Economic damages award should not be reduced due to pretrial settlement by another defendant

Law Reporter, Dec 2001

Gouty v. Schempel, __So. 2d __, No. SC00-1853, 2001 WL 1044872 (Fla. Sept. 13, 2001).

The Florida Supreme Court held that an economic damages award should not be reduced by the amount of money plaintiff received in a pretrial settlement, where the settling defendant was found not liable.

Here, a man who had suffered a gunshot wound sued the owner and the maker of the gun. Before trial, the manufacturer paid plaintiff a sum of money in exchange for a release and dismissal of his claim against it. The jury found the gun owner 100 percent liable and expressly declined to find the manufacturer at fault. The jury awarded damages, of which half were assessed as economic damages. Defendant moved to reduce the damages by the amount the manufacturer had paid plaintiff The trial court denied this motion.

An intermediate appellate court reversed, finding that defendant was entitled under Fla. Star. . 768.81 to the benefit of a setoff for the economic damages portion of the award. But the court certified the issue to the Florida Supreme Court as one of great public importance.

Quashing the appellate court's decision, the state high court said the enactment of 768.81 represented a policy shift in the state away from the traditional doctrine of joint and several liability. Under the statute, each defendant in a civil case is responsible only for the percentage of fault assigned to it by the jury. A majority of states that have abrogated joint and several liability have refused to require a setoff of settlement amounts where the liability of defendants is not joint.

The court explained that the rule permitting defendants to obtain a credit for amounts paid in settlement was adopted when courts could not allocate liability. Under the rule required by setoff statutes, each defendant may settle his or her own portion of the claim without affecting the liability of others. A settlement amount includes not only damages but also the value of avoiding a trial, so there is no conceptual inconsistency in allowing plaintiffs to recover more from a settlement or partial settlement than they would have received in a damage award.

Here, the judgment against the gun owner was not based on joint and several liability, but rather on the jury's finding that he was 100 percent responsible for the harm. Therefore, he was not entitled to any reduction of the award.

Accordingly, the court remanded the case. Plaintiffs' Counsel

Edward McCarthy III, Jacksonville, Fla.