Noyes v. Raymond

• Decision Date: 08 January 1990
• Docket Number: No. 88-P-1220,88-P-1220
• Citation: 28 Mass.App.Ct. 186,548 N.E.2d 196
• Parties: Joseph NOYES et al. 1 v. Jane E. RAYMOND et al., 2 executors. 3
• Court: Appeals Court of Massachusetts

Page 196

548 N.E.2d 196

28 Mass.App.Ct. 186

Joseph NOYES et al. ¹ v. Jane E. RAYMOND et al., ² executors.

³

No. 88-P-1220.

Appeals Court of Massachusetts,

Barnstable.

Argued Oct. 18, 1989.

Decided Jan. 8, 1990.

Richard K. Latimer, Falmouth, for plaintiffs.

Peter G. Collias, Fall River, for defendants.

Before WARNER, C.J., and KASS and FINE, JJ.

FINE, Justice.

Joseph Noyes was operating a vehicle on Route 6, the Bourne Scenic Highway, with his wife, Rita Noyes, in the passenger seat when they were struck at the intersection with Herring Pond Road by a pickup truck operated by Elmer Raymond. Rita and Joseph brought this action against Raymond for the injuries they sustained as a result of the accident. In his answer, Raymond denied that he was negligent. He alleged that, if he should nevertheless be found negligent, he was entitled to the benefit of the comparative negligence statute, G.L. c. 231, § 85, as Joseph was also negligent. And, finally, in a counterclaim, he sought contribution from Joseph under G.L. c. 231B, § 1(a ), towards any damages awarded to Rita.

When the case was called for trial, Joseph informed the court that he had reached a settlement with Rita for $10,000, and, relying on G.L. c. 231B, § 4, he presented a motion, entitled "motion for summary judgment," seeking a separate judgment of dismissal. None of the parties filed affidavits, but the following facts relating to the settlement were established at a hearing immediately convened before the trial judge. Joseph carried insurance with the Liberty Mutual Insurance Company with coverage in the amount of $50,000; before making the $10,000 offer on Joseph's behalf, Liberty Mutual made other offers to Rita which were lower and were rejected; Raymond had insurance coverage in the amount of $250,000; his insurer's last offer to Rita was approximately $17,000; Rita had made a $150,000 demand against the defendant based upon her attorney's evaluation of her damages; and Rita's attorney believed that the case against Joseph for liability was weak.

The judge determined that there was a material issue of fact on the question whether the settlement was made in good faith and denied the motion. The case then went to trial before a jury which, in answers to special questions, found that Raymond was 65% negligent and Joseph was 35% negligent. They found Rita's damages to be $100,000 and Joseph's damages to be $90,000. Judgment entered based upon the verdicts, but each damage award was reduced by $2,000, representing personal injury protection benefits, and Joseph's award was reduced further in accordance with the finding that he was contributorily negligent. Judgment also entered against Joseph on the counterclaim for contribution. Joseph filed a motion for judgment notwithstanding the verdict or, in the alternative, for a new trial, but the motion was denied.

On appeal, Joseph contends, and we agree, that he should have been discharged as defendant in counterclaim before trial on the basis of G.L. c. 231B, § 4. He also contends that the finding of some causal negligence on his part was based upon insufficient evidence and a faulty jury instruction. We do not agree with that contention.

1. The "good faith" settlement under G.L. c. 231B, § 4. We must decide first whether, on the basis of the limited facts about the settlement which were before the judge in advance of trial, Joseph was entitled to be discharged from all liability for contribution to Raymond. General Laws c. 231B, § 4, as inserted by St.1962, c. 730, § 1, states in part: "When a release or 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: ... (b) It shall discharge the tortfeasor to whom it is given from all liability for contribution to any other tortfeasor." ⁴

The statute neither defines "good faith" nor describes the burden of the party seeking to be discharged on the basis of a settlement. Although we would have expected those particular questions to have arisen with some frequency in tort litigation, to our knowledge, no appellate decision in this Commonwealth has addressed them. The purposes behind the statute have been discussed, however, and those discussions are of some guidance to us in resolving this appeal. Our courts have stated that the statute was intended to encourage settlements. See Bishop v. Klein, 380 Mass. 285, 293-294, 402 N.E.2d 1365 (1980); Robertson v. McCarte, 13 Mass.App.Ct. 441, 444, 433 N.E.2d 1262 (1982). The reference in G.L. c. 231B, § 4, to "good faith" also implies a concern on the part of the Legislature with the avoidance of collusion, fraud, and other wrongful conduct. Compare Hartford Acc. & Indem. Co. v. Millis Roofing & Sheet Metal, Inc., 11 Mass.App.Ct. 998, 999-1000, 418 N.E.2d 645 (1981), citing Spiegel v. Beacon Participations, Inc., 297 Mass. 398, 416-417, 8 N.E.2d 895 (1937). The history of the statute points to the same two legislative goals. General Laws c. 231B, adopted in Massachusetts in 1962, is based upon the 1955 version of the Uniform Contribution Among Tortfeasors Act, 12 U.L.A. 63 (Master ed. 1975). Section 4 of the Act was substantially changed from the 1939 version. ⁵ According to the commissioners who drafted the 1955 version, there were two purposes behind the changes. The first was to prevent collusion amongst the settling parties. The second was to encourage settlements. Id. at 99. ⁶ For a discussion of the legislative background, see also Bishop v. Klein, 380 Mass. at 294, 402 N.E.2d 1365.

The goal of encouraging settlements may be achieved only to the extent that motions for discharge based upon settlements are routinely allowed, with extended hearings on the question of good faith the exception. If it were otherwise, a party seeking to avoid trial by settling a claim could rarely achieve that objective; either the issue of good faith would be the subject of a full trial or, as happened in this case, a defendant who settles with a plaintiff may, nevertheless, be forced to stand trial on the merits of the tort claim. Faced with such prospects, a defendant would have little incentive to enter into a settlement.

We must first determine what lack of good faith means in the context of G.L. c. 231B, § 4. It certainly includes collusion, fraud, dishonesty, and other wrongful conduct. In the present case, the judge denied Joseph's motion because the amount of the settlement was small in proportion to Rita's claim. The fact that the amount of a settlement is low in comparison to the plaintiff's estimate of her own damages, by itself, is, however, not material. A relatively low settlement might well reflect uncertainty whether the settling party would be found liable, uncertainty whether the damages would be proved, or the general unpredictability of juries on both liability and damage issues. Even where a claimant receives nothing in exchange for releasing a defendant, the statute may preclude a claim by a codefendant for contribution. See Grace v. Buckley, 13 Mass.App.Ct. 1081, 1082, 435 N.E.2d 655 (1982). A rule whereby a determination of lack of good faith could be based only on the amount of a settlement would "require trial courts to apply an unworkable standard to every settlement. It [would] clog our trial courts with unnecessary hearings, discourage the settlement of legitimate claims, and severely strain the resources of the parties and the trial and appellate courts of this state." Tech-Bilt, Inc. v. Woodward-Clyde & Assocs., 38 Cal.3d 488, 502, 213 Cal.Rptr. 256, 698 P.2d 159 (1985) (Bird, C.J., dissenting). ⁷

Second, we must decide which party has the burden of producing evidence relative to the good faith of the settling parties. The party relying upon a settlement in seeking to be discharged certainly has the initial burden of establishing that a settlement has been agreed upon and its nature and terms. If the nonsettling party raises a legitimate issue of lack of good faith, he would be entitled to an evidentiary hearing on the question of good faith. Consistent with the statute's policy of encouraging settlements, however, the burden of coming forward with some showing of lack of good faith ought to rest, we think, with those opposing the discharge. ⁸ Compare Home Ins. Co. v. Advance Mach. Co., 443 So.2d 165, 169 (Fla.Dist.Ct.App.1983); Barreto v. Waukegan, 133 Ill.App.3d 119, 128, 88 Ill.Dec. 266, 478 N.E.2d 581 (1985). Only with such a rule will motions for discharge based upon G.L. c. 231B, § 4(b ), be routinely allowed, with litigation over the issue of good faith taking place only in rare instances.

There was no suggestion in this case that the settlement was collusive or otherwise wrongful. No inference of collusion arose merely from the fact that Rita and Joseph are husband and wife, as the offer was actually made by the insurer who would bear the responsibility for satisfying the terms of the settlement. Moreover, there was some evidence before the judge that the settlement was fair and reasonable. Joseph's liability appeared questionable, at least to Rita's attorney. And, considering that Joseph's maximum liability for contribution after trial would have been 50% of the damages awarded to Rita, his offer was in the same range as the $17,000 settlement offer made by Raymond's insurer.

There was, thus, no proper basis for denying Joseph (or in reality his insurer) the right to "buy his peace" and be free of liability for contribution to Raymond. ⁹

2. The comparative negligence verdict against Joseph. There was ample evidence presented at trial to support a finding that Joseph was negligent. The jury could have found that Joseph was driving forty-five to fifty miles per hour in the passing lane of Route 6 as he approached the intersection with Herring Pond Road. There was a blinking yellow light facing him at the intersection, and the scenic parking area to the right of the road contained...