The Joint Tortfeasor Contribution Act is not as straightforward as attorneys might think. Section three of the Joint Tortfeasor Contribution Act provides the pro rata share of each tortfeasor shall be determined in accordance with his relative culpability and no person shall be required to contribute to one seeking contribution an amount greater than his pro rata share.ⁱ Unfortunately for defense clients, that is not the end of the story. Section three contains an exception where “the obligation of one or more of the joint tortfeasors is uncollectable. In that event, the remaining tortfeasors shall share the unpaid portions of the uncollectable obligation in accordance with their pro rata liability.”ⁱⁱ

The United States Court of Appeals for the Seventh Circuit certified a question of law to the Illinois Supreme Court asking whether the obligation of a settling party is uncollectable pursuant to the Illinois Joint Tortfeasor Contribution Act.ⁱⁱⁱ   The Illinois Supreme Court found the obligation of a joint tortfeasor who settles is not deemed “uncollectable” within the meaning of section three of the Contribution Act.^iv

Factual Background

Plaintiff was driving a truck westbound through a construction zone when he saw a flagger holding a sign which said “SLOW.” Roberts slowed down, the flagger suddenly turned the traffic sign from “SLOW” to “STOP,” and plaintiff abruptly slammed on his brakes.  One of the defendants, who had been driving a tractor-trailer behind plaintiff for about two miles before the stop, was not able to stop his tractor-trailer in time.  Defendant driver’s tractor-trailer rear-ended plaintiff’s truck.  Plaintiff’s injuries resulted in medical bills totaling more than $500,000. Plaintiff and his wife filed a complaint for negligence against defendant driver, Alexandria Transportation, Inc., and defendant Alex Express, LLC. (collectively “defendants”).  The defendants filed a third-party complaint for contribution against Edwards-Kamalduski, LLC (E-K), the general contractor for the road construction project, and Safety International, LLC (Safety), the subcontractor E-K retained to manage the construction site’s worker safety program.^v

Ultimately, plaintiffs settled with E-K for $50,000. Plaintiffs and E-K filed a joint motion for a finding of good faith pursuant to the Contribution Act.  Defendants objected, arguing the amount of E-K’s settlement did not reflect its relative degree fault in causing or contributing to plaintiffs’ damages.  Over defendants’ objection, the district court granted the motion for good faith finding and dismissed E-K from the third-party contribution action with prejudice.  Subsequently, defendants settled with plaintiffs for $1.85 million. That settlement also released defendants’ third-party claims against Safety.  By its settlement, defendants paid to plaintiffs the collective tort liability of themselves and Safety.  Now, the only remaining claim in the district court’s litigation was defendants’ third-party contribution claim against Safety.^vi

Defendants’ third-party claim for contribution proceeded to trial. During the jury instruction conference, the district court determined defendants Safety and E-K must appear on the verdict form so the jury would have the option to apportion fault among every tortfeasor, even though the court had dismissed E-K from the contribution action.  The district court determined, based on its interpretation of the Contribution Act, that any share of liability the jury would assign to E-K should not be reallocated between defendants and Safety on a pro rata basis. Therefore, the district court ordered Safety would pay to defendants only what the jury determined was Safety’s portion of fault, and defendants would remain liable for E-K’s entire share along with its own.  The jury allocated the percentages of fault: 15% to defendants, 10% to Safety, and 75% to E-K.  This meant Safety was obligated to contribute only 10% of the accident liability, leaving defendants liable for their share of liability for the accident plus E-K’s, which totaled 90% of the total accident liability.^vii

On appeal, the court observed that section 3 of the Contribution Act provides the pro rata share of each tortfeasor shall be determined in accordance with his relative culpability. The court then cited section 3’s exception where tortfeasors whose obligations are not deemed uncollectable will cover remaining unpaid portions of uncollectable obligations. Their payments on these uncollectable obligations will be determined based on their overall pro rata share of liability in the judgment. Defendants argued section 2(d) of the Contribution Act, which provides a tortfeasor who settles with a plaintiff in good faith has no liability to contribute, renders a settling defendant’s obligation, such as E-K’s, “uncollectable” in any future contribution action.  The Court of Appeals rejected this argument, however, finding “discharged” does not necessarily mean ‘uncollectable.” The appellate court then certified the following question to the Illinois Supreme Court:  “Whether the obligation of a settling party is uncollectable pursuant to the Illinois Joint Tortfeasor Contribution Act.”^viii

The Illinois Supreme Court’s Findings

Defendants contend a tortfeasor who settles with a plaintiff in good faith “is discharged from all liability for any contribution to any other tortfeasor.”  This means the obligation of a settling tortfeasor, such as E-K, is “uncollectable” in any future contribution action.  The effect therefore requires the 75% share of liability the jury assigned to E-K be reallocated between defendants and Safety on a pro rata basis.  Safety responded a good-faith settlement with a plaintiff does not render the settling party’s obligation “uncollectable” within the meaning of Section Three of the Contribution Act. Therefore, Safety is protected from contributing more than the jury’s determination of its pro rata share of the common liability.  This means E-K’s 75% share must not be reallocated between defendants and Safety.^ix

After discussing the history of statutory construction, the Illinois Supreme Court rejected defendants’ argument that section 2(d) renders the obligation of that settling party “uncollectable.” The Court recognized how “discharged” does not mean “uncollectable.”  E-K’s settlement payment of $50,000 contributed to the total common liability owed to plaintiffs.  Therefore, E-K’s obligation was collected. The Court articulated its position that “uncollectable” refers to a joint tortfeasor’s insolvency or immunity.  The Court concluded defendants voluntarily chose to settle with plaintiffs for $1.85 million, and Safety had absolutely no input in the settlement amount, which constituted the bulk of the common liability.  Pursuant to the Contribution Act, it would be inequitable to require Safety to pay more than its pro rata share under these circumstances.^x

Takeaway

The majority view of the Court found when defendants established the total common liability to plaintiffs, they knew in advance what percentage of this contribution E-K had already paid and knew this was all E-K would ever pay toward the common liability.^xi  Therefore, in their third-party action against Safety, defendants should have known they would only be able to recover Safety’s pro rata share of fault, which might be adjudged to be a small share of the total liability.

The dissenting opinion, however, argues the majority’s holding a settling tortfeasor’s obligation is “not uncollectable” cannot be reconciled with the legislature’s decision to provide a settling tortfeasor with absolute legal immunity from contribution claims.^xii  In this case, Safety, a party who chose not to settle with plaintiffs, unfairly benefits from defendants’ settlement with plaintiffs because that settlement released claims against Safety. Defendants paid plaintiffs the collective tort liability of both themselves and Safety.^xiii

This seems unfair to settling defendants with pending third-party contribution actions who run the risk of ultimately having to pay more than their pro rata share of liability, especially when the jury ultimately determines, as it did here, that E-K’s settlement payment of $50,000 does not reflect its equitable pro rata share of liability to plaintiffs.

Keep Reading

Cannabis Workers Allege Quota to Trim 4 Pounds a Day Violates the California Labor Code The Ninth Circuit Reminds Us: Every Word Matters NO WAY, PRO SE! The Consequences of Abusing the Judicial System as a Pro Se Litigant in Colorado Victim of Financial Mismanagement or Unlawful Retaliation? New Jersey City University Program Founder Claims School Retaliated After Reporting Alleged Sexual Harassment “Real Housewives” Gets a Reality Check Missing a Chapter: Insufficiency of Expert Deposition Testimony in Medical Malpractice Litigation Crash Course: Why Summary Judgment Misses the Mark in Illinois Multi-Cause Limousine Crash Collision Bitter Truths: Lead, Cadmium, and Defective Pleadings in California Chocolate Class Action The Law of Unintended Consequences: Including Insurance Brokers in Litigation Strategy Communication May Waive the Attorney-Client Privilege

More by this author

Missing a Chapter: Insufficiency of Expert Deposition Testimony in Medical Malpractice Litigation Update: Pay Me Now, or Potentially Pay Me More Later – Prejudgment Interest Statute Held Constitutional Good Faith Under the Contribution Act – Not Always Good for the Defense It’s Official—Illinois Now Provides for Pre-Judgment Interest Illinois Biometric Privacy Law Does Not Require Showing of Actual Injury Time is on Their Side: If Illinois House Bill 3360 Becomes Law – Allowing Plaintiffs to Recover Pre-Judgment Interest Special Interrogatories in Illinois State Court are Now Weighted in Favor of Plaintiffs The Discovery and Use of Social Media Evidence in Illinois