The Short Happy Life of Litigation Between Tortfeasors: Contribution, Indemnification and Subrogation After Washington's Tort Reform Acts
| Publication year | 1997 |
Introduction
While many of the ramifications of Washington's 1981(fn1) and 1986(fn2) Tort Reform Acts have been divined by the courts, some pockets of uncertainty remain. One such area confronts parties involved in multiple tortfeasor civil litigation. The primary remaining issues are (1) whether a defendant can implead by way of a "third-party complaint" another tortfeasor whom the plaintiff has chosen not to sue; and (2) whether a defendant who has settled a lawsuit or has had a judgment taken against it may pursue other tortfeasors for reimbursement of the monies paid to the tort victim. Such an action might be brought under the theories of contribution, indemnification, or subrogation.
In 1981, the Washington Legislature for the first time created a limited right of contribution.(fn3) A jointly and severally liable defendant, forced to pay another tortfeasor's share of a settlement or judgment, could now sue for reimbursement.(fn4) But in 1986, the Legislature generally abolished joint and several liability and replaced it with proportionate liability, with defendants now responsible only for their respective shares of fault.(fn5) Two exceptions to the general rule of proportionate liability were created: "factual" and "procedural" joint and several liability.(fn6) The first exception involves the factual existence of an agency or employment relationship, or concerted action.(fn7) The second exception requires the procedural entry of a judgment against multiple defendants, with a fault-free plaintiff.(fn8)
The confusion about the propriety of an action for reimbursement arises mainly because of the imperfect meshing of these two acts. While the 1986 Act abolished joint and several liability, the right of contribution created by the 1981 Act remained.(fn9) And because contribution rests primarily on the existence of joint and several liability, the question arises as to whether a right of contribution serves any purpose under present law. The answer is that contribution still has vitality, but only when joint and several liability exists-now an infrequent occurrence.
Contribution enjoyed a short wave of popularity between 1981 and 1986.(fn10) It was common for defendants to implead other tortfeasors into lawsuits by third-party complaints, to make cross-claims against other defendants, and to pursue post-settlement or post-judgment claims.(fn11) But the basic premise for this internecine litigation was seriously undermined by the abolition of joint and several liability in 1986. Because defendants are now (as a general rule) only responsible for their own proportionate share of liability, they can never be forced to pay the share of another tortfeasor. Thus, after the 1986 Act, there has been generally no basis for contribution claims. However, this vestige of the past still inappropriately finds its way into current tort litigation.
This Article will discuss the propriety of claims for statutory contribution in two contexts: cases involving actively negligent tortfeasors, and cases involving both actively and passively negligent tortfeasors. It will also analyze whether, and under what circumstances, a right of reimbursement might be pursued under the equitable theories of contribution, subrogation, or indemnification.
This Article argues that unless an exception to the general rule of proportionate liability exists, a third-party complaint for contribution has no legal basis. The only applicable exception is the
Cross-claims for contribution between defendants are permissible but premature. While joint and several liability may arise under either the factual or the procedural exception, there is no need to seek contribution until one has actually been forced to pay another's share. Moreover, because a defendant seldom pays more than its proportionate share, post-settlement and post-judgment contribution actions are seldom necessary.
Outside of the
Questions have been posed as to whether statutory contribution is even applicable in the agency/employment context, and whether other equitable theories should be used instead by a passively negligent party. This Article concludes that despite some conceptual flaws in the application of the statute, contribution is available to a principal/ employer against the agent/employee whose active negligence rendered the principal/employer vicariously liable.
Because the 1981 Act abolished equitable (implied) indemnity, the only common-law reimbursement theory remaining is equitable subrogation.(fn15) However, courts will not resort to equity to fashion a remedy when a statutory or legal remedy already exists, and because contribution is available to an employer/principal, a claim for equitable subrogation is unnecessary.
Section I summarizes the history and development of tort law in Washington, with an emphasis on the impact of the 1981 and 1986 Tort Reform Acts and their imperfect union. Section II outlines the traditional equitable remedies that are potentially available to a tortfeasor seeking reimbursement for having paid more than its share. Section III sets out the above-referenced thesis and explains why under current law a tortfeasor's suit for reimbursement should be the exception, not the rule. The need, and the basis, for such litigation is dependent upon the existence of joint and several liability-which now occurs only infrequently.
I. The Development and Modification of Tort Law In Washington
Over time, by legislative enactment and case law, certain harsh common law doctrines have been modified. In 1973, the Washington Legislature enacted a "pure" comparative negligence system.(fn16) In 1981 and 1986, significant tort-reform legislation was enacted.(fn17) The 1981 Act authorized a tortfeasor's action for contribution for the first time in Washington history.(fn18) Later, the 1986 Act largely eliminated the doctrine of joint and several liability.(fn19) All this occurred against a backdrop of significantly expanding theories of tort liability.
The law of torts is concerned with the allocation of losses arising out of human activities. It is a creature of social theory whose "primary purpose, of course, is to make a fair adjustment of the conflicting claims of the litigating parties."(fn20) Our courts and legislatures are routinely called upon to make adjustments to the rules to create a more equitable system. The Washington Legislature has indicated that while decisional law has resulted in significant progress and has eliminated the harshness of many common law doctrines, "the legislature has from time to time felt it necessary to intervene to bring about needed reforms."(fn21)
The course of tort law since the late 1950s has been an expansion of tort liability. New theories and causes of action were created. The rules regarding statutes of limitation, contributory negligence, causation, and immunities were relaxed. Most of these changes worked to the benefit of injured parties in civil actions against a widely expanded list of tortfeasors.(fn22)
These trends occurred against the backdrop of a well-developed body of common law. Two of the harsher common law rules were joint and several liability,(fn23) and contributory negligence.(fn24) Joint and several liability was denounced as a system that imposed liability not based upon fault, but rather upon the ability to pay.(fn25) Under the common law, joint,(fn26) concurrent,(fn27) and successive(fn28) tortfeasors were jointly and severally liable for all indivisible harm(fn29) caused by their negligence.(fn30) The victim could sue any one of these tortfeasors and force that person to pay the entirety of the judgment.
The Washington Legislature recognized the harshness of contributory negligence two decades ago. The rule was abolished in 1973 in favor of a "pure" system of comparative negligence that permitted a plaintiff to recover some of his damages regardless of his degree of fault.(fn31) Joint and several liability was, however, not...
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