Patsy DIONESE, et Vir., Petitioners,
v.
CITY OF WEST PALM BEACH, et al., Respondents.
Supreme Court of Florida.
Barbara Green of Daniels and Hicks, P.A., Miami, and Ricci and Roberts, P.A., West Palm Beach, for petitioners.
R. Fred Lewis of Magill & Lewis, P.A., Miami, for respondents.
Patricia A. Seitz and Nancy E. Swerdlow of Steel, Hector & Davis, Miami, for Florida Power & Light Co., amicus curiae.
ADKINS, Justice.
We have for review Dionese v. City of West Palm Beach,
Whether a private, unilateral agreement among several plaintiffs to apportion *1348 funds paid by one joint tort-feasor is binding upon non-settling joint tort-feasors and the court in determining the set-off claim of the non-settling joint tort-feasors?
Id. at 1364. We have jurisdiction pursuant to article V, section 3(b)(4) of the Florida Constitution and answer the question in the negative.
Patsy Dionese, a driving instructor, was injured when an automobile driven by a student collided with a partially raised manhole cover located in the City of West Palm Beach. Patsy sued various parties in an attempt to recover damages for her personal injuries and her husband Charles joined the suit seeking damages for loss of consortium.
The Dioneses settled their claim with the driver of the automobile and her insurer for $45,000. The settlement agreement did not apportion the money between Mr. and Mrs. Dionese. The Dioneses proceeded to trial against the City of West Palm Beach. After taking comparative negligence and the failure to wear a seat belt into account, the jury returned a verdict of $57,000 for Mrs. Dionese and $3,800 for her husband.
A post-trial hearing was held to determine the proper method of set-off as required by section 768.041(2), Florida Statutes (1983), which provides:
At trial, if any defendant shows the court that the plaintiff ... has delivered a release ... in partial satisfaction of the damages sued for, the court shall set off this amount from the amount of any judgment to which the plaintiff would be otherwise entitled at the time of rendering judgment and enter judgment accordingly.
At the hearing, the Dioneses notified the court of a private unilateral agreement to apportion $10,000 of the $45,000 settlement proceeds to Mrs. Dionese's claim for personal injuries, and the remaining $35,000 to Mr. Dionese's claim of loss of consortium. A set-off of $10,000 from Mrs. Dionese's verdict of $57,000 would leave a $47,000 judgment against the City. The City would not have to pay any of the $3,800 verdict to Mr. Dionese because the $35,000 settlement would result in a net judgment of zero. Hence, the Dioneses sought entry of a $47,000 judgment against the City. The Dioneses both testified in post trial depositions that they agreed to the $35,000/$10,000 apportionment because Mrs. Dionese was receiving workers' compensation benefits while Mr. Dionese was previously uncompensated.
The City of West Palm Beach asserted that the general $45,000 settlement must be deducted from the combined $60,800 verdict. This calculation would result in entry of a $15,800 judgment against the City. In support, the City notes that the settlement agreement itself did not apportion the proceeds. Further, in response to a pretrial inquiry concerning the existence of any settlement agreements, counsel for the Dioneses explained that his clients had obtained a $45,000 settlement that was a "general release." The Dioneses did not advise the City, or the court, that the settlement had been apportioned until after entry of the jury verdict. In addition, counsel for the settling parties testified that he had refused to execute a post-verdict settlement agreement apportioning the $45,000, and would not have settled at all if the Dioneses had insisted upon an apportionment.
Both existing case law and fairness to the parties involved require us to ignore a private unilateral apportionment of settlement proceeds among plaintiffs, when the settlement agreement itself fails to apportion the proceeds among the plaintiffs.
Both parties argue that Devlin v. McMannis,
The trial court entered a zero verdict after setting off the $20,000 settlement from the $15,000 verdict. The district court of appeal reversed and entered a $8,000 verdict in favor of the estate. This figure was reached by setting off the $2,000 settlement allocated to the estate from the $10,000 verdict returned in favor of the estate. This Court upheld the decision of the district court.
The Dioneses assert that Devlin is supportive of their position because it recognizes and preserves the identity of separate causes of action, and provides that only the amount of the settlement agreement apportioned to a specific cause of action, not the amount of the entire settlement, must be set off against the jury verdict for the corresponding cause of action. The Dioneses fail to recognize that Devlin is easily distinguishable from the instant case. In Devlin, the settlement agreement itself recognized two separate and distinct causes of action and apportioned the proceeds accordingly. Conversely, the settlement agreement in the instant case was a general release that failed to apportion the proceeds. In Devlin, we recognized this crucial distinction when we cautioned:
[W]e are not unaware that there may be occasions where a settlement is effected so as to fail to preserve or otherwise differentiate settlement sums pertaining to the damages distinctive and peculiar to the underlying causes of action. Under such circumstances, subsequent verdicts entered against another joint tort-feasor on the same causes of action may indeed occasion the necessity of offsetting against the total sum of the verdicts the total amount of the prior settlement.
City of Tamarac v. Garchar,
The Dioneses contend that Florida Freight Terminals, Inc. v. Cabanas,
Prior to trial, the administrator of the decedents' estates and the children's guardian settled with several defendants for a sum of $745,000. The agreement stipulated that $300,000 was allocated to the decedents' estates and $445,000 was apportioned to the children's claim. The administrator of the estate proceeded to trial against the two remaining defendants. A zero verdict was returned against one defendant and a verdict of $2,034,500 was returned against the remaining defendant. All of the parties agreed that the portion of the settlement agreement allocated to the estate, $300,000, must be set off against the $2,034,500 verdict in favor of the estate. A dispute arose when the defendant sought to have all or part of the $445,000 settlement allocated to the children set off against the verdict in favor of the estate. The trial court denied the defendants' request, and the district court reversed, finding that if the plaintiff prevailed in the new trial that was ordered, the trial court should hold proceedings to determine what portion of the $445,000 should be set off against the estate's verdict.
We reject the Dioneses' contention that Cabanas is inconsistent with the ruling below because Cabanas provided for the apportionment of a general release. Cabanas allowed a portion of the $445,000 settlement in favor of the children's guardian to be set off from the verdict awarded to the estate because "[t]he language of the release specifically includes as part of the settlement, claims for wrongful death."
Private unilateral agreements by plaintiffs to divvy up the proceeds of a general settlement agreement are contrary to all concepts of fairness. Private unilateral agreements to apportion settlement proceeds would often result in a windfall recovery. In this case, the jury assessed Mr. Dionese's damages for loss of consortium at $3,800. The settlement allocation the Dioneses advocate $10,000 to Mrs. Dionese and $35,000 to Mr. Dionese would result in more than a $30,000 windfall for Mr. Dionese, a recovery about 900% greater than the damages the jury determined he should receive.
The only proper method of ensuring against duplicate recoveries in an undifferentiated lump sum settlement situation is to set-off the total settlement funds against the total jury award. If necessary, the settlement can then be allocated proportionally against the jury verdict for each cause of action tried, thus preserving the distinct nature of the separate claims.
The rights of both the settling and non-settling joint tort-feasors would be adversely effected if we were to allow plaintiffs to privately and unilaterally apportion the proceeds of a settlement agreement containing a general release. The Uniform Contribution Among Tortfeasors Act, section 768.31, Florida Statutes (1983), provides that when two or more persons become jointly or severably liable for the same injury, a tortfeasor who pays more than his pro rata share of the liability has a right of contribution against the other tortfeasor. In order to encourage settlements, the legislature created subsection (5) of section 768.31, which provides that a joint *1351 tort-feasor who is given a release in good faith cannot be sued for contribution. Sobik's Sandwich Shops Inc. v. Davis,
The non-settling joint-tortfeasor is also concerned with the terms of any settlement agreement obtained by the plaintiff. This concern surfaced at a pre-trial hearing when counsel for the City requested information about any existing settlement agreements. In fact, disclosure of the terms of an existing settlement agreement may lead the non-settling defendant to alter his plans, and enter into a settlement agreement instead of proceeding to trial. The non-settling defendant's interest in the terms of existing settlement agreements is illustrated by the City's position in this case. Clearly, the City would be adversely affected if the private unilateral agreement were enforced because it would be forced to pay a $47,000 final judgment as opposed to $15,800.
For the reasons expressed, we answer the certified question in the negative and hold that a private unilateral agreement among several plaintiffs to apportion funds paid by one joint tort-feasor is not binding upon the non-settling joint tort-feasors and the courts in determining the claim of the non-settling joint tort-feasors. Rather, an agreement to apportion the proceeds of a settlement agreement must be found on the face of the settlement agreement and agreed to by all of the parties involved in the settlement.
Accordingly, we approve the decision of the district court.
It is so ordered.
McDONALD, C.J., and OVERTON, EHRLICH, SHAW and BARKETT, JJ., concur.
