Perlmutter v. Blessing
| Decision Date | 30 September 1985 |
| Docket Number | No. 83SC399,83SC399 |
| Citation | 706 P.2d 772 |
| Parties | Joseph PERLMUTTER and Rosemary Perlmutter, Petitioners, v. Frederick P. BLESSING and Peak Engineering, Inc., a Colorado Corporation, Respondents. |
| Court | Colorado Supreme Court |
Patric J. LeHouillier, Barash & LeHouillier, Colorado Springs, for petitioners.
Steven J. Barr, Colorado Springs, for respondents.
In Perlmutter v. Harmony Homes, Inc., 677 P.2d 381 (Colo.App.1983), a tortfeasor who was found individually liable for one of the plaintiffs' injuries, and jointly and severally liable with another tortfeasor for another of the plaintiffs' injuries, reached a settlement with the plaintiffs before trial. Judgment was rendered against the tortfeasors for an amount including the damages arising from both injuries. The court of appeals held that, under the Uniform Contribution Among Tortfeasors Act (Act), §§ 13-50.5-101 to -106, 6 C.R.S. (1984 Supp.), the entire settlement amount should be deducted only from the portion of the judgment representing the damages for which both tortfeasors are jointly and severally liable. We granted certiorari to consider the court of appeals' holding. We conclude that the settlement amount should be deducted from the total judgment amount rather than from the joint and several portion only, and, accordingly, we reverse the judgment of the court of appeals.
In 1978, the plaintiffs, Joseph and Rosemary Perlmutter, purchased a newly constructed home from its builder, Harmony Homes, Inc. Subsequently, a retaining wall located on the plaintiffs' property partially collapsed, and water began to leak into their home through the foundation. The foundation had been designed by Frederick P. Blessing, an engineer and employee of Peak Engineering, Inc. The plaintiffs filed a complaint in El Paso County District Court against Harmony Homes, Blessing, Peak Engineering and a number of other defendants who the plaintiffs believed were responsible for the damage to their home. The plaintiffs alleged that Harmony Homes was negligent in its construction of the retaining wall and foundation and had breached both an implied warranty of fitness for habitation and an express warranty to repair any defect within one year after closing. The plaintiffs further alleged that Blessing had been negligent in designing the foundation and that Peak Engineering, as Blessing's employer, was liable for this negligence under principles of respondeat superior.
Trial was to the court. Following the presentation of testimony, the court found that Harmony Homes was negligent in its construction of the retaining wall, foundation and drainage system and had breached an implied warranty of habitability. The court found that damages arising from the faulty construction amounted to $67,037. The court further found that Blessing and Peak Engineering had negligently designed the foundation and drainage system and assessed damages against these defendants at $46,027. According to the court, this amount represented a joint and several liability of Harmony Homes, Blessing and Peak Engineering, and was included in the $67,037 damages attributable to Harmony Homes. Accordingly, the court entered judgment against Harmony Homes, Blessing and Peak Engineering for $67,037. The court determined that the other defendants were not liable.
Blessing and Peak Engineering filed a motion for new trial, contending that the damages awarded were excessive. The court agreed that certain damages should not have been awarded and reduced the joint and several liability portion of the award to $44,427. Blessing and Peak Engineering also alleged that prior to trial Harmony Homes had received a release from the plaintiffs in exchange for payment of $30,000. It was undisputed that under the Act this settlement relieved Harmony Homes from any further obligation to pay the joint and several portion of the award. § 13-50.5-105(1)(b). However, Blessing and Peak Engineering argued that the Act mandated deduction of the settlement amount from the $46,027 joint and several liability of Harmony Homes, Blessing, and Peak Engineering. The court disagreed, interpreting the Act to require that the $30,000 paid in settlement by Harmony Homes be deducted from the total judgment of $67,037, rather than from the joint and several portion of the judgment alone. The court accordingly entered judgment for $37,037. Because Harmony Homes had no further liability to the plaintiff or to the other defendants, and because the judgment amount was less than Blessing and Peak Engineering's joint and several liability to the plaintiffs, the effect of the court's ruling was that Blessing and Peak Engineering alone would be liable for $37,037.
The court of appeals reversed, holding that under the Act the settlement funds must be set off against the joint and several liability and could not be applied to the portion of the judgment representing the individual liability of Harmony Homes. The court of appeals reduced the liability of Blessing and Peak Engineering to $14,427. We believe that the district court's resolution was correct, and we reverse the judgment of the court of appeals. 1
Section 13-50.5-105 provides for the set off of settlement funds paid by one tortfeasor from the claim against other tortfeasors jointly or severally liable for the same injury:
(1) 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 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 the 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.
Where the only injuries involved in an action are those for which all tortfeasors are jointly or severally liable, the application of this section is clear: either the settlement amount or the amount provided for in the settlement document, whichever is greater, must be deducted from the total judgment against the remaining tortfeasors. Here, however, the judgment rendered comprises both an individual liability of the settling tortfeasor and a joint and several liability of the settling and nonsettling tortfeasors. Because the defendants were found "liable in tort for the same injury," 2 i.e., for the damages resulting from the leaky foundation, it is clear that the statute has some application in this case. However, it is unclear whether the phrase "claim against the others" is intended under these circumstances to denote the entire judgment or solely the portion of the judgment representing the joint and several liability of the tortfeasors. 3
Where, as applied here, statutory language is ambiguous or unclear, the statute must be interpreted to further the statutory purposes. Mountain Mobile Mix, Inc. v. Gifford, 660 P.2d 883, 885 (Colo.1983). We believe that the district court's resolution, setting the settlement amount off from the entire judgment in this case, is the method of set off most closely in accord with the policies of the Act. First, section 13-50.5-105 states that any settlement agreement "does not discharge any of the other tortfeasors from liability ... unless its terms so provide." This provision reversed the common law rule that the release of one joint tortfeasor released all other joint tortfeasors. Cingoranelli v. St. Paul Fire and Marine Insurance Co., 658 P.2d 863, 866 (Colo.1983). At the same time, the Act retains the rule of joint and several liability, so that each tortfeasor is liable for the whole of the common liability in the event that it cannot be collected from the other tortfeasors. § 13-50.5-103; National Farmers Union Property and Casualty Co. v. Frackelton, 662 P.2d 1056, 1059 (Colo.1983); Mountain Mobile Mix, 660 P.2d at 889. Further, the statute provides that the claim against the remaining tortfeasor will be reduced by a fixed amount either provided for in the settlement agreement or represented by the...
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