Opinion ID: 2306056
Heading Depth: 1
Heading Rank: 7

Heading: The Judgment Credit Issue

Text: Finally, all parties contend that the trial court erred in calculating the judgment credit to which they are entitled. Both WBSI and Dr. Convit essentially argue that due to the settlement agreement between Dr. Barrett and Mrs. Wilson, they are entitled to a 50% pro rata credit and reduction of the total jury verdict on both the negligence and loss of consortium claims. [74] Mrs. Wilson asserts that the trial court erred by reduc[ing] the jury's verdict for Mr. Wilson against WBSI on Count I [the negligence claim], based on Mrs. Wilson's settlement with [Dr.] Barrett on Court II [the consortium claim]. She also contends that the trial court erred by giving WBSI a pro tanto credit and Dr. Convit a 50% pro rata credit on Count II, and that Dr. Barrett's settlement with Mrs. Wilson entitled WBSI and [Dr.] Convit to only a 33% pro rata credit against the verdict on Count II. Where the plaintiff settles with a joint tortfeasor, the non-settling tortfeasors are entitled to a credit. The question of how to credit the judgment entered upon a jury verdict against a nonsettling defendant with the proceeds a settling defendant paid to the plaintiff is purely a question of law, which this court reviews de novo.  [75] In District of Columbia v. Shannon, 696 A.2d 1359 (D.C.1997), we recounted the origin of the judgment credit concept in this jurisdiction: In Martello v. Hawley, 112 U.S.App. D.C. 129, 300 F.2d 721 (1962), the United States Court of Appeals for the District of Columbia Circuit held, in an opinion binding on us, that where a plaintiff settles with one joint tortfeasor whose liability is judicially established, a nonsettling tortfeasor is entitled to a pro rata reduction of a jury verdict for the plaintiff. See id. at 132, 300 F.2d at 724. The court reasoned that, because the remaining defendants could have sought contribution from the settling defendant had the settlor remained in the case, no remaining defendant should be forced to pay more than it otherwise would have paid if the settling defendant had not settled. See id. at 131, 300 F.2d at 723.[ [76] ] In Washington Hosp. Ctr., supra, we summarized the judgment credit concept as it has developed in this jurisdiction: In this jurisdiction, where there is contribution among joint tortfeasors, damages are apportioned equally among them. R. & G. Orthopedic Appliances [v. Curtin], [] 596 A.2d [530,] 544 [(D.C.1991)] (citing Early Settlers [Ins. Co. v. Schweid], [221 A.2d 920,] 923 [D.C.1966]). When one party settles with the injured party, and the claim proceeds to verdict against the non-settling party, where contribution would otherwise be called for, a credit is applied against the amount of any judgment. . . equal to the share of the judgment that should be borne by the settling tortfeasor. Lamphier, supra [note 18], 524 A.2d at 733. If the settling tortfeasor is judicially determined to be a joint tortfeasor, the non-settling defendant is entitled to a pro rata credit against the verdict. Berg, supra [note 11], 673 A.2d at 1248 (citing Martello, supra, 112 U.S.App. D.C. at 132, 300 F.2d at 724). When plaintiff has settled with a party whose culpability has not been determined, or with a party whom the finder of fact has found not liable, the court awards the nonsettling defendant a credit against the verdict in the amount of the settlement, dollar-for-dollar ( pro tanto ), 673 A.2d at 1248-49 (citing Snowden v. District of Columbia Transit Sys., Inc., 147 U.S.App. D.C. 204, 205-06, 454 F.2d 1047, 1048-49 (1971)). In either case, the risk of loss is on the injured party who has sold a portion of his or her claim.[ [77] ] Thus, as we have said, a Martello ( pro rata ) credit is warranted when two requirements are met: (1) the nonsettling defendant asserts the settling defendants' negligence and [his] right to contribution before the jury returns a verdict; and (2) the settling defendant is found jointly liable for the harm caused to the plaintiff. [78] The purpose behind this policy is to prevent a settlement from defeating the non-settling joint tortfeasor's right to recover a full measure of contribution which otherwise would not be vindicated without undermining the policy of according protective finality to out-of-court settlements by tort-feasors. [79] Conversely, if the plaintiff has settled with a party whose culpability has not been determined or with a party whom the finder of fact has found not liable, the court awards the nonsettling defendant a credit against the verdict in the amount of the settlement, dollar-for-dollar ( pro tanto ). [80] The rationale behind the pro tanto credit . . . is to ensure that the plaintiff receives no more than the loss actually suffered for her claim. [81] We have not previously had a case requiring the calculation of a judgment credit where an agent entered into a settlement agreement with a plaintiff but the vicariously liable employer did not, and where the jury returned a verdict against the vicariously liable employer, as well as another party. Here, when the Wilsons filed their complaint, there were two potential joint tortfeasors, (1) Dr. Barrett/WBSI under a theory of respondeat superior and (2) Dr. Convit. [82] Both WBSI and Dr. Convit declined to settle, leaving WBSI and Dr. Convit as potential joint tortfeasors. Furthermore, we have already concluded that the settlement agreement between Dr. Barrett and Mrs. Wilson, and the $4,050,000.00 settlement sum applied only to the loss of consortium claim. The trial court ruled, and we agree, that WBSI could not be held liable to pay a compensatory-damages amount already satisfied by its agent, Dr. Barrett (who has never been judicially determined to be a tortfeasor), on the loss of consortium claim. [83] Thus, the trial court correctly applied a pro tanto credit of $4,050,000.00 to the $2,500,000.00 judgment against WBSI on the loss of consortium claim. The settlement agreement, then, effectively relieved WBSI of all obligation to pay the damages award applicable to the loss of consortium claim. The trial court also correctly decided that Dr. Convit, as an adjudicated joint tortfeasor, was liable for only 50% of Mrs. Wilson's loss of consortium judgment; hence, he was entitled to a $1,250,000.00 pro rata reduction of the jury award for Mrs. Wilson's claim. Mrs. Wilson's argument that the trial court erred by giving WBSI a pro tanto credit and Dr. Convit a 50% pro rata credit, rather than a 33% pro rata credit each to WBSI and Dr. Convit, is incorrect. Similar to this court in Chidel, supra note 82, in St. Paul Fire & Marine Ins. Co. v. MAG Mutual Ins. Co., 209 Ga.App. 184, 433 S.E.2d 112 (1993), the trial court declared that contribution shares of the parties should be one-half for one joint tortfeasor (Piedmont Hospital Inc.) and a combined one-half for the other joint tortfeasor (Dr. John C. Garrett) and his derivatively liable employer (Resurgens, P.C.). On appeal, the insurance carrier of Piedmont Hospital Inc. argued, as Mrs. Wilson does here, that the correct measure of contribution among joint tortfeasors should be determined by dividing the judgment or settlement amount by the number of joint tortfeasors without regard to the character of each tortfeasor's negligence and that, therefore, in this case each defendant should pay one-third of the total amount paid in settlement to the plaintiff. [84] The Court of Appeals of Georgia, however, agreed with the trial court, explaining that [w]here one or more of such defendants is liable solely on the basis of negligence imputed to him by virtue of his relationship with one of the other tortfeasors, the one guilty of negligence and the one to whom that negligence is imputed are to be treated as one party for the purpose of measuring the pro rata share of contribution due to the others. [85] In sum, we agree with the trial court's calculation of the judgment credits with respect to the loss of consortium claim. We also reject WBSI's and Dr. Convit's argument that they are each entitled to a 50% pro rata reduction on Mr. Wilson's negligence claim. As we previously noted, a 50% pro rata reduction is warranted only when a joint tortfeasor settles his claim with the plaintiff. [86] The settlement agreement, which was between Mrs. Wilson and Dr. Barrett only, does not, as the trial court ascertained, manifest Mrs. Wilson's intent to settle the negligence claim (and, of course, could not signify WBSI's intent to settle). The settlement agreement explicitly states this Agreement in no way releases the defendant [WBSI] from any part of [Mr. Wilson's] Claims against WBSI for Barrett's actions. . . . That Mrs. Wilson settled her loss of consortium claim is of no moment. A loss of consortium claim stands `separate and independent' from a negligence claim and a `judgment against [a spouse claiming negligence] is not a bar to an action by [the spouse claiming loss of consortium].' [87] Furthermore, because the loss of consortium claim, the only claim to which the settlement agreement applies, is independent of the negligence claim, we conclude that the trial court erred in applying the $1.55 million excess sum paid by Dr. Barrett to WBSI's liability on the negligence claim. As we have said previously: It seems to us that a plaintiff's good fortune in striking a favorable bargain with one defendant gives other defendants no claim to pay less than their . . . share of the total loss. [88] Accordingly, for the foregoing reasons, we reverse the trial court's reduction of WBSI's liability for the award of damages on Mr. Wilson's negligence claim, but we affirm its judgment in all other respects. So ordered.