Opinion ID: 1699241
Heading Depth: 1
Heading Rank: 3

Heading: The Effect of the Settlement with Cloeter.

Text: Mr. Cloeter and the plaintiff entered into an agreement in open court before trial which called for the payment of $4,500 by Mr. Cloeter to the plaintiff in return for a complete discharge, including any obligation by way of contribution. Mr. and Mrs. Junkans did not participate in this agreement, and the plaintiff reserved his right to proceed against them. There was an additional clause in the agreement under which the plaintiff reserved the right to reject the settlement figure of $4,500. However, at the oral argument his counsel advised this court that the $4,500 has been received by Mr. Lee and that this additional clause is now surplusage. The agreement is in effect a hold-harmless agreement. Mr. Lee agreed to settle with Mr. Cloeter for the specified sum and to protect him from being obligated to pay any  larger amounteither to the plaintiff or to anyone else. The agreement was a valid one and should be given full acceptance by the court. However, as held in State Farm Mut. Automobile Ins. Co. v. Continental Casualty Co. (1953), 264 Wis. 493, 59 N. W. (2d) 425, this type of agreement does not, by itself, shield a settling defendant from a demand for contribution by a joint tort-feasor. However, when the additional fact of actual payment of the settlement figure is added, then to permit contribution would be to encourage needless circuity. The plaintiff having been actually paid $4,500 by Mr. Cloeter, he must, under his agreement, hold the latter harmless to any further claims. If the plaintiff actually recovers over half of the damages from the other tort-feasor, Mr. Junkans, the latter could look to Mr. Cloeter for contribution; if Mr. Cloeter were to pay the excess to Mr. Junkans, Mr. Cloeter could in turn recover from the plaintiff under their hold-harmless agreement. It would seem reasonable to short-circuit this involved procedure in those cases where there is an indemnification agreement and the settlement figure has actually been paid in full; this could be accomplished in the instant case by entering judgment for one half of the original judgment in favor of the plaintiff and against the nonsettling tort-feasor only. In effect, such judgment would be limited to the amount that the plaintiff will be able to retain from the nonsettling tort-feasor. In the instant case such amount is one half of the judgment, or $6,137.58. It should be noted that the settlement agreement in the case at bar does not purport to settle one half of the case. While this is the ultimate result reached, it is not because we are presented with an agreement like the one in Heimbach v. Hagen (1957), 1 Wis. (2d) 294, 83 N. W. (2d) 710. On the contrary, the agreement herein is unlike that involved in the Heimbach Case. The net result here of a  judgment for one half arises only because of the fact of full payment of the amount of the settlement and the agreement to indemnify, together with our intention to avoid an unrewarding contribution action.