Slocum v. Donahue

• Decision Date: 23 April 1998
• Docket Number: No. 96-P-100,96-P-100
• Citation: 693 N.E.2d 179,44 Mass.App.Ct. 937
• Parties: Lee SLOCUM 1 & another 2 v. Robert F. DONAHUE & another 3 ; Ford Motor Company, Third-Party Defendant.
• Court: Appeals Court of Massachusetts

Page 179

693 N.E.2d 179

44 Mass.App.Ct. 937

Lee SLOCUM ¹ & another ² v. Robert F. DONAHUE & another ³ Ford Motor Company, Third-Party Defendant.

No. 96-P-100.

Appeals Court of Massachusetts.

April 23, 1998.

Virginia Casey Goscinak, Boston, for Robert F. Donahue & another.

Michelle I. Schaffer, Boston, for Ford Motor Company.

RESCRIPT.

After Robert Donahue pleaded guilty to motor vehicle homicide in the death of their eighteen month old son, the Slocums filed a civil action against the Donahues alleging negligence and gross negligence. The Donahues then filed a third-party complaint against Ford Motor Company (Ford), denying negligence and alleging that Ford was negligent and was in breach of warranties of merchantability and fitness for a particular use. The Donahues claim that, when Robert Donahue was in the car prior to the accident, he inadvertently pushed the floor mat on the driver's side, under the throttle. When he later started to back the car down his driveway, the engine began to race and, although he repeatedly stepped on the brakes, his car continued to accelerate. The car's rear wheels hit the curb across the street from his house, became airborne, turned, and then hit a fence. When he got out of the car, he saw Todd Slocum lying on the lawn. The Donahues' expert would testify at trial that the floor mat was defective, permitting it to interfere with the operation of the vacuum booster which caused the power brakes to fail to function. ⁴

Prior to trial, the Slocums and Ford signed a settlement agreement providing that Ford would pay $150,000 to the Slocums in exchange for a release of any claim. Ford then moved for summary judgment as to the Donahues' claims and on the grounds that the settlement was made in good faith and, pursuant to G.L. c. 231B, § 4, that all claims for contribution were thereby extinguished, and that there was no basis for the Donahues' claims for indemnity. Ford also moved for a separate and final judgment pursuant to Mass.R.Civ.P. 54(b), 365 Mass. 821 (1974). The Donahues appeal from the final judgment dismissing their third-party complaint against Ford. ⁵ We affirm.

1. Right to contribution. Under G.L. c. 231B, § 4, as inserted by St.1962, c. 730, § 1, "When a release ... 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." The Donahues argue on appeal that the settlement between Ford and the Slocums was not made in good faith and was collusive both because the amount of the settlement was for less than the value of the case and because Ford allegedly told the Slocums that Ford would allow them to use its experts so that the Donahues' attempt to attribute liability to Ford at trial would be unsuccessful.

The seminal Massachusetts case construing this statute in this context, Noyes v. Raymond, 28 Mass.App.Ct. 186, 548 N.E.2d 196 (1990), controls the instant case in material respects. The issue before the court in Noyes was the same as that before the court here: "whether, on the basis of the limited facts about the settlement which were before the judge in advance of trial, Joseph [Noyes] was entitled to be discharged from all liability for contribution to Raymond." Id. at 188, 548 N.E.2d 196. The basis for an exception requiring an extended hearing on the issue of good faith had not been made to appear in Noyes and has not been presented here.

As in Noyes, there were facts before the judge showing that the settlement between Ford and the Slocums was fair and reasonable. It was reasonably predictable that damages would be high and that a jury would find liability on the part of Robert Donahue, in view of the fact that he pleaded guilty in the criminal case and on the basis of his admission in his deposition that, prior to the accident, he was drinking from a bottle of vodka that he kept under the driver's seat in a brown bag. Given these facts, it was not unreasonable to think that a jury might not find any liability on the part of Ford.

According to the Donahues' attorney, in February of 1995, counsel for Ford notified the Donahues' attorney that Ford was proposing a settlement offer totaling $300,000 with $150,000 to be contributed by Ford, $125,000 by Liberty Mutual Insurance Company (the policy limits of the Donahues' insurance carrier), and $25,000 by the Donahues personally. ⁶ The Donahues' attorney responded that she would discuss the matter with her clients, but that $25,000 was not an amount that her clients would be financially able to contribute to the settlement. Apparently the subsequent negotiations between the Slocums and Ford occurred without the Donahues' participation. In May, 1995, the Slocums settled with Ford for $150,000. Noyes instructs that the purpose of the contribution statute is to promote settlement, that a low settlement figure alone is not evidence of "bad faith," and that settlements should be routinely approved without extended hearings if the purpose of the statute is to be served. Further, the court in Noyes observed that lack of good faith was evidenced by "collusion, fraud, dishonesty, and other wrongful conduct." Id. at 190, 548 N.E.2d 196. In these circumstances Ford's settlement with the Slocums for an amount contemplated as its contribution to a total settlement package does not indicate bad faith or collusion.

As to the Donahues' contention that the Slocums' use of experts originally retained by Ford is evidence of collusion, we disagree. ⁷ In Commercial Union Ins. Co. v. Ford Motor Co., 640 F.2d 210 (9th Cir.), cert. denied, 454 U.S. 858, 102 S.Ct. 310, 70 L.Ed.2d 154 (1981), cited by the Donahues, the court found that the settlement was collusive because, to some extent, it was "dictated by the tactical advantage of removing a deep-pocket defendant because of the experts it could produce" and, therefore, "[was] not made in 'good faith' consideration of the relevant liability of all parties." Id. at 214. ⁸ The Donahues' argument suggests that there was bad faith here because the Slocums were not interested in the deep pocket of Ford, but settled with Ford because they believed that Ford was not responsible for the death of their son. Such a speculation does not trigger the necessity for a more extensive hearing on the issue of good faith. See McDermott, Inc. v. AmClyde, 511 U.S. 202, 213 n. 16, 216-217, 114 S.Ct. 1461, 1468 n. 16, 1469-1470, 128 L.Ed.2d 148 (1994) (while recognizing "the cursory nature of most good-faith hearings," also noted "the large potential for unfairness" in "the pro tanto rule untamed by good-faith hearings"). The motion for summary judgment was properly allowed.

2. Right to indemnity. "Under G.L. c. 231B, contribution is allowed between joint tortfeasors who cause another, by reason of their wrongdoing, to incur injury or damage. In addition, ... the statute permits a plaintiff to settle with one joint tortfeasor and still have recourse against remaining tortfeasors (subject to the limitations stated in the statute). The right to contribution, unlike the right to indemnity, is based on the shared fault of the joint tortfeasors. Indemnity, on the other hand, allows someone who is without fault, compelled by operation of law to defend himself against the wrongful act of another, to recover from the wrongdoer the entire amount of his loss, including reasonable attorney's fees." Elias v. Unisys Corp., 410 Mass. 479, 482, 573 N.E.2d 946 (1991). "[I]ndemnity is permitted only when the would-be indemnitee does not join in the negligent act." Decker v. Black & Decker Mfg....