Opinion ID: 2298988
Heading Depth: 2
Heading Rank: 1

Heading: Third-party settlement disclosed by judge

Text: Federal courts have held that Rule 408 applies to settlements between plaintiffs and third-party joint tortfeasors or former co-defendants. [12] Although Rule 408 is a general prohibition against admitting testimony of compromise, a judge may disclose the fact of settlement for the purpose of avoiding jury confusion. [13] Disclosing settlement explains the absence of the settling defendants and thus tends to reduce jury confusion.... [14] In Kennon, the plaintiff injured his leg when his moped's windshield shattered after the moped struck a chug hole. He sued Slipstreamer, the manufacturer of the moped, and the windshield wholesaler. Slipstreamer cross-claimed against the windshield wholesaler, and brought third-party actions against the windshield retailer and the manufacturer of the Lucite from which the windshield was made. Before trial, the plaintiff settled with all defendants except Slipstreamer for a nominal amount, and the judge dismissed the parties from the suit. The judge, on his own initiative, explained to the jury that [t]he plaintiff has made an election in this case, which is not unusual, that it wishes to proceed in the lawsuit against the one defendant only, and that there is a procedure available to do that, that eliminates their presence, even though the other two had been sued by this Defendant. [15] The judge further explained that he didn't want [the jury] speculating on why [the other defendants] were not here and be concerned as to whether the court had made a ruling on the merits of the case.... [16] On appeal, the Fifth Circuit held that the district judge was within his discretion to disclose the fact of settlement, but not the amount of settlement. [17] Disclosing the fact of settlement was for the purpose of avoiding jury confusion, whereas disclosing the amount of settlement serves no such purpose. [18] The Eighth Circuit held similarly in a case involving the application of the Uniform Contribution Among Tortfeasors Act and what a judge could properly advise a jury about the fact of settlement. [19] In Arhart v. Micro Switch Manufacturing Co ., the plaintiff was injured in an industrial accident and brought products liability claims against three defendants including Micro Switch. The defendants sought indemnity and contribution under the Arkansas Uniform Contribution Among Tortfeasors Act. In the midst of trial, the plaintiffs settled with all the defendants except Micro Switch for $465,000. The plaintiff discharged the claims against the settling defendants, but Micro Switch's cross-claim against the other defendants remained in play. The trial judge immediately instructed the jury of the fact of settlement and that accordingly the jury was not to be concerned any longer with the settling defendants. [20] At the conclusion of the trial, the judge instructed the jury on negligence and comparative negligence. Under this bifurcated method, the jury was required to determine who, as between Micro Switch and the plaintiff, was negligent, and if it found Micro Switch negligent, apportion the liability between all the defendants. The plaintiffs requested that the trial judge instead instruct the jury to answer four specific interrogatories addressing which party (including the settling parties) was negligent, and then apportion liability to each. The trial judge instructed the jury using the former approach, and the jury returned a zero damage verdict. On appeal, the Eighth Circuit held that both methods of submitting the case to the jury were acceptable, and that the district court judge did not err by advising the jury of the fact of settlement. [21] The court explained that because the plaintiffs settled there remained no other alternative than to advise the jury of the obvious  that there had been a settlement. [22]
Delaware courts, as the federal courts, allow judges to disclose the fact of settlement by third-party defendants for a purpose other than to prove liability or invalidity of the claim or its amount. Specifically, we have stated, [I]t would not have been improper for the trial judge to tell the jury that [one of the defendants] was no longer part of the case and instructing them that they need not speculate why. The purpose of the instruction would have been to inform the jury of the alignment of the parties. [23] In the case at hand, the trial judge used Civil Pattern Jury Instruction 22.19 to instruct the jury how to apportion liability among the joint tortfeasors. The instruction was similar to the bifurcated instruction the court used in Arhart. [24] Pursuant to Instruction 22.19, the trial judge stated that Alexander settled with Knotts and Bermudez. The trial judge explained that the jury was to decide whether LeHane, Bermudez, Knotts, and Cahill, or which of them were negligent and whether that negligence proximately caused Alexander's injuries. The jury was then instructed to compute the damages without concerning themselves with what Alexander may have or should have received in his settlement. The trial judge then instructed the jury to apportion the verdict to attribute a percentage of negligence to each defendant in a percentage range from zero to 100, and that the court would calculate the total amount of the plaintiff's award based on the amount of jury award and apportionment. We conclude that the trial judge appropriately informed the jury about the fact of settlement. The method the court used to disclose the fact of settlement avoided jury confusion, and did not reveal the amount of settlement. The trial judge did not abuse his discretion when he disclosed the fact of settlement to the jury, and would have been within his discretion if he had disclosed the fact of settlement to the jury at the outset of the trial.