2023 New Mexico Statutes › Chapter 41 - Torts › Article 3 - Contribution Among Tortfeasors › Section 41-3-4 - Release; effect on injured person's claim.

A release by the injured person of one joint tortfeasor, whether before or after judgment, does not discharge the other tortfeasors unless the release so provides; but reduces the claim against the other tortfeasors 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.
History:
1941 Comp., § 21-121, enacted by Laws 1947, ch. 121, § 4; 1953 Comp., § 24-1-14.
ANNOTATIONS
"Claim" and "damages recoverable".
— The legislature appears to have interpreted the terms "claim" and "damages recoverable" synonymously. In this section, the release, under certain circumstances, has the effect of reducing the "claim" of the injured person against other tortfeasors, while in 41-3-5 NMSA 1978 the same right is spoken of as "damages recoverable."
Garrison v. Navajo Freight Lines, Inc.
, 1964-NMSC-099, 74 N.M. 238, 392 P.2d 580.
Release of joint tortfeasors.
— A release of liability executed in favor of one defendant does not operate to extinguish liability of the joint tortfeasors unless the release so provides. Rather, the release only operates to reduce the amount of damages for which the remaining defendants are responsible.
Martinez v. Albuquerque Collection Servs., Inc.
, 867 F. Supp. 1495 (D.N.M. 1994).
The effect of the release of one joint tortfeasor upon the injured person's claim against remaining tortfeasors is to reduce it in an amount at least as great as the consideration paid for the release, and to a larger amount if the release so provides. This provision prevents a double recovery by the injured person.
Garrison v. Navajo Freight Lines, Inc.
, 1964-NMSC-099, 74 N.M. 238, 392 P.2d 580.
Releases are contractual in nature,
thus, the question of whether the general release clause contained in the plaintiff's release of the defendants discharging "every other person, firm, or corporation" is binding upon the plaintiff must be determined in accordance with contract principles. Absent an ambiguity or other reasons which might invalidate the contract, such as fraud, duress, or undue influence, the parties to a release are free to discharge not only the settling tortfeasor but all other unnamed tortfeasors as third party beneficiaries to the release.
Perea v. Snyder
, 1994-NMCA-064, 117 N.M. 774, 877 P.2d 580, cert. denied, 118 N.M. 90, 879 P.2d 91.
Release effective whether or not person adjudged tortfeasor.
— Whether or not one who settles and receives a release is judicially determined to be a tortfeasor or clearly admits being one, absent any other countervailing consideration, the release reduces the claim against the other tortfeasors in the amount of the consideration paid for the release or in such amount or proportion as the release provides for reduction, if the total claim is greater than the consideration paid.
Kirby v. N.M. State Hwy. Dep't
, 1982-NMCA-014, 97 N.M. 692, 643 P.2d 256, cert. denied, 98 N.M. 51, 644 P.2d 1040.
Effect of release under 41-3-5 NMSA 1978.
— Where release is taken pursuant to 41-3-5 NMSA 1978, the release of one joint tortfeasor does not release all joint tortfeasors.
Garrison v. Navajo Freight Lines, Inc.
, 1964-NMSC-099, 74 N.M. 238, 392 P.2d 580.
Effect of recovery alone on discharge of others.
— The fact of the recovery of a judgment by the injured persons against one tortfeasor alone does not operate as a discharge of other joint tortfeasors.
Rio Grande Gas Co. v. Stahmann Farms, Inc.
, 1969-NMSC-089, 80 N.M. 432, 457 P.2d 364;
Herrera v. Uhl
, 1969-NMSC-011, 80 N.M. 140, 452 P.2d 474.
When joint tortfeasor also released.
— A release executed by the plaintiff to a motorist whose vehicle was involved in an accident with one operated by a city police officer in which plaintiff was a prisoner discharged the city from any liability because the release provided for the extinguishment of any liability sought to be asserted by the plaintiff.
Johnson v. City of Las Cruces
, 1974-NMCA-031, 86 N.M. 196, 521 P.2d 1037.
Plaintiff's burden of proof following execution of release when suing different defendants.
— Following the plaintiff's execution of a release of judgment, the plaintiffs sought under a different theory of recovery and against different defendants the same damages as evidenced by the release. Since an award for punitive damages must be supported by an established cause of action, the plaintiffs may recover any unpaid compensatory and punitive damages if they can successfully establish a cause of action for either nominal or compensatory damages.
Sanchez v. Clayton
, 1994-NMSC-064, 117 N.M. 761, 877 P.2d 567.
Collateral source rule.
— The collateral source rule presents an exception to the general prohibition of double recovery, permitting a plaintiff to recover the same damages from both a defendant and a collateral source; compensation received from a collateral source does not operate to reduce damages recoverable from a wrongdoer.
Gonzagowski v. Steamatic of Albuquerque
, 2023-NMSC-016,
rev'g in part
2021-NMCA-056.
The collateral source rule has no application to a postjudgment payment made by an adjudicated wrongdoer.
— Where plaintiff's home sustained water damage in a hailstorm, and where plaintiff's insurer hired a restoration service to perform water abatement and mold remediation services, and where plaintiff claimed that the mold was not remediated properly and that he developed a severe and permanent lung condition as a result, and where, in a civil trial, the jury found that plaintiff suffered $2.5 million in compensatory damages, that plaintiff's insurer caused 30% of the damages, that the restoration service caused 55% of the damages and that plaintiff's failure to mitigate caused 15% of his damages, and where the district court entered final judgment accordingly, and where, after entry of judgment, plaintiff's insurer settled with plaintiff and secured full satisfaction and release from judgment, and where, shortly after this postjudgment settlement, plaintiff moved to amend the final judgment as only against the restoration service, claiming that the remaining defendant was liable for 80% of plaintiff's compensatory damages, and where the district court entered an amended judgment setting aside the prior final judgment and holding that the restoration service was liable to plaintiff for $2,000,000 in compensatory damages and was not entitled to an offset of the amount of damages allocated to plaintiff's insurer, the district court erred in its amended final judgment, because the 80% share of damages allocated to defendant partially duplicated the 30% share allocated to plaintiff's insurer in the initial final judgment and an offset was necessary due to plaintiff's insurer's satisfaction of the same damages. In a postjudgment settlement with an adjudicated wrongdoer, that payor is not a collateral source, and therefore plaintiff is not permitted to recover the duplicative portion of both defendants' combined liability damages.
Gonzagowski v. Steamatic of Albuquerque
, 2023-NMSC-016,
rev'g in part
2021-NMCA-056.
Double recovery for injuries received is not permissible.
— Where plaintiff filed a complaint that included a breach of contract claim against his insurance company for failing to adequately remediate his home and a negligence claim against defendant for improperly performing water mitigation and mold remediation work following a hailstorm that caused interior damage to plaintiff's home, which resulted in severe and permanent lung damage to plaintiff from inhaling mold and mold spores, and where at trial the jury awarded a total of $2.5 million in compensatory damages, finding the insurance company thirty percent at fault, defendant fifty-five percent at fault, and plaintiff fifteen percent at fault for failing to exercise ordinary care to minimize, or lessen, his damages, and where, after settling with the insurance company, plaintiff filed a motion to amend the judgment against defendant from $1.375 million to $2 million, arguing that it was error to compare the insurance company's breach of contract to defendant's negligence for purposes of apportioning liability for damages, and that judgment should be entered against defendant for the full compensatory damage award on the negligence claim, and where the district court, after granting plaintiff's motion and entering an amended final judgment against defendant in the amount of $2 million, denied defendant's motion to reduce the amended judgment by the amount of the judgment against the insurance company, the district court erred in denying defendant's motion to reduce the amended judgment by the amount plaintiff received from the insurance company, because to the extent the insurance company satisfied a portion of the compensatory damages judgment, that satisfaction has the effect of a discharge and reduces the amount plaintiff is entitled to collect from defendant.
Gonzagowski v. Steamatic of Albuquerque, Inc
., 2021-NMCA-056, 497 P.3d 1202,
rev'd in part by
2023-NMSC-016.
Release acknowledging full satisfaction of judgment.
— Payment by a tortfeasor of $200,000 in return for an instrument which acknowledged "full satisfaction of the judgment" against that tortfeasor was a full satisfaction of the compensatory damages for the injury, thereby precluding an action by plaintiff against the tortfeasor's principal for compensatory damages for the same injury, since the consideration paid by one tortfeasor for a release represents full compensation for the injury, the other tortfeasor is discharged.
Sierra Blanca Sales Co. v. Newco Indus., Inc.
, 1975-NMCA-118, 88 N.M. 472, 542 P.2d 52,
rev'd
sub nom., Fortuna Corp. v. Sierra Blanca Sales Co.
, 1976-NMSC-014, 89 N.M. 187, 548 P.2d 865.
Payment in full not required.
— Although a judgment may only be satisfied by payment in full, payment in full is not required where there is a lawful agreement discharging the judgment, the essence of which is consideration, and where plaintiff accepted a lesser amount than that to which it was entitled by the judgment in order to obtain immediate cash, being unable to secure funds in order to levy on defendant's stock on which he had a lien, the court of appeals held that there was a lawful agreement discharging the judgment, plaintiff was compensated for the injury in full and the trial court was correct in granting summary judgment to his principal on the issue of compensatory damages.
Sierra Blanca Sales Co. v. Newco Indus., Inc.
, 1975-NMCA-118, 88 N.M. 472, 542 P.2d 52,
rev'd
sub nom., Fortuna Corp. v. Sierra Blanca Sales Co.
, 1976-NMSC-014, 89 N.M. 187, 548 P.2d 865
Release must be read as a whole
and the intent of the parties gathered from the entire instrument and not from separate portions.
Garrison v. Navajo Freight Lines, Inc.
, 1964-NMSC-099,74 N.M. 238, 392 P.2d 580.
There is no right to reduction of jury award
based on out-of-court settlements when the case is tried on a theory of comparative fault.
Atler v. Murphy Enters., Inc.
, 2005-NMCA-006, 136 N.M. 701, 104 P.3d 1092, cert. quashed, 2005-NMCERT-008, 138 N.M. 330, 119 P.3d 126.
Release is ambiguous if it is fairly susceptible to more than one meaning.
Collins v. United States
, 708 F.2d 499 (10th Cir. 1983).
Effect of release as to punitive damages.
— Since punitive damages are not awarded as compensation to the party wronged, but rather as punishment of the offender, and as a warning to others, plaintiff ought not be limited to one amount of punitive recovery, and therefore the release of one tortfeasor as to the punitive aspect of the damages would logically have no effect on plaintiff's rights against another tortfeasor for such damages.
Sierra Blanca Sales Co. v. Newco Indus., Inc.
, 1975-NMCA-118, 88 N.M. 472, 542 P.2d 52,
rev'd
sub nom., Fortuna Corp. v. Sierra Blanca Sales Co.
, 1976-NMSC-014, 89 N.M. 187, 548 P.2d 865
Law reviews.
— For note, "Tort Law - Original and Successive Tortfeasors and Release Documents in New Mexico Tort Law: Lujan v. Healthsouth Rehabilitation Corporation," see 27 N.M.L. Rev. 697 (1997).
Am. Jur. 2d, A.L.R. and C.J.S. references. —
54 Am. Jur. 2d Monopolies § 526; 66 Am. Jur. 2d Release §§ 2, 27 to 43, 55.
Payment of, or proceeding to collect, judgment against one tortfeasor as release of others, 27 A.L.R. 805, 65 A.L.R. 1087, 166 A.L.R. 1099, 40 A.L.R.3d 1181.
Release of one tortfeasor as affecting liability of others, 50 A.L.R. 1057, 66 A.L.R. 206, 104 A.L.R. 846, 124 A.L.R. 1298, 148 A.L.R. 1270.
Rule that release of one tortfeasor releases others, as applicable to cause of action which is punitive rather than compensatory in its nature, 85 A.L.R. 1164.
Amount paid by one alleged joint tortfeasor in consideration of covenant not to sue (or a release not effective as a full release of the other joint tortfeasor), as pro tanto satisfaction of damages recoverable against other joint tortfeasor, 104 A.L.R. 931.
Rule that release of one joint tortfeasor releases other as applicable in case of anticipatory release prior to accident or injury, 112 A.L.R. 78.
Release of one of two or more persons whose independent tortious acts combine to produce an injury as releasing other or others, 134 A.L.R. 1225.
Provision in judgment in action against one or more joint tortfeasors to effect that it shall be without prejudice to plaintiff's claim against another joint tortfeasor, or otherwise reserving rights against him, as affecting question of release of latter, 135 A.L.R. 1498.
Agreement with one tortfeasor that any judgment that may be recovered will not be enforced against him, as affecting liability of cotortfeasor, 160 A.L.R. 870.
Release of one of joint and several defalcating tortfeasors as releasing insurer which was surety on fidelity bond of each, 35 A.L.R.2d 1122.
Insured's release of tortfeasor before settlement by insurer as releasing insurer from liability, 38 A.L.R.2d 1095.
Judgment against or settlement with negligent employee as releasing United States, or vice versa, 42 A.L.R.2d 960.
Conflict of laws as to release of one tortfeasor upon liability of another tortfeasor, 69 A.L.R.2d 1034.
Release of one joint tortfeasor as discharging liability of others: modern trends, 73 A.L.R.2d 403, 6 A.L.R.5th 883.
Civil damage act, settlement with or release of person directly liable for injury or death as releasing liability under, 78 A.L.R.2d 998.
Release of, or covenant not to sue, master or principal as affecting liability of servant or agent for tort, or vice versa, 92 A.L.R.2d 533.
Manner of crediting one tortfeasor with amount paid by another for release or covenant not to sue, 94 A.L.R.2d 352.
Voluntary payment into court of judgment against one joint tortfeasor as release of others, 40 A.L.R.3d 1181.
Effect of settlement with and acceptance of release from one wrongful death beneficiary upon liability of tortfeasor to other beneficiaries or decedent's personal representative, 21 A.L.R.4th 275.
Release of, or covenant not to sue, one primarily liable for tort, but expressly reserving rights against one secondarily liable, as bar to recovery against latter, 24 A.L.R.4th 547.
Release of one joint tortfeasor as discharging liability of others under Uniform Contribution Among Tortfeasors Act and other statutes expressly governing effect of release, 6 A.L.R.5th 883.
Validity and effect of "Mary Carter" or similar agreement setting maximum liability of one cotortfeasor and providing for reduction or extinguishment thereof relative to recovery against nonagreeing cotortfeasor, 22 A.L.R.5th 483.
76 C.J.S. Release § 1 et seq.