Opinion ID: 2518592
Heading Depth: 3
Heading Rank: 2

Heading: The hearing in the circuit court

Text: At the circuit court's June 4, 2003 hearing, Zane conceded the general principle of the Taylor rule, see supra note 2; however, she urged that DaimlerChrysler was not an actual tortfeasor in light of the nuisance value of its settlement payment and that, consequently, its self-insurance was not applicable, see HRS § 431:10C-103, supra note 1, to the Taylor offset: [ZANE:] . . . Taylor held that a credit is due the [UIM] carrier for the difference in the amount of the settlement paid and the policy limits of the [UIM] tort[]feasor. . . . And we don't have a problem with that. . . . But what is a tort[]feasor? A tort[]feasor is . . . and this is a definition out of Black[']s [Law Dictionary]a wrongdoer, an individual or a business that commits or is guilty of a tort. Now, . . . [n]one of the parties here could establish any wrongdoing or a tort that [Daimler]Chrysler was guilty of. . . . . And none of those parties could develop a viable product liability claim against [Daimler]Chrysler. And that is undisputed. . . . Therefore, [Daimler]Chrysler was not a tort[]feasor. And not being a tort[]feasor, Taylor simply doesn't apply when it speaks of a credit that's due for the policy limits. . . . . . . . . . . Vassiliu [v. Daimler Chrysler Corp., 356 N.J.Super. 447, 813 A.2d 547 (2002), rev'd in part on other grounds, 178 N.J. 286, 839 A.2d 863 (2004),] . . . discuss[ed] the situation where . . . a party has no liability[.] And . . . when you speak of available insurance, you speak of available insurance for . . . actual, responsible tort[]feasors, as opposed to parties that don't have liability or responsibility. . . . Mulholl [and ] comes to the same conclusion, that when you talk about a credit, you are talking about a credit against an actual tort[]feasor.[ [9] ] And Mulholl [and ] actually discusses . . . the situation where a plaintiff files suit initially against everybody that might be involved. . . . [A]s the case goes on and it is determined that there is no liability against certain parties, . . . . . . that's okay. . . . Because the alternative . . . is that the plaintiff only sues the most liable one. And the UIM carrier then loses its subrogation rights against all the other potential tort[]feasors. . . . By suing everyone initially, . . . the plaintiff actually ends up protecting the subrogation rights of the UIM carrier against all potential tort[]feasors. And then . . ., you sort out the liability. . . . THE COURT: . . . Are you saying that you have to have a judgment? [ZANE]: No. . . . . . . . [I]ssues of liability . . . are under UIM policies the subject of arbitration. . . . So . . . if the parties disagree whether the compromise was due to just simply wanting to forgo the expenses of litigation, or whether it was a liability question, that would be an issue for arbitration. Although I think in most cases that becomes pretty obvious. Where you sav[e] 5,000 [dollars] off the policy, . . . that's being done for convenience. Where you tak[e] five percent of the policy, . . . obviously there are some liability questions. Zane then broached the issue of Liberty Mutual's representations, if any, concerning its intention to forgo the Taylor credit: In this case, [Zane] ha[s] from day one been very specific about what was consented to. Full disclosure was made to Liberty Mutual that this is a situation of no liability. . . . We were taking $200,000. And to make sure we didn't get in that Taylor bind of then not being able to collect, we simply went to [Liberty Mutual] and said look, this is the situation. We want your consent to this, so that we can proceed with the UIM claim. . . . . . . . [I]n [its] reply memorandum Liberty Mutual has attached the declaration of the adjuster himself who participated throughout the entire proceeding. . . . . . . [It] says only that sometime in January he talked to . . . [Zane]'s lawyer and brought up the Dizol case. . . . . . . And what's really telling about this affidavit is not what it says, but what it doesn't say. This affidavit doesn't say no, I never agreed with [Zane]'s lawyer when he called me in [sic] December 20th . . . that this settlement was for nuisance value. . . . (Emphases added.) Liberty Mutual responded that DaimlerChrysler is a joint tort[]feasor. . . . [U]nder our [U]niform [C]ontribution [A]mong [T]ortfeasors [A]ct[, HRS ch. 663, pt. II (Supp.1999) (UCATA), [10] ] it's not necessary that a judgment or . . . a[n] ultimate finding of liability be made in order for a party to be determined to be a joint tort[]feasor. . . . . . . . [T]he parties reached a settlement in the amount of $200,000. . . . But . . . reasonably speaking it cannot be determined that a $200,000 settlement is a nuisance value settlement. . . . . . . . The injuries in this case were indeed high. But nuisance value does not depend necessarily on the injuries. . . . [N]uisance value is a case in which there is no liability and the defendant merely throws some money on the table. In other words, notwithstanding the finding of liability. [sic presumably, notwithstanding the lack of a finding of liability] And . . . in this case the amount of the settlement, as well as the fact of the settlement itself, confirm[] DaimlerChrysler's position as a joint tort[]feasor. . . . . . . . [F]or example, . . . in [ Gump v. Wal-Mart Stores, 93 Hawai`i 417, 5 P.3d 407 (2000)], M[]cDonald's, the settling defendant, was considered to be a joint tort[]feasor, even though there was no ultimate finding of liability. . . . . . . [T]hey did make a settlement. And in the Court's view that confirmed their status as a joint tort[]feasor. . . . [U]nder HRS[ §] 663-11[ [11] ] the definition of a joint tort[]feasor again does not turn on the ultimate finding of liability or nonliability. What it basically states is that a party can be deemed to be a joint tort[]feasor, whether or not judgment is recovered against all or some of the tort[]feasors in the case. . . . . . . . [Zane] did request that Liberty Mutual consent. That's undisputed. It is undisputed that Liberty Mutual consented to the settlement. . . . . . . . The reason why we attached [Chang's declaration to our May 30, 2003 reply] . . . is that in [her May 27, 2003] memorandum in opposition what [Zane] was arguing . . . was that [she] didn't know about this [( i.e., the Taylor/Dizol rule )] before they finalized the settlement. . . . Liberty Mutual was not required to advise them of the applicable law. . . . . . . . If [Zane] is [making an estoppel claim], . . . it's simply not supported on the record before the Court. And any reliance by [Zane]for one thing, there was no representation made by . . . Chang that he would not be asserting a credit. Silence cannot create an estoppel. And . . . any reliance upon that wouldn't. . . . . . . . Under Taylor [it] is simply not our place to object to the settlement. And Taylor strongly advises [UIM] insurers to consent to settlement. And we did that in this case. . . . [B]ut . . . it would be counter-intuitive . . . to suggest that every time a[UIM] insurer consents to a settlement[,] . . . that would foreclose it from asserting the credit and the offset[]. . . . . . . . . . . I believe that [ Taylor ] did everything but sa[y] that you have to consent. But I think what they were trying to do again is to encourage [UIM] insurers to consent, so that they would not get in the way of an underlying [BI] settlement. (Emphases added.) Liberty Mutual emphasized that the Taylor credit i.e., the insured's waiver of the difference between the settlement amount and the applicable BI limits applies irrespective of whether or not [the insurer's] consent is obtained. . . . [B]ecause that's the exact thing that they were trying to encourage by giving the carriers the credit on the back hand. And what they wanted to tell the carrier is there is no reason for you not to continue as long as you get the credit on the back hand. . . . It is undisputed that Liberty Mutual consented to the settlement. . . . Our only point is that we should be entitled to the full credit . . . under . . . Dizol . . . . Nevertheless, the circuit court ruled that the purpose of getting the consent, which was made known to Liberty Mutual, was so that the credit would not kick in. And no one's argued to the Court, and the Court does not find, that even if you are entitled to the credit that you can't give it up. And the Court finds that they did. . . . [U]nder the peculiar, undisputed facts of this, the consent constituted not only a consent but also a waiver of any claim to a credit beyond the 200,000[ dollars]. Accordingly, the circuit court granted summary judgment in Zane's favor and against Liberty Mutual: Liberty Mutual would have been entitled to a credit for joint tortfeasor DaimlerChrysler . . ., in connection with the underlying accident, but, having consented to the liability settlement with DaimlerChrysler, Liberty Mutual may not now object to that settlement as a basis for denying [UIM] benefits, and . . . may not now claim said credit and[,] accordingly, the Court grants . . . Zane's Motion for Summary Judgment and denies . . . Liberty Mutual's Motion for Summary Judgment. Issues relating to the liability of . . . Kim or . . . Zane's damages may be submitted to arbitration . The circuit court's April 25, 2005 judgment effectively ordered Liberty Mutual to provide full . . . UIM[] coverage benefits to Zane, without any credit/offset for . . . self-insurance applicable to . . . DaimlerChrysler[]. See op. at 963-64.