Jackson v. Barton Malow Co.

• Court: Court of Appeal of Michigan
• Writing for the Court: T.M. BURNS; CYNAR; MARUTIAK
• Citation: Jackson v. Barton Malow Co., 131 Mich.App. 719, 346 N.W.2d 591 (Mich. App. 1984)
• Decision Date: 16 March 1984
• Docket Number: Docket No. 66012
• Parties: Michael JACKSON, Plaintiff-Appellant, v. BARTON MALOW COMPANY, Defendant-Appellee.

Page 591

346 N.W.2d 591

131 Mich.App. 719

Michael JACKSON, Plaintiff-Appellant, v. BARTON MALOW COMPANY, Defendant-Appellee.

Docket No. 66012.

Court of Appeals of Michigan.

Submitted March 14, 1983.

Decided Feb. 6, 1984.

Released for Publication March 16, 1984.

Lopatin, Miller, Freedman, Bluestone, Erlich, Rosen & Bartnick by Richard E. Shaw, Detroit, for plaintiff-appellant.

Joselyn, Rowe, Jamieson, Grinnan, Callahan & Hayes, P.C. by Joseph E. Grinnan, Detroit, for defendant-appellee.

Before T.M. BURNS, P.J., and CYNAR and MARUTIAK, ^* JJ.

T.M. BURNS, Presiding Judge.

On July 16, 1982, the trial court entered a judgment for plaintiff of $0 against defendant. Plaintiff appeals as of right.

This case deals with one of the difficult unanswered questions left by Placek v. Sterling Heights, 405 Mich. 638, 275 N.W.2d 511 (1979), which adopted comparative negligence for this state. How does the trial court apportion damages after the verdict when one of the tortfeasors settled before trial? In the present case, plaintiff was injured on a construction site when he was struck in the face by a shovel. Eventually, he sued both defendant and the Barthel Contracting Company. Barthel settled for $150,000. The jury determined that plaintiff's total damages were $400,000, but that plaintiff was 75 percent negligent. In arriving at the money judgment against defendant, the trial court first reduced the $400,000 damage figure by 75 percent ($300,000). It then subtracted the $150,000 settlement. Because this figure is less than zero, it entered a figure of zero dollars against this particular defendant.

Plaintiff argues that the trial court should have instead first subtracted the $150,000 settlement figure from the $400,000 damages figure and then subtracted the 75 percent comparative negligence. This would leave plaintiff with a $62,500 recovery against this defendant. Added to the $150,000 settlement figure he received from Barthel, this would leave plaintiff with a total recovery of $212,500.

We find that the formula advanced by plaintiff should have been applied by the trial court. The Supreme Court recently expressed a policy against litigation over the relative degree of fault of third parties not represented in a suit. Mayhew v. Berrien County Road Comm., 414 Mich. 399, 326 N.W.2d 366 (1982). This Court has stated that the formula used by the trial court "would have required jurors to consider plaintiff's degree of fault relative to all parties involved in the incident, including non-party settling tort-feasors, contrary to the policies announced in Mayhew". Gagnon v. Dresser Industries Corp, 130 Mich.App. ---, 344 N.W.2d 582 (1983). The Court in Gagnon found that it was proper to deduct the amount of the settlement before making the deduction for comparative negligence.

Even before Gagnon, this Court found that the settlement figure should be subtracted before subtracting the percentage due to comparative negligence. Rittenhouse v. Erhart, 126 Mich.App. 674, 683, 337 N.W.2d 626 (1983). In Rittenhouse, this Court noted that this state has a very strong policy favoring settlements. E.g., Empire Industries, Inc. v. Northern Assurance Co., Ltd., 342 Mich. 425, 70 N.W.2d 769 (1955); Pratt v. Castle, 91 Mich. 484, 52 N.W. 52 (1892); Krevsky v. Naccarato, 56 Mich.App. 704, 224 N.W.2d 731 (1974), lv. den. 394 Mich. 772 (1975). In fact, "courts will encourage settlements which avoid litigation * * * ". 5 Michigan Law and Practice, Compromise and Settlement, Sec. 1, p. 367. Especially during this time when our courts are flooded with litigation, we should encourage settlements. We are convinced that this rule will encourage settlements. The nonsettling tortfeasor will more likely realize that he is running a risk of increasing the amount he will later pay if he does not settle. Under this rule, the nonsettling tortfeasor will not escape liability for his negligence by merely relying on the settling tortfeasor's contribution as would otherwise happen in a case such as the present one.

Our position is further supported by DeMaris v. Brown, 27 Wash.App. 932, 945-946, 621 P.2d 201, 209-209 (1980):

"The issue we decide is this: Where the plaintiffs settle with one concurrent tort-feasor for $10,000, their damages are determined to be $50,000, and the jury finds the decedent 85 percent negligent, should the $10,000 settlement be deducted from the plaintiff's total damages of $50,000 or should the $10,000 be offset against the $7,500 that the nonsettling defendant is otherwise legally obligated to pay, i.e., the plaintiff's total damages less the percentage of negligence attributable to the decedent? We hold that the $10,000 settlement must first be deducted from the plaintiffs' total damages. The jury, without knowing of the settlement, found the total damages to equal $50,000. By reducing the $40,000 by the decedent's 85 percent contributory negligence, the comparative negligence rule is not affronted since the total percentage of contributory negligence remains the same. No one can know whether the tort-feasor's combined negligence might have been found to be 20 percent or less, in which case the State might not have owed anything, or more than 20 percent, in which case the State might have been liable for any excess over $10,000. The settling tort-feasor most likely wished to wash his hands clean of the whole affair. Involving the settling tort-feasor in this suit has been avoided. The trial court should have awarded the plaintiffs a judgment of $6,000." ¹

Therefore, plaintiff is entitled to $62,500 from the defendant.

Judgment affirmed as modified.

CYNAR, Judge (concurring in result only).

While concurring in the result only, I am compelled to write separately. The fact that this state has a very strong policy favoring settlement is no reason to force an unfair settlement upon a plaintiff or defendant. Reasons inducing settlement are many. Parties settle when they perceive such to be in their best respective interests. The purpose of awarding damages is not to punish the defendant but to award fair compensation to the plaintiff.

MARUTIAK, Judge (dissenting).

I respectfully dissent.

Having determined that plaintiff was damaged in the amount of $400,000 and that plaintiff's own negligence accounted for 75 percent of this amount, it was the decision of the jury that plaintiff would be compensated by receiving $100,000. Since he had already received a greater amount from his settlement with Barthel Construction Company, he was entitled to nothing more. By subtracting the settlement amount after plaintiff's negligence percentage was factored in, the trial judge properly applied comparative negligence principles to the jury's findings of fact.

However, by holding that the settlement amount should be deducted first, the majority allows plaintiff to recover an additional $62,500, a figure which has no obvious foundation in theory.

The leading opinion advances two reasons for its method of calculating awards: 1) the policy of encouraging settlements, and 2) the logic employed by the Court in DeMaris v. Brown, 27 Wash.App. 932, 621 P.2d 201 (1980), and Rittenhouse v. Erhart, 126 Mich.App. 674, 337 N.W.2d 626 (1983).

The assessment of artificially enhanced "compensatory" damages ¹ as an inducement for defendants to settle is problematic, since parties will settle only when both plaintiff and defendant perceive such to be in their best interests.

Concern that a nonsettling tortfeasor may escape liability does not justify this result. The purpose of damages in Michigan is to compensate a plaintiff for his injuries, not to punish a defendant. In fact, the reason plaintiff should recover nothing from this defendant is that he already received, by settlement with the other tortfeasor, a greater amount than his case was worth. ²

I do not agree with the reasoning used by the Court in DeMaris, supra. That Court approved deduction of the settlement first, arguing that "the comparative negligence rule is not affronted since the total percentage of contributory negligence remains the same". DeMaris, supra, 27 Wash.App. p. 945, 621 P.2d 201. This is simply bad math. Factoring plaintiff's negligence into a jury award only after the settlement amount has been deducted is the equivalent of applying a lesser percentage to the gross award. This is precisely the point made by the dissenting judge, who complained: "By deducting the settlement amount first, the majority reduces the plaintiff's fault percentage below that found by the jury." DeMaris, supra, p. 946, 621 P.2d 201 (Dore, J., dissenting). See also Lemos v. Eichel, 83 Cal.App.3d 110, 118-119, 147 Cal.Rptr. 603, 606-607 (1978).

Alternatively, the DeMaris majority relied on speculation that, had the settling tortfeasor's negligence been assessed at trial, the plaintiff might have recovered something from the other tortfeasor. The concept that a plaintiff is prejudiced where the jury is not allowed to apportion negligence to a settling tortfeasor has been refuted by the Michigan Supreme Court. Mayhew v. Berrien County Road Comm., 414 Mich. 399, 412, 326 N.W.2d 366 (1982). ³

I conclude that deduction of a settlement amount prior to reduction of the gross jury verdict by the percentage of a plaintiff's negligence affronts principles of comparative negligence and distorts a jury's...