Opinion ID: 1683646
Heading Depth: 1
Heading Rank: 1

Heading: mary carter agreements and public policy

Text: Mary Carter agreements occur in multiparty litigation when fewer than all defendants settle with the plaintiffs. [2] The term encompasses a wide variety of settlement arrangements that are limited only by the ingenuity of counsel and the willingness of the parties to sign. Maule Indus., Inc. v. Rountree, 264 So.2d 445, 447 (Fla.App.1972), modified, 284 So.2d 389, 390 (Fla.1973). [3] A typical Mary Carter agreement has the following features: 1) The liability of the settling defendant is limited, and the plaintiff is guaranteed a minimum recovery; 2) The settling defendant remains a party to the pending action without disclosing the full agreement to the nonsettling parties and/or the judge and jury, absent court order; and 3) If judgment against the non-settling defendant is for more than the amount of settlement, any money collected will first offset the settlement so that the settling defendant may ultimately pay nothing. See Hackman v. Dandamudi, 733 S.W.2d 452, 455 (Mo.App.1986). We first address Tom's concern that all Mary Carter agreements are contrary to public policy and invalid as a matter of law because they distort the adversary process and undermine the fair apportionment of damages under our system of comparative fault. The propriety of Mary Carter agreements have been roundly criticized in recent years. [4] Courts and commentators have been particularly troubled by the secretive nature of the agreement and by the settling defendant's direct financial interest in the amount recovered against any nonsettling defendant. We believe that these distinctive features do, indeed, distort the adversarial process and potentially undermine the right to a fair trial. As the Florida Supreme Court noted in Ward v. Ochoa, 284 So.2d 385, 387 (Fla.1973): [s]ecret agreements between plaintiffs and one or more of several multiple defendants can tend to mislead judges and juries, and border on collusion.