Didner v. Keene Corp.

• Decision Date: 09 February 1993
• Parties: Marlene DIDNER, as the Executrix of the Estate of Saul Didner and Marlene Didner, Individually, Plaintiffs-Respondents, v. KEENE CORPORATION, Defendant-Appellant, and General Electric, et al., Defendants.
• Court: New York Supreme Court — Appellate Division

Page 238

593 N.Y.S.2d 238

188 A.D.2d 15

Marlene DIDNER, as the Executrix of the Estate of Saul

Didner and Marlene Didner, Individually, Plaintiffs-Respondents, v. KEENE CORPORATION, Defendant-Appellant, and General Electric, et al., Defendants.

Supreme Court, Appellate Division,

First Department.

Feb. 9, 1993.

Andrew T. Berry, of counsel (John C. Garde and Debra M. Perry, with him, on the brief, McCarter & English, attorneys), for defendant-appellant Keene Corp.

Perry S. Reich, of counsel (Sybil Shainwald, with him, on the brief, Law Offices of Sybil Shainwald, attorneys), for plaintiffs-respondents.

Before MILONAS, J.P., and ELLERIN, KUPFERMAN, ASCH and KASSAL, JJ.

ELLERIN, Justice.

On this appeal we are once again confronted with an issue as to how the provisions of General Obligations Law § 15-108 are to be construed in the context of a multi-defendant tort litigation, a format that is becoming increasingly common in our trial courts. (See, e.g., Williams v Niske, 181 A.D.2d 307, 586 N.Y.S.2d 942, lv. granted 186 A.D.2d 1099, 593 N.Y.S.2d 391 (Murphy, P.J.).

The underlying action, which sought to recover damages for wrongful death, pain and suffering and loss of consortium by reason of the death of plaintiff-respondent's husband from exposure to asbestos, resulted in a jury verdict of almost $6,000,000 that was ultimately reduced by the trial court to the sum of $3,917,353. In accordance with the innovative procedures instituted by Justice Helen Freedman, the trial judge to whom all New York asbestos litigation had been assigned by administrative order, the trial of the action was held in two stages, with damages being tried first and liability thereafter. The damage verdict was rendered on June 27, 1990 and the verdict on liability, which found that 13 of the 18 named defendants proximately contributed in some degree to the condition that resulted in decedent's death, was rendered on July 10, 1990. Appellant Keene Corporation ["Keene"] was held to be responsible for 15% of the liability, while the respondent Manville Corporation, Asbestos Disease Compensation Fund ["Manville"] was found to be responsible for 60.167%. At the time the final verdict was rendered, all other defendants who were found by the jury to have some liability to plaintiff, as well as two defendants who were found not liable, had irrevocably settled the claims against them in a total amount of $2,500,000. In every such instance the payment amount was substantially greater than the proportionate amount that the jury had allocated to such defendant. Subsequent to the completion of the trial, on August 14, 1990, a consent judgment in the amount of $800,000 was entered against Manville.

On February 5, 1991, a final judgment was entered which required Keene to pay $618,452, a sum equivalent to 15% of the reduced total verdict, plus interest, the proportionate share of liability charged against it by the jury. Keene now appeals from that judgment contending (1) that plaintiff had settled with defendant Manville for $800,000 prior to the final verdict requiring that General Obligations Law § 15-108 be applied in molding Keene's share of the instant verdict; and (2) that proper application of that section requires that the total verdict be reduced not only by the $2,500,000 received by plaintiff from the other defendants with whom she concededly had settled prior to the verdict but also by the additional sum of $2,356,953.80 representing Manville's 60.167% of the liability, resulting in no payment whatsoever due from Keene.

Under appellant's mathematical configuration, plaintiff's maximum permissible recovery out of the total $3,917,353 would be $3,330,000, in the event that Manville pays the $800,000 which Keene characterizes as a settlement. Thus, under appellant's "best scenario" plaintiff would be left with a shortfall of $617,353 from the amount of the reduced verdict. Alternatively, in the event defendant Manville, which Keene itself acknowledges in its brief is an entity created as a result of the bankruptcy of Johns-Manville Company and "has not yet paid the $800,000 which it agreed to pay", were to fail to pay the $800,000, plaintiff's share of the reduced verdict would be some $1,417,353 less than the award which was found to be reasonable compensation for the loss involved. Appellant Keene asserts that in either event it is exonerated from making any payment by virtue of General Obligations Law § 15-108 notwithstanding that the jury found it to be responsible for 15% of the liability and that to thus exonerate it from any responsibility would also result in a marked reduction of the amount of the recovery to which plaintiff was held entitled.

The interpretation which appellant seeks to accord to General Obligations Law § 15-108 is not only at variance with the language of the statute itself but completely ignores its historical genesis and purpose and impermissibly skews the intent of the statute.

The first issue is, indeed, whether General Obligations Law § 15-108 applies to this situation, at all.

The provisions of the statute relied upon by appellant Keene are as follows:

§ 15-108. Release or covenant not to sue

(a) Effect of release of or covenant not to sue tortfeasors. When a release or a covenant not to sue or not to enforce a judgment is given to one of two or more persons liable or claimed to be liable in tort for the same injury, or the same wrongful death, it does not discharge any of the other tortfeasors from liability for the injury or wrongful death unless its terms expressly so provide, but it reduces the claim of the releasor against the other tortfeasors to the extent of any amount stipulated by the release or the covenant, or in the amount of the consideration paid for it, or in the amount of the released tortfeasor's equitable share of the damages under article fourteen of the civil practice law and rules, whichever is the greatest. (Emphasis added)

While appellant and the dissent assert that the plaintiff "settled with, among others, Manville" on July 5, 1990, before the conclusion of the liability and apportionment phase of the trial, the record before us contains a letter dated July 23, 1990, referring to an accompanying agreed upon proposed order which simply provided for the entry of a judgment in the amount of $800,000 against Manville. That order was signed on August 6, 1990 and filed on August 14, 1990, well after the final verdict date. Significantly, neither the letter accompanying the consent judgment nor the judgment itself provides for a release of Manville or a discontinuance of the action with prejudice, in distinction to the stipulations and orders in the record covering other defendants, including Owens-Corning Fiberglas Corp. and General Electric, with whom plaintiff did, in fact, enter binding pre-verdict settlements, nor does the statement quoted by the dissent constitute the kind of specific irrevocable agreement involved in Lettiere v. Martin Elevator, 62 A.D.2d 810, 406 N.Y.S.2d 510 affd. 48 N.Y.2d 662, 421 N.Y.S.2d 879, 397 N.E.2d 390.

Appellant argues that plaintiff's "settlement" with Manville is the precipitating event which renders the statute applicable. Significantly, however, the statute itself nowhere uses that term but instead clearly and expressly predicates its applicability to situations where "a release or a covenant not to sue or not to enforce a judgment is given" to one of several claimed tortfeasors. While various decisions relating to General Obligations Law § 15-108 have used the terms "settlement" or "settled" in applying the statute, the question of the existence of a binding and irrevocable pre-verdict settlement discharging the settling party from further liability has not itself been an issue in those situations, as is here the case, and the terms have essentially been used as a convenient shorthand characterization. It is the plain and unambiguous language of the statute, however, that is the best indication of the legislative intent and that is controlling (see, e.g., Kurcsics v. Merchants Mut. Ins. Co., 49 N.Y.2d 451, 426 N.Y.S.2d 454, 403 N.E.2d 159; McKinney's Consolidated Laws of N.Y., Book 1, Statutes § 76). The words "release or a covenant not to sue" used in the statute are clear and unambiguous and must be given effect in accordance with their meaning. Those words expressly state that, in multi-tortfeasor situations, a tortfeasor who proceeds to verdict cannot receive the benefit of a reduction of the verdict under the section with respect to any other tortfeasor's share of liability unless the other tortfeasor's discharge from liability prior to verdict culminates in a release, or a covenant not to sue (which is usually given contemporaneously with either payment or an irrevocable promise for such payment). The statutory language further emphasizes the crucial role of such release or covenant by, in the first instance, expressly conditioning any reduction in the claim against the litigating tortfeasors "to the extent of any amount stipulated by the release or the covenant, or in the amount of the consideration paid for it".

Reference to the legislative history of General Obligations Law § 15-108 provides an explanatory background of the significance of the particular language used in the statute. The purpose of § 15- 108 when originally enacted in 1972 was to ameliorate the effect of the old common law rule under which a general release given to one of two or more joint tortfeasors was held to release the liability of all even though the others were not named. (See, e.g., Milks v. McIver, 264 N.Y. 267, 190 N.E. 487; see also, "Recommendation of the Law Revision Commission to the Legislature Relating to the Effect of a General Release Without Reservation given to One of Two or More Joint Tortfeasors," 1972 Report of NY Law Rev.Commn., N.Y.Legis.Doc., 1972, No. 65[k]. To redress a rule which it characterized as "a trap for the...