Opinion ID: 2419272
Heading Depth: 1
Heading Rank: 4

Heading: the partial settlement

Text: The $10,000 paid by co-defendant, Ground Hog, Inc., was a payment by a party sued as tortfeasor along with Burke. It was made in partial satisfaction for the same injury which is the subject matter of the complaint against Burke. It is a tort rule of longstanding that where two or more persons are potentially liable for a single indivisible harm, a payment by or on behalf of any of them shall be a credit against the total amount due. Prosser and Keeton on Torts, 5th ed., 1984, §§ 49, 52; Restatement (Second) Torts, § 885(3). In Daniel v. Turner, Ky., 320 S.W.2d 135 (1959), we state the general rule: It is well settled that a party can have but one satisfaction for an injury resulting from a tort. . . . Id. at 138. The receipt of full satisfaction discharges the claim. Receipt of partial satisfaction, as here, discharges the claim pro tanto. Beech v. Deere & Co., Ky.App., 614 S.W.2d 254, 257 (1981), states the purpose of the rule, to avoid an unjust enrichment or a double recovery. Recently, in Richardson v. Eastland, Inc., Ky., 660 S.W.2d 7, 9 (1983), we recognized that the injured party should not forfeit the right to full compensation by accepting payment in partial satisfaction from one of several persons potentially liable. Conversely, it is equally fundamental that the injured party's right of recovery should be limited to payment of the amount constituting full satisfaction. On principles universally recognized ( Prosser and Keeton, supra; Restatement, supra ), Burke was entitled to credit for the amount paid by Ground Hog, Inc. Mitchell claims that Burke has forfeited this obvious entitlement because Burke's counsel insisted in discussion before the trial that this was not an Orr v. Coleman case. See Orr v. Coleman, Ky., 455 S.W.2d 59 (1970). The record shows that at the instruction phase neither side asked for an Orr v. Coleman type of instruction. In Orr v. Coleman , we changed the rules on how to submit the case against a nonsettling tortfeasor to the jury where there was a settling tortfeasor. But we did not discuss what happens when the Orr v. Coleman method is not followed and the nonsettling defendant later demands a credit against the judgment. In Orr v. Coleman , we fashioned a rule peculiar to this jurisdiction that the jury shall apportion between the nonsettling tortfeasor and the settling tortfeasor who is now no longer a party. KRS 454.040, the statute which permits (but does not require) the jury to apportion its verdict among the parties' defendant on trial, was applied by analogy, while conceding that the words of the statute had no expressed application to this state of facts. We are now faced with what to do where the nonsettling defendant failed to ask for, and the trial court failed to utilize the Orr v. Coleman procedure. No apportionment has been made. Nevertheless, the movant insists on the general rule that affords the credit. In Orr v. Coleman, supra , we started with this premise: Aside from the procedural question, when two tortfeasors are in pari delicto [2] this court consistently has required that the amount received from one of them in partial satisfaction of the whole claim be credited against the full amount of damages as subsequently determined in a trial against the other. [Cases cited.] 455 S.W.2d at 60. The procedural question presented by the litigants did not relate to apportionment. The question presented related to how the credit due the nonsettling tortfeasor should be handled  by advising the jury of the fact and amount of settlement, or by not advising the jury about the settlement and, instead, simply giving credit in the judgment for the amount previously paid. We settled this argument stating: In any event, we are of the firm opinion that neither the fact nor the amount of the settlement should be communicated to the jury that tries the issue of the nonsettling tortfeasor's liability. 455 S.W.2d at 61. The result, had we stopped at this point, would have been to provide a credit to the nonsettling tortfeasor for the amount paid by the settling tortfeasor, by simply deducting the amount of the settlement from the judgment against the settling tortfeasor. But, we did not stop. We then embraced the apportionment theory: [T]he jury should be required to assess the total amount of the claimant's damages and fix the proportionate share of the nonsettling tortfeasor's liability on the basis of his contribution to the causation. The trial court may then compute the amount of the judgment to be entered against the nonsettling tortfeasor, thus fixing his ultimate liability (and incidentally obviating any question of or necessity for contribution). 455 S.W.2d at 61. Under this rule, the jury cannot assess legal causation, and thus can make no apportionment, against a settling defendant who was not found at fault. Burke and Mitchell now argue, for different reasons, that Ground Hog, Inc. had no legal liability under the evidence in this case. If true, the jury would not have been permitted to apportion. Orr v. Coleman requires both the settling and nonsettling defendant to be found at fault before apportioning liability. Orr v. Coleman can only be used after the jury has found fault on the part of both the settling and the nonsettling defendant. It presupposes a finding of fault followed by apportionment. So if Ground Hog, Inc. had no legal liability, this was not a case for an Orr v. Coleman instruction, although for a different reason than the one movant pressed upon the trial court. But, neither Orr v. Coleman nor any case decided subsequently embraces double recovery as a substitute for the credit procedure. As stated in the Restatement (Second) Torts, § 885(3): A payment by any person made in compensation of a claim for a harm for which others are liable as tortfeasors diminishes the claim against the tortfeasors, at least to the extent of the payment made, whether or not the person making the payment is liable to the injured person and whether or not it is so agreed at the time of payment or the payment is made before or after judgment. (Emphasis added.) In the context of the Restatement any person means all those against whom the injured party has asserted tort liability for a single indivisible harm, regardless of whether liability could be proven in fact. See Comment on § 885 Subsection (3), Restatement (Second) Torts, pp. 335-36. The trial court erred when it denied Burke's motion for a credit against the amount of the verdict for $10,000, the amount paid by Ground Hog, Inc. The fact that Orr v. Coleman was not applied does not bar a credit in the circumstances presented. The Court of Appeals was incorrect when it stated that Ground Hog, Inc. and Burke were not joint tortfeasors. If Ground Hog, Inc. was a tortfeasor at all, it was a joint tortfeasor, and Orr v. Coleman applied. But the Court of Appeals' opinion does not confront what happens when Orr v. Coleman applies, and no Orr v. Coleman instruction has been asked for. We disagree with the Court of Appeals that movant's failure to tender an apportionment instruction foreclosed its right to a credit. Movant is not complaining of an error in the instructions but of the trial court's refusal to sustain his post-trial motion for credit. This was an appropriate motion in the circumstances. So much of the Court of Appeals' opinion as refuses this credit is reversed.