Opinion ID: 895280
Heading Depth: 1
Heading Rank: 3

Heading: Settling Persons

Text: We finally consider whether Central Texas and the bus driver [25] are settling persons under Chapter 33 of the Texas Civil Practice and Remedies Code. The 1995 version of Chapter 33 provided a proportionate responsibility framework for apportioning percentages of responsibility in the calculation of damages. [26] At that time, section 33.003 required a trier of fact to determine the percentage of responsibility for each claimant, each defendant, each settling person, and each responsible third party who had been properly joined. TEX. CIV. PRAC. & REM.CODE § 33.003. [27] Section 33.013 provided, with some exceptions, that a defendant was only liable for the percentage of responsibility found by the trier of fact, unless the percentage exceeded fifty percent. Id. § 33.013(a); [28] F.F.P. Operating Partners, L.P. v. Duenez, 237 S.W.3d 680, 687 (Tex.2007). If a defendant's percentage of liability exceeded fifty percent, the defendant was jointly and severally liable for the entirety of the damages recoverable by the claimant. TEX. CIV. PRAC. & REM.CODE § 33.013(b); Duenez, 237 S.W.3d at 687. Relevant to our determination of this issue is the definition of a settling person. While settle and settlement were not defined in Chapter 33, see C & H Nationwide, Inc. v. Thompson, 903 S.W.2d 315, 319 (Tex.1994), settling person was. A settling person was a person who at the time of submission has paid or promised to pay money or anything of monetary value to a claimant at any time in consideration of potential liability ... with respect to the personal injury, property damage, death, or other harm for which recovery of damages is sought. TEX. CIV. PRAC. & REM.CODE § 33.011(5). [29] Here, the trial court refused MCI's request to include Central Texas as a settling person in a proportionate responsibility question in the jury charge. Whether the trial court erred in this ruling is crucial: a finding by the jury that Central Texas had a percentage of responsibility as a settling person could potentially have reduced MCI's percentage of liability to fifty percent or less, thus limiting the amount of damages MCI would have had to pay. Our analysis of whether Central Texas is a settling person under Chapter 33 turns on a question of statutory construction. A question of statutory construction is a legal one which we review de novo, ascertaining and giving effect to the Legislature's intent as expressed by the plain and common meaning of the statute's words. Duenez, 237 S.W.3d at 683 (citing Tex. Dep't of Transp. v. City of Sunset Valley, 146 S.W.3d 637, 642 (Tex.2004)); see also Leland v. Brandal, 257 S.W.3d 204, 206 (Tex.2008) (citing Nat'l Liab. & Fire Ins. Co. v. Allen, 15 S.W.3d 525, 527 (Tex.2000)) (observing the necessity of a court determining and giving effect to the Legislature's intent in construing a statute). [30] We first look at the statute's language to determine that intent, as we consider it `a fair assumption that the Legislature tries to say what it means, and therefore the words it chooses should be the surest guide to legislative intent.' Brandal, 257 S.W.3d at 207 (quoting Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 866 (Tex.1999)). Thus, we consider the statute's plain and common meaning, and do not look to extraneous matters for an intent the statute does not state. Allen, 15 S.W.3d at 527. As noted, the applicable version of Chapter 33 defined settling person as a person who, at the time of submission, has paid or promised to pay anything of value to a claimant in consideration of liability. C & H Nationwide, 903 S.W.2d at 320. We apply the plain meaning of these words to the facts before us. Here, Central Texas had filed for bankruptcy, but its insurer deposited, on the bankruptcy court's order, the limits of its policy into the court's registry for payment to the Plaintiffs. Central Texas also agreed to pay the claimants $7,000 a year for five years. There is no question that the claimants who chose to obtain funds from the Apportionment Plan settled with Central Texasthey received money in exchange for a release of Central Texas's liability. But the Plaintiffs chose to participate in the Litigation Plan, which they claim could not constitute a settlement due to its uncertain and adversarial nature at the time of submission in the trial court. As the court of appeals observed, all the parties in the bankruptcy court engaged in extensive negotiations over the division of the funds among the litigants, and Central Texas and its insurer did not oppose tendering the funds into the court's registry or participating in mediation. Thus, Central Texas definitely paid something of monetary value to the claimants, including the Plaintiffs$5 million in insurance proceeds, plus $7,000 annuallyin respect to its potential liability, and the Plaintiffs negotiated for, and were the ultimate recipients of, some of these proceeds. Central Texas was further discharged from tort liability in the bankruptcy court on approval of its reorganization plan, which the Plaintiffs approved. Although the Litigation Plan was arguably not styled a settlement by the claimants or bankruptcy court, it had all semblances of a settlement. See Ratcliff v. Fibreboard Corp., 819 F.Supp. 584, 588-89 (W.D.Tex.1992) (concluding that agreement was a final settlement under Chapter 33, despite language in the agreement to the contrary). We hold, under these facts, that Central Texas is a settling person, and the trial court should have submitted a question to the jury concerning Central Texas's proportionate responsibility as such. The Plaintiffs advance several arguments supporting their position that Central Texas cannot be considered a settling person under the applicable version of Chapter 33. We address each in turn. First, the Plaintiffs contend that the uncertain and adversarial nature of the Litigation Plan renders the Plan a form of litigation. One group of claimantsthose who elected to participate in the Apportionment Plandid immediately collect their proportion of the insurance funds, while those who elected to participate in the Litigation Plan deferred their receipt of the funds. Our inquiry, then, is whether electing to defer the collection of funds permits the Plaintiffs to deny Central Texas's status as a settling person. We conclude it does not. The definition of settling person requires only a promise to pay, not an actual payment, in consideration for a release from liability. See C & H Nationwide, 903 S.W.2d at 320. Here, there was, in essence, a promise to pay in consideration for Central Texas's release from liability. While the Plaintiffs chose to present arguments in a hearing before a special judge, the Litigation Plan also allowed the Plaintiffs to agree at any time to approve full or partial distribution of the Litigation Funds to any or all participants, even without going before the special judge. There was never a real possibility that the Plaintiffs would not recover some amount of proceeds from the Litigation Fund: the Plaintiffs not only had the option of receiving the proceeds in the Litigation Fund at any time, but the Litigation Plan contained no provision for the return of any nonawarded proceeds to Central Texas or its insurer. Further, even though the Plaintiffs chose not to approve distribution from the Litigation Fund before the hearing in front of the special judge, the hearing was not adversarial in nature and the end result of the hearing was certain before it began. Central Texas was not present at the hearing and, of course, had no reason to be present since it had irrevocably paid money into the court's registry in exchange for a release from liability. Thus, the hearing lacked the adversarial nature the Plaintiffs contend existed. The Plaintiffs argue that the amount each claimant might have received following the hearing was uncertain. But the Litigation Plan capped the amount of each claimant's recovery at 110% of that determined by the mediator, and each participant in the Litigation Plan received within two percent of the amount determined by the mediator, with one exception. Even if the exact amount each claimant might have received was uncertain, there was little uncertainty that each Plaintiff was going to receive some amount. The statute does not require certainty in the actual amount of the money or thing of monetary valuejust the promise that the person will receive something of value. TEX. CIV. PRAC. & REM.CODE § 33.011(5); [31] see also Gilcrease v. Garlock, Inc., 211 S.W.3d 448, 455 (Tex.App.-El Paso 2006, no pet.) (holding settlement agreement was not contingent because the defendants made an unconditional promise to pay). Second, the Plaintiffs contend that Central Texas's release from liability in the bankruptcy court was involuntary under federal bankruptcy law, and thus cannot constitute a settlement. See In re Arrowmill Dev. Corp., 211 B.R. 497, 503 (Bankr.D.N.J.1997). But to hold that the definition of settling person requires a voluntary release of claims would compel us to insert language into the statute that is not there. See Fortis Benefits v. Cantu, 234 S.W.3d 642, 649 n. 41 (Tex.2007) (noting that courts should not by judicial fiat insert non-existent language into statutes). In any event, it is inaccurate to describe Central Texas's release from liability as involuntary. Central Texas and its insurer engaged in negotiations concerning not only the money to be placed in the bankruptcy court's registry and the manner in which funds were to be allocated, but also whether or not Central Texas was to be released from liability. When the Plaintiffs voted in favor of approving Central Texas's reorganization plan, they consented to release Central Texas from liability. Third, the Plaintiffs contend that there was uncertainty at the time of submission. TEX. CIV. PRAC. & REM.CODE § 33.011(5) (requiring the payment or promise to pay something of monetary value to have occurred at the time of submission in order for a person to be considered a settling person) (emphasis added). [32] But the fact that the Plaintiffs had not actually presented their cases to the special judge at the time of submission does not change whether or not the settlement was certain. At the time of submission in the trial court, Central Texas and its insurer had already deposited funds in the bankruptcy court's registry, the Litigation Plan had been in place for over two years, and the Plaintiffs had the option of requesting disbursement of their proportionate shares of the Fund. Fourth, the Plaintiffs argue that the proper vehicle for proportioning some share of Central Texas's potential liability would have been through its joinder as a responsible third party. Under the applicable version of Chapter 33, a responsible third party was defined as a person (1) over whom the court can exercise jurisdiction, (2) who was not sued by the claimant, and (3) who is or may be liable for all or part of the damages claimed against the named defendant. TEX. CIV. PRAC. & REM. CODE § 33.011(6). [33] The term specifically excluded a person or entity that is a debtor in bankruptcy proceedings or a person or entity against whom this claimant's claim has been discharged in bankruptcy, except to the extent that liability insurance or other source of third party funding may be available to pay claims asserted against the debtor. Id. The Plaintiffs contend that since a debtor in bankruptcy without the availability of liability insurance was excluded from the definition of responsible third party, it follows that a debtor in bankruptcy with the availability of liability insurancelike Central Texasis a responsible third party. [34] Assuming that Central Texas could properly be characterized as a responsible third party, nothing in Chapter 33 suggested that a party's identification as a responsible third party or settling person is an either-or proposition. A person could potentially fall within the definitions of both settling person and responsible third party, and the Legislature included no language in Chapter 33 indicating otherwise. See Brandal, 257 S.W.3d at 206 (noting that the Legislature tries to say what it means, and therefore the words it chooses should be the surest guide to legislative intent (citing Fitzgerald, 996 S.W.2d at 866)); Lee v. City of Houston, 807 S.W.2d 290, 295 (Tex.1991) (observing that a court may not judicially amend a statute and add words that are not implicitly contained in the language of the statute). The Legislature did not limit the designations of settling person and responsible third party as exclusive, and we will not read such a limitation into the statute. See C & H Nationwide, 903 S.W.2d at 320 (concluding that the definition of settling person is not limited to those who fully resolve all claims against them and includes those who settle only partially); City of Rockwall v. Hughes, 246 S.W.3d 621, 629 (Tex.2008) (noting that a statute is to be interpreted as written, unless the context requires otherwise or the construction would lead to an absurd result). Fifth, the Plaintiffs contend that to find Central Texas a settling person will confuse settlement jurisprudence and overbroadly designate a person as settling any time the person deposits funds in a court's registry. We disagree with this assertion. We do not hold that a deposit of funds in a court's registry is always akin to a settlement. Rather, it is so when, as here, the negotiations and terms of an agreement in every way resemble a settlement. When this is the case, we must define it as what it isa settlement. As discussed before, Central Texas and its insurer did not simply deposit funds in the bankruptcy court's registry. They negotiated the terms of the deposits with the claimants and entered into a mediated agreement where the claimants could either accept the funds immediately or defer acceptance to a later date, and Central Texas was released from liability. Our holding will also have no adverse effect on parties in bankruptcy proceedings or in settlement negotiations. To the contrary, parties in bankruptcy and related litigation will know that if they enter into an agreement that in all respects resembles a settlement, they will be deemed settling persons in related state litigation for purposes of Chapter 33. Finally, the Plaintiffs point to statements made both in documents in the bankruptcy court [35] and by the bankruptcy court judge suggesting that the Litigation Plan was not a settlement under Chapter 33. In his dissent, CHIEF JUSTICE JEFFERSON also relies on these statements as indication that the Litigation Plan was not a settlement. But these statements were not part of the bankruptcy court's holdings. As the court of appeals observed, these were merely ipse dixit statements that, in any event, have no bearing on our interpretation of Texas law. See Allen, 15 S.W.3d at 527 (observing that we consider the statute's plain and common meaning and do not look to extraneous matters for an intent the statute does not state); cf. In re W.E.R., 669 S.W.2d 716, 716 (Tex. 1984) (per curiam) (holding that appellate court may not accept a trial judge's oral comments as findings of fact or conclusions of law). CHIEF JUSTICE JEFFERSON asserts that we improperly construe the circumstances under which the Plaintiffs pursued their claims in the bankruptcy court. We respectfully disagree. As discussed above, the portion of the Apportionment Plan concerning the Litigation Plan specifically provided that the Litigation Plan participants could agree at any time to distribution of Litigation Funds to any or all participants, provided that it was done in writing by all participants in the Litigation Plan. Although the Plaintiffs did not ultimately exercise this option, it was available to them at the time of submission in the trial court. Thus, at the time of submission, not only had Central Texas unilaterally deposited funds in the bankruptcy court registry for future distribution to the claimants, but the Plaintiffsand other Litigation Plan participantshad the option of receiving those funds at any time. Moreover, even though the Plaintiffs ultimately decided to pursue the litigation option, the record belies a description of the hearing before the special judge as adversarial or contingent. The claimants crafted the Litigation Plan after extensive negotiations and, as previously mentioned, could not individually recover more than 110% of the mediator's allocation. While it is true that the Litigation Plan did not set a floor on each claimant's possible individual recovery, there was never a real possibility that any of the Plaintiffsall victims of the bus accident and their familieswould receive none of the bankruptcy court funds, given that the hearing was uncontested and the Litigation Plan contained no provision for the return of undisbursed funds to Central Texas. This is not a retroactive view of the proceedings: because Central Texas's reorganization plan had previously been approved, Central Texas had no reason to appear at the hearing. Of course, the dissent correctly notes that the actual results of the hearing before the special judge are not relevant since we must determine settlement at the time of submission. But the resultswith all but one participant receiving within two percent of the amount assigned by the mediatordo highlight the fact that this was not actual, adversarial litigation with an uncertain outcome. There is further no indication in the record that other potential parties were entitled to the Litigation Funds in lieu of the Litigation Plan participants. Rather, the bankruptcy judge stated that other parties might be entitled to those funds if the Litigation Plan participants were not for whatever reason. At the time of submission, Central Texas had deposited the limits of its insurance policy in the bankruptcy registry and had been released from liability, and the Litigation Plan participants had the option of either receiving their proportionate shares of the funds or bringing their cases before a special judge in a nonadversarial hearing. Despite how the bankruptcy court or the Plaintiffs might describe these events, we conclude they constitute a settlement under Chapter 33. Chapter 33 expresses the Legislature's intent to hold defendants responsible for only their own conduct. Its purpose is to hold each person responsible for [the person's] own conduct causing injury. Duenez, 237 S.W.3d at 690. This is consistent with a fundamental tenet of tort law that an entity's liability arises from its own injury-causing conduct. Id. We therefore hold that the trial court erred in refusing to submit a question to the jury concerning Central Texas's proportionate responsibility as a settling person.