Opinion ID: 666948
Heading Depth: 2
Heading Rank: 2

Heading: Settlement Reduction Under N.Y. Gen. Oblig. Sec. 15-108

Text: 26 Section 15-108 of New York's General Obligations Laws governs the situation where one of several tortfeasors settles with the plaintiff and obtains a release from liability. Specifically, the section does not release non-settling tortfeasors from liability, but it reduces the amount which the plaintiff may recover from them by the greater of: (1) the amount stipulated in the settlement; (2) the amount of consideration paid for the settlement; or (3) the released tortfeasor's equitable share of the damages. N.Y.Gen.Oblig. Sec. 15-108(a). Additionally, the settling tortfeasor is relieve[d] ... from liability to any other person for contribution but is also prohibited from seeking contribution from any other tortfeasor. N.Y.Gen.Oblig. Sec. 15-108(b), (c). The statute thus establishes a quid pro quo arrangement: the settlor limits its liability but in exchange forfeits any right to contribution. Gonzales v. Armac Indus., 81 N.Y.2d 1, 595 N.Y.S.2d 360, 362, 611 N.E.2d 261, 263 (1993); see also Orsini v. Kugel, 9 F.3d 1042, 1046 (2d Cir.1993). 4 The statute applies to concurrent, successive, independent, alternative, and even intentional tortfeasors. Board of Educ. v. Sargent, Webster, Crenshaw & Folley, 71 N.Y.2d 21, 523 N.Y.S.2d 475, 478-79, 517 N.E.2d 1360, 1364 (1987). 27 Keeling and LKA argue they are entitled to a reduction of the judgment against them by an amount equal to the amount stipulated or the consideration paid to BTC by Scandrill and the other parties (Scandrill's corporate parents) to the settlement. This would result in no damages for BTC. The district court refused to order a settlement reduction, on the ground that Scandrill, Scanoil, STC, and Volvo were not joint tortfeasors along with LKA and Keeling. The court further observed that there was no danger of double recovery by BTC in the absence of a settlement reduction, because BTC had restricted its claim to the amount it lost pursuant to the Scandrill loan minus the amount it received pursuant to the settlement. 28 We agree with the district court and BTC that LKA and Keeling are not entitled to a reduction under section 15-108. General Obligations Law Sec. 15-108 applies only to contribution claims in tort actions. Gonzales, 595 N.Y.S.2d at 363, 611 N.E.2d at 264; see also Sargent, 523 N.Y.S.2d at 477-78, 517 N.E.2d at 1363. Indeed, by its terms, it applies to joint tortfeasors--persons liable or claimed to be liable in tort for an injury. BTC and Scandrill had a contract, which Scandrill breached, and with respect to which BTC, Scandrill, and Scandrill's corporate parents reached a settlement. BTC has never brought a tort action against Scandrill or the other parties to the settlement, nor has LKA or Keeling ever attempted to implead them in the tort action between BTC and LKA and Keeling. Thus, they simply are not joint tortfeasors within the meaning of the statute. 29 Moreover, we agree with the district court that the jury was specifically instructed that any award of compensatory damages to BTC from Keeling and LKA could only be for damages for which BTC had not already been compensated. The jury heard testimony and received evidence relating to the settlement agreement and its terms. Because the jury's compensatory award did not take into account plaintiff's injuries attributable to the settling codefendants, [nonsettling defendants] may not invoke Sec. 15-108 to decrease their liability for compensatory damages by virtue of these settlements. Getty Petroleum Corp. v. Island Transp. Corp., 862 F.2d 10, 16 (2d Cir.1988), cert. denied, 490 U.S. 1006, 109 S.Ct. 1642, 104 L.Ed.2d 157 (1989).