appeal and not maintaining a united front with the Tomyns. The Tomyns contended that a full satisfaction of the judgment by confession would be inappropriate because it would preclude them from bringing a claim for the breach of the implied covenant of good faith and faith dealing.
However, the Washington Court of Appeals determined that since the Tomyns received full payment of the amount owed under the confession by judgment, the judgment had been fully satisfied. Accordingly, the Sharbonos are no longer indebted to the Tomyns for the amount specified in the judgment by confession. Thus, the trial court erred when it concluded that the judgment by confession had been only partially satisfied. The court of appeals agreed with the trial court that the judgment involving the insurance company had been fully satisfied. The court chose not to address the effect of the satisfaction of judgment and whether the Tomyns would be stopped from bringing future claims against the Sharbonos for breach of the implied duty of good faith and fair dealing.
NOTE: This opinion has not been published. It is provided to demonstrate how the court approaches the issues involved in the case. It cannot be cited as authority to a court of law.
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