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A Practitioner's Note on the Effect of Discharging Joint Tortfeasors in Missouri

Posted by José M. Bautista | May 06, 2024 | 0 Comments

Discharging Joint Tortfeasors in Missouri

There is no such a thing as an "empty chair defense" in Missouri courts.  Defendants are forbidden from comparing the fault of non-parties.  Those non-parties include joint tortfeasors who settle with and are discharged by the plaintiff.  Yet defendants continue to ignore these established principles and implead settling tortfeasors for contribution and non-contractual indemnification.  And they're getting bolder, often serving interrogatories, requests for documents, and even requests for admissions with their third-party actions upon the settling tortfeasor.  Perhaps they previously obtained the cooperation of unsuspecting or inexperienced attorneys representing settling tortfeasors.  Anyhow, all of it is improper, unfairly subjects the settling tortfeasors to attorneys' fees and costs to defend the action, and should be exposed as sanctionable behavior.  What follows is this practitioner's recent experience and recommended course of action.

Our Client was the driver of an SUV which struck negligently placed debris and equipment left at a roadway repair site by a construction company and the owners/managers of certain property without signs, barricades or other warnings for motorists on May 31, 2022. One of her passengers suffered serious orthopedic and internal injuries in the crash. The Client settled for policy limits of $100,000.00 in good faith pursuant to Mo. Rev. Stat. § 537.060 with the injured passenger on December 29, 2022.  The injured passenger, or "Plaintiff," subsequently sued the construction company and the owners/managers for personal injuries arising out of the wreck on February 10, 2023.  Because Plaintiff had already discharged our Client for liability for his injuries, she was not included as a defendant.

Defendant Knew Our Client Settled for Policy Limits by Plaintiff William Campbell Before Pursuing the Third Party Action

           Defendants filed a Third-Party Petition against our Client for claims of contribution, non-contractual indemnity, and negligence on May 12, 2023.  All the claims in the impleader regarded the Client's alleged liability for the damages to Plaintiff  in relation to the May 31, 2022 motor vehicle crash.  None involved cross-claims or claims of separate, independent damages to the Defendants.  The Third-Party Petition was purely comprised of claims from which Plaintiff had discharged our Client.  

On May 24, 2023, after a teleconference with Defendants' counsel, our firm sent a letter confirming the December 29, 2022 policy limits settlement with the Plaintiff and explaining how it extinguished any derivative claims stemming from any liability to him.  The Release was attached to the letter to corroborate the details of the settlement.  Despite the foregoing, on January 12, 2024, Defendants served the Third-Party Petition against our Client, along with a set of Interrogatories and Requests for Production.

The Settlement Agreement between Our Client and Plaintiff Effectively Discharged the Client from Contribution and Indemnity

Section 537.060 of the Missouri Revised Statutes governs release of liability issues.  The statute provides, in relevant part:

When an agreement by release, covenant not to sue or not to enforce a judgment is given in good faith to one of two or more persons liable in tort for the same injury or wrongful death, such agreement shall not discharge any of the other tort-feasors for the damage unless the terms of the agreement so provide; however such agreement shall reduce the claim by the stipulated amount of the agreement, or in the amount of consideration paid, whichever is greater.  The agreement shall discharge the tort-feasor to whom it is given from all liability for contribution or noncontractual indemnity to any other tortfeasor.  The term “non contractual indemnity” as used in this section refers to indemnity as used in this section refers to indemnity between joint tort-feasors culpably negligent, having no relationship to each other and does not include indemnity which comes about by reason of contract, or by reason of vicarious liability.

Id. (emphasis supplied).  In enacting § 537.060, the Missouri Legislature wanted to continue to foster a public policy of encouraging settlements made in good faith between tort-feasors and injured claimants that began with common law allowing a defendant to settle with a plaintiff and absolve itself of all claims for damages and contribution.  State ex rel. Sharma v. Meyers, 803 S.W.2d 65, 68 (Mo. App. W.D. 1990); State ex rel. Curators of the Univ. of Mo. v. Moorhouse, 181 S.W.3d 621 (Mo. App. W.D. 2006).  The “incentive” to settle for a potential tortfeasor is he or she can “put the incident to rest and will not be subject to a later action for contribution.”  Sharma, 803 S.W.2d at 67.  In other words, “[a] defendant settles to obtain peace and repose.  If these are not available, there will be no settlement.”  Lowe v. Norfolk and Western Ry. Co., 753 S.W.2d 891 (Mo. banc 1988). 

            Missouri courts, beginning with the Missouri Supreme Court in Lowe, made it clear that under § 537.060 a settling tort-feasor was immune from liability form any action or liability in contribution by non-settling tort-feasors.  Id.  In Lowe, injured railroad workers sued the railroad company and three other companies involved with the derailment, spillage, and cleanup of toxic chemicals from a train.  753 S.W.2d at 892-93.  The railroad company filed third-party claims against the defendants who had previously settled.  Id.  After a hearing, the trial court dismissed the third-party claims, "concluding that the plaintiffs had entered into good faith settlements with the third-party defendants and that the settlements were effective to discharge these defendants from all liability."  The Missouri Supreme Court agreed.   Citing Missouri policy of promoting settlement and valuing “present assurance over future uncertainty”, the Court affirmed the dismissals of the railroad company's third-party claims.  Id. at 894.

            Shortly after Lowe, our Court of Appeals considered a preliminary writ in prohibition stopping the Circuit Court from proceeding on a claim for contribution by St. Luke's Hospital to recover some of a two-million-dollar verdict against it from settling tortfeasors in a medical malpractice suit.  Sharma, 803 S.W.2d at 65.  The settling tortfeasors – two doctors and a medical group -- had been discharged and released by the plaintiff in exchange for the policy limits of $100,000.00, when the hospital filed its separate action for contribution.  Id. at 66.  Finding the doctors and the medical group had already settled with the plaintiff, the Sharma Court held the contribution claims by the hospital were “clearly barred” under § 537.060 and the trial court would exceed its jurisdiction in permitting further “useless and unwarranted” proceedings against the settling tortfeasors.  Id. at 66, 68.  The Sharma Court thus made the preliminary writ absolute and ordered the trial court to dismiss the hospital's contribution suit against the settling tortfeasors.  Id. at 68.

            Consistently, the Western District held that the University of Missouri was made immune by its settlement with a family who brought a malpractice suit against two physicians and their corporation upon revisiting the issue in State ex rel. Curators of the Univ. of Mo. v. Moorhouse in 2006.  181 S.W.3d at 621.   Upon being sued, the physicians brought a third-party claim against the University for indemnity and contribution.  The family, however, had settled with the University and released it from liability.  So, when the trial court would not dismiss the case, the University sought an order in prohibition to direct the trial court to dismiss the third-party claim.  The Western District agreed with the University.  To the Court, the University's settlement with and release from liability by the family meant that the University could no longer be liable for contribution to the physicians per § 537.060 and a newer statute, § 538.230.3[1].  Id. at 624.  Similar to the Sharma Court, the Moorhouse Court concluded that the trial court was acting without jurisdiction in proceeding with the third-party claim against the University and “erred in refusing to dismiss the action.”  Id. at 625.  It then issued the writ of prohibition directing the trial court to dismiss the third-party action.  Id.

          Defendant Third-Party Petition for Contribution against the Client was Useless and Unwarranted and Needed to be Dismissed.

By operation of Mo. Rev. Stat. § 537.060, the good faith settlement agreement between our Client and the Plaintiff for policy limits discharged the Client from all liability for contribution or noncontractual indemnity from any other tortfeasor, including Defendants.  Lowe, 753 S.W.2d at 892-93; Sharma, 803 S.W.2d at 68; Moorhouse, 181 S.W.3d at 621.  Defendants did not assert a claim for contractual indemnity in the Third-Party Petition (nor could it as no contract or agreement existed in which our Client agreed to indemnify Defendants in any way for the damages alleged by Plaintiff), so contractual indemnity did not present an issue.  The Third-Party Complaint sought nothing more than contribution for alleged liability for the personal injuries and damages from which Plaintiff had already discharged our Client in settlement.    

Accordingly, Defendants' Third-Party Complaint against the Client was without legal basis.  Our Client was rendered immune from third-party claims by the § 537.060 settlement with the Plaintiff, as the settling defendants in Lowe and Moorhouse.  753 S.W.2d at 892-93; 181 S.W.3d at 621.  Without more, the Third-Party Petition should have been summarily dismissed with prejudice for failing to state a claim for relief may be granted.  Lowe, 753 S.W.2d at 892-93.  

Allowing the Third-Party Complaint to proceed would have be “useless and unwarranted,” not to mention negatively impactful to the Client, who continued to incur costs and expenses after she had bought her peace from litigation.  Sharma, 803 S.W.2d at 68.  Defendants were attempting to use the third-party action to do exactly what the Sharma Court sought to prevent with discovery requests – further proceedings “to delve into the intent” of the Client in settling.  Id.  What's more, many of the discovery requests would have been inappropriate, even if our Client had not settled with the Plaintiff and was properly a party in this case.  The Third-Party Petition should have never been filed, much less served and pursued.

We filed a Motion to Dismiss with a request for costs setting forth these arguments on behalf of our Client in lieu of an answer.  Defendants dismissed without prejudice the Third-Party Petition shortly after we filed our Motion, but before the matter could be heard and/or ruled on by the Court.  While we did not have the opportunity to seek costs to make our Client whole, our written communications and the averments in our Motion is ample notice and grounds for potential sanctions against Defendants should they decide to refile the non-suited impleader.  The Motion also allowed us to inform the Court of the proper scope of a subpoena upon a non-party witness, which will be useful if our Client's deposition is sought.  Most importantly, we were able to stop the abusive prosecution and discovery for our Client.

[1] Enacted in 2005, Section § 538.230.3 of the Revised Missouri Statutes provides, in relevant part: “Any release, covenant not to sue, or similar agreement entered into by a claimant and a person or entity against which a claim is asserted arising out of the alleged transaction which is the basis for plaintiff's cause of action, whether actually made a party to the action or not, discharges that person or entity from all liability for contribution or indemnity.”

About the Author

José M. Bautista

Partner - Personal Injury Attorney


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