Michigan Supreme Court
Lansing, Michigan
Chief Justice: Justices:
Opinion Clifford W. Taylor Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman
FILED MARCH 8, 2005
GERLING KONZERN ALLGEMEINE
VERSICHERUNGS AG, subrogee of
REGENTS OF THE UNIVERSITY OF
MICHIGAN,
Plaintiff-Appellant,
v No. 122938
CECIL R. LAWSON and AMERICAN
BEAUTY TURF NURSERIES, INC.,
jointly and severally,
Defendants-Appellees.
______________________________
BEFORE THE ENTIRE BENCH
MARKMAN, J.
This case requires that we consider whether a
plaintiff, who has settled an underlying tort claim with an
injured party, may subsequently proceed on a contribution
action against a defendant whom the plaintiff alleges was a
joint tortfeasor whose negligence constituted a proximate
cause of the underlying plaintiff's injuries. Defendants
argue that tort reform legislation in 1995, specifically
MCL 600.2956, MCL 600.2957, and MCL 600.6304, has abrogated
plaintiff’s contribution action because, had the underlying
tort action proceeded to trial, the jury or judge would
have been required to allocate fault among all tortfeasors
and each tortfeasor, including plaintiff, would have been
required to pay only for its percentage of fault. Further,
defendants maintain that, if plaintiff paid more in the
settlement than was warranted by its percentage of fault,
it did so as a volunteer and therefore cannot seek
contribution from joint tortfeasors.
These arguments are unavailing for the simple reason
that the 1995 tort reform legislation preserved the right
of a severally liable tortfeasor such as plaintiff to bring
an action for contribution. Therefore, we reverse the
judgment of the Court of Appeals and remand this case to
the trial court for further proceedings consistent with
this opinion.
I. FACTS AND PROCEDURAL HISTORY
This case arose from a three-vehicle accident that
occurred in 1997. In one vehicle were Ricki Ash and James
Nicastri, the injured parties in the underlying claim; in
the second vehicle, owned by the Regents of the University
of Michigan (Regents), was employee Barry Maus; and in the
third vehicle, owned by American Beauty Turf Nurseries,
Inc. (American Beauty), was employee Cecil Lawson. Ash and
2
Nicastri filed suit in the Court of Claims against Maus and
the Regents. Gerling Konzern Allgemeine Versicherungs AG
(Gerling Konzern), the insurer and subrogee of the Regents,
settled with Ash and Nicastri on behalf of Maus and the
Regents, and the underlying tort action was accordingly
dismissed with prejudice.
In November 1999, plaintiff in this action, Gerling
Konzern, filed a contribution action against defendants
Lawson and American Beauty pursuant to MCL 600.2925a-
600.2925d. Defendants moved for summary disposition
pursuant to MCR 2.116(C)(8), arguing that the tort reform
acts of 1995, 1995 PA 161 and 1995 PA 249, by eliminating
joint and several liability in certain tort actions,
including the underlying action in this case, abrogated
plaintiff’s contribution cause of action. The trial court
denied defendants’ motion for summary disposition. On
appeal, the Court of Appeals reversed the order of the
trial court and remanded for entry of judgment in favor of
defendants, holding that plaintiff’s contribution action
was barred as a result of the elimination of joint and
several liability and the rule that, in tort actions in
which liability is several only, each tortfeasor is
required to pay only for his percentage of fault. 254 Mich
App 241; 657 NW2d 143 (2002). We granted plaintiff’s
3
application for leave to appeal, 469 Mich 947 (2003), and
subsequently ordered that the case be reargued and
resubmitted. 471 Mich 855 (2004).
II. STANDARD OF REVIEW
We review de novo the trial court’s decision to grant
or deny summary disposition under MCR 2.116(C)(8). Maiden
v Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999). A
motion under MCR 2.116(C)(8) tests the legal sufficiency of
the complaint, and may be granted only where the claims
alleged are “‘so clearly unenforceable as a matter of law
that no factual development could possibly justify
recovery.’” Maiden, supra at 119 (citation omitted). We
also review questions of statutory interpretation de novo.
Oade v Jackson Nat’l Life Ins Co, 465 Mich 244, 250; 632
NW2d 126 (2001).
III. ANALYSIS
Until the enactment of tort reform legislation in
1995, concurrent tortfeasors in Michigan were “jointly and
severally” liable. This meant that where multiple
tortfeasors caused a single or indivisible injury, the
injured party could either sue all tortfeasors jointly or
he could sue any individual tortfeasor severally, and each
individual tortfeasor was liable for the entire judgment,
although the injured party was entitled to full
4
compensation only once. See Markley v Oak Health Care
Investors of Coldwater, Inc, 255 Mich App 245, 251; 660
NW2d 344 (2003); Maddux v Donaldson, 362 Mich 425, 433; 108
NW2d 33 (1961). “At common law, contribution was not, as a
general rule, recoverable among or between joint wrongdoers
or tortfeasors.” O'Dowd v Gen Motors Corp, 419 Mich 597,
603; 358 NW2d 553 (1984). The right of contribution,
although now codified in a majority of states, evolved in
equity. See 4 Restatement Torts, 2d, § 886A, comment c.1
Thus, even though, at law, a “joint and several” tortfeasor
was liable for an entire judgment, equity came to allow
that tortfeasor to seek contribution from other
tortfeasors. A primary purpose underlying “contribution”
was to mitigate the unfairness resulting to a jointly and
severally liable tortfeasor who had been required to pay an
entire judgment in cases in which other tortfeasors also
contributed to an injury.
However, as part of the 1995 tort reform legislation,
the Legislature enacted MCL 600.2956, which provides in
part, “Except as provided in section 6304, in an action
based on tort or another legal theory seeking damages for
1
This remains apparent in Michigan’s relevant
statutory provisions. For example, MCL 600.2925b(c)
provides, “[p]rinciples of equity applicable to
contribution generally shall apply.”
5
personal injury, property damage, or wrongful death, the
liability of each defendant for damages is several only and
is not joint.” MCL 600.2957(1) further provides, “In an
action based on tort or another legal theory seeking
damages for personal injury, property damage, or wrongful
death, the liability of each person shall be allocated
under this section by the trier of fact and, subject to
section 6304, in direct proportion to the person's
percentage of fault.” Finally, MCL 600.6304 provides:
(1) In an action based on tort . . . seeking
damages for personal injury, property damage, or
wrongful death involving fault of more than 1
person, including third-party defendants and
nonparties, the court . . . shall instruct the
jury to answer special interrogatories or, if
there is no jury, shall make findings indicating
both of the following:
* * *
(b) The percentage of the total fault of
all persons that contributed to the death or
injury . . . .
* * *
(4) Liability in an action to which this
section applies is several only and not joint.
Except as otherwise provided in subsection (6), a
person shall not be required to pay damages in an
amount greater than his or her percentage of
fault as found under subsection (1).
Thus, the 1995 legislation eliminated joint and
several liability in certain tort actions, requires that
the fact-finder in such actions allocate fault among all
responsible tortfeasors, and provides that each tortfeasor
need not pay damages in an amount greater than his
6
allocated percentage of fault. As such, in an action in
which an injured party has sued only one of multiple
tortfeasors and in which §§ 2956, 2957, and 6304 apply, the
tortfeasor would have no need to seek contribution from
other tortfeasors, either in that same action (by bringing
in third-party defendants) or in a separate action, because
no “person shall . . . be required to pay damages in an
amount greater than his or her percentage of [allocated]
fault . . . .” Section 6304(4). Thus, the dissent is
correct in observing that the “1995 tort reform legislation
has . . . rendered unnecessary most claims for contribution
in personal injury accidents.” Post at 8.
Yet, although the 1995 tort reform legislation may
have “rendered unnecessary" most contribution claims, this
does not mean that it precludes every type of contribution
claim, in particular that at issue in the instant case.
Even before the 1995 legislation, a tortfeasor had a
statutory right to seek contribution in the event that he
settled a claim, see MCL 600.2925a(3), and this is the type
of contribution at issue here. Contribution actions have
not always solely been directed toward recovering monies
that a “jointly and severally” liable tortfeasor was
required to pay as the result of a verdict for which the
tortfeasor was fully, although not solely, responsible.
7
Rather, such actions have also been directed toward
obtaining contribution from other responsible tortfeasors
following a settlement. We find no basis in §§ 2956, 2957,
or 6304 to conclude that a right to seek contribution in
these circumstances has been precluded in cases in which
liability among multiple tortfeasors is now “several” only
rather than “joint and several.”
MCL 600.2925a provides, in part:
(1) Except as otherwise provided in this
act, when 2 or more persons become jointly or
severally liable in tort for the same injury to a
person or property or for the same wrongful
death, there is a right of contribution among
them even though judgment has not been recovered
against all or any of them.
(2) The right of contribution exists only in
favor of a tort-feasor who has paid more than his
pro rata share of the common liability and his
total recovery is limited to the amount paid by
him in excess of his pro rata share. A tort-
feasor against whom contribution is sought shall
not be compelled to make contribution beyond his
own pro rata share of the entire liability.
(3) A tort-feasor who enters into a
settlement with a claimant is not entitled to
recover contribution from another tort-feasor if
any of the following circumstances exist:
(a) The liability of the contributee for the
injury or wrongful death is not extinguished by
the settlement.
(b) A reasonable effort was not made to
notify the contributee of the pendency of the
settlement negotiations.
(c) The contributee was not given a
8
reasonable opportunity to participate in the
settlement negotiations.
(d) The settlement was not made in good
faith.
These provisions lead to the conclusion that plaintiff
is entitled to seek contribution from defendants, and the
tort reform legislation, in our judgment, does not alter
this conclusion. The dissent’s overreaching analysis
notwithstanding, this case is actually one of
straightforward statutory interpretation. As a result of
the underlying accident in this case, “2 or more persons
bec[a]me . . . severally liable in tort for the same injury
. . . .” Section 2925a(1). Thus, “there is a right of
contribution among them even though,” as in this case,
“judgment has not been recovered against all or any of
them.”2 Id. Plaintiff’s right to seek contribution exists
because plaintiff allegedly has, “paid more than his pro
rata share of the common liability . . . .”3 Section
2
Judgment has not been recovered against any
tortfeasor in this case because the injured parties instead
settled with plaintiff.
3
Section 2925b(a) provides that, for purposes of
contribution, “in determining the pro rata shares of
tortfeasors in the entire liability as between themselves
only . . . [t]heir relative degrees of fault shall be
considered.” Thus, in determining whether a severally
liable tortfeasor has paid more than his “pro rata” share
of the common liability such that he may be entitled to
contribution under § 2925a, § 2925b requires considering
9
2925a(2). Plaintiff’s “total recovery [in the contribution
action] is limited to the amount paid by him in excess of
his pro rata share.” Id.
Moreover, § 2925a(3) provides statutory support for
plaintiff’s contribution claim resulting from its
settlement. Plaintiff, is a “tort-feasor who enter[ed]
into a settlement with [the injured parties]” and,
therefore, “is . . . entitled to recover contribution from
another tort-feasor” unless one of the circumstances
enumerated in § 2925a(3)(a)-(d) exists, which is not
alleged here to be the case. Section 2925a(3).4
each tortfeasor’s relative degree of fault, just as § 6304
requires the fact-finder to consider the relative degree of
fault of each tortfeasor in any action subject to several
liability under that provision.
4
Moreover, MCL 600.2925c(4) provides:
If there is not a judgment for the injury or
wrongful death against the tort-feasor seeking
contribution, his right to contribution is barred
unless he has discharged by payment the common
liability within the statute of limitations
period applicable to claimant's right of action
against him and has commenced his action for
contribution within 1 year after payment, or
unless he has agreed while action is pending
against him to discharge the common liability and
has, within 1 year after the agreement, paid the
liability and commenced his action for
contribution. [Emphasis added.]
This provision contemplates situations such as the
instant one, in which a tortfeasor is seeking contribution
even though there has been no judgment against it because
10
IV. RESPONSE TO DISSENT
The dissent’s argument appears to rest on three
grounds. First, it observes, correctly, that under §
2925a(2), a plaintiff may seek contribution only if he has
paid more than his share of the “common liability.”
Therefore, unless a severally liable tortfeasor shares a
“common liability” with other tortfeasors, he has no right
to contribution. The dissent then concludes that, because
the 1995 tort reform legislation made tort liability in
relevant actions “several” only and not “joint and
several,” there is no “common liability” among the
tortfeasors and, thus, no right to contribution under §
2925a(2). Post at 10-11. Essentially, the dissent equates
“common liability” and “joint liability” and concludes that
common liability does not exist where liability is several
only.
The dissent’s position is flawed. Its construction of
“common liability” as used in § 2925a(2) is inconsistent
with the Legislature’s express statutory directive in §
the tortfeasor has settled with the injured parties. As
long as the tortfeasor complies with the requirements of
this provision, it may proceed on its contribution claim
pursuant to sections 2925a(3)(a)-(d). Contrary to the
dissent’s suggestion, post at 12, a tortfeasor’s legal
liability is not “governed by the gamesmanship and legal
strategies of his fellow tortfeasors.” Rather, such
liability is governed by the language of § 2925a.
11
2925a(1) that contribution may be obtainable where
liability is joint or several. The dissent’s
interpretation of “common liability” essentially reads the
“joint[] or several[]” language out of the statute.5
Moreover, in O’Dowd, this Court specifically addressed
whether a tortfeasor who was “severally” liable was
entitled to seek contribution under § 2925a. We held that
a right to contribution existed because § 2925a
specifically refers to liability that is “joint[] or
several[]”:
[A]ll that is necessary to enforce
contribution [under § 2925a] is that the
tortfeasors commonly share a burden of tort
liability or, as it is sometimes put, there is a
common burden of liability in tort. . . . If the
defendants are jointly or severally liable in
tort for "the same injury to a person" or for
"the same injury to . . . property" or for "the
same wrongful death", contribution pursuant to [§
2925a] is obtainable. [O’Dowd, supra at 604-
606.][6]
5
In discerning legislative intent, a court must “give
effect to every word, phrase, and clause in a statute . . .
.” State Farm Fire & Cas Co v Old Republic Ins Co, 466
Mich 142, 146; 644 NW2d 715 (2002).
6
O’Dowd further asserted:
The Legislature partially abrogated the
common-law bar [to contribution] by adopting the
1939 Uniform Contribution Among Tortfeasors Act
which provided for contribution in respect of a
judgment obtained against two or more persons
jointly. . . .
Subsequently, the Legislature . . .
12
In Salim v LaGuire, 138 Mich App 334, 341; 361 NW2d 9
(1984), the Court of Appeals similarly observed, “(1) the
former bar against contribution among nonjoint tortfeasors
is abolished; (2) the right of contribution exists among
nonintentional wrongdoers who share a common liability; and
(3) common liability exists among individuals who are
responsible for an accident which produces a single
indivisible injury.” (Emphasis added.)
Accordingly, a “common liability” exists in situations
in which multiple tortfeasors are liable for the same
injury to a person or property or for the same wrongful
death. Common liability exists in such cases because
multiple tortfeasors are alleged to be “responsible for an
accident which produce[d] a single indivisible injury.”
Id. The 1995 tort reform legislation does not negate the
substituted the substance of the 1955 Uniform
Contribution Among Tortfeasors Act for the 1941
act. Section 1 of the statute now provides:
“(1) Except as otherwise provided in this
act, when 2 or more persons become jointly or
severally liable in tort for the same injury to a
person or property or for the same wrongful
death, there is a right of contribution among
them . . . ." [Emphasis in O'Dowd.]
. . . The revised act by explicitly
providing for contribution among tortfeasors
“severally” liable in tort extended contribution
to [such tortfeasors]. [O’Dowd, supra at 603-604
(citations omitted; emphasis added unless
otherwise noted).]
13
existence of common liability among such multiple
tortfeasors. On the contrary, § 6304(1) provides that the
allocation provisions of that section apply to tort actions
“for personal injury, property damage, or wrongful death
involving fault of more than 1 person,” just as the
contribution provisions of § 2925a(1) apply “when 2 or more
persons become . . . severally liable in tort for the same
injury to a person or property or for the same wrongful
death . . . .” Section 6304 applies specifically in those
cases in which there is common liability among multiple
tortfeasors, and it is inaccurate to interpret it as
meaning that there is no longer any common liability among
responsible tortfeasors. Rather, the common liability
remains; what differ merely are the terms and conditions by
which that liability must be satisfied. That is, by virtue
of § 6304, in cases in which there has been a judgment, a
tortfeasor need only pay a percentage of the common
liability that is proportionate to his fault. Previously,
where there had been a judgment, a tortfeasor could have
been required to pay the entire amount of common liability
and then seek contribution from other tortfeasors according
to their degrees of fault.
Second, the dissent relies on Restatement Torts, 3d:
Apportionment of Liability, § 11, comment c, which states:
14
When, under applicable law, a person is
severally liable to an injured person for an
indivisible injury, the injured person may
recover only the severally liable person's
comparative-responsibility share of the injured
person's damages.
* * *
c. Contribution by severally liable
defendant. When all defendants are severally
liable, each one is separately liable for that
portion of the plaintiff's damages. Since
overlapping liability cannot occur, severally
liable defendants will not have any right to
assert a contribution claim. See § 23, Comment f.
[Emphasis in original.]
We note that the duty of this Court is to construe the
language of Michigan’s statutes before turning to secondary
sources such as the Restatements. The specific statute at
issue, § 2925a, allows for contribution after a settlement
in cases in which liability is joint or several. Moreover,
the above Restatement section refers, specifically, to
those situations, already discussed above, in which an
injured party has sued only one of multiple tortfeasors and
the court, as it is obligated to do, has applied § 6304.
The dissent is correct in observing that in such
situations, the 1995 tort reform legislation, because it
provides that liability is now several only, has “rendered
unnecessary most claims for contribution in personal injury
accidents.” Post at 8. “[Because] overlapping liability
cannot occur, severally liable defendants [need] not have
15
any right to assert a contribution claim.” Restatement
Torts, 3d, § 11, comment c.
However, more relevant to the specific issue raised in
the instant case is the Restatement Torts, 3d:
Apportionment of Liability, § 23, which provides in part:
(a) When two or more persons are or may be
liable for the same harm and one of them
discharges the liability of another by settlement
or discharge of judgment, the person discharging
the liability is entitled to recover contribution
from the other, unless the other previously had a
valid settlement and release from the plaintiff.
(b) A person entitled to recover
contribution may recover no more than the amount
paid to the plaintiff in excess of the person's
comparative share of responsibility.
There is nothing in the language of § 23 or its
comments to suggest that it does not apply in those cases
in which the settling tortfeasor was only severally liable.
The pertinent question is not whether liability is joint
and several, or several only, but rather whether the
settlement released the contributee. See note 10 later in
this opinion.
Finally, the dissent asserts, despite the fact that §
2925a provides that it applies to cases in which liability
is “joint[] or several[],” that contribution is barred in
cases in which liability is several because a severally
liable tortfeasor, pursuant to § 6304, is never required to
pay more than his allocated share of fault. Thus, the
16
dissent surmises, “‘plaintiff’s decision to voluntarily pay
pursuant to a settlement must be attributed to its own
assessment of liability based on its insured’s
negligence.’” Post at 14 (citation omitted). The
dissent's analysis is defective. That a tortfeasor is
never required, “in an action” to which § 6304 applies, to
pay more than its allocated share of fault is simply not
relevant in determining whether the tortfeasor may exercise
its statutory right to settle with the injured party and
then exercise its statutory right to seek contribution from
other tortfeasors on the basis of each tortfeasor’s
relative degree of fault.
This is illustrated by the fact that, even before the
1995 tort reform legislation, a tortfeasor whose liability
was “joint and several” was never required, in a
settlement, to pay more than what it deemed to be its fair
share of the common liability burden. Yet, even though not
required, the statute specifically gave (and continues to
give) a tortfeasor who chose to settle for more than its
fair share a right to seek contribution from other
tortfeasors.7 Indeed, the dissent would retain that right
7
The important consideration in determining whether a
settling tortfeasor may seek contribution from other
tortfeasors has always been, and continues to be, not
whether the tortfeasor settled for what it considered to be
17
for tortfeasors whose liability remained joint and several.
Because no tortfeasor, including one whose liability is
“joint and several,” is or has ever been required to settle
for more than his fair share of the common liability and
yet § 2925a provides a right to contribution even after
settling, it is evident that the dissent’s analysis on this
point is defective and cannot be sustained.8
Not only is the dissent’s position ungrounded in the
its fair share of the common liability or, alternatively,
for the entire amount of the common liability, but whether
the settling party complied with the conditions set forth
in § 2925a(3)(a)-(d), including releasing through the
settlement the contributee from further liability to the
injured party. Thus, even if a settling tortfeasor settles
for only what it presumes to be its fair share of the
common liability, if the settlement releases another
tortfeasor, that settling tortfeasor, if it complies with
the remainder of the statutory settlement conditions, may
seek contribution from the released contributee.
For the same reason, we find no merit in the dissent’s
suggestion, post at 16, that the majority's decision will
place parties in an “untenable position” during settlement
negotiations, because they must “pretend . . . that each is
potentially liable for the whole of a plaintiff’s
injuries.” Because a settling party may still seek
contribution under MCL 600.2925a for payments made in
excess of its fair share of the common liability, there is
no need to “pretend” to the contrary.
8
The dissent has a point, as noted above, that the
1995 tort reform legislation renders unnecessary
contribution actions that, in the absence of §§ 2956, 2957,
and 6304, would have otherwise resulted after a “jointly
and severally” liable tortfeasor has been required to pay
an entire judgment to an injured party. Nonetheless, that
these provisions also prohibit contribution actions
resulting from a settlement is a concept, as also noted
above, that has no apparent source in Michigan law.
18
relevant statutes, it raises an unnecessary disincentive to
voluntary settlements, potentially harming both willing
plaintiffs and willing defendants.9 The dissent states
that, “while settlements are generally favored, neither MCL
600.2925a nor MCL 600.6304 makes clear that the
Legislature’s goal was to promote voluntary settlement.
Instead, their provisions place the risk of, and burden
for, payment upon a party only to the extent that it is
actually responsible for the injury.” Post at 15. The
dissent may be correct in these assertions, but they are
irrelevant. Section 2925a may not “clearly” reflect a
legislative intent of encouraging settlements, but neither
does it reflect, clearly or otherwise, any intent to
disfavor settlements, which is what the dissent’s
9
A tortfeasor might rationally conclude, after all,
that it is in his interest to settle for an amount greater
than his estimated pro rata liability as determined by a
trier of fact. Taking a case to trial and leaving the
allocation of responsibility to the trier of fact can
involve a number of transactional costs. There are, for
example, fees for attorneys, retained experts and other
litigation costs, possible fiscal losses because of
negative publicity, and opportunity costs incurred by those
required to divert their time and energy from more
productive matters to litigation.
A severally liable tortfeasor might prefer to settle
for more than his pro rata share in order to avoid these
costs. This incentive may be especially powerful when the
tortfeasor believes that he may be found liable for non-
economic damages that defy accurate estimation.
19
construction would produce. Moreover, to construe § 2925a
as affording a settling party a right to seek contribution
from other responsible tortfeasors in cases in which
liability is several only does not countermand the
legislative intent of placing the “risk of, and burden for,
payment upon a party only to the extent that it is actually
responsible for the injury.” Post at 15. On the contrary,
such a construction of § 2925a works affirmatively to
effect that intent.10
10
See CSX Transportation, Inc v Union Tank Car Co, 173
F Supp 2d 696, 699-700 (ED Mich, 2001), in which the United
States District Court for the Eastern District of Michigan,
in a contribution claim filed after a settlement by the
settling party against other responsible tortfeasors, noted
that while § 6304 renders contribution claims unnecessary,
§ 2925a still allows such claims after a settlement, thus
furthering the legislative goals of encouraging settlements
and properly allocating fault:
Plaintiff CSXT is seeking an allocation of
fault between the tortfeasors in this case. It is
seeking neither "joint liability," nor "joint and
several liability." Plaintiff CSXT is entitled,
under Michigan law, to show that the Defendants
and Plaintiff CSXT were/are severally liable
(with an appropriate allocation of the
percentages of fault) for the rail tank car
accident in January of 2000.
Because currently, in the usual case [i.e.,
the cases that proceed to trial], the allocation
of fault is mandated, there will usually not be a
circumstance where a tortfeasor has paid more
than his pro-rata share of the common liability.
Thus, there would be no need for a claim for
contribution. This is what Kokx v. Bylenga, 241
Mich. App. 655, 617 N.W.2d 368 (2000) explained.
20
. . .
In the instant case, [because] Plaintiff
CSXT . . . has settled numerous lawsuits, paying
the full share of each, CSXT can assert that it
has paid more than its pro-rata share of the
liability. Thus, under Michigan law, it has a
claim for contribution.
If the purposes behind the Michigan tort
reform legislation were speedy settlement of
suits, and allocation of fault, thwarting CSXT's
ability to seek contribution defies both of those
objectives. First, without the possibility of
seeking "reimbursement" from other tortfeasors,
CSXT would have no interest in seeking a speedy
settlement of claims. Further, allowing CSXT to
bring a claim for contribution furthers the
purpose of holding tortfeasors responsible for
their share of the liability.
A brief example explains a possible
misunderstanding of the effect of the tort reform
legislation. Assume two tortfeasors are equally
responsible for an injury. Prior to the tort
reform legislation, they could each be held
liable for 100% of the injury. If one defendant
paid the entire balance, he could sue the second
defendant for contribution. However, after the
tort reform legislation abolished joint and
several liability (in nearly all cases, and the
exceptions are irrelevant here), each could only
be held for 50% of the injury. Therefore, there
would be no need for an action for contribution.
This does not mean that a cause of action
for contribution was completely extinguished by
the legislation; it simply means that in the
usual case [i.e., those that proceed to trial],
it would not be needed. This is bolstered by the
fact that the legislature did not repeal the
contribution statute.
In the instant case, the claims have been
settled without an allocation of fault. One
tortfeasor has paid 100%, although there are
likely other tortfeasors which can be allocated
21
V. CONCLUSION
MCL 600.2925a-600.2925d provide plaintiff a statutory
right to seek contribution from other responsible
tortfeasors after having settled with the injured parties
in the underlying tort action, and tort reform legislation
in 1995 does not alter this right. Accordingly, we hold
that plaintiff may proceed on its contribution action
against defendants. We reverse the judgment of the Court
of Appeals and remand this case to the trial court for
further proceedings consistent with this opinion.
Stephen J. Markman
Clifford W. Taylor
Maura D. Corrigan
Robert P. Young, Jr.
some of the fault. The statute permits a claim
for contribution in this situation -- Plaintiff
CSXT can allege that it has paid more than its
pro-rata share of the liability. The tort reform
legislation did not erase this right.
22
S T A T E O F M I C H I G A N
SUPREME COURT
GERLING KONZERN ALLGEMEINE
VERSICHERUNGS AG, subrogee of
REGENTS OF THE UNIVERSITY OF
MICHIGAN,
Plaintiff-Appellant,
v No. 122938
CECIL R. LAWSON AND AMERICAN
BEAUTY TURF NURSERIES, INC.,
jointly and severally,
Defendants-Appellees.
_______________________________
WEAVER, J. (concurring).
I concur in the majority’s conclusion that plaintiff
may proceed with its contribution action against defendant.
As both the majority and the dissent note, tort reform has
rendered many contribution actions unnecessary.1
Nonetheless, the contribution statute, MCL 600.2925a, has
not been repealed by the Legislature and remains in effect.
Therefore, we must apply it to the present case.
Further, I agree with the majority’s analysis of
“common liability,” as that which “exists in situations in
which multiple tortfeasors are liable for the same injury
1
Ante at 7; post at 8.
to a person or property or for the same wrongful death.”
Ante at 13. Multiple tortfeasors are “‘responsible for an
accident which produce[d] a single indivisible injury.’”
Id. (citation omitted). While a tortfeasor is now required
to pay only a percentage of liability proportionate to the
tortfeasor’s degree of fault, there remains a single injury
to the person or property for which multiple tortfeasors
may be held liable, according to their degrees of fault.
Thus, there is “common liability.”
The dissent’s analysis of “common liability” would, in
essence, wipe out the contribution statute by equating
“common liability” with “joint and several liability.”
Post at 8-12. While there may be good policy reasons to
reconsider how the contribution statute should operate in
light of recent tort reform, these questions are properly
resolved by the Legislature, which may repeal or amend the
statute as it sees fit.
In the present case, it is alleged that there are
multiple tortfeasors responsible for “a single injury” to
Ricki Ash and James Nicastri. Thus, there is “common
liability” under the statute, and plaintiff may proceed
2
with its contribution action.2 For these reasons, I concur
in the result of the majority opinion.
Elizabeth A. Weaver
2
Note that just because plaintiff may proceed with a
contribution action, this does not mean that plaintiff will
prevail. Plaintiff must establish that defendant is at
fault in the accident, the degree of defendant’s fault, and
that it paid more than its pro rata share of the entire
liability.
3
S T A T E O F M I C H I G A N
SUPREME COURT
GERLING KONZERN ALLGEMEINE
VERSICHERUNGS AG, subrogee of
REGENTS OF THE UNIVERSITY OF
MICHIGAN,
Plaintiff-Appellant,
v No. 122938
CECIL R. LAWSON and AMERICAN
BEAUTY TURF NURSERIES, INC.,
jointly and severally,
Defendants-Appellees.
______________________________
KELLY, J. (dissenting).
Plaintiff seeks contribution from defendants for a
portion of settlement monies paid to two third parties
following a traffic accident involving three vehicles. We
are asked to decide whether a contribution action is
possible under the facts of this case and in light of tort
reform legislation enacted in 1995.
The majority finds that such an action is viable, even
considering that Michigan has adopted a comparative
negligence scheme for personal injury actions. Under it,
plaintiff would not have been liable for defendants'
percentage of fault had this case proceeded to trial.
Because I believe that the majority misreads this tort
reform legislation, I disagree with its conclusions.
According to MCL 600.2956, part of the 1995 tort
reform legislation, tortfeasors' potential liability in a
personal injury lawsuit is several and not joint. Applied
to this case, it follows that plaintiff’s insured was not
liable for defendants' negligence. Hence, it could not
have been held legally responsible to pay damages to third
parties for injuries arising from defendants' negligence.
When plaintiff settled with the third parties, the amount
it agreed to pay could not be held to have included any of
another party’s percentage of fault for the accident.
Consequently, I would find that plaintiff cannot now
seek contribution from the defendants for monies it paid in
settlement of the third parties' claim. Thus, I would
affirm the decision of the Court of Appeals that any amount
that plaintiff paid in excess of its insured’s percentage
of fault should be deemed a voluntary payment.
FACTS AND LOWER COURT PROCEEDINGS
This case is a secondary proceeding that arose from a
three-vehicle traffic accident on October 21, 1997. One
vehicle was occupied by Ricki Ash and James Nicastri.
Another was driven by Barry Maus, who was employed by the
University of Michigan Board of Regents. Plaintiff is the
2
insurer of Maus and of the regents. The third vehicle was
a semitrailer driven by defendant Cecil R. Lawson, who was
employed by defendant American Beauty Turf Nurseries, Inc.
Ash and Nicastri sued Maus and the regents for damages
for their injuries. In a separate proceeding, Lawson sued
Maus and the regents for his injuries. Plaintiff settled
both lawsuits against Maus and the regents, paying on their
behalf approximately $2.2 million to Ash and Nicastri and
$85,000 to Lawson.
In November 1999, plaintiff filed a separate complaint
seeking statutory contribution under MCL 600.2925a from
Lawson and American Beauty Turf for a portion of the amount
it had paid to Ash and Nicastri. Defendants moved for
summary disposition in their favor, alleging that plaintiff
and the regents had not complied with the notice
requirements of the contribution statute. See MCL
600.2925a(3) through (5). The trial court denied the
motion and found that plaintiff had given defendants
sufficient notice of its settlement negotiations with Ash
and Nicastri. These claims are not at issue in this
appeal.
After the trial court's motion cutoff date passed,
defendants moved to dismiss pursuant to MCR 2.116(C)(8).
They argued that the 1995 tort reform legislation,
3
specifically MCL 600.2956, 600.2957(1), and 600.6304(1),
abrogated plaintiff's cause of action for contribution.
Without addressing the substantive issue, the trial court
denied the motion as untimely.
On appeal, the Court of Appeals reversed the decision
and remanded for entry of judgment in defendants' favor.
It held that, under the express language of the statutes at
issue, contribution was not available to plaintiff. 254
Mich App 241, 248; 657 NW2d 143 (2002). We granted
plaintiff's application for leave to appeal, 469 Mich 947
(2003), and subsequently ordered that the case be reargued
and resubmitted. 471 Mich 855 (2004).
STATUTORY LANGUAGE
This Court reviews de novo a decision on a motion for
summary disposition. Questions regarding the
interpretation and construction of statutes are questions
of law that are also reviewed de novo. Northville Charter
Twp v Northville Pub Schools, 469 Mich 285, 289; 666 NW2d
213 (2003). When construing a statute, our goal is to
ascertain and give effect to the intent of the Legislature
in writing it. Turner v Auto Club Ins Ass'n, 448 Mich 22,
27; 528 NW2d 681 (1995). The best measure of intent is the
words that the Legislature used. Chandler v Dowell
Schlumberger Inc, 456 Mich 395, 398; 572 NW2d 210 (1998).
4
As the Court of Appeals correctly noted, at issue here
is the interplay between the provisions in the 1995
amendments of the Revised Judicature Act1 and the
preexisting contribution provisions contained in MCL
600.2925a, 600.2925b, and 600.2925c.
The pertinent subsections of MCL 600.2925a state:
(1) Except as otherwise provided in this
act, when 2 or more persons become jointly or
severally liable in tort for the same injury to a
person or property or for the same wrongful
death, there is a right of contribution among
them even though judgment has not been recovered
against all or any of them.
(2) The right of contribution exists only in
favor of a tort-feasor who has paid more that his
pro rata share of the common liability and his
total recovery is limited to the amount paid by
him in excess of his pro rata share. A tort-
feasor against whom contribution is sought shall
not be compelled to make contribution beyond his
own pro rata share of the entire liability.
[Emphasis added.]
One tortfeasor can seek contribution from another
regardless of whether a judgment has been entered against
either. MCL 600.2925c(1). However:
If there is not a judgment for the injury or
wrongful death against the tort-feasor seeking
contribution, his right to contribution is barred
unless he has discharged by payment the common
liability within the statute of limitations
period applicable to claimant's right of action
against him and has commenced his action for
contribution within 1 year after payment, or
unless he has agreed while action is pending
1
1995 PA 161 and 1995 PA 249.
5
against him to discharge the common liability and
has, within 1 year after the agreement, paid the
liability and commenced his action for
contribution. [MCL 600.2925c(4) (emphasis
added).]
MCL 600.2925b addresses the expression "pro rata
share" and includes considerations of fault and equity:
Except as otherwise provided by law, in
determining the pro rata shares of tortfeasors in
the entire liability as between themselves only
and without affecting the rights of the injured
party to a joint and several judgment:
(a) Their relative degrees of fault shall be
considered.
(b) If equity requires, the collective
liability of some as a group shall constitute a
single share.
(c) Principles of equity applicable to
contribution generally shall apply.
It is against this statutory backdrop that the Court
is asked to address plaintiff's right to contribution under
the 1995 tort reform legislation. MCL 600.2956 states:
Except as provided in [MCL 600.6304], in an
action based on tort or another legal theory
seeking damages for personal injury, property
damage, or wrongful death, the liability of each
defendant for damages is several only and is not
joint. However, this section does not abolish an
employer's vicarious liability for an act or
omission of the employer's employee.
MCL 600.2957(1) similarly states:
In an action based on tort or another legal
theory seeking damages for personal injury,
property damage, or wrongful death, the liability
of each person shall be allocated under this
section by the trier of fact and, subject to [MCL
6
600.6304], in direct proportion to the person's
percentage of fault. In assessing percentages of
fault under this subsection, the trier of fact
shall consider the fault of each person,
regardless of whether the person is, or could
have been, named as a party to the action.
In connection with the above, the relevant portion of
MCL 600.6304 provides:
(1) In an action based on tort or another
legal theory seeking damages for personal injury,
property damage, or wrongful death involving
fault of more than 1 person, including third-
party defendants and nonparties, the court,
unless otherwise agreed by all parties to the
action, shall instruct the jury to answer special
interrogatories or, if there is no jury, shall
make findings indicating both of the following:
(a) The total amount of each plaintiff's
damages.
(b) The percentage of the total fault of all
persons that contributed to the death or injury,
including each plaintiff and each person released
from liability under section 2925d, regardless of
whether the person was or could have been named
as a party to the action.
* * *
(4) Liability in an action to which this
section applies is several only and not joint.
Except as otherwise provided in subsection (6), a
person shall not be required to pay damages in an
amount greater than his or her percentage of
fault as found under subsection (1).
ANALYSIS
After reviewing the statutory provisions cited above,
I agree with much of the rationale used by the Court of
Appeals in this case and in its previous opinion in Kokx v
7
Bylenga, 241 Mich App 655; 617 NW2d 368 (2000). The
essence of these opinions is that the 1995 tort reform
legislation has prevented and rendered unnecessary most
claims for contribution in personal injury accidents.
Contribution remains a useful tool for fault and
liability allocation in certain other circumstances. The
Court of Appeals in Kokx opined:
[U]nder the plain and mandatory language of
the revised statutes, a defendant cannot be held
liable for damages beyond the defendant's pro-
rata share, except in certain specified
circumstances. Accordingly, in actions based on
tort or another legal theory seeking damages for
personal injury . . . there would be no basis for
a claim of contribution. Moreover, because joint
liability remains in certain circumstances, the
Legislature would have no reason to repeal §
2925a, which provides for a right of
contribution . . . . [Id. at 663.]
I agree with these observations. For example, MCL
600.2956 continues to recognize that common or joint
liability exists in claims involving “an employer’s
vicarious liability . . . .” And MCL 600.6304(6)
specifically provides for joint liability in medical
malpractice cases.
However, the statutory language at issue in this case
supports defendants' position. In order for one tortfeasor
to recover contribution from others, he must pay the
complainant more than his pro rata share of the common
8
liability. The amount that he may recover from the others
is limited to the amount he paid to the complainant in
excess of that for which he was liable. MCL 600.2925a(2).
See also MCL 600.2925c(4). In this case, before any such
calculation may be entertained, plaintiff must establish
that under MCL 600.2957 or MCL 600.6304 there is common
liability among the defendants.
This Court has previously discussed the interplay
between contribution and "common liability" as follows:
The general rule of contribution is that one
who is compelled to pay or satisfy the whole or
to bear more than his aliquot share of the common
burden or obligation, upon which several persons
are equally liable or which they are bound to
discharge, is entitled to contribution against
the others to obtain from them payment of their
respective shares. [Caldwell v Fox, 394 Mich 401,
417; 231 NW2d 46 (1975) (emphasis added).]
Thus, in order to enforce contribution under the revised
act, it is necessary that the torfeasors “commonly share a
burden of tort liability or, as it is sometimes put, there
is a common burden of liability in tort.” O'Dowd v Gen
Motors Corp, 419 Mich 597, 604-605; 358 NW2d 553 (1984).
See also Caldwell, supra at 420 n 5.
However, although these older cases are useful to a
point, they do not take into account the sweeping changes
the Legislature made in tort reform in 1995. Sections
2956, 2957, and 6304 replaced the notion of common
9
liability, which also has been referred to as joint and
several liability, with "fair-share liability." See Smiley
v Corrigan, 248 Mich App 51, 53 n 6; 638 NW2d 151 (2001),
citing House Legislative Analysis, HB 4508 (Substitute H-
6), April 27, 1995, p 3. Thus, because liability can no
longer be joint but is now solely several under
circumstances such as exist in this case, there is no basis
for contribution. There is no "common liability" from
which to seek it. See Restatement Torts, Apportionment of
Liability, 3d, § B19, comment k, p 183.
The majority adopts plaintiff's argument that §
2925a(1), because it refers to persons who become “jointly
or severally liable,” may apply to cases in which
tortfeasors are severally liable under MCL 600.2956.
However, plaintiff fails to evaluate § 2925a(1) in
conjunction with the limitation in § 2925a(2). That
subsection expressly restricts the right of contribution to
circumstances where there has been a payment of greater
than one’s pro rata share of “common liability.” See also
§ 2925c(4).
Thus, it is not enough that tortfeasors are “jointly
or severally liable.” Before contribution can be sought,
they must share a “common liability.” This does not occur
when the liability of tortfeasors is several. As stated in
10
Restatement Torts, Apportionment of Liability, 3d, § 11, p
108:
When, under applicable law, a person is
severally liable to an injured person for an
indivisible injury, the injured person may
recover only the severally liable person's
comparative-responsibility share of the injured
person's damages.
I also find comment c of the same provision
persuasive:
c. Contribution by severally liable
defendant. When all defendants are severally
liable, each one is separately liable for that
portion of the plaintiff's damages. Since
overlapping liability cannot occur, severally
liable defendants will not have any right to
assert a contribution claim. [Id., p 109.]
Therefore, the conclusion in Salim v LaGuire,2 that
common liability could exist among individuals responsible
for an accident causing a single indivisible injury, may
have been correct before the enactment of tort reform.
However the injury involved in this case is no longer an
“indivisible injury” under MCL 600.2925a. The Legislature
has indicated its intention that these "indivisible
injuries" now be divided.
In essence, what the majority appears to argue is that
we should continue our notions of what, in the past,
constituted an indivisible injury. In so doing, it ignores
2
138 Mich App 334, 340; 361 NW2d 9 (1984).
11
the intent of the Legislature in passing tort reform. The
majority realizes that, had this case proceeded to trial,
plaintiff could not have been held responsible for
defendants' negligence. (Ante at 15-16.) Yet, because
plaintiff chose to settle before trial, the majority
maintains that the injury remains indivisible and thus
plaintiff's contribution action is viable.
I conclude that the Legislature did not intend that a
tortfeasor's legal liability for personal injury be
governed by the gamesmanship and legal strategies of his
fellow tortfeasors.3 Implicit in the majority’s opinion is
the premise that an injury only becomes divisible when a
jury divides it. I cannot accept this position. It would
allow the parties to circumvent the tort reform statutes
during settlement. Rather, the Legislature has based
tortfeasors' potential liability on the cause of action
involved, and what cause is involved is determined at the
commencement of litigation.
The majority's analysis relies on case law decided
before the existence of tort reform. It uses this law to
frustrate the Legislature's recognition that injuries may
3
I note that the majority omits the fact that
plaintiff had already entered into a separate settlement
agreement with defendant Lawson before it brought this
contribution action.
12
now share a common origin or cause, yet result in no common
liability or burden in tort.
Similarly, a plaintiff should not rely on the language
of MCL 600.2925b merely because it sets out guidelines for
determining the “pro rata shares” of common liability. The
statute does not expose a plaintiff to greater liability
than it would otherwise have under § 2956, § 2957, and §
6304. Where common liability exists, a review could be
made of the measure of pro rata shares under MCL 600.2925b,
possibly subjecting a tortfeasor to more liability than his
actual percentage of fault. However, § 2925b does not
apply where there is no common liability.
Thus, I think it clear that a pro rata division can be
made only when tortfeasors actually share a common tort
burden or liability. Because this case is a personal
injury action, it is governed by MCL 600.2956 and, pursuant
to that statute, there is no common liability. Hence,
plaintiff's insured was responsible only for its own
separate liability to Ash and Nicastri. This fact did not
change simply because plaintiff chose to settle instead of
proceeding to a jury determination of the actual
percentages of fault of plaintiff's insured and defendants.
Even if plaintiff deliberately paid more than its pro
rata share of the total liability, it cannot recover any of
13
that excess from defendants. As the Court of Appeals aptly
stated, “plaintiff's decision to voluntarily pay pursuant
to a settlement must be attributed to its own assessment of
liability based on its insured's negligence.” 254 Mich App
247-248. This view is certainly not unusual:
In a several liability system, the
nonsettling tortfeasor is held only for his
comparative fault share. In determining the
percentage responsibility of the nonsettling
tortfeasor, jurors must determine the comparative
share of every tortfeasor, including those who
have settled. However, a determination that A's
fault was 50% and B's fault was 50% does not
affect A's settlement or his liability. It
merely means that B is liable for 50%, no more,
no less. If A paid more than 50% of the damages,
that was his decision. If he paid less, the
plaintiff made a bad bargain, but none of this
matters to B's liability. [2 Dobbs, The Law of
Torts, Practitioner Treatise Series (2001) § 390,
p 1088.]
The majority opinion discusses at length how my
reading of these statutes creates a disincentive to
voluntary settlement (Ante at 19 to conclusion.) However,
it also acknowledges that "[a] primary purpose underlying
'contribution' was to mitigate the unfairness resulting to
a jointly and severally liable tortfeasor who had been
required to pay an entire judgment in cases in which other
tortfeasors also contributed to an injury." (Ante at 5.)
Allowing a contribution action in this case does not serve
14
the Legislature’s purpose in enacting tort reform, which
changed the scheme to fair-share liability.
Moreover, while settlements are generally favored,
neither MCL 600.2925a nor MCL 600.6304 makes clear that the
Legislature’s goal was to promote voluntary settlement.4
Instead, their provisions are designed to allocate
liability. They place the risk of, and burden for, payment
upon a party only to the extent that it is actually
responsible for an injury. This applies even if the injury
traditionally would be viewed as indivisible.
The logic of the majority’s position that its
interpretation encourages settlement and mine hinders it is
shaky. Once parties know the rules involving their
negotiations, settlement will be facilitated. Clarifying
the statute’s meaning so that the parties know the extent
of their liability aids negotiations. It does not preclude
them.
In addition, I find questionable the assertion that
allowing contribution actions under these circumstances
will foster settlement goals. The majority fails to
4
I recognize that the language of MCL 600.2925a(3)
discusses what must be done during settlement negotiations
to permit a subsequent contribution action. However, I
read this language as barring tortfeasors who do not first
seek the inclusion of other potentially liable parties in
settlement negotiations, not as a policy statement
preferring settlement.
15
recognize the untenable position in which parties will be
placed during settlement negotiations as a result of its
decision. The parties will be left to negotiate portions
of claims for which they have no possible liability. The
better position is to leave negotiations over those
portions to the parties actually responsible.
The parties must recognize that, under tort reform,
each tortfeasor cannot be held responsible for more than
his fair share of the liability for a plaintiff's injury.
But they must also pretend the contrary, that each is
potentially liable for the whole of a plaintiff's injuries.
Thus, in deciding whether to settle a claim, tortfeasors
must calculate into their settlement decisions certain
risks for liability that the Legislature has stated do not
exist. The majority's conclusions inject unnecessary
confusion into the settlement process involving personal
injury actions.
CONCLUSION
The language in MCL 600.2925a(2) and 600.2925c(4)
allows recovery in a contribution action based on "common
liability" only. MCL 600.2956 precludes common liability
in a personal injury lawsuit. Because the lawsuit
underlying this action was for personal injury, plaintiff's
insured could not be held liable for contribution. It is
16
liable only for its “fair share” of the damages incurred by
Ash and Nicastri based on its percentage of fault.
Accordingly, plaintiff cannot justifiably state that
when it settled with Ash and Nicastri it was at risk of
shouldering more than its fair share of a common burden.
It cannot now recover contribution from defendants on the
theory that it paid more than its pro rata share of such
liability.
Therefore, I respectfully dissent from the majority's
decision that contribution is possible here. I would
instead affirm the decision of the Court of Appeals.
Marilyn Kelly
Michael F. Cavanagh
17