Slayton v. Ford Motor Co.

• Decision Date: 14 July 1981
• Docket Number: No. 315-79,315-79
• Citation: 435 A.2d 946,140 Vt. 27
• Court: Vermont Supreme Court
• Parties: Walter B. SLAYTON, Jr., and Velma J. Slayton, Individually and as Guardians for David B. Slayton v. FORD MOTOR COMPANY, Richard Brunig, Arthur Brunig, J. Max Rabe and Karen Rabe, Crakim, Inc., formerly known as Jacobsen Manufacturing, and Textron, Inc.

Page 946

435 A.2d 946

140 Vt. 27

Walter B. SLAYTON, Jr., and Velma J. Slayton, Individually and as Guardians for David B. Slayton v. FORD MOTOR COMPANY, Richard Brunig, Arthur Brunig, J. Max Rabe and Karen Rabe, Crakim, Inc., formerly known as Jacobsen Manufacturing, and Textron, Inc.

No. 315-79.

Supreme Court of Vermont.

July 14, 1981.

Motion for Reargument Denied Aug. 14, 1981.

John T. Sartore of Paul, Frank & Collins, Inc., Burlington, for plaintiffs.

Barbara E. Cory of Dinse, Allen & Erdmann, Burlington, for defendants.

Before BARNEY, C. J., and LARROW, BILLINGS, HILL and UNDERWOOD, JJ.

UNDERWOOD, Judge.

On June 5, 1975, David Slayton, then age 6, was severely injured when a lawn and garden tractor equipped with a rotary mower backed over his legs. David's parents brought suit individually and on his behalf against the operator of the tractor, the owner/entruster of the tractor, the owners of the property on which the accident occurred, and the manufacturer of the tractor. Ford Motor Company was originally named as the manufacturer. The tractor was manufactured for Ford by Jacobsen Manufacturing Company, who later sold its lawn tractor business to Textron, Inc., and changed its corporate name to Crakim, Inc. Textron and Crakim were added as defendants with the consent of the other parties.

During the trial, the plaintiffs reached a monetary settlement with all of the defendants except the appellees, Ford, Textron and Crakim. The judge informed the jury of the amount of the settlement, and the trial continued against the corporate defendants. The defendants later called David's father as a witness, and questioned him about the settlement with the other defendants. The plaintiffs objected to this examination, but it was permitted by the court.

At the end of the trial, the court, over the objection of the plaintiffs, again informed the jury of the amount of the settlement, and instructed it to deduct that amount from the plaintiffs' damages, should they find the remaining defendants liable. The jury was given written interrogatories on the issues of comparative negligence and damages, but found none of the defendants liable on any theory presented, and therefore never reached those issues. The plaintiffs appeal.

The plaintiffs argue that the trial court erred in admitting evidence of the fact and the amount of the settlement, and in instructing the jury to deduct the settlement from any award of damages. The question is whether the judge or the jury should perform the calculation when a damage award against one tortfeasor must be reduced by the amount of a settlement between the plaintiff and another tortfeasor.

It has been the custom in Vermont for the court to permit the jury to perform the necessary calculation. However, only the existence of the custom has been recognized by this Court. Its propriety has never been directly addressed. See, e. g., Quesnel v. Raleigh, 128 Vt. 95, 100, 258 A.2d 840, 843 (1969); Stevens v. Nurenburg, 117 Vt. 525, 534, 97 A.2d 250, 257 (1953).

We declare it to be the policy of the Court henceforth that where there has been a liquidated settlement between one of several defendants and a plaintiff under a covenant not to sue, a partial release, or the like, the jury not be informed of such fact, or the sum paid, and that it be the function of the court, on motion of the defendant following the verdict, to find the amount by which such verdict should be reduced.

In most of the recent, pertinent cases, courts have held that these calculations should be performed by the court after the jury has determined the plaintiff's total damages. See, e. g., Luth v. Rogers & Babler Construction Co., 507 P.2d 761 (Alaska 1973); Egurrola v. Szychowski, 95 Ariz. 194, 388 P.2d 242 (1964); Brooks v. Daley, 242 Md. 185, 218 A.2d 184 (1966); McCombs v. Stephens, 252 S.C. 442, 166 S.E.2d 814 (1969). Some courts, in adopting the "court rule," expressly overruled or limited earlier cases which had endorsed the "jury rule." See, e. g., Pease v. Beech Aircraft Corp., 38 Cal.App.3d 450, 113 Cal.Rptr. 416 (1974); Orr v. Coleman, 455 S.W.2d 59 (Ky.1970); Silisky v. Midland-Ross Corp., 97 Mich.App. 470, 296 N.W.2d 576 (1980). Some courts still apply the "jury rule." See generally Annot., 94 A.L.R.2d 352, 360-73 (1964).

If the jury is informed of either the fact or the amount of a settlement, there is a danger that it will draw improper inferences. A jury might conclude that the settling defendant was the party primarily responsible for the injury, and that the remaining defendants should therefore be exonerated. De Lude v. Rimek, 351 Ill.App. 466, 473, 115 N.E.2d 561, 565 (1953). It might take the amount of the settlement as a measure of the plaintiff's damages. Orr v. Coleman, supra, 455 S.W.2d at 61. It might consider one defendant's settlement to be an admission of negligence, and then impute this negligence to a nonsettling defendant. Azure v. City of Billings, 596 P.2d 460, 466 (Mont.1979).

The "jury rule" draws objections from both plaintiffs and defendants. As was stated in Luth v. Rogers & Babler Construction Co., supra, 507 P.2d at 768 submitting the matter to the jury might prejudice the unreleased defendant, for the jury might imply his negligence from the virtual admission of negligence by the covenantee. The jury method also creates the risk that payment of money for a covenant might be considered evidence of the covenantee's total responsibility for the injury and of the defendant's freedom from fault.... (P)olicies encouraging extrajudicial settlements will be frustrated.

The problem with the "jury rule" is ably diagnosed in De Lude v. Rimek, supra, 351 Ill.App. at 473-74, 115 N.E.2d at 565.

It is well understood by lawyers and judges experienced in such matters that in a case where evidence is offered of the payment of a substantial sum for a covenant not to sue, the jury considers it evidence that the covenantee is the party responsible for the injury, and that the defendant or defendants should be exculpated. Hence, there is always an effort on the part of the defense to put the covenant before the jury and to make the most of it during the course of the trial.

....

While the amount paid under a covenant not to sue should be deducted from the total damages sustained, we hold it is the function of the jury to find the plaintiff's total damages, and the function of the judge, upon application of the defendant after verdict, to find the amount by which such verdict should be reduced by virtue of any covenant made by the plaintiff with another concerned in the commission of the tort.

Prior to statutory enactment of the "court rule," Connecticut used the "jury rule." In discussing the change effected by the statute, the court observed that "the disclosure of such covenants to the jury was often more prejudicial than probative, and was of questionable utility since the mathematical adjustment of the verdict could readily be effected by the court alone." Fritz v. Madow, 179 Conn. 269, 270, 426 A.2d 268, 269 (1979). See also Brooks v. Daley, supra, 242 Md. at 193, 218 A.2d at 188-89.

Use of the "jury rule" creates a possibility of confusion and prejudice on the part of the jury. There is no compelling reason to adopt it, and the risk of error is high. If there is even a chance of miscarriage of justice, or if verdicts are more likely to be set aside, why run that risk? Adherence to the "jury rule" also...