Moran v. G. & W.H. Corson, Inc. ( 1991 )

MONTEMURO, Judge,

concurring and dissenting:

I agree with the majority’s conclusion that the evidence was insufficient to establish the requisite reckless conduct necessary to submit the issue of punitive damages to the jury. I also agree with the majority’s resolution of the issue of delay damages and appellee Corson’s arguments on cross-appeal. I must dissent, however, from the majority’s determination that the trial court erred in directing that the compensatory damage award be marked satisfied because the amount of the settlements received by appellant Catherine Moran from the settling joint tort-feasors exceeded the amount of the compensatory damage verdict. I believe that this Court’s decision in Walton v. Avco Corp., 383 Pa.Super. 518, 557 A.2d 372 (1989), allocatur granted, 524 Pa. 599, 568 A.2d 1249 (1989) and § 8326 of the Uniform Contribution Among Tortfeasors Act (UCATA), 42 Pa.C.S.A. § 8326, control the resolution of this issue and require that the judgment be marked satisfied as to all of the defendants.

Section 8326 of the UCATA provides:

A release by the injured person of one joint tort-feasor, whether before or after judgment, does not discharge the other tort-feasors unless the release so provides, but reduces the claim against the other tort-feasors in the amount of the consideration paid for the release or in any amount or proportion by which the release provides that the total claim shall be reduced if greater than the consideration paid.

42 Pa.C.S.A. § 8326. In Charles v. Giant Eagle Markets, 513 Pa. 474, 482, 522 A.2d 1, 4 (1987), our Supreme Court noted that § 8326 “affords the parties to the release an option to determine the amount or proportion by which the total claim shall be reduced provided that the total claim is greater than the consideration paid." Id. (emphasis added). In Giant Eagle, one of the joint tort-feasors (Giant Eagle) entered into a settlement agreement in which the plaintiff agreed “that any recovery that I may obtain against any ... corporation other than Giant Eagle Markets, Inc. ... shall be reduced to the extent of the pro rata share of ... Giant Eagle.” Id., 513 Pa. at 482, 522 A.2d at 5. The case was tried and the jury returned a verdict in favor of the plaintiff. Although the settlement figure was less than the total , jury verdict, the amount of the settlement exceeded the amount of the settling tort-feasor’s proportionate share of the verdict. The nonsettling tortfeasor, Stanley Magic Door, Inc. (Stanley), argued that the verdict against it should be reduced by the amount by which Giant Eagle’s settlement payment exceeded Giant Eagle’s share of the verdict, that is, that the plaintiff was only entitled to receive the amount of the jury award minus the settlement payment. The Court disagreed, holding that the clear language of both the release and § 8326 required that the jury verdict be reduced only by Giant Eagle’s proportionate share. Id., 513 Pa. at 482, 522 A.2d at 5. Thus, Stanley was not relieved of its responsibility for payment of its proportionate share of the damages.

While the instant case is similar to Giant Eagle in that the releases which were executed between appellant and the settling joint tort-feasors provide that the total damages shall be reduced by the pro rata share of the settling tort-feasor’s liability, see R.R. at 35a, 40a, 43a, 47a, 50a, 54a, I find that this case is markedly different from Giant Eagle, as the total amount paid in consideration of the settlements exceeds the compensatory verdict. In this regard, I find that Walton v. Avco, supra, is directly on point.

In Walton, the plaintiffs (“Waltons” and “Tinchers”) sued the Avco Corporation (Avco) and the Summa Corporation (Hughes) for damages arising out of the deaths of two individuals resulting from a helicopter accident. Id., 383 Pa.Super. at 522, 557 A.2d at 374. Before trial, Avco settled both the Walton and Tincher actions for settlement figures which exceeded the ultimate jury verdict entered against both Avco and Hughes. The release in Walton provided that the damages award would be reduced by the greater of (1) the amount of the consideration paid for the release or (2) the pro rata share of Avco’s liability. On appeal, this Court rejected the Walton plaintiffs’ claim that under Giant Eagle, they were entitled to receive from Hughes the full amount of Hughes' share of the jury verdict and that Avco was not entitled to contribution from Hughes. Id., 383 Pa.Superior Ct. at 537-38, 557 A.2d at 382. We found that no portion of Hughes’ share of the jury-verdict was owed to the plaintiffs, because Avco had, “by paying plaintiffs a greater settlement amount than the jury awarded to the plaintiffs as damages, ‘discharged the common liability’ of Avco and Hughes.” Id., 383 Pa.Superior Ct. at 541, 557 A.2d at 384, citing 42 Pa.C.S.A. § 8324(b). Relying on Giant Eagle, this Court stated:

If the settlement amount exceeds the ultimate claim recovered at trial against all defendants, as in the instant case, then the parties executing a release agreement have no option as to the amount by which the judgment will be reduced. Under those circumstances, the judgment is essentially cancelled out by the previous settlement payment to the plaintiff. It is where the consideration paid for the previous release agreement is less than the total claim ultimately recovered by the plaintiff at trial, as in [Giant Eagle], that the parties to a release agreement have ‘the option to determine the amount or proportion by which the total claim shall be reduced.’

Walton, supra, 383 Pa.Super. at 541-42, 557 A.2d at 384, quoting Giant Eagle, supra, 513 Pa. at 482, 522 A.2d at 4. I disagree with the majority’s characterization of this language as dicta, as the settlement figure in Walton was greater than the ultimate jury award. The majority overlooks the plain language of § 8326, which provides that parties to the release have the option to determine the amount or proportion by which the total claim shall be reduced if the claim is “greater than the consideration paid.” 42 Pa.C.S.A. § 8326. Thus, although the releases in this case provided only that the verdict would be reduced by the pro rata share of the releasee’s liability, and unlike the release in the Walton case, did not provide that the claim would be released by the amount of the consideration paid for the release, I believe that this distinction is not determinative of the outcome of this case, because under § 8326 and the Walton case, the parties do not have the option to determine the amount by which the claim will be reduced where the settlement figure exceeds the jury verdict.

Consistent with Walton and Giant Eagle and the plain meaning of § 8326,1 believe that appellant did not have the option to choose the amount by which the jury award would be reduced, as the amount she received in settlement of her claims exceeded the ultimate jury verdict. In paying appellant an amount greater than the jury award, the settling tort-feasors discharged the common liability of all of the defendants.

The majority’s holding further conflicts with the UCATA insofar as the decision frustrates the legislative intent that settling tort-feasors who have paid more than their proportionate share have a right to contribution from the nonsettling tort-feasors. As in the Walton case, three of the settling tort-feasors here expressly reserved the right to contribution under the UCATA in their release agreements. See R.R. at 35a, 50a, 55a.¹ In Walton, the Court upheld the right of Avco to pursue its contribution rights against Hughes, as Avco had specifically provided in its release agreement with the plaintiffs that its involvement in the lawsuit would continue in so far as Avco retained the right to seek contribution against other liable parties. Walton, supra, 383 Pa.Super. at 540-41, 557 A.2d at 384. Because Avco had paid the plaintiffs a greater settlement amount than the jury award, Avco had “discharged the common liability” of all of the defendants, and thus had a right to contribution under § 8324 of the UCATA. Id. Although appellant and the settling tort-feasors here also agreed that the settling tort-feasors would retain their right to contribution against the nonsettling tort-feasors, the consequence of the majority’s decision is to render invalid this right to contribution. If the nonsettling tort-feasors are required to pay their proportionate shares of the liability to appellant, then they cannot be required to pay contribution to the settling tort-feasors. Thus, the majority holding will interfere with the settling tort-feasors’ right to contribution granted by the UCATA and expressly reserved by virtue of their release agreements.

I believe that the policy considerations of encouraging both plaintiffs and defendants to settle, which are set forth in Giant Eagle and relied upon by the majority in this case, are in no way jeopardized by my conclusion that appellant is not entitled to recover the full amount of the nonsettling tort-feasors’ share of the jury verdict. As the Walton Court stated:

The plaintiff is encouraged to settle in view of the fact that he will recover at least the amount of the jury verdict entered against the joint defendants and perhaps a greater amount where the release consideration exceeds the total jury verdict. The nonsettling defendant, where the settling defendant has retained the right to seek contribution, has no incentive to allow the case to go to trial in hopes of securing a windfall at the settling defendant’s expense. The settling defendant, who protected his contribution rights, has appropriately reached an agreement which is satisfactory to the plaintiff and has at the same time protected his own interests in a fair and reasonable manner.

Walton, supra, 383 Pa.Super. at 542, 557 A.2d at 384. These considerations also apply to the instant case.

For the foregoing reasons, I dissent from the majority’s conclusion that under the facts of this case, the verdict should be reduced solely by the releasee’s pro rata share, rather than be marked satisfied.

1 . All of the defendants’ claims for contribution were severed prior to trial.