Section 3.6 Effect on Remainder of Claim

• Library: Settling Cases 2014

Even before 1983, injured parties who settled with one of several tortfeasors only retained a cause of action for the balance of the damages for their injuries. Vinson v. E. Tex. Motor Freight Lines, 280 S.W.2d 124, 133 (Mo. 1955). This was so because, at common law, an injured party is only entitled to one satisfaction for the party’s injuries. Id.

Section 537.060, RSMo 2000, provides in this regard that the settlement agreement “shall reduce the claim by the stipulated amount of the agreement, or in the amount of consideration paid, whichever is greater.” The clause concerning the amount of consideration paid tracks with the common-law concept that an injured party’s remaining claim is reduced by the amount of the settlement.

What happens if a party settles, proceeds to trial against the nonsettling defendants, and receives a verdict for an amount less than that received in the partial settlement? In Hampton v. Safeway Sanitation Services, Inc., 725 S.W.2d 605 (Mo. App. E.D. 1987), the plaintiffs settled with one of three defendants for $45,000. Trial proceeded as to the other two defendants, and the jury returned a verdict assessing the plaintiffs’ damages at $30,000. The court held that the remaining defendants were entitled to a satisfaction of judgment because the plaintiffs had already been paid more than the full amount of their damages. Id. at 611.

Sometimes the nature of the settlement may make credits confusing. In Walihan v. St. Louis‑Clayton Orthopedic Group, Inc., 849 S.W.2d 177 (Mo. App. E.D. 1993), the decedent hurt his back in Illinois. He later underwent treatment for his injuries in Missouri. Following surgery, the decedent developed blood clots and died. The decedent’s wife and children sued the Illinois defendants responsible for his initial injury. Under Illinois law, the plaintiffs to the Illinois action were permitted to seek damages for the injury the decedent suffered up until the time of his death and damages for his death. The plaintiffs settled the Illinois case for $300,000. Id.

The plaintiffs filed a separate suit in Missouri against various health care providers for wrongful death. One of the Missouri defendants settled before trial for $40,000. The plaintiffs proceeded to trial against the remaining defendants and received a verdict for $300,000. Id. Clearly, the nonsettling defendants were entitled to a credit for the $40,000 settlement paid by the Missouri defendant, but were they entitled to a credit for what the Illinois defendants paid in the other action? If so, the remaining defendants were entitled to a satisfaction of judgment.

In deciding this issue, the court of appeals first reviewed § 537.060, which refers to partial settlements “for the same injury or wrongful death.” Id. The court held that this language entitled the nonsettling defendants to relief only if the injuries involved in both cases were the same. To determine the basis for the Illinois settlement, the court looked at the language of the Illinois settlement agreement, which released the Illinois defendants for claims arising out of the decedent’s injury and his death. The agreement did not apportion how much of the money paid under it went for the decedent’s injuries as opposed to his death. The right of the Missouri defendants to a reduction of their liability was limited to the extent that the Illinois settlement was for the decedent’s death.

The court held that a reduction under § 537.060 is similar to the common-law defense of satisfaction. The burden was on the nonsettling defendants to both plead and prove their right to a reduction of their liability. There was no presumption that the Illinois settlement was all attributable to the death claim any more than it would be presumed to be all attributable to the injury claim. As a result, the court of appeals held that the trial court erred in crediting the nonsettling defendants with the entire amount of the Illinois settlement.

The court remanded the case to the trial court to make a factual determination “with or without a jury at the option of the parties” of how much of the Illinois settlement was for the decedent’s death to determine how much of a reduction...