Beech Aircraft Corp. v. Jinkins

• Citation: 739 S.W.2d 19
• Decision Date: 08 July 1987
• Docket Number: No. C-4807,C-4807
• Parties: BEECH AIRCRAFT CORPORATION, et al., Petitioners, v. Dr. Wiley J. JINKINS, III, Respondents.
• Court: Supreme Court of Texas

Page 19

739 S.W.2d 19

BEECH AIRCRAFT CORPORATION, et al., Petitioners, v. Dr. Wiley J. JINKINS, III, Respondents.

No. C-4807.

Supreme Court of Texas.

July 8, 1987.

Rehearing Denied Nov. 25, 1987.

Patricia J. Kerrigan, Fulbright & Jaworski, Roger Rider and Robert M. Roach, Mayor, Day and Caldwell, Houston, for petitioners.

Suzanne B. Baker, Gilpin Pohl & Bennett, William L. Maynard, Beirne, Maynard & Parsons, Houston, for respondents.

MAUZY, Justice.

This case concerns the contribution rights of a settling party under both statutory and common law contribution schemes. The specific issue is whether a defendant, who settles a plaintiff's entire claim, may preserve a right to contribution from an alleged joint tortfeasor who does not participate in the settlement. The trial court rendered summary judgment denying the settling defendants any opportunity to establish their right to contribution. The court of appeals affirmed, holding that the settling defendants were, as a matter of law, not entitled to seek contribution under either the common law or statute. 698 S.W.2d 722. For reasons different from those expressed by the court of appeals, we affirm.

Wiley Jinkins and Richard Weiner were injured in the crash of Jinkins' private plane. At the time of the accident, Jinkins was the pilot and Weiner was his passenger.

Jinkins and Weiner filed separate lawsuits, later consolidated, alleging theories of negligence and products liability against Beech Aircraft Corporation, Teledyne Continental Motors, Aircraft Products Division, and Houston Beechcraft, Inc. The defendants each filed counterclaims against pilot Jinkins, alleging negligence.

The defendants subsequently settled passenger Weiner's claims and obtained a release. Although Weiner had not sued Jinkins, the settlement agreement released Jinkins from liability to Weiner also, and expressed the intent of defendants Beech, Teledyne and Houston Beechcraft to seek contribution from Jinkins. Pursuant to the settlement agreement, Weiner dismissed his claims with prejudice and the defendants amended their counterclaims against Jinkins to include contribution claims purportedly reserved in the settlement agreement with Weiner.

Jinkins moved for summary judgment on defendants' counterclaim for contribution, arguing that the settlement agreement which released Beech, Teledyne, and Houston Beechcraft also extinguished their respective rights to contribution. The trial court granted Jinkins' motion for summary judgment and severed the contribution claims so that the defendants might appeal. The summary judgment did not, in fact could not, identify the applicable contribution scheme because the trial court disposed of the contribution claims prior to a determination of the liability issues.

At present we have three distinct contribution systems in Texas--two based on statute and one created at common law. Tex.Civ.Prac. & Rem.Code Ann. § 32.001 et seq. (Vernon 1987) (the original contribution statute); Tex.Civ.Prac. & Rem.Code Ann. § 33.001 et seq. (Vernon 1987) (the comparative negligence statute); Duncan v. Cessna Aircraft Co., 665 S.W.2d 414 (Tex.1984) (common law contribution by comparative causation). The applicable contribution scheme is determined by the liability theories adjudged against the joint tortfeasors. For example, if liability is established exclusively in negligence, the comparative negligence statute applies. If liability is established under products liability theory or if joint liabilities must be compared under mixed theories, the common law scheme controls contribution rights. Any remaining tort actions not covered by common law or the comparative negligence statute are the domain of the original contribution statute. Tex.Civ.Prac. & Rem.Code Ann. § 32.001(a) and (b) (Vernon 1987).

Because the pleadings in the present case included allegations of both negligence and products liability, neither of which was established prior to judgment on the contribution claims, it was unknown whether the common law or the comparative negligence statute, if either, should control contribution rights. The court of appeals therefore considered the settling parties' rights under both. With one justice dissenting, the court of appeals concluded that the settling parties were not entitled to contribution under either the statutory or common law schemes and, accordingly, affirmed the judgment of the trial court.

That court observed, however, that contribution might be available under the comparative negligence statute, provided certain conditions were met. One of these conditions was that the settling party be cast as a "judgment debtor" which might be accomplished simply by incorporating the terms of the settlement agreement into the judgment of non-suit. Because Beech, Teledyne and Houston Beechcraft had neglected to do this, the court held they had waived any potential right to contribution under the comparative negligence statute.

As the court of appeals points out we have previously recognized a settling party's right to contribution, but only under the original statute. Bradshaw v. Baylor University, 126 Tex. 99, 84 S.W.2d 703 (1935); Callihan Interests, Inc. v. Duffield 385 S.W.2d 586 (Tex.Civ.App.--Eastland 1964, writ ref'd). Subsequent decisions have interpreted Callihan and the original statute as requiring a judgment to preserve contribution rights, hence, the court of appeals' conclusion that a settling party's right to statutory contribution depends on its status as a "judgment debtor." See Iowa Manufacturing Company v. Weisman Equipment Company, 667 S.W.2d 209 (Tex.App.--Austin 1983, writ ref'd n.r.e.); Lubbock Manufacturing v. International Harvester Company, 584 S.W.2d 908 (Tex.Civ.App.--Dallas 1979, writ ref'd n.r.e.). Following Singleton v. New York Underwriters Ins. Company, 739 F.2d 198 (5th Cir.1984), the court of appeals extended the "judgment debtor" prerequisite to settling defendants seeking contribution under the comparative negligence statute.

While we agree that a judgment adverse to the party seeking contribution is an essential prerequisite to contribution, we do not accept the court of appeals' conclusion that such a judgment may be created by agreement of the parties following settlement. The essential prerequisites for a contribution claim are a judgment finding the party seeking contribution to be a joint tortfeasor and the payment by such party of a disproportionate share of the common liability. An agreed judgment incorporating a settlement does not provide a basis for subsequent contribution claims.

We have not previously recognized the contribution rights of a settling party under the comparative negligence statute, and we do not view our previous decisions under the original contribution statute as compelling such recognition. Other than their general subject matter, there is little similarity between the two contribution statutes. The original contribution statute defines its right of action in terms of "(a) person against whom a judgment is rendered...." TEX.CIV.PRACT. & REM.CODE ANN. § 32.002 (Vernon 1987). This language provides some basis for those cases holding "judgment debtor" status to be a prerequisite to a settling party's contribution claim. The comparative negligence statute, however, does not define its right of action in terms of a judgment debt.

Additional differences exist in the context of settlements. The original contribution statute does not discuss the possibility of settlement or its impact on contribution rights. The comparative negligence statute, in contrast, deals in some detail with the subject, but only with regard to a joint tortfeasor's right of contribution against a settling party. TEX.CIV.PRACT. & REM.CODE ANN. §§ 33.014 and 33.015 (Vernon 1987). The comparative negligence statute does not mention the contribution rights of a settling party. The legislature did not see fit to create a contribution right in favor of a settling party and we likewise decline to do so in comparative negligence cases.

The court of appeals also held that contribution was not available to the settling parties under the common law scheme adopted in Duncan v. Cessna Aircraft Co., 665 S.W.2d 414 (Tex.1984). Although we have difficulty following the court of appeals' discussion of the common law scheme, we understand that court's ultimate conclusion to be that a settling party has no right to common law contribution because he can settle only his proportionate share of liability and not the plaintiff's entire claim as the defendants attempted here. The court of appeals' conclusion rested on its interpretation of both Duncan and Bonniwell v. Beech Aircraft Corp., 663 S.W.2d 816 (Tex.1984). Our confusion arises because the court of appeals reads Bonniwell as additional authority for the requirement that a settlement must be incorporated into a judgment which suggests that contribution rights may be preserved to a settling party even under common law, if certain procedural formalities are followed. 698 S.W.2d at 727.

We agree that the common law scheme adopted in Duncan permits settlement of only a party's proportionate share of liability. In Duncan we discussed the effects of partial settlements and the operation of contribution in favor of the non-settling defendant. Duncan, 665 S.W.2d at 429-432. In that context we said, "Because each defendant's share can now be determined, it logically follows that each may settle just that portion of the plaintiff's suit." Id. We reiterate that statement now in the context of attempted, complete settlements. We see no advantage in allowing defendants responsible for the plaintiff's injuries a...