Opinion ID: 1156578
Heading Depth: 1
Heading Rank: 2

Heading: mary carter agreements

Text: As indicated, the terms of the settlement agreement included a provision requiring Ospital's estate to pay Slusher $65,000. However, Ospital's estate remained in the case so it could pursue its cross-claim against Campbell. Campbell contends that such an agreement changed the adversarial position of the agreeing parties and provided an incentive for them to collude against him. Campbell claims that this type of an agreement is a Mary Carter agreement and that while such agreements should perhaps be invalidated as against public policy, at a minimum, evidence of such agreements should be admitted for consideration by the jury. In this way, the jury can better assess the nature of the testimony offered by the agreeing parties, knowing that there now exists an incentive on their part to shift as much blame as possible onto their common adversary. There is a legitimate basis for Campbell's concern. Initially, Slusher was motivated to show himself to be free of negligence, but he had no particular stake in the allocation of liability between defendants. However, after the settlement with Ospital's estate, Slusher had every incentive to characterize Campbell as solely responsible and exclusively liable. Ospital's estate, of course, wanted to focus responsibility on Campbell all along, but with the settlement, the estate had a motivated ally in Slusher. Although there is no evidence of fabricated testimony in the record before us, the potential for prejudice clearly existed, and Campbell argues that had the settlement agreement been disclosed to the jury, it may well have rendered a different verdict concerning the allocation of liability between Campbell and Ospital. It is against this background that Campbell condemns the settlement as a Mary Carter agreement. The term derives from a 1967 Florida case, Booth v. Mary Carter Paint Co., 202 So.2d 8 (Fla.Ct.App. 1967), overruled in part by Ward v. Ochoa, 284 So.2d 385, 388 (Fla. 1973), [3] upholding the validity and nondisclosure of a secret agreement that limited the maximum liability of two out of three defendants. A classic Mary Carter agreement [4] is a settlement accord with these features: (1) it limits the liability of the agreeing defendant, who remains a party to a pending action; (2) it is withheld from the nonsettling parties and/or judge and jury; and (3) it guarantees to the plaintiff a minimum recovery, notwithstanding the fact that the plaintiff may not recover a judgment against the agreeing defendant or that the verdict may be less than that specified in the agreement. General Motors Corp. v. Lahocki, 286 Md. 714, 720-23, 410 A.2d 1039, 1042-43 (Ct.App. 1980). The notoriety surrounding Mary Carter agreements has increased in the last twenty years with the growing use of such agreements as a settlement device. [5] Entman, Mary Carter Agreements: An Assessment of Attempted Solutions, 38 U.Fla.L.Rev. 521, 522 (1986). The perceived evils engendered by a Mary Carter agreement include undue prejudice against the nonsettling defendant, and therefore denial of a fair trial, and collusion among the settling defendants and the plaintiff. The most egregious characteristic of the Mary Carter agreement is secrecy: Secrecy is the essence of [a Mary Carter agreement], because the court or jury as trier of the facts, if apprised of this, would likely weigh differently the testimony and conduct of the signing defendant as related to the non-signing defendants. By painting a gruesome testimonial picture of the other defendant's misconduct or, in some cases, by admissions against himself and the other defendants, he could diminish or eliminate his own liability by use of the secret Mary Carter Agreement. Ward, 284 So.2d at 387. Such factors obviously tend to undermine the adversarial nature of a trial proceeding. Ospital and Slusher argue that the settlement agreement between them was not a Mary Carter agreement and that it did not have any of the prejudicial effects of such agreements. They argue that the element of secrecy was not present, as Campbell had been informed by Ospital of the likelihood of settlement and in fact learned of the settlement before the trial. The settlement was then disclosed to the trial court. Moreover, this particular settlement was for a fixed sum and fully compromised Slusher's claim against Ospital. Accordingly, it is not a Mary Carter agreement in a technical sense. [6] We think this is largely irrelevant, however, to the present case. The fact that the agreement might influence testimony but was kept secret from the jury is enough to trigger legitimate concern about whether Campbell received a fair trial.