New York City Asbestos Litigation (Brooklyn Naval Shipyard Cases), Matter of
| Decision Date | 18 November 1993 |
| Citation | 624 N.E.2d 979,82 N.Y.2d 342,604 N.Y.S.2d 884 |
| Parties | , 624 N.E.2d 979 In the Matter of NEW YORK CITY ASBESTOS LITIGATION (BROOKLYN NAVAL SHIPYARD CASES). Marlene DIDNER, Individually and as Executrix of Saul Didner, Deceased, Respondent, v. KEENE CORPORATION, Appellant. (And Other Actions.) |
| Court | New York Court of Appeals Court of Appeals |
We granted leave in this case together with two other cases Matter of New York City Asbestos Litig. [Brooklyn Nav. Shipyard Cases], 188 A.D.2d 214, 593 N.Y.S.2d 43, affd. 82 N.Y.2d 821, 605 N.Y.S.2d 3, 625 N.E.2d 588 [decided herewith]; Pollicina v. Misericordia Hosp. Med. Ctr., 187 AD2d 217, 593 N.Y.S.2d 512, mod. 82 N.Y.2d 332, 604 N.Y.S.2d 879, 624 N.E.2d 974 [decided herewith] primarily to resolve a question which we have not addressed pertaining to General Obligations Law § 15-108(a) as applied in an action with multiple defendants where two or more of the defendants have settled with the plaintiff prior to submission of the case to the jury. 1 This question, not answered by the plain language of the statute, 2 is: Which method for computing the amount of the General Obligations Law § 15-108(a) offset to the jury award should be adopted: (1) the case-by-case method, under which each settling defendant is taken separately and, for that defendant, the amount of the settlement or the amount of the corresponding apportioned share, whichever is higher, is deducted from the verdict; or (2) the aggregate method, in which the settling tortfeasors are viewed collectively, the settlement amounts and the corresponding apportioned shares are totaled, and the offset is allowed for the greater of the two totals.
The particular appeal before us is taken by defendant Keene Corporation (Keene), a nonsettling defendant in a multidefendant tort action arising out of plaintiff's decedent's exposure to asbestos. The appeal turns on the effect to be given under General Obligations Law § 15-108(a) to an agreement of settlement between plaintiff and the Manville Asbestos Disease Compensation Fund (Manville), announced in open court, which was to be effectuated by entering "a consent judgment" after the verdict. The Appellate Division has concluded with a divided court Didner v. Keene Corp., 188 A.D.2d 15, 593 N.Y.S.2d 238 that this agreement did not constitute a settlement bringing General Obligations Law § 15-108(a) into play for the reason that the agreement did not expressly release the tortfeasor. Thus, this holding of the Appellate Division presents a preliminary issue on which defendant Keene must prevail before the question concerning the proper method for calculating the offset can be discussed--i.e., whether the Manville agreement constitutes a settlement under General Obligations Law § 15-108(a); in other words, whether General Obligations Law § 15-108(a) applies at all. On this issue, for reasons explained hereafter in part II, we agree with defendant Keene and the dissent at the Appellate Division id., at 26-30, 593 N.Y.S.2d 238 that the Manville agreement is a settlement triggering General Obligations Law § 15-108(a).
We thus reach the second issue which involves the choice between the case-by-case or the aggregate approach for determining an offset under General Obligations Law § 15-108(a). Defendant Keene contends that the offset representing the Manville agreement should be calculated for that settling defendant separately under the case-by-case method. For reasons stated in part III, we reject defendant Keene's argument and conclude that the aggregate method of computation, favored by the Appellate Division majority see, id., at 23-26, 593 N.Y.S.2d 238, is the correct approach. The order of the Appellate Division should be modified accordingly.
Plaintiff commenced this action against 18 defendants to recover damages for wrongful death, pain and suffering and loss of consortium by reason of the death of her husband due to asbestos exposure. The trial was conducted in two stages, with the jury considering damages first and questions of liability, including apportionment of fault, second. On June 27, 1990, the jury returned a damages verdict totaling $5,867,353, later reduced by the trial court to $3,917,353. The liability phase commenced the next day, June 28, 1990.
On July 5, prior to the submission of the case to the jury, plaintiff's counsel announced in open court that settlements had been reached with various defendants, including Manville. The record contains the following colloquy:
When the case was submitted to the jury, Keene and Westinghouse Electric Corporation (Westinghouse) were the only nonsettling defendants. The jury was asked to apportion liability pursuant to General Obligations Law § 15-108(a) among all 18 defendants--i.e., the 16 settling defendants, including Manville, which were no longer participants in the trial, in addition to Keene and Westinghouse, the only defendants still in the case. On July 10, in its liability verdict, the jury apportioned fault among 13 of the 18 defendants, finding Keene responsible for 15%, Manville for 60.167%, and all other defendants responsible for the remaining 24.833% of liability. 3
On July 23, 1990, plaintiff's counsel presented to the trial court a proposed form of order for a consent judgment to be entered against Manville. In the letter accompanying the proposed order, plaintiff's counsel stated, "[i]n accordance with our agreement with the Manville Asbestos Disease Compensation Fund in the above-captioned case, we enclose a proposed order awarding judgment against the Fund in the amount of $800,000" (emphasis added). The trial court signed the order memorializing the consent judgment on August 6, 1990.
On February 5, 1991, a judgment against defendant Keene was filed in the total sum of $618,452, an amount equal to 15% of the reduced total verdict plus interest. The judgment did not reflect General Obligations Law § 15-108(a) offsets for the amounts paid in settlement or the apportioned shares of the recovery for any of the settling defendants. Thereafter, defendant Keene filed objections to the judgment, contending that the court had erred in not following General Obligations Law § 15-108(a) and in simply basing the judgment against Keene on its apportioned share (15%) of the recovery as reduced.
In letter submissions to the court, Keene argued that the judgment should have reflected General Obligations Law § 15-108(a) offsets computed for each of the settling defendants individually on a case-by-case basis. Under this approach, for each defendant, except for Manville, the amount to be deducted would have been the amount of the agreed upon settlement because, in each case, the settlement was greater than the corresponding apportioned share. The total of the settlements for the defendants, other than Manville, is $2,500,000. For Manville, however, its apportioned share (60.167%) of the reduced recovery ($3,917,353) is $2,356,953.80, a sum in excess of the agreed upon consent judgment of $800,000. Applying Keene's proposed case-by-case method, the total of the settlements ($2,500,000) for the settling defendants exclusive of Manville, and the apportioned share for Manville ($2,356,953.80) are added together to compute the total offsets under General Obligations Law § 15-108(a) ($4,856,953.80), an amount which, if deducted from the reduced recovery ($3,917,353) would more than offset plaintiff's judgment against Keene. Keene filed a motion seeking to vacate the February 5, 1991 judgment and requested the court to enter the form of judgment it proposed using its case-by-case approach. The trial court denied this motion and adhered to the original judgment, reasoning that the Manville agreement was not a settlement within General Obligations Law § 15-108(a) because a stay order had been issued and Manville might be precluded from paying the $800,000 consent judgment.
The Appellate Division affirmed, with one Justice dissenting Didner, 188 A.D.2d 15, 593 N.Y.S.2d 238, supra. The majority concluded that General Obligations Law § 15-108(a) was inapplicable because plaintiff had not given Manville a release as part of the settlement, noting that:
id., at 21-22, 593 N.Y.S.2d 238.
In dictum, the Appellate Division stated id., at 23-26, 593 N.Y.S.2d 238 that if it had applied General Obligations Law § 15-108(a), it would have used the aggregate method, the approach adopted or approved by...
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