On Monday we mediated a fascinating case for a client to a successful conclusion. I cannot get into the details because the other half of the case is still to be litigated but the case brought up some novel issues that I thought I would share.
One of the more important changes over the last 5 years in Georgia law was the abolition of joint and several liability and the introduction of the law of apportionment. For the layperson allow me to explain it this way. If two people are driving like fools and their actions combine to create a crash with an innocent third party, they are joint tortfeasors under the law. That means they both had negligence and their negligence combined to create the harm.
In the old days, under joint and several liability that meant that you could hold either party liable for 100 percent of the damages. You could not recover more than 100 percent though as they would each get an offset. So if you sustained an injury in a car accident that has a jury value of $100,000 then you could get it all from party a but you could not get more from party b. In the alternative you could get 60,000 from party a in a settlement and then in a lawsuit where you get a 100,000 judgment for the injury against party b, the judge would order the verdict reduced to 40,000 becuase it is offset by the earlier settlement.
Under the old law, joint tortfeasors had the right to sue each other for contribution and indemnity in the event they felt they paid more than their share. They could do this after the main lawsuit with the victim was over or they could drag party b into the main suit filed by the victim seeking contribution.
Then the statute was passed.
OCGA § 51–12–33. Subsection (b) of this Code section provides:
Where an action is brought against more than one person for injury to person or property, the trier of fact, in its determination of the total amount of damages to be awarded, if any, shall after a reduction of damages pursuant to subsection (a) of this Code section, if any, apportion its award of damages among the persons who are liable according to the percentage of fault of each person. Damages apportioned by the trier of fact as provided in this Code section shall be the liability of each person against whom they are awarded, shall not be a joint liability among the persons liable, and shall not be subject to any right of contribution.
With the arrival of the new rule and ruling by the Supreme Court that the law means what is says, many lawyers took that to mean that not only was joint and several liability gone, but contribution and indemnity lawsuits are gone too.
Not so fast, my friend.
The answer is actually more complicated.
In cases where apportionment is actually decided by a jury or judge, then contribution and indemnity is actually gone. However, in cases where the victim and one defendant settle, the other defendant can still sue defendant a for contribution because damages will not have been apportioned by the trier of fact. Zurich American Ins. Co. v. Heard 321 Ga.App. 325 (2013)
The extinction of contribution claims was explained in McReynolds v. Krebs
290 Ga. 850, (2012)
b) In light of this holding, there was no error in the dismissal of McReynolds’s cross-claims for contribution and set-off against GM. As to contribution, OCGA § 51–12–33(b) flatly states that apportioned damages “shall not be subject to any right of contribution.”
In the case we handled on Monday, we have two separate tortfeasors and wanted to settle with one. The defendant was understandably concerned that if they settled, they did not want to be sued in for contribution by the other defendant when that suit gets filed. They wanted us to indemnify them for the risk of being sued. We could not do that because that is a cost that cannot be contained.
Using these cases, we were able to show that the only danger the tortfeasor who settles out is facing is if we settle with the second tortfeasor. These things are true:
1) In a verdict scenario with an apportionment decided by the trier of fact, there is no claim against the first tortfeasor.
2) The second tortfeasor cannot drag the first into the case with a contribution claim.
3) If we settle with the second tortfeasor, they can still sue the first tortfeasor in a subsequent contribution action.