Opinion ID: 2201124
Heading Depth: 2
Heading Rank: 3

Heading: NAME AND RETAIN DEFINED: PUTNEY v HASKINS; TEBO v HAVLIK

Text: In Putney, the plaintiff's decedent was killed when an automobile struck the rear of his motorcycle. Plaintiff brought a cause of action against Paul S. Gibson, the operator of the automobile, Judith M. Gibson, the owner of the automobile, and the owners of the taverns that had allegedly sold or furnished alcohol to Paul S. Gibson while he was visibly intoxicated. On the morning of the first day of trial, the plaintiff settled with one of the defendant tavern owners. On the morning of the second day of trial, the plaintiff informed the court that she had settled with defendants Paul S. Gibson, the allegedly intoxicated person, and Judith M. Gibson for $40,000 in exchange for a covenant not to sue. The Gibsons were not formally dismissed from the suit, and the jury was not informed of the settlement. The trial judge instructed the defendants' counsel to `do what you consider appropriate without attempting to hurt or help either side.' 414 Mich 185. Counsel examined several witnesses, but neither participated in the examination of the allegedly intoxicated person nor called any witnesses on behalf of his clients. Prior to jury instructions, the Gibsons requested that the jury be informed that they were no longer interested parties in the suit, and the plaintiff concurred. However, defendant tavern owner Haskins requested that the Gibsons be required to participate through closing arguments and jury deliberation in spite of the settlement. The trial court found as fact that there had been no collusion between Putney and the Gibsons and that the $40,000 settlement was not a mere token. Presumably, the trial court was attempting to comply with our decision in Salas v Clements, 399 Mich 103; 247 NW2d 889 (1976), where we stated: The provision will eliminate the common practice whereby the intoxicated person enters into a settlement with the injured plaintiff for a token sum, and thereafter energetically assists the plaintiff with the prosecution of a suit against the tavern owner. The provisions will also discourage possible collusion and perjury by those too weak to resist the obvious temptation inherent in the original dramshop act, which has now been recognized by the Legislature and corrected through this amendment. [399 Mich 108-109.] The trial court concluded that continued participation would amount to an injustice and discourage future settlements. Hence, the jury was informed that the suit against the Gibsons had been dismissed. A verdict in favor of the plaintiff in the amount of $25,050 was returned. The Court of Appeals affirmed, finding the settlement to be more than a mere token, and no collusion to the detriment of Melody Bar (Haskins). 94 Mich App 466; 289 NW2d 837 (1979). This Court reversed, rejecting the argument that the name and retain provision had been substantially complied with. In the first place, in the absence of a record adequately supporting such factual findings, we cannot presume that the $40,000 settlement precludes all possible collusion. It is not at all obvious that a $40,000 settlement in a wrongful death case arising from the defendant's alleged drunken driving is more than token.[3] However, such difficult factual questions were avoided when the Legislature adopted a per se rule requiring the defendant to be retained in the action until the litigation is concluded by trial or settlement. The Legislature could have required the allegedly intoxicated defendant to be retained unless the trial judge finds the absence of fraud and collusion and approves the settlement. For some reason, perhaps because it recognized the difficulties inherent in that sort of inquiry and the resulting drain on judicial resources, the Legislature chose not to write such an exception into the statute. We similarly decline to create such an exception by judicially amending the statute. [3] The plaintiffs' complaint asked for $500,000 in damages; the $40,000 settlement may well have been paid entirely or in part by defendants' insurer. [414 Mich 187.] We also rejected the argument that because Gibson was not formally dismissed, he was retained long enough to satisfy the statute. Once he settled with the plaintiffs, he ceased to be a real party in interest. The Court acknowledged that the Legislature was aware that dramshop cases have a singular danger of fraud and collusion and enacted the name and retain provision to avoid the attending danger. One of the ways the name and retain provision prevents fraud and collusion is by ensuring that the defendant will have a direct financial stake in personally testifying, examining witnesses, and arguing that he did not act in a negligent manner. Once the defendant's liability is fixed and limited, he has no incentive to produce witnesses or testimony tending to prove that he was not visibly intoxicated on the date in question. The dramshop defendant may have much more difficulty in identifying, locating, and obtaining favorable testimony from the defendant's friends or acquaintances who observed him at relevant times. [414 Mich 188. Emphasis added.] Accordingly, we held that a defendant has not been retained in an action if a settlement of any kind is reached between the plaintiff and the allegedly intoxicated defendant before `the litigation is concluded by trial or settlement.' 414 Mich 184. (Emphasis added.) In Tebo v Havlik , the Court considered two cases in which the liability of allegedly intoxicated persons had been fixed by agreement, but ostensibly retained. We rejected the arguments that the allegedly intoxicated persons had been retained in accord with the dramshop act, and then considered what retroactive effect Putney should have. The agreements in the present cases obviously do not retain the allegedly intoxicated persons within the meaning of the dramshop act. Liability has been fixed. If Putney is deemed to be retroactive, plaintiffs' actions must be dismissed. [418 Mich 360.] We proceeded to give our decision in Putney limited retroactive effect, not because of the provisions and policies of the dramshop act, but because of the nature of our appellate system and its effect on prior dramshop litigation strategy.