by Craig Brookes
Since
apportionment is a relatively new concept in Georgia, the cases have not fully
evolved to take into account all the potential interactions between
apportionment, contribution and indemnity among alleged joint
tortfeasors. However, in Zurich Am. Ins. Co. v. Heard, 321
Ga. App. 325 (2013) , a decision from last year, the Georgia Court of
Appeals “clarified” certain concepts surrounding these issues. Our
analysis of Zurich, prior contribution/indemnity cases and
subsequent cases lead us to the conclusions that follow:
As
an initial matter, if a defendant in a multi-party case resolves the case with
Plaintiff, the Court would then enter an order allowing the dismissal of the
settling defendant. Theoretically, the remaining defendant could object
to the dismissal, but it is unlikely any remaining defendant would want
additional defendants in the case or have any viable legal claim to avoid the
dismissal based on the settlement. It would also be unlikely for the
Court to deny a dismissal motion from the plaintiff and settling defendant,
even if the remaining defendant objected for some reason. As a
practical matter, we believe in most circumstances, the remaining defendant
would rather defend the case by blaming the settling defendant (i.e. the empty
chair defendant) and arguing apportionment to the jury, than deal with the
settling defendant as a potential adversary. In other words, in most
cases, there appear to be no viable legal claims that could be brought by the
remaining defendant against the settling defendant. Specifically, since a
jury is allowed to apportion damages at trial, the common law contribution
“cross claim” no longer exists in Georgia. Under the apportionment
statute, the apportionment by the jury defines the parties exposure, not a
subsequent action seeking pro rata contribution. As such, there would be
no “cross claim” for contribution.
As
an aside, in determining whether or not claims may remain against a settling
defendant, indemnification claims must be considered. An indemnification
claim exists when one defendant has a non-delegable duty (such as a property
owner in a premises case) and the co-defendant caused the alleged injury (like
a cleaning company who created a hazardous condition that caused the Plaintiff
to fall). In this example, the property owner would have an
indemnification claim against the cleaning company, since the property owner
can be held liable to Plaintiff based on his non-delgable duty to keep his
premises safe. Before settling in a multi-party case, potential
indemnification claims should be evaluated separately from contribution
claims.
Interestingly,
under Zurich, the settling defendant would have a contribution
claim against the remaining defendant. Specifically, any settlement by a
defendant would result in the ability to seek contribution on a pro-rata basis
from the remaining defendant(s). In a two defendant case with one
defendant settling, the settling defendant would have a contribution claim for
50% of the amount paid in the settlement. For example, if the settling
defendant paid $400,000 to resolve the case, it would have a potential
contribution claim for $200,000.00. Recent case law has confirmed that
the contribution claim will exist up through and including the time that
the jury apportions fault. So, if one defendant settles and the remaining
defendant goes to trial, the remaining defendant’s liability is fixed (assuming
any amount is awarded to Plaintiff) and the settling defendant’s contribution
claim no longer exists. Further, after apportionment, the remaining
defendant (who tried the case) would no longer have any potential contribution
claim against the settling defendant since its percentage of fault would have
been determined by the jury.
Theoretically
speaking, if one defendant settles with Plaintiff and the remaining defendant
settles at a later date with Plaintiff, there is a scenario where the defendant
who settled last, could have a contribution claim against the defendant that
settled first. Specifically, this could happen if the defendant, who
settled last, paid more than the defendant who settled first. For
example, if the first defendant settled for $100,000, the second defendant (in
a two defendant case) would have to pay more than twice that amount to get any
contribution, as contribution is calculated on a pro rata basis. Assuming
the first settling defendant paid $100,000 to resolve the case and the second
defendant settled for $150,000, the first settling defendant’s pro rata share
would be $125,000. In that case, the first settling defendant is subject
to a contribution claim for $25,000.00 (the difference between the settlement
amount of $100,000 and its pro rata share of the $250,000 settlement (i.e. $125,000).
The
interaction between contribution claims and apportionment is an important
consideration in the resolution of multi-defendant cases. If you have any
questions regarding these concepts, please feel free to contact Craig A.
Brookes or any of our other attorneys at 404-892-1991.
