Opinion ID: 389929
Heading Depth: 1
Heading Rank: 4

Heading: The Co-Defendant's Settlement

Text: 45 On the eve of the trial, the Halls' claims against the dealer, Larry Buick, Inc., were dismissed with prejudice, as was Larry Buick's indemnification cross-claim against GM. The dismissals followed Buick's pre-trial settlement with the Halls. GM asserts that the settlement deprived it of the right to seek pro rata contribution it otherwise would have had against Buick. To compensate for the alleged loss of a right to seek contribution, GM contends that the judgment should be pared down by half (from $5.5 million to $2.75 million). Judge Green offset the amount of the settlement ($750,000), but refused to reduce the judgment further. 46 We conclude that GM received the appropriate credit in this action and is not entitled to more. First, it is not at all clear that the settlement stripped GM of a right to contribution it otherwise would have had. Second, no District of Columbia case recognizes a right to pro rata (50%) reduction of a plaintiff's judgment against a nonsettling defendant when the settling defendant's liability vel non has not been determined. Finally, if GM wished to safeguard any legitimate claim it might have to lessen the burden of a plaintiffs' verdict, a cross-claim against Larry Buick was available to it. 47 GM assumes that the settlement left it without recourse to an independent action for contribution against Larry Buick. We believe that question remains open. Our own decisions are inconclusive, 36 and GM has not called to our attention, nor have we found, any answer in decisions of the District of Columbia courts. We decline to forecast the ruling that might be made were GM to sue Larry Buick for contribution. In view of our decision in Williams v. Steuart Motor Co., 494 F.2d 1074, 1082-84 (D.C.Cir.1974), we have reason to doubt whether GM would wish to pursue such a claim. 48 In Williams v. Steuart Motor Co., this court held that when a car manufacturer and dealer are both found liable for an accident caused by a defect in the car, and the charge against the dealer is negligent failure to detect and repair the defect, the manufacturer ordinarily must indemnify the dealer. The dealer's right to indemnification against the manufacturer is hardly consistent with a right in the manufacturer to seek contribution from the dealer. 49 Turning to the relevant District of Columbia case law on pro rata reduction of a damage award, we find brackets around the case GM portrays this one to be. If a trier of fact has found the settling defendant liable, pro rata (50%) reduction may be ordered. Martello v. Hawley, 300 F.2d 721, 724 (D.C.Cir.1962). If a trier of fact has exonerated the settling defendant, only pro tanto (the amount of the settlement) reduction is available. Snowden v. D.C. Transit System, 454 F.2d 1047 (D.C.Cir.1971). Larry Buick, the settling defendant here, was neither found liable nor exonerated. Again, we decline to proceed beyond the point where District of Columbia precedent leaves off, for GM had a clear opportunity to settle the issue of Larry Buick's liability. It might have filed a cross-claim against Buick. 50 GM correctly points to the general rule that cross-claims are permissive, not compulsory. See Fed.R.Civ.P. 13(g). But in this case, GM was on the receiving end of a cross-claim. Larry Buick, Inc., when it answered the Halls' complaint, also asserted a cross-claim against GM. The cross-claim stated that if the Halls should succeed in establishing that the vehicle was defective, then Larry Buick avers that the car was defective when obtained from GM. The defective condition, Buick contended, would constitute a breach of GM's warranty to Buick. GM generally denied the allegations contained in Buick's cross-claim, but asserted no claim on its part against Buick. 51 We do not hold that GM was compelled to meet dealer Buick's cross-claim with one of its own. If matured claims were involved, an answering cross-claim might well be compulsory. 37 But claims for contribution and indemnity contingent upon the outcome of another claim have not been placed in the compulsory category. 38 Thus GM's decision not to cross-claim against Buick in this action does not preclude GM from pursuing Buick in a separate action. 52 We do hold, however, that in view of the multiple uncertainties clouding GM's alleged contribution right, the Halls' judgment should not be altered. GM has offered us no reason to believe that, had there been no settlement between Larry Buick and the Halls, part of the compensation awarded the Halls would have come out of dealer Buick's pocket. See Williams v. Steuart Motor Co., supra. Nor is it clear that the settlement between the Halls and Buick deprives GM of any genuine contribution claim it may have against Buick. See note 36 supra. GM had an opportunity to cross-claim and passed it by. GM is therefore not comfortably situated to urge that we chart new law regarding reduction of judgments when an alleged joint tort-feasor settles. See p. 184 supra. In summary, GM presents no convincing justification for withholding from the Halls full compensation for their injuries. 53 For all the foregoing reasons, the judgment of the District Court is 54 Affirmed.