Opinion ID: 599581
Heading Depth: 1
Heading Rank: 6

Heading: The Contribution Issue

Text: 46 Finally, we consider whether the district court correctly granted Dr. Bryant's motion requesting a reduction of the total judgment against him by the full amount that the hospital paid Mrs. Lynch to settle. Pursuant to Fed.R.Civ.P. 59(e), Dr. Bryant filed a timely motion to amend the judgment of the district court. We agree with the district court's decision granting this motion. 47 After the jury had rendered its decision regarding the liability of Dr. Bryant and the hospital, and one day before the jury was charged on the issues of compensatory and punitive damages, Mrs. Lynch and the hospital reached a settlement agreement, (J.A. at 147), which required the hospital to make a lump-sum cash payment of $240,000 to Mrs. Lynch and to provide two annuities to be purchased by the hospital at a cost of $160,000. Of the total lump-sum payment, the parties allotted $10,000 to compensatory damages and the remainder, $230,000, to punitive damages. The purchase price of the annuities was also allocated as punitive damages. 48 The following day, March 18, 1985, it was announced in open court that all claims against the hospital had been settled. Therefore, the district court instructed the jury on the issue of damages only in regard to Dr. Bryant, and the jury subsequently awarded Mrs. Lynch the previously mentioned compensatory and punitive damages against Dr. Bryant. 49 Dr. Bryant, in his motion to alter or amend the judgment, claimed that pursuant to Tennessee's Uniform Contribution Among Tort-Feasors Act, Tenn.Code Ann. §§ 29-11-101 to -106 (1980) (the Contribution Act), 5 the judgment against him should be reduced according to the amount of the full settlement between Mrs. Lynch and the hospital, and the district court agreed. Mrs. Lynch claims that the district court erred in this decision. She admits that, under the Contribution Act, Dr. Bryant was entitled to a credit against his compensatory damage award for the amount the hospital paid Mrs. Lynch to settle the compensatory claims, but she argues that he was not entitled to a credit for any amount the hospital paid to settle the punitive damage claims against it. Mrs. Lynch contends that an award of punitive damages, being an award for the purposes of punishment and deterrence, is not a common liability shared by multiple tortfeasors. Thus, the Contribution Act should not apply to punitive damages. 50 Contrary to Mrs. Lynch's assertion, we do find that under the facts of this case the Contribution Act affects the jury's award of punitive damages. The Contribution Act was intended to provide a right of contribution to a tortfeasor who has paid more than his or her pro rata share of a common liability for which two or more individuals are jointly or severally liable. Dykes v. Raymark Indus., Inc., 801 F.2d 810, 813 (6th Cir.1986), cert. denied, 481 U.S. 1038 (1987). We expressly held in Dykes that settlement payments, including those characterized and allocated as punitive damages, reduce similar awards against non-settling defendants under the application of the Tennessee Contribution Act. Id. at 812-15. Dykes was a diversity case where the law of Tennessee was controlling. Id. at 812. The jury in Dykes awarded the plaintiff $300,000 in compensatory damages and $200,000 in punitive damages for personal injuries suffered by Mr. Dykes. Id. After a comprehensive review of the Tennessee Contribution Act, we concluded that the Act did apply to punitive damages based upon wanton or willful conduct. Id. at 819. 51 Section 29-11-102 of the Contribution Act defines the right of contribution among tortfeasors and it delineates certain exceptions to contribution. In Dykes, we construed this statute and determined that it did not expressly exclude punitive damages. Id. at 813. In fact, we found that the least forced interpretation of the statute was that it was intended to exclude damages for intentionally caused injury only. Id.; see also Tenn.Code Ann. § 29-11-102(c) (There is no right of contribution in favor of any tort-feasor who has intentionally caused or contributed to the injury or wrongful death.). 52 In Tennessee, as the district court noted, punitive damages may be awarded for behavior other than intentional misconduct. The Tennessee Supreme Court stated in Inland, 529 S.W.2d at 45, that punitive damages could be awarded for fraud, malice, gross negligence, oppression, wilful misconduct, intentional misconduct, reckless behavior, and conscious indifference. 6 In this case, the punitive damage awards given to Mrs. Lynch, both in her individual and representative capacities, were based on a finding of gross negligence, not intentional misconduct. Therefore, since the Contribution Act only excepts intentionally caused injury, the punitive damage awards based on gross negligence are subject to its governance. 53 Mrs. Lynch, noting the private fine nature of punitive damages, see Dykes, 801 F.2d at 814, contends that this case is distinguishable from Dykes because, in this case, the settlement with the hospital occurred after the jury found both Dr. Bryant and the hospital liable. Thus, when the jury considered the issue of damages after the settlement with the hospital was announced, it was considering only Dr. Bryant's conduct. In Dykes, all the defendants but one settled before the jury reached a liability verdict. Id. at 812. Under those circumstances, we held that the apportionment of damages based on liability would have been pure speculation at best. Id. at 814. But here, Mrs. Lynch argues, apportionment would not be based on speculation since liability for all of the defendants had been determined and the jury was only considering the conduct of Dr. Bryant when it awarded punitive damages. 54 While we recognize the personal and private nature of punitive damages, the jury's sole consideration of Dr. Bryant's liability at the damages phase of the trial does not affect the application of the Contribution Act. Under the Contribution Act, the first question to ask is whether the settling defendant was sued as a tortfeasor. Rosenbaum v. First Am. Nat'l Bank, 690 S.W.2d 873, 879 (Tenn.Ct.App.1985). If the settling and non-settling defendants are named in the plaintiff's original complaint and the same damages are sought from both, then any liability of the non-settling defendant must be reduced by the amount paid by the settling defendant for the release or the covenant not to sue. Id. at 878. Whether the settling defendant was, in fact, guilty of tort is immaterial. Id. 55 In her complaint, Mrs. Lynch contended that Dr. Bryant and the hospital were liable for the injuries, and she sought non-allocated compensatory and punitive damages from both. Since the hospital was clearly sued as a tortfeasor, Dr. Bryant's liability must be reduced by the amount of the settlement agreement between the hospital and Mrs. Lynch. The Contribution Act makes no distinction as to the timing of a settlement, and this court may not read one into it. 56 Finally, Mrs. Lynch argues that there was ample evidence of intentional misconduct presented at the trial, which removes the applicability of the Contribution Act. The jury, however, found that Dr. Bryant's conduct constituted gross negligence, and we agree with the district court that this was a question of fact for the jury to decide. 57 Mrs. Lynch requested that we certify the issue of the proper interpretation of the Contribution Act to the Tennessee Supreme Court if we refused to distinguish our decision in Dykes from this case. We find this unnecessary. While the Tennessee Supreme Court still has not addressed the applicability of the Contribution Act to punitive damage awards, it has been five years since our decision in Dykes. If the State of Tennessee had been disturbed by our interpretation in Dykes, it seems reasonable that the legislature would have taken steps to clarify the matter. In the absence of contrary indication, we find Dykes controlling. 58 AFFIRMED. 59