Smith v. Monongahela Power Co.

• Decision Date: 08 April 1993
• Docket Number: ASP-D,No. 21345,21345
• Citation: 189 W.Va. 237,429 S.E.2d 643
• Court: West Virginia Supreme Court
• Parties: Dennis Dwight SMITH, in his capacity as Administrator, DBN of the Estate of John Q. Hutchinson, deceased, Plaintiff Below, v. MONONGAHELA POWER COMPANY, Defendant and Third-Party Plaintiff Below, Appellant, v. DICO COMPANY, INC., a corporation, The Greater Iowa Corporation, a corporation,ico, Inc., a corporation, New Dico Company, Inc., a corporation, Dyneer Corporation, a corporation, Dico, Inc., a corporation, Hiab Cranes & Loaders, Inc., a corporation, (collectively referred to as "Dico"), U.S. Truck Cranes, Inc., a corporation, and J.E. White Construction Company, a corporation, Third-Party Defendants Below, Appellees (Dico).

Page 643

429 S.E.2d 643

189 W.Va. 237

Dennis Dwight SMITH, in his capacity as Administrator, DBN

of the Estate of John Q. Hutchinson, deceased, Plaintiff Below, v. MONONGAHELA POWER COMPANY, Defendant and Third-Party Plaintiff Below, Appellant, v. DICO COMPANY, INC., a corporation, The Greater Iowa

Corporation, a corporation, ASP-Dico, Inc., a corporation,

New Dico Company, Inc., a corporation, Dyneer Corporation, a

corporation, Dico, Inc., a corporation, Hiab Cranes &

Loaders, Inc., a corporation, (collectively referred to as

"Dico"), U.S. Truck Cranes, Inc., a corporation, and J.E.

White Construction Company, a corporation, Third-Party

Defendants Below, Appellees (Dico).

No. 21345.

Supreme Court of Appeals of West Virginia.

Submitted March 9, 1993.

Decided April 8, 1993.

Syllabus by the Court

1. "A defendant in a civil action has a right in advance of judgment to join a joint tortfeasor based on a cause of action for contribution. This is termed an 'inchoate right to contribution' in order to distinguish it from the statutory right of contribution after a joint judgment conferred by W.Va.Code, 55-7-13 (1923)." Syllabus Point 2, Board of Education of McDowell County v. Zando, Martin & Milstead, Inc., 182 W.Va. 597, 390 S.E.2d 796 (1990).

2. "A party in a civil action who has made a good faith settlement with the plaintiff prior to a judicial determination of liability is relieved from any liability for contribution." Syllabus Point 6, Board of Education of McDowell County v. Zando, Martin & Milstead, Inc., 182 W.Va. 597, 390 S.E.2d 796 (1990).

3. "Defendants in a civil action against whom a verdict is rendered are entitled to have the verdict reduced by the amount of any good faith settlements previously made with the plaintiff by other jointly liable parties. Those defendants against whom the verdict is rendered are jointly and severally liable to the plaintiff for payment of the remainder of the verdict. Where the relative fault of the non-settling defendants has been determined, they may seek contribution among themselves after judgment if forced to pay more than their allocated share of the verdict." Syllabus Point 7, Board of Education of McDowell County v. Zando, Martin & Milstead, Inc., 182 W.Va. 597, 390 S.E.2d 796 (1990).

4. If a plaintiff enters into a settlement with a non-party against whom it has not directly asserted a cause of action, and the settlement occurs before a judicial determination of liability, the settlement relieves the non-party of all further obligations to the plaintiff and all liability for contribution to the non-party's joint tortfeasor, if the settlement was made in good faith and the amount of the settlement is disclosed to the trial court for the purpose of reducing the verdict.

5. Settlements are presumptively made in good faith. A defendant seeking to establish that a settlement made by a plaintiff and a joint tortfeasor lacks good faith has the burden of doing so by clear and convincing evidence. Because the primary consideration is whether the settlement arrangement substantially impairs the ability of remaining defendants to receive a fair trial, a settlement lacks good faith only upon a showing of corrupt intent by the settling plaintiff and joint tortfeasor, in that the settlement involved collusion, dishonesty, fraud or other tortious conduct.

6. Some factors that may be relevant to determining whether a settlement lacks good faith are: (1) the amount of the settlement in comparison to the potential liability of the settling tortfeasor at the time of settlement, in view of such considerations as (a) a recognition that a tortfeasor should pay less in settlement than after an unfavorable trial verdict, (b) the expense of litigation, (c) the probability that the plaintiff would win at trial, and (d) the insurance limits and solvency of all joint tortfeasors; (2) whether the settlement is supported by consideration; (3) whether the motivation of the settling plaintiff and settling tortfeasor was to single out a non-settling defendant or defendants for wrongful tactical gain; and (4) whether there exists a relationship, such as family ties or an employer-employee relationship, naturally conducive to collusion.

7. The determination of whether a settlement has been made in good faith rests in the sound discretion of the trial court. The focus of the trial court's determination is not whether the settlement fell within a "reasonable range" of the settling tortfeasor's proportional share of comparative liability, but whether the circumstances indicate that the non-settling tortfeasor was substantially deprived of a fair trial because of corrupt behavior on the part of the plaintiff and the settling tortfeasor or tortfeasors. The determination of the trial court may be based on such evidence as it deems appropriate in the circumstances. In many (if not most) cases, a review of discovery documents and affidavits from counsel will be sufficient. The trial court may, in its discretion, conduct a hearing on the issue, but it is not required to do so.

Harley E. Stollings, Breckinridge, Davis, Sproles & Stollings, Summersville, for appellant.

James A. Colburn, Baer, Colburn & Morris, Huntington, for Dico, appellees.

NEELY, Justice:

Monongahela Power Company ("Monongahela Power") appeals a dismissal of several related corporations, namely: Dico Company, Inc.; The Greater Iowa Corporation; ASP-Dico, Inc.; New Dico Company, Inc.; Dyneer Corporation; Dico, Inc.; and Hiab Cranes & Loaders, Inc. (hereafter referred to collectively as "Dico"). The dismissal order ended Monongahela Power's efforts to seek contribution from Dico in a civil action arising from the death of John Q. Hutchinson.

On 29 March 1985, John Q. Hutchinson delivered mortar, brick and various other masonry supplies to Homer Graham's house. Construction at the Graham house had included the erection of a new bridge across Valley Fork Creek that connected the Graham property with West Virginia Route 36. For approximately 40 years, Monongahela Power had maintained two 7200-volt electric transmission lines directly above the bed of Valley Fork Creek at the location of the newly-erected bridge. After construction of the bridge, the vertical clearance below the lower power line was reduced from 17 feet (above the ground) to 9.1 feet (above the deck of the bridge).

Mr. Hutchinson had apparently been directed to unload the supplies on the bridge, a difficult task due to the physical limitations imposed by the location of Route 36, the bridge, the creek and the power line. Mr. Hutchinson used a boom hoist truck allegedly manufactured by Dico and owned by Mr. Hutchinson's employer, J.E. White Construction Company, to deliver and unload the masonry supplies. During the unloading process, Mr. Hutchinson stood on the ground and manipulated the boom using hand controls, which were connected to the hoist's master control box by an electrical cable. While unloading the supplies, the boom made contact with the power line. The electric current was transmitted through the boom and cable to Mr. Hutchinson, who suffered severe injuries from which he died five weeks later.

The administrator of Mr. Hutchinson's estate, filed suit against Monongahela Power in 1987. The administrator alleged that Monongahela Power had negligently failed to raise two inadequately insulated power lines after being requested to do so by Homer Graham in December 1984, during construction of the bridge. Monongahela Power thereafter filed a third-party complaint for contribution against several third-parties, including Dico. Monongahela Power sought to prove that Dico had manufactured the boom hoist truck and that the design of the hoist controls was the proximate cause of Mr. Hutchinson's injuries. Specifically, Monongahela Power asserted that for several years before the accident, a conversion kit was available that would have replaced the electrical controls with pneumatic controls, thereby eliminating the danger of electric shock. The Hutchinson estate, however, did not sue Dico.

On 16 February 1990, the circuit court ordered that the issues raised in Monongahela Power's third-party complaint be bifurcated for trial purposes from the issues raised in the plaintiff's complaint against Monongahela Power. The circuit court further ordered that Monongahela Power not be permitted to introduce evidence of negligence by, or seek to assign a percentage of negligence to, the various third-party defendants during the trial between Monongahela Power and the Hutchinson estate. The circuit court determined that, should a jury return a verdict against Monongahela Power and in favor of the estate, Monongahela Power could thereafter proceed to trial against the third-party defendants ¹.

On 29 March 1990, the week before trial, Dico entered into a settlement with the Hutchinson estate by which Dico paid the estate $15,000 in exchange for a complete release. Another third-party defendant, U.S. Truck Cranes, Inc., settled with the estate on that same date for $2500.

The trial between the Hutchinson estate and Monongahela Power began on 2 April 1990. The jury were instructed that, should they find that damages were sustained as a result of Monongahela Power's negligence, they must deduct from their verdict the sum of $17,500, the amount paid by "others not sued by the estate...." The jury returned a verdict for compensatory damages in the amount of $789,700 which, upon deduction of the amounts previously paid in settlement ², left a compensatory damage award of $772,200. The jury attributed 80 percent of the negligence to Monongahela Power and 20 percent to Mr. Hutchinson, further reducing the compensatory judgment against the defendant to $617,760. Additionally, the jury rendered a verdict for $1.5 million in punitive damages against Monongahela Power. On 29 June 1990, the circuit court approved a settlement ³ between the estate and Monongahela Power...