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Porter Hayden Co. v. Bullinger
713 A.2d 962
Md.
1998
Check Treatment

*1 713 A.2d 962 PORTER HAYDEN COMPANY et al.

Barbara BULLINGER et al. 56, Sept. Term,

No. 1997. Appeals Maryland. Court

May 1998.

Reconsideration Denied June 1998. *2 Duvall, Gardner Stone, IÍ, M. Dwight W. McSherry Padriac Morton, Whiteford, Taylor L.L.P., Baltimore, & Preston. for Porter Hayden Co. Hungar Simms,

Thomas G. (Larry Gibson, L. Dunn & Crutcher, L.L.P., DC; Washington, John P. Sweeney, Gregory Lockwood, Stockbridge, Baltimore, Miles & brief), all on Owens Corning. *3 (Peter

William Burgy, C. Timothy Hogan, Nicholl, J. T. Nicholl), Law Baltimore, Offices Peter T. John Herrick (Ness, Loadholt, Motley, Poole, Richardson Charleston, SC; & David M. Layton, Gerel, Baltimore, Ashcraft brief), all on for respondents.

Russell D. Karpook, Lee Baylin, Kingsley Lisa-Gail Jen- kins, P.A., Francomano & Karpook, Baltimore, amicus curiae.

Elizabeth D. Rodriguez, Lawall, Francis J. Charles H. Carpenter, Pepper, Scheetz, L.L.P., Hamilton & Washington, DC, amicus curiae. Austem,

David T. Crewe-Alien, Pamela Manville Personal Injury Trust, Fairfax, VA, Settlement amicus curiae. Cohen,

Anne E. Debevoise & Plimpton, New York City, amicus curiae.

Argued BELL, C.J., before ELDRIDGE, RODOWSKY, CHASANOW, WILNER, JJ., RAKER and and DALE R. CATHELL, Judge (Specially Assigned).

DALE CATHELL, R. Judge (Specially Assigned). granted We petition for writ of presented certiorari (Owens Owens Corning Fiberglass Corporation Corning) (Porter to Hayden Company Hayden), petitioners, Porter arising out of verdicts rendered address three issues personal injury action them a consolidated asbestos-related presented The issues City. in the Circuit Court for Baltimore (1) authority the trial court had the to determine are: whether claims when a application of co-defendant contribution application federal court was to address the set- principles pending proceeding off federal class action (2) instant whether the involving parties appeal; trial court refusing petitioners erred disclose agreements negotiated amount the settlement between (3) tort-feasors; plaintiffs and other whether for finding purposes default constitutes a of section 3-1404 of Courts and application Judicial of our Proceedings Article. Because resolution the second issue, it unnecessary is us to address the first issue shall presented petitioners. We also address third issue.

I. FACTS This us to appeal requires separate examine two sets of facts that arose out of actions filed in courts. The different first set of facts involved two federal actions: one bankruptcy adjudication and one class action settlement. The second set appeal. involves the instant We shall discuss these facts separately.

A. The Federal Cases *4 In (Johns-Manville), Johns-Manville Corporation a products, manufacturer of asbestos-related for bankrupt filed cy primarily because of numerous asbestos-related claims brought against it. As result of the Johns-Manville bank (Man- ruptcy, Injury the Manville Personal Settlement Trust Trust) injured ville to compensate persons was created asbestos-containing products manufactured Johns-Man (S.D.N.Y.1986), ville. See In re Johns-Manville 68 B.R. 618 Corp., now,, Corp., sub Kane v. Johns-Manville 843 F.2d aff 'd (2d Cir.1988)(Manville I). all of the Manville Trust beneficia class action for In case, was created ries, parties this which included trust in both litigation pending all supersede because it The class was created and state courts. federal to com inadequately funded the trust was apparent became re In a settlement beneficiaries. possible all pensate was reached. of Manville Trust funds the distribution garding 129 B.R. 710 Litig., E. Asbestos In re & S. Dists. See Joint S.D.N.Y.1991)(Manville II). (E.D.N.Y. Ap The Court of & however, Circuit, approval of the vacated peals for the Second Litig., 982 re E. & S. Dists. Asbestos See In Joint settlement. III). (2d Cir.1992)(Manville F.2d remand, again Trust Beneficiaries Following the agreement, Pursuant to this settlement a settlement. reached and all claims recapitalized Trust was the Manville systems from the various tort to be removed Trust were called the procedures to administrative according processed (TDP). TDP, to the Process Pursuant Trust Distribution resulting exposure from categories of diseases numerous on each monetary placed and a value were created asbestos TDP enumerated the methods The also category of disease. in litiga- would be calculated set-off by which co-defendant’s Stipulation Beneficiaries. The involving the Trust tion however, in Ma- Settlement, arising excluded claims explicitly appropriate provisions. to the set-off respect with ryland provided: of Settlement Stipulation TDP, with calculation of set- which deals H.3 of the Section Stipulation of this with off, by operation not apply shall arising health claims under to asbestos respect of the issue consent to trial the Courts parties law. The with developed rules that should be set-off appropriate with claims or the Trust connection respect to Manville Maryland law.... arising under 473, 578 Litig., F.Supp. E. Asbestos

In re & S. Dists. Joint S.D.N.Y.1995)(Manville IV). (E.D.N.Y. vacated the for the Second Circuit Appeals

The Court of respect of the settlement with approval lower court’s

457 Maryland set-off issue. It stated that to by refusing resolve issue, to disagreement Maryland set-off the trial deciding court “abstained from the issue left unresolved In E. Litig., Settlement.” re Joint & S. Dists. Asbestos (2d Cir.1996)(Manville V). 764, 775 F.3d The court held such inappropriate an abstention was and remanded the case back to the district court for a determination of Maryland set- issue. off court, attempting predict

On remand federal district to Maryland Appeals what the Court of would decide if faced issue, Maryland determining with the set-off held that set-off, courts to appropriate were “exclude the Trust from shares, calculations of settling pro other defendants’ rata ... credit amounts settled the Trust to tortfeasors who have not settled.” In re E. Dists. Joint & S. Asbestos (E.D.N.Y. S.D.N.Y.1996)(Manville Litig., F.Supp. & VI). court, however, judg The federal district rendered this ment on 10 after trial June court rendered appeal its from which the instant arose. Appeal

B. The Instant Zumas, Grimshaw, Nick Patrick McCaffery, John Ethel Granski, Balonis, Krueger Marie Casimir and Frank each filed suit the Circuit Court for City petitioners Baltimore defendants, and numerous alleging exposure other each products by petitioners manufactured caused him or her to contract asbestos-related mesothelioma. The cases were con- April solidated for trial an order dated 3 1995. Hayden third-party

Porter filed a contribution claim against (B W) Babcock B April & Wilcox & on 1995. After & W failed file an answer and respond discovery requests, Hayden Porter Hayden’s moved default. Porter default motion granted third-party on its complaint against W, court and the entered an order of default in favor of Porter Hayden. The court ultimately entered a default against B on August & W 30 1995. *6 jury 21 December the verdicts in favor

On returned Zumas, Grimshaw, in McCaffery, the and Gran- plaintiffs the In order the to the judgment, ski cases. to reduce verdicts trial camera information to the court for in plaintiffs provided with Trust regarding settlements the Manville consideration joint other Both settling petitioners and with tort-feasors.1 to obtain this in order to under- sought settlement information judgment calculate final The court stand and the amounts. requests judgments their and rendered final on denied to affording petitioners opportunity March without an In this information. the final rendering examine settlement Trust, trial judgments accounting and Manville but, joint unlike the court considered trust a tort-feasor court, granted a tanto reduction in the verdicts pro federal against petitioners. rendered Corning Special Appeals to the Court of appealed

Owens judgments against it in favor of the from the rendered Zumas, Grimshaw, McCaffery, plaintiffs. and Granski Porter from the verdict in the Grim- Hayden appealed only rendered shaw case. Special judgment affirmed the Appeals Court to trial to authority

trial court. As whether the court had despite verdicts federal judgment pending reduce the to action, class court held the circuit court “had appellate jurisdiction adjust compensatory damages fundamental to judgment Packing a final instant issue cases.” Anchor Grimshaw, 134, 173, 5, 24 Md.App. 692 A.2d Co. Special also held amounts of the Appeals The Court agreements properly petition- settlement were withheld from respect judgment ers. With to the default entered W, authority the court the trial court lacked the held Hayden’s rata pro “reduce Porter share of the B & tort- because it was established that was a W at at 30. feasor.” Id. 692 A.2d plaintiffs’ The docket entries the court of 1. reflect counsel informed agreements paid by and whether all the amounts release/settlement settling joint statutory pro-rata share. tort-feasors exceeded We issued writ of certiorari to address the three issues presented by petitioners. Prior to oral argument, this Court was informed that Owens Corning plaintiffs settled with McCaffery and Zumas. Accordingly, Corning Owens appeals only from the verdicts rendered it the Grimshaw and Granski cases. Porter Hayden appeals only still from the rendered the Grimshaw case. Barbara Bullinger is personal representative of the Grimshaw estate. We shall refer to Bullinger and Granski collectively respon- dents.

In issue, respect the second we trial hold the court erred refusing petitioners allow to inspect the amounts of the *7 settlement agreements and we judg- vacate the trial court’s ment as to the apportionment of liability. regard With to issue, Porter Hayden’s third we hold that a default constitutes a finding of for of purposes the application of section 3-1404 of the Courts and Judicial Proceedings Article.2 Because we are vacating the trial apportion- court’s ment of damages the among the tort-feasors the cases, Grimshaw and Granski the federal court’s apportion- VI, ment decision in Manville supra, predate will the appor- tionment determination to be made the circuit court on remand. The trial court must apply preclusive then the effect of, what at that time will be prior, the federal court action in Manville VI. explain.

We

II. THE DISCLOSURE OF SETTLEMENT

AGREEMENTS The scope of discovery under Maryland law is very broad. pertinent discovery rule states: Maryland 2. The Among Contribution Joint-Tortfeasors Act was recodi- fied from Article 50 of the Code to the Courts and Judicial Laws, Proceedings Article. See 1997 Md. ch. 31. The Revisor's Note to provides: section may 3-1401 interpreted “[T]his Act not be to render any change substantive to Maryland.” the Laws of We shall cite to the Act as codified in the Proceedings Courts and Judicial Article.

(a) Generally.—A may discovery obtain party regarding matter, existence, including not any privileged, descrip- the condition, tion, nature, any and of docu- custody, location if sought ... matter tangible things ments or other is subject matter involved in the action.... It relevant ground objection sought information is is party known to or otherwise obtainable already discovery that the information will be inadmissi- seeking or sought reasonably the trial if information appears ble at to lead to the of admissible evidence. calculated 2-402(a). of purpose have noted that the Md. Rule We discovery rules to litigant of all require party

is to disclosure facts adversaries, eliminate, to far thereby his and as necessity any party litigation going possible, mind, concerning trial a confused or muddled state litigation. parties If all of the gave facts that rise to the relevant, knowledge pertinent have of all of the non- facts, knowledge or the the existence where- privileged facts, able parties properly abouts of such should be defenses, thereby advancing their claims and prepare justice. expeditious administration of sound 8, 13, 174 Baltimore Transit Co. v. 227 Md. A.2d Mezzanotti (1961); Katzen, see also Berrain (1993); Hosp., 629 A.2d 708-09 Androutsos v. *8 Fairfax 638, (1991); 634, 574, 576 v. Mass Md. 594 A.2d Kelch Transit 449, Admin., 223, 229, (1980); 287 Md. 411 A.2d 453 Williams (1967). Moran, 279, 291, 274, 236 v. 248 Md. A.2d 281-82 discovery rules are broad in and are scope con Berrain, liberally purpose. their 331 accomplish strued 697, 709; Androutsos, 638, 629 A.2d at 323 Md. at Md. at 594 Kelch, 576; 229, 453; at 411 at A.2d at 287 Md. A.2d Mezza notti, 13, general 227 Md. at 174 A.2d at 771. Under the rule, discovery party may discovery obtain of information privileged. Privileges prohibiting is relevant and not or are limiting the introduction of evidence created United statutes, Constitution, Constitution, Maryland States

461 Fifth of the United States common law. The Amendment 22 of the Declaration of Maryland Constitution and Article protect compulsory Evans Rights self-incrimination. State, 682, 128, 660, 117, denied, 333 Md. 637 cert. 513 A.2d State, 833, 109, (1994); 115 130 Choi v. U.S. S.Ct. L.Ed.2d 56 529, 535, 1108, (1989); A.2d 1111 Lodowski v. 316 Md. 560 State, 246-47, 299, 306-07 Md. 513 A.2d statutory are also Maryland privileges. There numerous See (1974, § 9-105 Repl.Vol., Md.Code Supp.), (confidential (CJ) Proceedings Courts & Judicial Article mari (spousal privilege); § tal communications CJ 9-106 privilege); self-incrimination); § § 9-107 CJ 9-108 (privilege CJ (attorney-client § privilege); (patient-psychothera CJ 9-109 pist privilege); §CJ mental (client-psychiatric 9-109.1 health (client-accountant nursing specialist § privilege); CJ 9-110 § § privilege); (priest-penitent CJ 9-111 CJ 9-112 privilege); (newspaper person-news privileged); § source and CJ 9-121 (social worker-client Certain privilege). common-law rules prevent also of use at trial certain matters. Verdow, Hamilton v. A.2d (1980)( privilege “The has concept executive been considered evidence.”). part the common law Respondents have asserted no privilege pertaining to the amounts of the settle agreements negotiated they ment with other potentially re sponsible parties. whether, next

We must address forth in 2- as set Rule 402(a), sought the information by petitioners was relevant. Although the negotiated amounts may settlements have pre-trial been irrelevant stage, once the verdicts were against petitioners, rendered amounts the settlement agreements determining became relevant the apportion- of damages petitioners ment Maryland as to under Uni- Among form Contribution Joint Tort-Feasors Act.

Courts outside of have had the opportunity address the agreements, issue of whether settlement deemed parties them, confidential that negotiated are discover- In involving able. case Uniform Rhode Island Contribu- *9 462 Act,3 Dis- Tort-Feasors the United Among

tion Joint States District of Rhode Island examined whether trict Court for the could disclosure of a settle- nonsettling compel a defendant a for- agreement negotiated plaintiffs ment between and brought in that case a plaintiffs mer The had codefendant. hospital. a malpractice group physicians suit and former who plaintiffs physicians, The and the codefendant other, argued settled with each the documents previously had hospital were not the codefendant because discoverable disclosure, the secrecy provisions agreement prevented of the and agreement, did not show a need for hospital defendant agreement would inhibit future settle- the disclosure of ments. 26(b) Rule of the Federal of Civil noting

After Rules permitted Procedure broad and of information was privileged, if relevant the court examined the relevan- concluding In cy agreement. agreement settlement “[Ujnder the relevant, court Island reasoned: Rhode Among version of Contribution Joint Tortfeasors the Uniform Act, ... which can collect from the damages plaintiffs successfully if of the Hospital they what remains prosecute terms, amount, case will to some on the depend extent Pere, Bennett v. La of the 112 Physicians’ value settlement.” (D.R.I.1986) (citations omitted). court F.R.D. were no that would also concluded there other considerations militate the disclosure. amounts discussing

Another case whether of settlement Associates, is Bottaro v. Hatton agreements are discoverable Bottaro, (E.D.N.Y.1982). concerning F.R.D. In case violations, one of the defendants with negotiated securities law agreement, stipulated that its plaintiffs a settlement which settling not be disclosed. After the defendant terms would action, two remaining was dismissed from the defendants They sought pretrial agreement. disclosure of the obtain Maryland, adopted Like 3. Rhode Island has modified version Among 1939 Model Contribution Joint Tort-Feasors Act. See Uniform U.L.A.

463 in argued agreement determining the settlement was relevant settling whether the defendant was liable to them for contribu- Holding agreement tion. the settlement was not relevant at pretrial stage, the court stated: it is that a for settling liability While true defendant’s depends paid any contribution on whether he his share of award, damage this determination cannot be made until a Only juncture final has been rendered. at that known, will the full of all pro defendants be and the rata share settling party owed ascertained. Even then, any the settlement would not be evidence relevant to in issue this case other than apportionment the ministerial damages, a mathematical which computation the Court Hence, rather than juiy perform. will amount of the settlement is not relevant to any issue this case at this time. (citations omitted).

Id. at 160 Other federal examining discoverability courts of settle agreements ment agreements concluded settlement were dis Farm, they coverable if Young were relevant. See v. State Co., (S.D.W.Va.1996) (hold 72, Mut. Auto. Ins. 169 F.R.D. 79 ing agreement settlement between client and insurance com pany that resulted from an practices unlawful trade suit was discoverable in an action by attorney client’s former fees a tort action because it was to relevant the nature of the agreement between client attorney and the results ob action); Dist., tained the tort Doe v. Methacton Sch. (E.D.Pa.1995) 175, F.R.D. (recognizing discoverability of agreements declining settlement but to allow discovery be agreement relevant); cause was not Co. v. Vardon BBMG Golf (N.D.Ill.1994) Ltd., 156 F.R.D. 650-51 (recognizing Golf agreements settlement were long they discoverable so were declining relevant but to compel agreement disclosure of relevant); because defendant not it did show was Lesal Interi ors, Inc. v. Resolution Trust Corp., 153 F.R.D. 563-64 (D.N.J.1994) (recognizing discoverability agree settlement ments but declining compel disclosure where party seeking it particularized did make a showing sought material evidence); Fidelity to lead to admissible likely was relevant Felicetti, 148 F.R.D. v. & Loan Ass’n Fed. Sav. (E.D.Pa.1993) was entitled (holding party Indus., Trinity Inc. v. agreement); settlement Morse/Diesel (S.D.N.Y.1992) magistrate judge (holding 142 F.R.D. agreements where of settlement ordering production erred reason- the documents were whether judge did not determine evi- discovery of admissible ably calculated lead Co., 122 Morse/Diesel, F.R.D. Fidelity Dep. dence); Inc. (S.D.N.Y.1988) agreements (holding settlement 447, 450-51 *11 of relevant to issues they were discoverable because were costs).4 recognized courts have Some federal construction See agreements. of settlement admissibility impliedly the Co., 389, 400- Ins. 61 F.3d Casualty v. Lafarge Corp. Hartford Inc., Miller, (5th Haworth, 998 Cir.1995); Inc. v. Herman 01 (Fed.Cir.1993). 975 F.2d agreements, have held that settlement courts also

State them, are negotiated who parties deemed confidential Colony East Owners Sea See Council Unit discoverable. of of 86C-AU-52, Assocs., 1990 WL C.A. v. M. Freeman Carl of settle- (holding portion 128185, (Del.Super.Ct.1990) at *3 discovery of prohibiting but was discoverable agreement ment relevant); v. not Perez because it was remaining portion 1018, Indus., Inc., (La.Ct.App.1991) 1020 578 So.2d State discoverable and could be agreement was (holding settlement of the introduction despite prohibiting bias rule used show Guidry, v. 506 liability); Page agreements prove settlement agree- settlement 854, (La.Ct.App.1987) (holding So.2d 857-58 agree- examining discoverability settlement of 4. The federal courts discovery showing split requisite needed to obtain ments are on the party seeking discovery of require the documents. Some courts these showing” inspec- "particularized agreements to make a settlement Com- agreements will lead to admissible evidence. tion of settlement 562; Morse/Diesel, 79; Lesal, Young, 153 F.R.D. at pare 169 F.R.D. at 451; Bottaro, "particularized (requiring at 160 at 96 F.R.D. 122 F.R.D. Bennett, (rejecting "particularized showing”) 112 F.R.D. at 139-40 with cases, articulated, standard). prior a workable showing” We have information. party seeks of confidential standard when 54, State, (1992); City Dep’t Baltimore 326 Md. 602 A.2d 1247 Zaal v. Stein, 1, 612 A.2d 880 Social Services v.

465 agreements ments were discoverable where the were apportion admitted to admitted to establish but were plaintiffs credibility veracity); assess the and damages Co., Auction 368 Com Exch. Bank v. Tri-State Livestock (S.D.1985) (stating “[a]ny agreement 599 between N.W.2d some, all, upon should be disclosed litigants but not proce in accordance with our rules of request any party dure”); Leggat, Ford Motor Co. v. 904 S.W.2d (Tex.1995) (stating agreements are discoverable “[s]ettlement (citation omitted)); they to the extent are relevant” Collier Salinas, Corp. (Tex.Ct.App.1991) Servs. v. S.W.2d (holding agreement settlement was discoverable because it to a relevant creditor’s search assets from judgment); which to collect its Slusher v. Ospital, P.2d (Utah 1989) injured (holding plaintiff “where an more, all, one or but not defendant tort-feasors enter into a inform agreement, parties promptly settlement must parties court and the other to the action of the existence terms”). agreement and of its Arkansas Best Corp. Cf. 238, 246-47, General Elec. 317 Ark. Capital Corp., 878 S.W.2d (1994) 708, 712 (holding parties that when enter into a court- approved agreement, settlement the public may access the information agreement); contained the settlement Scott v. *12 Nelson, 1300, 697 So.2d 1301 (Fla.Dist.Ct.App.1997) (holding settlement agreement another case between defendant and an individual that a confidentiality provision prohib contained iting the individual or her from attorneys responding any to of inquiry any kind could not be to deposition used bar the of individual). But see In re N.Y. Data County Entry 263, 268, Litig., Worker Prod. Liab. 162 Misc.2d 616 N.Y.S.2d 424, 428 (Sup.Ct.1994) (holding “compelling privacy need for by plaintiffs articulated outweighs the reasons stated discovery defendants for agreements”), aff'd, the settlement 381, 222 A.D.2d 635 N.Y.S.2d 641 When settlement agreements involved, “Mary agreements termed Carter” are “Mary agreements 5. Carter” settlement contain three basic features: to the agreement disclosure of the require some state courts to the court disclosure permit and the and nonsettling parties Welch, 206, 211, Inc. v. Mustang Equip., 115 Ariz. See jury. Fenton, v. Kuhns (1977); 288 So.2d 564 P.2d Co., Kelsey-Hayes v. (Fla.1973); 594 P.2d Cox 253-54 (Okla.1978). 359-60 Maryland’s purpose scope the broad

Given rules, amounts of the settle relevancy required pay, were damages petitioners ments to the privileged, are agreements fact that the settlement conclude jurisdictions, from other we authority persuasive agreements are of such settlement portions that the relevant discoverable. maintaining the confiden- importance recognize

We example, For tiality negotiations. of settlement or offers to compromises admission of prevents Rule 5-408 claim. validity amount or of a civil prove compromise confidentiality negotia- recognize protecting alsoWe agreements. to enter into settlement encourages parties tions of this policy numerous occasions that the have stated on We negotiate compromises encourage parties is to State (1) party defend agreeing is to remain a and is to The defendant However, agreement. liability his is limited himself in court. part of call for on the instances this will increased In some (3) (2) agreement agreeing is secret. The co-defendants. The other guarantees plaintiff that he will receive a certain defendant amount, may notwithstanding the fact that he not recover may agreeing the verdict be less than against the defendant or that agreement. specified in the 714, 720, Lahocki, Corp. 410 A.2d Motors General (1980). Lahocki, opportunity we to address the discovera- In did not have agreements generally. The trial court in that case bility of settlement pretrial requiring the disclosure of all settlement order entered plaintiff defendants entered into an agreements. and one of the agree- having "Mary Carter” agreement the three basic features of however, party. agreement, was not disclosed to the other ment. This that, agreement agreement the terms was a settlement We held the *13 order, parties. It was pretrial to be disclosed to the of the had "Mary agreement a unnecessary pass upon whether the for us to order, was, agreement a court agreement whether the absent Carter” or discoverable. Lahocki, 286 Md. at suits. See of law settlements Co., 251 Md. 1045; Harry C. Weiskittel A.2d at Chertkof denied, (1968), cert. 394 U.S. 544, 550, 248 A.2d 1467,22 L.Ed.2d S.Ct. designed provisions rules contain Maryland discovery The information, of sensitive against disclosure protection to afford be contained settlement may as information such appropriate circumstances. agreements, under a authority protective trial court to enter gives Rule 2-403 embar- person annoyance, or from protect party order “to rassment, expense.” or undue burden oppression, matters not requiring an order “that certain may court enter discovery be limited scope into or that the inquired be or “that a trade secret or other confiden- to certain matters” research, information not be development, or commercial tial way.” Rule only designated or be disclosed Md. disclosed 2-403. specific issue of this Court has not examined

Although may agree- examine confidential settlement party whether a ments, inspect other party’s ability we have discussed a is confidentiality confidential where the information deemed State, example, For Zaal v. created statute. (1992), a criminal defen-

602 A.2d 1247 we addressed whether school records of a child he inspect dant could the confidential case, subpoenaed In that the defendant allegedly had abused. records, pursuant to victim’s school which are confidential responded by school board mov- Maryland regulations. The motion, During hearing on that ing protective for a order. information in the could argued the defendant records pattern affecting of conduct revealing contain information court, credibility. following The trial an in cam- the victim’s records, subpoena, denying era inspection quashed the defendant access to the records. opinion, appropriate

In our we set forth the standards and procedures attempts to be utilized when a criminal defendant to obtain of confidential information. We stated the seeking the information must first show a “need to defendant *14 468 information. this

inspect” the confidential We described possibility to as a “reasonable that review of inspect” “need evidence.” Id. the records would result usable determining at In the defen- at 602 A.2d 1260. whether may has the court need-to-inspect showing, dant met charges nature of the and the issue before the consider the need-to-inspect showing, court. Once the defendant meets the alone, may court elect to review the records to conduct “the counsel, presence permit by the review in the or to review alone, court, subject to such restric- counsel as officers requires protect tions as the court to the records’ confidentiali- ty.” Id. at 602 A.2d at 1264. applied procedure the Zaal to a civil case Baltimore

We Stein, City Dept. Social Servs. A.2d 880 Stein, action, In in a negligence that case defendant City to obtain all of the records of the Baltimore sought (BCDSS) Department relating plain of Social Services to the (1957, 88A, Art. Repl.Vol.), tiffs. Under Code 6, however, § the records were confidential. The BCDSS Order, filed a Motion for a Protective and Stein moved to trial court compel production the documents. The denied for a request protective granted the BCDSS’s order and motion to compel. Stein’s noting

In our after that opinion, sought records Stein, statute, confidential, extensively were we cited procedures adopted standards and outlined Zaal and approach emphasize, same for civil cases. We went on to however, party seeking that even when a disclosure has shown inspect, greater a need to “there should be no disclosure than is necessary inspect’ allowed meet ‘need shown Stein, by” the at party seeking inspection. Md. standard, certainly A.2d at 894. There would be no greater standard, may significantly there be less of a where there statutory confidentiality, is no basis for the claims of as in this case. so much of the inspect”

Petitioners had “need settle- ment as was relevant to a determination of agreement wheth- might be them much, judgments against er, and how (1) classified agreement in which the way affected (2) nontort-feasor, wheth ie., defendant, tortfeasor or settling (3) intended, and rata release pro tanto or pro er a more demonstrated Petitioners for the release. paid amount “ [settlement review of the possibility ‘a reasonable than ” evidence.’ discovery of usable would result agreements] *15 Zaal, 602 A.2d at 893; 326 Md. at 27, 612 A.2d at Id. at in the agreements of the settlement The amounts 1260.6 court to deter the trial were utilized case in instant fact against each judgments final entered mine the amounts withheld “evidence,” however, completely was This petitioner. inappro was procedure that such We hold petitioners. from priate. apportionment judge’s vacate the trial

Accordingly, we remand for and respective petitioners against the damages While we opinion. with this consistent proceedings further agreements the settlement nondisclosure of complete hold negotiations complete disclosure inappropriate, likewise, depending agreements to the settlement leading up remand, inappropri- also be might upon on the circumstances of the settle- of the conditions and certain ate. The sums in the context ments, however, are relevant and discoverable proceeding. of this JUDGMENT

III. THE DEFAULT judgment against a default trial court entered Although the Porter against W, reduce the B & it refused to Contribution Uniform Hayden pursuant (the Act). Act, Act Under Among Joint Tort-Feasors to a reduction on a is entitled joint tort-feasor nonsettling in Zaal procedures established recognize that standards 6. We during pretrial applied utilized in those cases in Stein were sought inspect the confiden- Although petitioners stage. in this case final jury its verdict but before after the rendered tial information entered, procedure why such a judgments we discern no reason were present context. not be utilized in the could against claim it when the has plaintiff entered into release joint provides: with a tort-feasor. The Act injured A person joint release of one tort-feasor ... not discharge does the other tort-feasors ... but it reduces the claim in the other tort-feasors amount of the consideration paid any the release or proportion by amount or which the release provides reduced, greater total claim shall be if than the consider- paid. ation § joint

CJ 3-1404. The term tort-feasors is defined the Act persons as “two or more or jointly severally liable tort for injury person property, the same whether or not judg ment has been recovered all or some of them.” CJ 3-1401(c). § respect may With method which one Act, be considered a tort-feasor under this Court Welk, 613, 619, Swigert (1957), 133 A.2d stated: “The act does not specify liability. Clearly, test of suffice; something short of an actual will we think it equally clear that a will denial not.” *16 judge jury

When a or a determines a is releasee liable releasee, injury plaintiff, for an by way of that judicial tort-feasor, of liability, joint determination becomes a and section 3-1404 of the Proceedings Courts and Judicial operates Article to reduce the claim nonsettling joint 185, 193, 242 Daley, tort-feasor. See Brooks v. Md. 218 184, (1966); Indus., A.2d 188 see also v. Eagle-Picher Collier Inc., 38, 58-59, Md.App. 256, 86 585 (holding A.2d 266-67 a nonsettling partial defendant was entitled to a in reduction joint verdict when a only release was executed and one of the settling defendants was hable for injury plaintiff), found Collier, cert. denied sub nom. Corhart Co. v. 323 Refractories 33, (1991). Md. 591 A.2d 249 hand, judicial

On the other when there is a determina tion a judge jury liable, either that the not releasee is joint tort-feasor, the releasee is not a considered and section 3-1404 does not apply plaintiffs reduce the claim nonsettling joint tort-feasor. See Owens-Corning Fiberg-

471 1143, 530-33, Garrett, 500, A.2d 1159 682 las v. 343 Md. Corp. (1996) were jury that a determination that releasees (holding right joint precluded therefore not tort-feasors not liable and Mueller, 350, 357, contribution); 513 Allgood v. (1986) 915, jury a that (stating 919 that determination A.2d not of verdict precluded releasees were liable reduction Brooks, defendant); 242 Md. at against nonsettiing defendant (stating nonsettling A.2d at 188-89 that jury a in verdict because determined entitled to reduction Collier, 58-59, liable); at Md.App. was not releasee (1991) settling a defen (concluding at 265-66 when A.2d liable, not entitled to a nonsettling dant is not defendant is Lord, Carter, verdict); K Inc. v. C & reduction (1988) 73-74, (holding 701-02 536 A.2d Md.App. settling granted summary judgment defendants were when suit, they nonsettling were immune from defen because verdict). entitled dant was not to a reduction subsequent A trial on the merits and determination a a is tort-feasor settling joint fact finder that defendant is may method nonsettling not the sole which defendant pursuant obtain a reduction the verdict to section 3-1404. settling between the and the defendant plaintiff The release is, may provide settling that the defendant or is to be consid ered, tort-feasor, joint nonsettling in which case the defen dant is entitled to a the verdict. Martinez v. reduction See 91, 94-95, (1984); Md. 476 A.2d Jones Lopez, 300 198-99 Hurst, 607, 611-12, 219, 222 Md.App. 459 A.2d case, no aby In this there has been determination fact Likewise, liability. apparent- finder as to & W’s the release ly as a provide did not that B & W was be treated purposes of the Act. The is whether the tort-feasor issue *17 Hayden’s on claim en- judgment third-party default Porter liability B & W tered constituted determination joint such that B & W considered a tort-feasor for should be Proceed- purposes section 3-1404 of Courts and Judicial Article. ings

472 recently

We the effect of a default in judgment described Clinic, Inc., Curry v. Hillcrest 412, 434-36, 337 Md. 653 A.2d 934, (1995), where we stated:

In Maryland judgment a default is considered more akin liability to an admission of than to a In punitive sanction. Bank, Hopkins v. Easton Nat’l 130, 134, 187 874, 171 Md. A. (1936), this Court said that a default results “the tacit admission the defendant in default of truth of the allegations of of complaint they the bill are averred.” In Horn, Inv. Mortgage Group, & Ltd. v. 100 Md.App. Pacific 311, 332, (1994), 641 A.2d Special the Court of Appeals judgment by stated that “[a] default constitutes an defaulting party admission liability its for the causes action set out complaint.” finally, And Hotels, Club, Inc., Gotham Ltd. v. Owl 158, 173, 26 Md.App. (1975), 337 A.2d the court held that “failure to ... plead constituted an admission ... of liability for the cause of action set forth the declaration.” Bonoumo, See also Associated v. Transp. 442, 445-46, 191 Md. (1948) (“[A] 62 A.2d judgment by binding default is as as any other liability establishes defendant to the plaintiff....”).

Curry proposition stands that a judg default ment should be treated as an liability. admission of question then is whether this admission of liability is sufficient to establish B joint stated, & W a tort-feasor. As we supra, in Swigert we noted that “[cjlearly, something short of an 619,133 actual will suffice.” 213 Md. at A.2d at 431. determination as to B no Although W’s was made by judge or a jury, & W’s admission of liability, resulting from entry judgment, of default is sufficient to establish it as a tort-feasor under the Act.

We find further support for our conclusion from the case of Montgomery Co., County Manufacturing Volk 562 A.2d 1246 respect With to third-party practice in involving actions the Uniform Among Contribution Joint Tort- Act, Feasors we stated: *18 regulated cases is party practice contribution

Now third 2-332, goals formerly Rule Md. Rule 315. Maryland however, “The device, remain the same. procedural of the the provided practice the party third purpose it to have superseded [is] Rules which the [UCATA] original litigation among action all phases in one try ” parties.... impleaded L. Teer Stem v. Nello Id. (quoting at 562 A.2d. at 1249 (1957)) (footnote Co., 132, 144, 130 A.2d omitted)(brackets in original). final court enter a

If to hold the trial could we were the de- Hayden recognizing without judgment against Porter W, B issue of what judgment against fault entered B would be Hayden due to from & W damages are Porter purposes one of main This would defeat unresolved. action all try Rules and the Act—to one litigation. of the phases

Accordingly, Special Appeals the Court of erred deter- B tort- joint not that & mining “it was established W was Grimshaw, at A.2d at 30. Md.App. feasor.” Likewise, considering trial in not what effect court erred establishing joint as a would have in & W’s status tort-feasor amount apportionment the correct of the of the Hayden in to pursuant Porter the Grimshaw case against Proceedings Article. 3-1404 of the and Judicial section Courts IY. CONCLUSION in refusing petitioners trial to allow We hold the court erred in order of the settlement inspect agreements to amounts of the verdicts entered to calculate amounts be and, apportion- court’s accordingly, them we vacate trial damages Due ment of the between defendants below. issue, of this it is for us resolve unnecessary the resolution indicated, have presented by petitioners. the first issue As we court to it on remand. necessary it will be for the trial address Special also hold trial court We and Court A treating joint erred B & W as tort-feasor. Appeals akin to an settling defendant is default of liability. admission Such an admission of liability is suffi- cient to establish one a purposes tort-feasor for the application of section 3-1404 of the Courts and Judicial Pro- ceedings Article. OF THE

JUDGMENT COURT OF SPECIAL APPEALS *19 TOAS APPORTIONMENT OF AND APPLI- DAMAGES THE CATION OF UNIFORM CONTRIBUTION AMONG VACATED; JOINT TORT-FEASORS ACT CASE RE- MANDED TO THE COURT OF SPECIAL APPEALS WITH DIRECTIONS TO VACATE THE JUDGMENT AS TO APPORTIONMENT OF OF THE DAMAGES CIR- CUIT COURT FOR BALTIMORE CITY AND TO RE- MAND THE TO CIRCUIT COURT FOR BALTIMORE CITY FOR FURTHER PROCEEDINGS CONSISTENT OPINION; WITH IN THIS COSTS THIS AND IN COURT THE COURT OF SPECIAL APPEALS TO BE PAID BY RESPONDENTS.

RODOWSKY, Judge, concurring dissenting. and join I in Parts I II of opinion. and the Court’s I respectful- ly dissent from the III holding Part opinion Court’s that entry the effect of the of a default judgment for contribu- (B W) tion against Babcock & Co. Wilcox & on the third-party (PH) Hayden claim of Porter Company was to reduce the amount of the payable plaintiff by the nonset- tling defendants. The Court does not consider the terms of (Grim- the release B between & W and John M. Grimshaw shaw). represents, Grimshaw Special and the Court of Ap- fact, peals treated as that the Grimshaw-B & W release “in provided that order for to be entitled to a [PH] decrease or pro rata damages Grimshaw, reduction of the claimed it adjudicated must be that the releasees are tort-feasors.” Grimshaw, Packing 134, Anchor Co. v. 115 Md.App. below,

A.2d As explained the default should not adjudicate be determined to joint tort-feasor, & W as a vis- a-vis, of, and to the detriment Grimshaw.1 1. Grimshaw’s action was Although consolidated with other cases. no part extract, appears of the Grimshaw-B & W release in the record Grim- B & W settled before that and appears

It Grimshaw PH B & W impleaded PH others. shaw filed suit B & defendant, contribution. W claiming third-party a responded nor third-party complaint answered the neither August PH. On discovery requests submitted docketed, following order: filed, court and the clerk circuit Default, Mary- pursuant Judgment by “ORDERED 2-433(a)(3) hereby is entered be and the same land Rule W], Plaintiff, Third [PH], against [B & Third-Party favor & herein.” against [B W] for contribution filed Party Claims 2-433(a)(3) (1998 Repl.Vol.) provides Rule court], may of discovery, if it a failure “the finds [circuit just, failure as are regard enter such orders .... including by default that entering

“... order ... [a]n sought all relief a determination as to includes *20 If, in failing party.... the by moving party against it judgment, is the court to enter default order enable the amount of an account or to determine necessary to take plain- by W language negotiated B & with other critical from releases appear supporting consolidation does in their memorandum tiffs against W. in favor of PH B & That a motion to vacate the default provision reads: by parties agreed and understood hereto It is further "7. any person organization whom we claim are liable to us for other or satisfac- injuries, damages should not be entitled to a our losses damages pro of the we are tion or reduction or rata reductions herein, payment claiming against unless it is them reason of joint person adjudicated Releasees are tortfeasors with said other any or of them are organization. In the event that Releasees tortfeasors, payment adjudicated joint then the herein shall to be amount of the constitute a reduction to the extent of either the dollar Releasees, any payment pro of of such or the rata share damage other greater, is for the recoverable us from whichever joint expressly intended and shall be tortfeasors. This release is pursuant construed to release Releasees for all claims of contribution Among to the Uniform Contribution Tortfeasors Act.” remanded, us will be under Part II of the Because the cases before releases, reviewing opinion purpose the actual this Court’s for the of City guidance give Baltimore in that Court should the Circuit Court for undertaking. affidavits, may rely ... court on damages conduct and, hearings appropriate, request- or order references as if ed, preserve plaintiff right by jury.” shall to the of trial plaintiffs sought Other in the consolidated cases to vacate order, trial the above but the cases went to without the court’s ruling on their motion. jury spe-

The consolidated cases were submitted to the on interrogatories. jury cial Grimshaw’s claims went to the defendants, whom, PH, four three of including were PH, suggestion simply found to be liable. At the the court defendants, third-party batched the cross-claim and claim regard without to which of the defendants claimed Describing third-party the cross-claim and claim defen- them. court simply parties,” dants “listed submitted their jury designed names to the on issues determine which were parties them tort-feasors.2 Ten listed were includ- special interrogatories, ed those most whom were entities that had settled with Grimshaw.3 & W was not one of the jury returned a verdict in favor of Grim- parties. listed jury million. The shaw also found that each listed $1.1 hable, party judg- was but the circuit court later revised the parties. ment ehminate one the listed jury concerning 2. The issues submitted to cross-claim and third- defendants, special party claim referred to issues as the "listed parties,” were as follows: you proven by preponderance "Do find that has of the [it been] exposure products evidence that John Grimshaw’s manufac- tured, supplied, parties installed distributed the listed and/or development contributing substantial factor in the of his mesothelio- ma? you proven by preponderance "Do find that it has been *21 parties negligent any evidence that of the listed were in manufactur- ing, supplying, installing, distributing asbestos-containing and/or products exposed? to which Mr. Grimshaw was you proven by preponderance "Do it has been find that a manufactured, installed, parties supplied, evidence that the listed asbestos-containing products distributed which reached Mr. and/or unreasonably dangerous Grimshaw in defective condition- to him?” procedure way [joint 3. This illustrates one in which "the test tort of liability” may "something judgment.” feasor] be short of an actual Welk, 613, 619, 428, (1957). Swigert v. 213 Md. 133 A.2d 431

477 judgment, final dock- ultimately a circuit court entered defendants, 17, 1996, PH and two other against April eted $170,357.14.4 in severally, the amount jointly should not be re- that the verdict position is Grimshaw’s B relies with & W. Grimshaw on his settlement based duced that, contractual absent a proposition on the well-established settling a contrary, paid the amount provision involved here apparently of release type under the defendant Tort- Among Joint the Uniform Contribution is treated under Act) (the if is payment payor voluntary Act feasors Mueller, v. 307 Allgood joint as a tort-feasor. adjudicated (1986); 2 2, 915, n. Brooks v. 350, 513 A.2d 919 & 357 & n. Md. (1966); 184, v. 185, 193, Swigert 188 242 218 A.2d Daley, Md. (1957); 428, Welk, 613, 619, 431 Collier 133 A.2d Inc., 38, 56, 256, Indus., 585 A.2d Md.App. Eagle-Picher W, B Grimshaw’s with & After his settlement joint B & W was a adjudication no having was in interest W, B to & Grimshaw Having given release tort-feasor. defendant; nor could original B & W as an could not sue prove that a allege or undertake expected be Grimshaw In W, tortiously B toward Grimshaw. nonparty, & acted correctly my Appeals, Special instant matter the Court of avoiding had in view, the interest that Grimshaw emphasized part on the of & joint tort-feasor adjudication an this, it has been held that a of an interest such as W. Because plaintiff participating from excluding trial court erred determining court was which the post-trial proceedings Collier, settling defendants. joint tort-feasor status of 57-58, at 265-66. at 585 A.2d Md.App. 17, 1996, entry April prior of the final entries of

4. The docket April in terms revises judgment, an order dated include 11, 1996, “to account judgment entered March in order an earlier August [B W] in favor the default order entered on been, quoted might have it is Whatever the intent fPH].” order joint B & W to be a tort- final did not consider clear that the tort-feasors April identifies feasor. The into account as credits whose settlements were taken verdict, W. enumeration does not include B & and that *22 enjoying peace B & interest was in the that it had W’s B It no concerns of to Grimshaw. & W bought. had it apparently exposure believed that had little or no for any settling nonsettling contribution to tort-feasor since B adjudication joint that & W was a tort-feasor at least any B having paid pro would B & W with its rata share. & credit in saving expense W’s concern seems to have been the lack of litigation, response as evidenced its to PH’s third- But it party complaint request discovery. and to PH’s W, B a appears negotiated by that the release so-called release, Grimshaw, not as a matter of Swigert require did contract, in against to credit a favor of Grimshaw share, B a greater paid by pro of the amount & W or rata adjudicated joint if B not a even & W were as tort-feasor. PH, hand, demonstrating on the other was interested in tort-feasor, joint discovery B & W was a and PH’s requested from B & would have been properly W directed that issue. Further, necessarily a in the of PH party position would know that had settled with an that was not plaintiff entity defendant, joined original represents as an and PH to us that it of a learned of the existence Grimshaw-B & W release when PH B moved for default & W.

Although may PH never seen have the terms the Grim- (and release, I majority shaw-B & W would hold of the disagree) Court does not seem to that the was on obligation adjudication joint PH to obtain an that B & was tort- W a PH feasor order for to have the verdict favor of Grim- shaw reduced under the Act the B & W settlement. Not was PH PH only third-party plaintiff, greater but has a obtaining adjudication W, interest than does & while under the plaintiff Swigert apparently release involved in proving payor’s here has no interest liability as tort-feasor. into

The issue then resolves whether the default entered as Act I discovery agree sanction satisfies the and the release. . majority that a in answering complaint with default admission, an operates the defendant default, complaint. See well-pleaded allegations of Inc., Clinic, A.2d Curry Hillcrest sanction I also assume *23 failing the party fashion against in that same operates default however, B Here, to have & discovery. PH seeks provide as conclusive legally treated discovery default W’s PH, effect, default position in takes the the Grimshaw. preclusion B as claim issue by operates & W status. I do joint B & W’s tort-feasor Grimshaw on W, opposi- on B without imposed the sanction & believe that W, adjudication an automatically operate can as by tion & detrimental to Grimshaw. these is found in the analyzing

The issues framework Paving in Keitz v. National reargument after opinion Co., 296, reargument, on Md. A.2d Contracting (1957). In tort motor case the 136 A.2d 229 of No. operator No. 1 sued the vehicle operator of vehicle that had corporation and the general employer, the latter’s At of No. 2 and its the close hired the of vehicle driver.5 use in granted the trial court a directed verdict plaintiffs the case judg- in proceeded, resulting of hirer. trial favor the The driver and plaintiff against ments favor of the the adverse general plaintiffs appeal, his the the Court employer. On the of in favor of hirer on issue vacated the the then new trial. Court addressed agency and ordered remand, that, contention at the after the plaintiffs the retrial on finding negligence part hirer bound the of the by would be damages jury. of the bound the awarded the driver and judgment against To the effect of the the servant determine hirer, the this Court looked proceedings against subsequent preclusion. of claim and issue The Court reasoned law that, if of No. was servant of the the driver vehicle both hirer, and two be general employer latter would law, at common tort-feasors and entitled contribution Keitz, 214 at wrongdoers, and under the Act. Md. non-active defendant, general employer joined manager 5. The as a was also present aspect but that is irrelevant to the discussion. Keitz 497-98, 136 at Relying A.2d 231. on the Restatements of Judgments Restitution, on Judgments, Freeman on in,” on the law of “vouching the Court analogized to the rule “that one liable over in tort as indemnitor or contributor is concluded as to right injured person to recover and the amount of damages, by judgment against the indemnitee or contributee who had notified him to defend.” Id. at 499- (footnote omitted).6 136 A.2d at 232 Further, this Court said policy that the Act

“will best be served making against one tortfeasor conclusive as to liability and amount on the other tortfeasor, where that other participated case manner and to the extent that [the did in hirer] [Keitz ].” 502, 136 Id. at at retrial, A.2d 234. on Consequently, the hirer was precluded from relitigating negligence of the driver *24 and from relitigating plaintiffs the damages.

Keitz differs substantially from the instant matter in at least First, two aspects. judgment against the general the employ- trial, er Keitz was the result of a but the judgment relied PH upon here is the Second, result of a default. the general employer and the hirer in Keitz were adversaries. Id. (“[J]oint tortfeasors, potential as pro indemnitees tanto with other, respect adversaries.”). to each necessarily are In the W, action now before us Grimshaw Band & the party against whom judgment entered, was are not adversaries on the pleadings, and they fact, were not adversaries inasmuch as B & did not participate W at all in the action.

Where the prior judgment is default, entered based on a law distinguishes claim preclusion between judicata) {res and (collateral issue preclusion estoppel). Generally, the rule is that a judgment default will support claim preclu- and defense sion against default, party but not preclusion issue against a party. third “Judgment by default commands the full effects of claim and preclusion.” defense Wright, 18 C.A. A.R. Miller & E.H. Cooper, Federal Practice & Procedure principle (Second) This relied on in is set forth in 2 Restatement 6. Keitz Judgments § of (1981) Moore’s Federal See also 18 (Wright). § at 373 (for (3d 1997) (Moore) 131.30[3][d], § at 131-106 ed. Practice is judgment a default treated preclusion of claim purposes Thus, in subse- judgment). final any same as other valid W, B B & W be PH and & would quent action between PHto for all or that it was not liable precluded asserting from against claim PH. part Grimshaw’s B against on PH relies was entered judgment But the which Grimshaw. In for Grimshaw be W and not order preclusion by judgment law bound of claim under W, B must be in with B & W. privity Grimshaw against & W, impleaded through entry PH B & From the time default, action, relationship final in the and that of releasor and & W was between Grimshaw none, have authority, PH has cited no and we found releasee. is claim holding relationship privity one of for I not. hold that it is The relea- preclusion purposes. would too in relation to tradi- relationship sor-releasee is attenuated it preclusion claim could create privity, applying tional Stables, Inc., v. Ciao Compare incalculable mischief. Small (1981) (Under agency 425 A.2d 1030 relation- involved, with agent ship principal privity there New York determining preclusive effects agent).

Where, here, underly- no there has been determination default, entry legal facts in ing connection with preclusion issue does arise is supported conclusion that Wright present the Wright both and Moore. The authors of *25 following analysis: enjoyed relationship preclusion changing

“Issue has to a judgments. default still adhere rule that Some courts judgment every default as to preclusion establishes issue issue same support that would have to be resolved trial rule has been judgment after on the merits. This that on vigorously grounds on two focus criticized related First, that pointed default failure answer. it is out preclusion lacking issue are essential foundations of litigation anything. want of actual actual decision Second, urged it is that a defendant may suffer a default for many valid reasons other than the merits of plaintiffs criticism, claim. In line with this many federal cases have ruled in various circumstances that default judgments do not support issue preclusion. This result is correct for the given reasons as to judgments that are entered without further inquiry upon failure to answer.” (footnotes omitted). § Wright at 374-76 See also Moore (A 132.03[2][k], § at 132-90 default judgment would not ordi- narily support preclusion issue because the issues have not actually litigated.). been

An Anderson, illustrative decision is Nichols v. 788 F.2d (5th Cir.1986). There a person who injured had been an automobile accident filed suit Mississippi against two defendants, one whom was insured policy under a contain- ing an exclusion that coverage limited to within a 150 mile radius of McCory, Arkansas. While the Mississippi action was pending, the insurer filed an action in Arkansas against the insured and obtained a declaratory judgment that there was duty no to defend no coverage, all upon based the default of the insured to respond to the Arkansas suit. After the injured party had obtained judgment against the insured in action, the Mississippi the former garnishment instituted a proceeding against the In insurer. that garnishment action contended, the insurer and the trial court agreed, Arkansas bound the tort plaintiff, rejecting the argument latter’s that Arkansas law applied and made the exclusion invalid. Fifth reversed, Circuit holding that Arkansas law applied but the validity of the radius “ exclusion had not been ‘actually litigated’ in the Arkansas proceedings.” Id. at 1142. The court specifically noted that it was not reaching the issue of whether the plaintiff-judgment holder could be in privity considered with the opera- adverse “for due process purposes.” tor/insured Id. at 1142 n. 1. (The exclusion was law.). held to be invalid under Arkansas

Issue preclusion on based a default in an action alleging fraud has been denied in a subsequent action bankruptcy where the debtor’s discharge is opposed on

483 (4th 1146 See, 922 F.2d Raynor, In re e.g., of fraud. grounds (10th Cir.1984); Lombard, F.2d 499 Cir.1991); In re Cir.1978). (3d McMillan, F.2d 289 Matter of liability of are upon express an admission based Judgments preclusion for issue judgments similarly to default treated an upon based judgment of a In the context purposes. defendant-third-party a plaintiff by liability of to admission on a binding is not judgment that the it has been said plaintiff, in, defendant, has vouched party or on a who been third-party liability defendant-third-party plaintiffs of the as to the issue Bongards Co. v. Blommer Chocolate to See plaintiff. (“the (N.D.Ill.1986) Creameries, Inc., F.Supp. party not bind a third a will judgment that principle [is] on the grounded if was defendant defendant/third liability....”). admission party plaintiffs for contribution the default way, Phrased another on an issue of PH is not a B in favor against & W Grimshaw, al- PH litigated between actually (Second) of See Restatement though they were adversaries. (“The preclusion issue is § 27 cmt. a rule of Judgments parties same action is between the where the second operative action, and who were adversar- prior to the parties who were issue.”). 38) (see For all of respect particular § with ies judgment for contribution reasons the default foregoing from by deducting Grim- B cannot be enforced against & W (1) B paid by the consideration damages greater shaw’s (2) computed rata share pro for its release & W tort- adjudicated joint among B the set including & W feasors. result, B & W’s absent sought accomplish

Had PH default, PH have to introduced evidence would have determination, all which sought jury B against & W and But oppose. an opportunity would have had Grimshaw know discovery, we do not give B failure to because of & W’s might present. PH have been able what evidence B as an majority treats & W’s default holding release. Pre- the condition adjudication that satisfies under which Grimshaw cost to & W of release sumably the *27 B unconditionally agreed joint treat & aWas tort-feasor would greater have been than the actually consideration paid. Thus, majority B opinion gives & than it W more willing to buy and bases that result on B conduct within & W’s control. The majority opinion allows B & to ignore W PH’s claim third-party and the associated discovery thereby alter Grimshaw’s contractual rights.

Although holding proposed above would resolve in favor of Grimshaw the issue whether recovery Grimshaw’s is to further, ask, be may fairly reduced one signifi- “What is the cance of the default I judgment?” interpret would the order imposing the sanction to mean that B & W is liable to PH for contribution. The amount Bof & W’s exposure to PH may be the pro difference between PH’s rata share of the common liability, by a joint determined set of tort-feasors that W, does not B include & pro PH’s rata share of the common liability, joint determined a set of tort-feasors that Further, PH, B includes '& W. suggesting the manner which tort-feasor status jury, be submitted to the may any have right waived to have a monetary judgment entered issues, These however, W. and related are not before this Court at this time.

713 A.2d 978 Lloyd COLLINS, Appellant, Kenneth Maryland, Appellee. STATE of 10, Sept. Term, Misc. No. 1998. Appeals Maryland.

Court of

July 1998. Aug.

Reconsideration Denied 1998.

Case Details

Case Name: Porter Hayden Co. v. Bullinger
Court Name: Court of Appeals of Maryland
Date Published: May 15, 1998
Citation: 713 A.2d 962
Docket Number: 56, Sept. Term, 1997
Court Abbreviation: Md.
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