South Carolina Lawyer
Vol. 13, No. 2, Pg. 28.
Easing a client's pain after the game is over: contribution, indemnification and set off
28Easing a client's pain after the game is over: contribution, indemnification and set offBy James T. Irvin IIIIntroduction
Whether the case has just come through the door or is at the courthouse steps, a defense attorney constantly looks for ways to reduce a client's exposure, either by bringing in other potential defendants or whittling down a plaintiff's recovery. Similarly, a plaintiff's lawyer must accurately evaluate a case to avoid spending time and resources on a case that has limitedpotential for return. With these goals in mind, there is a high-level checklist of legal theories practitioners should consider when a file is opened and periodically as discovery progresses. This article also includes reminders about nutsand-bolts issues that could develop into traps for the unwary.
The General Assembly enactedSouth Carolina's Uniform Contribution Among Tortfeasors Act (UCATA) to alleviate the draconian effects of joint and several liability, which continued to exist even after the adoption of comparative negligence. See Fernanders v. Marks Constr. of South Carolina, Inc., 330 S.C. 470, 477, 499 S.E.2d 509, 513 (Ct. App. 1998). Who the parties are and how they choose to structure settlements
29 may affect a party's right to contribution from other jointly liable defendants. This Section discusses some of the considerations related to such decisions. For a more complete discussion of the UCATA, see Robert H. Brunson, Contribution in South Carolina-Venturing into Uncharted Waters, 41 S.C.L. Rev. 533 (1990).
A party may have a right to contribution when it has become jointly and severally liable with another and has discharged this common liability. See 18 C.J.S. Contribution § 2 (1955). In South Carolina, the UCATA gives this party the right to a pro rata contribution from the other tortfeasors under certain circumstances. See S.C. Code Ann. §§ 15-38-10 to 15-38-70 (Law. Co-op. Supp. 2000). Common liability rather than joint negligence determines the right to contribution. Vermeer Carolina's Inc. v. Wood/Chuck Chipper Corp., 336 S.C. 53, 518 S.E.2d 301 (Ct. App. 1999). Section 15-38-20 outlines the rights and limitations regarding contribution:
If two or more persons become jointly or severally liable in tort for the same injury to person or property or for the same wrongful death, there is a right of contribution among them even though judgment has not been recovered against any or all of them.
The right of contribution exists only in favor of a tortfeasor who has paid more than his pro rata share and no tortfeasor is compelled to make contribution beyond his share.
There is no right of contribution for a tortfeasor who intentionally causes or contributes to the injury or wrongful death.
A tortfeasor who enters into a settlement is not entitled to recover contribution from another tortfeasor whose liability is not extinguished by the settlement nor in respect to any amount paid in a settlement which is in excess of what is reasonable.
A liability insurer that discharges a torfeasor's liability is subrogated to the tortfeasor's right to contribution "to the extent of the amount paid in excess of the tortfeasor's pro rata share of the common liability"
This chapter does not impair any right of indemnity under existing law. Where one tortfeasor is entitled to indemnity from another, the right of the indemnity obligee is for indemnity and not contribution, and the indemnity obligor is not entitled to contribution from the obligee for any portion of his indemnity obligation.
This chapter does not apply to breaches of trust or of other fiduciary obligation.
Section 15-38-40 sets forth general procedural considerations of a contribution claim and provides that "[i]f there is a judgment for the injury or wrongful death against the tortfeasor seeking contribution, any separate action by him to enforce contribution must be commenced within one year after the judgment has become final by lapse of time for appeal or after appellate review." S.C. Code Ann. § 15-38-40(C) (Law. Co-op. Supp. 2000).
In addition, whether a party can assert a contribution claim in the pending action depends on whether the case is in state or federal court. The South Carolina Supreme Court has recognized that "the right to recover contribution...