In the course of civil litigation, it is not uncommon for parties to settle out-of-court prior to – or even during – a trial.
In cases where there are multiple defendants, there may be situations in which some defendants settle out-of-court and others don’t. While those that do settle may not longer be compelled to pay additional damages, they may still be found liable in court. Generally what this means is that damages owed by the remaining defendants will be reduced by whatever share the settling defendant would have owed.
However, there is the issue of joint and several liability. This is when there are multiple parties liable for the same act or event, and plaintiff could collect damages from any, several or all liable parties.
Alabama follows a model of pure joint and several liability, which means each defendant may be liable for the entire loss.
Meanwhile California, where the recent case of Diamond v. Reshko was heard, follows modified joint and several liability. This is where the court recognizes joint and several liability for economic damages on negligent claims and only several liability for non-economic damages.
The question in Reshko was whether existence of a prior settlement between certain defendants was relevant to the jury. The trial judge determined in this taxi accident case that such information should not be disclosed to the jury. However, the California Court of Appeals, First Appellate District, Division Four, reversed, finding trial court abused its discretion on this issue. Further, the error was prejudicial to defendant.
According to court records, plaintiff was a passenger in the back seat of a taxi that made an illegal U-turn. Another vehicle traveling the opposite direction was speeding, crossed into the intersection and broad-sided the taxi cab, causing plaintiff to suffer severe personal injury.
Plaintiff and her husband sued the driver, the owner of the taxi and the taxi collective, as well as the driver of the other vehicle.
Prior to trial, plaintiffs settled with the driver, the taxi owner and the taxi collective for a total of $400,000. Per the agreement, those defendants agreed to participate in the trial as defendants, but would not be responsible for further damages.
Prior to trial, the remaining defendant/ other driver wanted to make sure the jury was aware of the out-of-court settlement, because, he alleged, it effectively put the taxi defendants on the “same team” as plaintiffs. Trial judge denied, and the case proceeded, with jurors deciding in favor of plaintiff and apportioning the other driver 60 percent of the fault for a $406,000 damage award.
Defendant appealed on grounds trial court erred in failure to disclose the prior settlement agreement. Appellate court reversed.
While the issue of whether to disclose a prior settlement is usually up to the discretion of the court (although some states have addressing statutes), appeals court ruled trial judge abused his discretion in this case.
Call Allred & Allred P.C. at 334.396.9200 to speak with a Montgomery personal injury lawyer.
Diamond v. Reshko, Aug. 20, 2015, California Court of Appeal, First Appellate District, Division Four
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