Court Opinion

ID: 9562653
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:32:26.8315+00
Date Added: 2024-06-11T09:17:28.439405
License: Public Domain

BOOCHEVER, Chief Justice,
dissenting in part.
I agree with the majority opinion except that I believe the amount of the the judgment should be reduced by the amounts previously paid as a result of settlements with Sears and Decora. B & R entered a confessed judgment for $618,000.00 on January 10, 1973. At that time Warbelow had previously negotiated settlements with Sears for $350,000.00 and with Decora for $108,125.00.
AS 09.16.010(d) specifies:
A tortfeasor who enters into a settlement with a claimant is not entitled to recover contribution from another tort-feasor whose liability for the injury or wrongful death is not extinguished by the settlement nor in respect to any amount paid in a settlement which is in excess of what was reasonable.
Thus, Sears and Decora could not recover contributions from B & R.
AS 09.16.040 provides:
Release or covenant not to sue. When a release or covenant not to sue or not to enforce judgment is givén in good faith to one of two or more persons liable in tort for the same injury or the same wrongful death
(1) it does not discharge any of the other tortfeasors from liability for the injury or wrongful death unless its terms *297so provide; but it reduces the claim against the others to the extent of any amount stipulated by the release or the covenant, or in the amount of the consideration paid for it, whichever is the greater; and
(2) it discharges the tortfeasor to whom it is given from all liability for contribution to any other tortfeasor.
According to this section, the amount of the judgment against B & R was to be reduced by the amounts-stipulated for the release of Sears and Decora.
B & R does not contest Continental’s assertion that a confessed judgment is subject to reduction under the statute. Instead, it characterizes the judgment as a negotiated settlement, which would not normally be subject to reduction by the amount of the other settlements achieved in the same action. B & R points to the fact that the figure was negotiated by the attorneys representing the parties, and states that there was no special reason why a judgment was needed. However, the “settlement” was reduced to judgment, and the figures indicate that it was the intent of B & R and Warbe-low to treat the amount of $618,000.00 as the total liability of all three defendants.
Warbelow had made an offer of settlement to B & R on January 7, 1973, in the amount of $160,000.00, apparently based on the belief that this covered the limits of Continental’s liability under its policy insuring B & R ($100,000.00 plus costs and attorney’s fees). It seems obvious that the amount of the confessed judgment was to cover this sum plus the amount of the two prior settlements, rounded to the nearest thousand dollars.
Confessed Judgment $618,000
Total of Sears and Decora Settlements ($350,000 and $108,125) - 458,125
$159,875
Thus, when the confessed judgment is reduced by the two settlements, the liability of B & R amounts to almost the identical sum as Warbelow’s last settlement offer. The $618,000.00 represented the value of the Warbelow claim against all three defendants, and that amount due from B & R' should be reduced by the amount of the Sears and Decora settlements.
In the suit nominally brought by B & R against Continental, the jury found Continental liable on a negligence theory. The jury had been instructed that B & R claimed $618,000.00 as damages resulting from that negligence. The jury was not instructed as to the prior settlements and that the amount of the B & R judgment was subject to reduction by the sum of $458,125.00. Warbelow was the real party in interest in the suit against Continental, and the trial court erred in failing to reduce the judgment as required by the Contribution Among Joint Tortfeasors Act (AS 09.-16.010 and 09.16.040) by the amounts War-below was to receive under the other settlements. To hold otherwise results in a double recovery.
The doctrine prohibiting double recovery supports the rule that a payment received by the plaintiff for a covenant not to sue someone potentially liable in tort must be deducted from the damages recoverable from persons whose tort liabilities arise out of the same circumstances.
Luth v. Rogers & Babler Construction Co., 507 P.2d 761, 766 (Alaska 1973). In Lath, plaintiffs, injured in an automobile accident, entered into a covenant not to sue a potential defendant in consideration of payment of $3,500.00. Judgment was -later obtained against Rogers & Babler in the amount of $7,000.00. The jury was not instructed as to the prior confession of judgment, similar to the situation here where the jury was not instructed as to the prior settlements. We held that the trial court employed the proper procedure in reducing the damages awarded by the amount of the prior settlement. Id.
Similarly, I believe that it was error not to reduce the amount of B & R’s judgment by the amount of the Sears and Decora settlements.