Frier's, Inc. v. Seaboard Coastline R. Co.

• Citation: 355 So.2d 208
• Decision Date: 22 February 1978
• Docket Number: No. CC-464,CC-464
• Parties: FRIER'S, INC. and Hartford Accident and Indemnity Company, Appellants, v. SEABOARD COASTLINE RAILROAD COMPANY and Billy Jean Parker, Appellees.
• Court: Florida District Court of Appeals

Page 208

355 So.2d 208

FRIER'S, INC. and Hartford Accident and Indemnity Company, Appellants, v. SEABOARD COASTLINE RAILROAD COMPANY and Billy Jean Parker, Appellees.

No. CC-464.

District Court of Appeal of Florida, First District.

Feb. 22, 1978.

Rehearing Denied March 14, 1978.

Richard T. Jones of Jones & Ritch, Gainesville, for appellants.

John R. Young, Delray Beach, E. A. Sellers, Live Oak, Robert O. Stripling, Jr., Gainesville, William R. Swain and Douglass E. Myers, Jr., of Webb, Swain & Watson, Jacksonville, for appellees.

MILLS, Judge.

This action arose from an automobile-train collision in which a passenger in the car was killed. The automobile was owned by Frier's Inc. (Frier's) and insured by Hartford Accident and Indemnity Company (Hartford). Seaboard Coastline Railway Company (Seaboard) owned the train. A wrongful death action was brought by Billie Jean Parker (Parker), mother of the deceased, against Frier's, Hartford and Seaboard. Prior to trial, Parker entered into a "Mary Carter" agreement with Frier's and Hartford. The agreement provided that: (a) if Parker received a judgment in excess of $85,000 against all defendants, she would pursue satisfaction of the judgment only against Seaboard and not against Frier's and Hartford; (b) if Parker received a judgment of less than $85,000 against all the defendants, she would pursue satisfaction against Seaboard, and Frier's and Hartford would pay the difference between the amount collected from Seaboard and $85,000; (c) if Parker received a judgment in any amount against Frier's and Hartford only, Frier's and Hartford would pay Parker $85,000; (d) if Parker did not receive a judgment against any of the defendants, Frier's and Hartford would pay $85,000. After trial, final judgment was entered against Frier's, Hartford and Seaboard in the amount of $150,000. Seaboard filed a post-trial motion for contribution from Frier's and Hartford and attached to the motion the agreement entered into by Frier's, Hartford and Parker. The motion alleged that the agreement was not based upon any consideration and ". . . attempts to abrogate the provisions of Florida Statute 768.31 . . ." The trial court granted Seaboard's motion for contribution and ordered that Frier's and Hartford pay Seaboard $75,000, plus one-half the costs and interest.

Frier's and Hartford contend that the trial court erred in failing to apply Section 768.31(5)(b) and ordering contribution. Subsection 768.31(5) of Florida's Uniform Contribution Among Tortfeasors Act reads as follows:

"(5) Release or covenant not to sue. When a release or a covenant not to sue or not to enforce judgment is given in good faith to one of two or more persons liable in tort for the same injury or the same wrongful death:

(a) It does not discharge any of the other tortfeasors from liability for the injury or wrongful death unless its terms so provide, but it reduces the claim against the others to the extent of any amount stipulated by the release or the covenant, or in the amount of consideration paid for it, whichever is the greater; and,

(b) It discharges the tortfeasor to whom it is given from all liability for contribution to any other tortfeasor."

Agreements of the general type entered into by Frier's, Hartford and Parker are known loosely as Mary Carter agreements, receiving their name and judicial recognition in the case of Booth v. Mary Carter Paint Co., 202 So.2d 8 (Fla. 2d DCA 1967).

A Mary Carter agreement is an agreement entered into between a plaintiff and one or more but not all defendants which typically has the following features:

(A) secrecy;

(B) the agreeing defendants remain as party defendants in the lawsuit;

(C) the agreeing defendants' liability is decreased in direct proportion to the nonagreeing defendants' increase in liability;

(D) the agreeing defendant guarantees to the plaintiff a certain amount of money if plaintiff does not receive a judgment against any of the defendants or if the judgment is less than a specified sum.

See Ward v. Ochoa, 284 So.2d 385 (Fla.1973); Booth v. Mary Carter Paint Co., supra. Mary Carter agreements are valid in Florida, Weinstein v. National Car Rentals, 288 So.2d 509 (Fla. 2d DCA 1974); however, the courts have not overlooked the fact that such agreements can be extremely prejudicial to the nonagreeing defendant and have attempted to mitigate the harmful effects by permitting pretrial discovery of the agreement and by holding that the agreements are admissible into evidence. Ward v. Ochoa, supra; Maule Industries, Inc. v. Roundtree, 284 So.2d 389 (Fla.1973).

The agreement between Parker, Frier's and Hartford is obviously a Mary Carter agreement. It is also a covenant not to enforce judgment. Section 768.31(5) (b) clearly states that when a covenant not to enforce judgment is given in good faith, ". . . (i)t discharges the tortfeasor to whom it is given from all liability for contribution to any other tortfeasor." Under this provision a tortfeasor is not discharged from liability for contribution merely because he has been given a release or covenant not to enforce judgment. The covenant must have been given in good faith.

In determining whether a covenant has been given in good faith, the Act within which the term is found must be considered. The purpose of the Act is to distribute the burden of responsibility equitably among those who are jointly liable to an injured party. Commissioners' Prefatory Note (1955 Revision), Uniform Contribution Among Tortfeasors Act, 12 U.L.A. 59 (1975). At the same time, the Act encourages settlements. Commissioners' Comment, § 4, 12 U.L.A. 99 (1975).

The 1939 Act promoted equitable sharing to the extent of providing that a release did not discharge the tortfeasor to whom it was...