Dosdourian v. Carsten

• Decision Date: 26 August 1993
• Docket Number: No. 78370,78370
• Citation: 624 So.2d 241
• Parties: , 18 Fla. L. Weekly S459 Patricia DOSDOURIAN, Petitioner, v. Richard Paul CARSTEN, et al., Respondents.
• Court: Florida Supreme Court

Page 241

624 So.2d 241

62 USLW 2154, 18 Fla. L. Weekly S459

Patricia DOSDOURIAN, Petitioner, v. Richard Paul CARSTEN, et al., Respondents.

No. 78370.

Supreme Court of Florida.

Aug. 26, 1993.

John P. Joy of Walton, Lantaff, Schroeder & Carson, Miami, for petitioner.

Louis M. Silber of Pariente & Silber, P.A., West Palm Beach, and Larry Klein of Jane Kreusler-Walsh, West Palm Beach, for respondents.

Marguerite H. Davis of Katz, Kutter, Haigler, Alderman, Davis & Marks, P.A., Tallahassee, amicus curiae for American Ins. Ass'n.

Clifford M. Miller of Clifford M. Miller, Chartered, Vero Beach, amicus curiae for the Academy of Florida Trial Lawyers.

GRIMES, Judge.

We review Dosdourian v. Carsten, 580 So.2d 869 (Fla. 4th DCA 1991), in which the court certified the following question as being of great public importance:

IS A NON-SETTLING DEFENDANT ENTITLED TO HAVE THE JURY INFORMED OF A SETTLEMENT AGREEMENT BETWEEN THE PLAINTIFF AND ANOTHER DEFENDANT WHEREBY THE SETTLING DEFENDANT'S OBLIGATION IS FIXED BUT THE SETTLING DEFENDANT IS REQUIRED TO CONTINUE IN THE LAW SUIT?

Id. at 872. We have jurisdiction under article V, section 3(b)(4) of the Florida Constitution.

Richard Paul Carsten brought suit against Patricia Dosdourian and Christine DeMario alleging that each of them had negligently operated their automobiles in such a manner as to cause him serious personal injuries. Shortly before trial, Carsten filed a motion in limine seeking to prevent disclosure to the jury that he had entered into an agreement under which he settled all claims against DeMario in return for payment of her insurance policy limits of $100,000 and her continued participation in the litigation through trial and judgment. The trial judge granted Carsten's motion by ruling that the agreement would not be disclosed to the jury unless the live testimony of DeMario was presented at trial. In that event, the matter could be addressed on cross-examination. Further, the judge ruled that Dosdourian could not raise matters pertaining to the agreement if it was Dosdourian who called DeMario as a witness during trial. In the face of this ruling, Dosdourian moved that DeMario be dismissed from the litigation. This motion was denied.

At the trial, Carsten introduced DeMario's deposition, which had been taken before the settlement was reached. Because DeMario did not personally testify at the trial, the jury was not made aware of the settlement agreement between Carsten and DeMario. At the conclusion of the trial, the jury allocated negligence as follows: Dosdourian 35%, DeMario 55%, and Carsten 10%. The jury awarded over $2 million in damages for medical costs, lost earnings, and pain and suffering.

Dosdourian argued on appeal that the trial judge should have permitted the jury to be apprised of the settlement agreement under the rationale of Ward v. Ochoa, 284 So.2d 385 (Fla.1973). In Ward, this Court addressed the issue of whether "Mary Carter agreements" ¹ should be disclosed to the jury. We described the typical Mary Carter agreement as follows:

A "Mary Carter Agreement," however, is basically a contract by which one co-defendant secretly agrees with the plaintiff that, if such defendant will proceed to defend himself in court, his own maximum liability will be diminished proportionately by increasing the liability of the other co-defendants. Secrecy is the essence of such an arrangement, because the court or jury as trier of the facts, if apprised of this, would likely weigh differently the testimony and conduct of the signing defendant as related to the non-signing defendants. By painting a gruesome testimonial picture of the other defendant's misconduct or, in some cases, by admissions against himself and the other defendants, he could diminish or eliminate his own liability by use of the secret "Mary Carter Agreement."

Id. at 387. Concluding that such agreements tend to mislead judges and juries and border on collusion, we held that they must be produced for examination before trial if sought to be discovered under appropriate rules of procedure and should be admitted into evidence at trial upon the request of any other defendant who may stand to lose as a result of the agreement. Id.

In the instant case, the agreement did not provide that DeMario had the opportunity to diminish her own liability by staying in the litigation and the district court of appeal found it difficult to identify actual prejudice resulting from the nondisclosure of the agreement. Therefore, the court felt constrained by the language of this Court's opinion in Ward to affirm the judgment. However, the court expressed a view that whenever there is an agreement by which the settling party is required to remain in the case, the agreement should be disclosed to the jury. The court reasoned:

Under our adversary system a jury can usually assume that the parties and their counsel are motivated by the obvious interests each has in the litigation. That assumption is no longer valid when the parties have actually made an agreement to the contrary prior to trial. The fairness of the system is undermined when the alignment of interests in the litigation is not what it appears to be.

Jurors are also deceived by being informed that they are resolving an existing dispute between parties that have already resolved their differences. In our view, this undermines the integrity of the jury system which exists to fairly resolve actual disputes between our citizens. Hence, even if the parties and counsel conduct themselves with honesty and integrity, a cloud of doubt remains over the proceedings because of the information withheld from the jurors.

Dosdourian, 580 So.2d at 872.

In deciding this case, it became necessary for us to consider in depth the ramifications of Mary Carter agreements and the effect such agreements have on the trial process. As a consequence, this Court asked the parties to submit supplemental briefs with respect to the continuing viability of Mary Carter agreements and permitted the filing of amicus curiae briefs on the subject. We now conclude that the time has come to do away with Mary Carter agreements.

Unique to the scheme of Mary Carter agreements, settling defendants retain their influence upon the outcome of the lawsuit from which they settled: so-called settling defendants continue "defending" their case. Defendants who have allegedly settled remain parties throughout the negligence suit, even through trial. As a consequence, these defendants remain able to participate in jury selection. They present witnesses and cross-examine the witnesses of the plaintiff by leading questions. They argue to the trial court the merits and demerits of motions and evidentiary objections. Most significantly, the party status of settling defendants permits them to have their counsel argue points of influence before the jury.

In many instances, Mary Carter defendants may exert influences upon the adversarial process before a trial as well. They may, for example, share with a plaintiff work product previously (or subsequently, if the agreement remains secret) disclosed to them by a nonsettling defendant. The plaintiff and the settling defendant can combine their combatant energies far in advance and coerce nonsettling defendants, out of fear that they will be subject to an unfair trial, to settle for sums in excess of that which would otherwise be proportional to those defendants' fair shares of the burden.

By virtue of a Mary Carter agreement, settling defendants often acquire a substantial financial interest in a trial's outcome should the jury rule favorably for the plaintiff. See, e.g., Booth v. Mary Carter Paint Co., 202 So.2d 8 (Fla. 2d DCA 1967), rejected by Ward v. Ochoa, 284 So.2d 385 (Fla.1973). For example, a settling defendant may agree to settle at some ceiling figure upon the condition that if the jury awards the plaintiff a judgment against the nonsettling defendant in excess of a certain amount, the settling defendant's settlement money is returned proportionately or perhaps entirely. In these instances, Mary Carter defendants desire to remain parties to the suit so that their counsel may influence the jury's verdict in favor of the plaintiff and against the nonsettling defendant.

Rather than cooperating with their codefendants to minimize the culpability of all defendants and to minimize the jury's assessment of plaintiff's damages, Mary Carter defendants offer to the plaintiff their counsel's services for the purpose of persuading the jury to apportion to nonsettling defendants the greatest percentage of fault and to award the full amount of damages the plaintiff has requested. Even possible collusion between the plaintiff and the settling defendant creates an inherently unfair trial setting that could lead to an inequitable attribution of guilt and damages to the nonsettling defendant. Watson Truck & Supply Co. v. Males, 111 N.M. 57, 801 P.2d 639, 643 (1990) (Wilson, J., specially concurring).

In addition, Mary Carter agreements, by their very nature, promote unethical practices by Florida attorneys. If a case goes to trial, the judge and jury are clearly presuming that the plaintiff and the settling defendant are adversaries and that the plaintiff is truly seeking a judgment for money damages against both defendants. In order to skillfully and successfully carry out the objectives of the Mary Carter agreement, the lawyer for the settling parties must necessarily make misrepresentations to the court and to the jury in order to maintain the charade of an adversarial relationship. These actions fly in the face of the attorney's promise to employ "means only as are consistent with truth and honor and [to] never seek to mislead the Judge or Jury by any artifice or false statement of fact or law." Oath of Admission to The Florida Bar, Florida Rules of Court 977 (West 1993). The Arizona State Bar Committee on Rules of Professional Conduct has...