Schuman v. Vitale

BYER, Judge,

dissenting.

This appeal from the denial of a claim for contribution against a joint tortfeasor presents a question of apparent first impression in any jurisdiction which has enacted the Uniform Contribution Among Tortfeasors Act. Where joint tortfeasors settle with a plaintiff as part of a “package deal,” does the fact that they obtain separate releases rather than a single release naming all defendants preclude a claim for contribution between settling defendants? The trial court answered this question in the affirmative and dismissed a claim for contribution. The majority affirms. I would answer the question in the negative and reverse.

*566In this case, there was one settlement, but it was accomplished by two releases. One release, for the stated consideration of $165,000, discharged defendants Vitale and Schuman and their insurance carriers. While waiving any further rights against each other, this release expressly reserved their rights to pursue any claim against co-defendant DOT. The second release for a stated consideration of $9,000 discharged plaintiffs’ claim against DOT. All parties and their counsel received copies of both releases accompanied by a letter from plaintiffs’ counsel.

The trial court dismissed Vitale’s cross-claim based on section 8324(c) of the Uniform Contribution Among Tortfeasors Act, 42 Pa.C.S. § 8324(c), which provides:

(c) Effect of settlement. — A joint tort-feasor who enters into a settlement with the injured person is not entitled to recover contribution from another joint tortfeasor whose liability to the injured person is not extinguished by the settlement.

The language of this statute clearly denies parties who settle any right to contribution from non-settling jointtortfeasors. However, what constitutes “the settlement” for purposes of this statute is less obvious.

In reaching its decision, the trial court analyzed the Schuman-Vitale release and the express language of section 8324(c). Noting that this release clearly failed to extinguish liability between DOT and the plaintiffs, the court concluded that Vitale could not look to DOT for contribution. However, I believe that this overlooks the effect of the second release.

Although the Schuman-Vitale release did not discharge DOT, the plaintiffs did, in fact, contemporaneously release DOT from any liability to them as part of the same settlement. If payment to the plaintiff in exchange for release from liability is the key to a joint-tortfeasor’s availability for contribution, as the trial court opinion implied, then if the trial court had also considered the second release, it *567should have agreed with Vitale’s conclusion that, “[s]imply put, Defendant PennDOT has been released from liability and is, therefore, available for contribution pursuant to 42 Pa.C.S.A. Section 8324(c).” (Appellant’s brief, 7).

DOT urges that releases must be interpreted according to the intent of the parties. Hertzog v. Jung, 363 Pa. Superior Ct. 439, 526 A.2d 425 (1987).1 The Schuman-Vitale release alone does not extinguish DOT’S liability. On the other hand, the two releases in this case, although separate documents, were executed contemporaneously as part of a settlement involving three defendants. Moreover, the September 23, 1988 letter from plaintiffs’ counsel2 confirming the settlement and requesting counsel for the defendants to forward an appropriate release implies that this was, in fact, a “package deal” for $174,000.00. These circumstances indicate the parties’ intent to treat the two releases as one larger settlement.

*568It is worth noting that DOT’s brief phrases the “statement of the question involved” to indicate that these two releases may equal one settlement:

STATEMENT OF THE QUESTION INVOLVED

Is one co-defendant precluded from pursuing a cross-claim for contribution from another co-defendant when settlement of plaintiffs’ claims are effectuated by means of separate releases which do not name both co-defendants as released parties? (emphasis added)

(DOT’S brief, 1).

The majority opinion also recognizes that this case involves only a single settlement. The majority opinion states:

After a jury was impaneled, but before trial, the plaintiffs entered into a settlement with defendants Vitale, Schuman and DOT for $174,000. The defendants contributed to the total as follows: $115,000 from Vitale; $50,000 from Schuman; and $9,000 from DOT. Two releases were prepared.

Maj. op., 562. (Emphasis added).

DOT also contends that its argument is supported by 42 Pa.C.S. § 8326, which provides in pertinent part:

A release by the injured person of one joint tort-feasor, whether before or after judgment, does not discharge the other tort-feasors unless the release so provides ...

In fact, 42 Pa.C.S. § 8326 does not affect Vitale’s argument adversely. Vitale readily admits that the Schuman-Vitale release does not provide for DOT’S discharge; however, he contends that DOT was relieved of liability to the plaintiffs in a separate, contemporaneous release, and we should consider the two releases together as a single settlement. I agree. By adopting this reasoning, and viewing the two documents merely as portions of one settlement, we would adhere to the language of the statute as well as its spirit.

*569My research has not uncovered any case on point.3 However, I find it particularly significant that 42 Pa.C.S. § 8324(c) uses the term “settlement” and not “release.” As this case demonstrates, the two terms are not always synonymous. There is no good reason why we should prohibit a single settlement with multiple joint tortfeasor defendants using separate releases, unless the defendants forfeit their rights to contribution.4

I respectfully suggest that the effect of the majority opinion is to “amend” 42 Pa.C.S. § 8324 by changing the General Assembly’s word “settlement” to “release.” The General Assembly clearly knew the difference between these two terms. The General Assembly used the term *570“release” in other provisions of the Uniform Contribution Among Tortfeasors Act. See 42 Pa.C.S. §§ 8326, 8327. However, in § 8324(c) the General Assembly did not use the term “release,” but instead used the term “settlement.” We must assume that this choice of language by our General Assembly was deliberate.

We simply are “not free to engraft additional verbiage in an effort to pursue the ... spirit” of a statute. McNelly Appeal, 122 Pa.Commonwealth Ct. 601, 607, 553 A.2d 472, 475 (1989), (citing Black v. Billy Penn Corp., 72 Pa.Commonwealth Ct. 628, 632, 72 Pa.Commonwealth Ct. 628, 632, 457 A.2d 192, 193 (1983) (additional citation omitted)). Similarly, our Supreme Court has recently stated in In re J.S., 526 Pa. 418, 426, 586 A.2d 909, 913 (1991), that it “is not our stead to engraft upon legislation provisions which the General Assembly did not consider or did not see fit to enact. See Commonwealth v. Revtai, 416 Pa. 53, 532 A.2d 1 (1987).”

Therefore, I would hold that the term “settlement” in 42 Pa.C.S. § 8324(c) includes a settlement which is accomplished through the execution of more than one release, at least where the circumstances indicate that the separate releases are part of a single or “package deal” settlement.5

I respectfully dissent.

. In Milford v. Metropolitan Dade County, 430 So.2d 951 (Fla.App. 1983), a Florida court addressed this issue of party intent. Milford involved a suit for damages arising from a motorcycle collision, in which a defendant filed a third party complaint against the county for contribution. Thereafter, the original plaintiff and defendant settled and executed a release which omitted mention of the county. When contribution was sought, the county argued that it could not be held liable for contribution, because the release failed to extinguish its liability to the plaintiff. The defendant argued that the release should be reformed to reflect the true intent of the parties: extinguishing the county’s liability and activating the right to contribution. The court stated:

The fact that the release as written unambiguously fails to extinguish the County’s liability is plainly not dispositive and, indeed, is irrelevant to [the] claim for reformation____ Where an agreement does not carry out the intent of the parties or violates such intent, equity will reform the agreement.

430 So.2d at 952.

. That letter reads as follows:

This correspondence will serve to confirm our settlement of the above-captioned matter for the sum of $174,000.00 with the insurance carrier for Carmen Vitale, contributing the sum of $115,000.00, the insurance carrier for Theresa Schuman, contributing $50,000.00 and the Commonwealth of Pennsylvania, Department of Transportation, contributing the sum of $9,000.00.
Would you kindly forward the appropriate Release at your earliest opportunity so that we can formally conclude this matter.

. Although no Pennsylvania cases deal with this situation, a similar question was considered in Hawaii under its version of the act. In Nobriga v. Raybestos-Manhattan, Inc., 67 Haw. 157, 683 P.2d 389 (1984), the court dealt with an injured plaintiff who filed suit against twenty-four different manufactures, twenty-two of which settled and were separately released by the plaintiff. Nobriga held that the trial court erred in treating each release separately and not collectively with respect to its effect on the plaintiffs recovery. The court in Nobriga looked to its statute which provided that a release by the injured person of one joint tortfeasor does not discharge the other tortfeasor unless the release so provides.

Nobriga refused to follow the literal wording of the Hawaii statute and treat each release as a separate settlement. Rather, that court chose to consider the objectives sought to be achieved by the adoption of the act. It concluded that the legislature did not intend a different result when an injured party settles with several tortfeasor defendants by separate releases against what would have happened if settlement with all of them was effected by a single, joint release. Therefore, the court read the singular words "one joint-tortfeasor” and “release" to include the plurals, i.e. tortfeasors and releases.

. To hold otherwise would frustrate the aims of 42 Pa.C.S. § 8324 and invite abuse. That section indicates that when joint tort-feasors act in common to settle with the injured party, they are entitled to seek contribution from each other for any sums paid in excess of their shares of responsibility. It is apparent from the evidence in this case that all three defendants were released simultaneously after they reached a settlement agreement with the plaintiffs, even though that settlement was implemented by separate releases. To deny Vitale the right to seek contribution from DOT under these circumstances would not make sense and would not further the aim of the statute to encourage defendants to avoid letting the ultimate determination of contribution impede settlement with the injured plaintiff.

. The use of separate releases may actually facilitate faster payments to an injured plaintiff. There can be time consuming logistical problems in obtaining multiple signatures on a single release where the defendants’ signatures also are required or there are multiple plaintiffs. In addition, there may be circumstances where there is an . overall settlement with multiple defendants, but the precise language of the individual releases is the subject of separate negotiation with individual defendants. No reasons of policy favor the discouraging of such settlement options; in fact, I fear that to do so might discourage the desired goal of early settlement in some situations.