Walton v. Avco Corp.

WALTON, Glenda C. As of Administratrix Estate Dennis Earl McCracken and Glenda D. McCracken and Dana Marie McCracken, Minors, by Walton, Glenda C. their Parent and Natural Guardian

v. Corporation. AVCO CORPORATION and Summa TINCHER, Maeburl As Administratrix of the Estate Bill y Tincher, Tincher, Barry Larry James Tincher and Bill James Tincher, Tincher, Gregory Wayne Minors, Leann Kristie and Tincher, Maeburl their Parent and Natural and Guardian Right Maeburl Tincher In Her Own v. Corporation. AVCO and CORPORATION Summa CORPORATION, Appeal of at AVCO No. 138 and Corporation, Appellants. Summa at WALTON, Glenda C. as Administratrix Estate Dennis Earl McCracken and Glenda D. McCracken and Dana Marie McCracken, Minors, by Walton, Glenda C. their Parent and Guardian, Appellants, Natural

v. Corporation. AVCO CORPORATION and Summa TINCHER, Billy Maeburl As Administratrix of the Estate Tincher, Barry Tincher, Larry James Tincher and James Bill Tincher, Gregory Wayne Tincher, Kristie Leann Their Parent and Natural Guardian and Maeburl Tincher Her Right, Appellants, Own

v. Corporation. AVCO CORPORATION and Summa TINCHER, Appeal al., of Maeburl et Walton, al., Glenda at No. C. et 140.

Supreme Pennsylvania. Court of

Argued April 1990. May 1992. Decided Bee, J. Flock, Elwood and James M. Anne C. Brenda Corp. for Philadelphia, al., Tincher, Smith, Newtown, et and for Maeburl

Craig Walton, al. C. et Glenda Corp. McKissock, Philadelphia, Summa Bruce for

J. Wall, Pittsburgh, and John Edward Campbell W. Scott amicus, Pa. Defense Institute. LARSEN, FLAHERTY, NIX, C.J., Before CAPPY, PAPADAKOS, McDERMOTT, ZAPPALA, JJ. OPINION NIX, Justice. Chief that have been cross-appeals

The instant matter relates to Court which affirmed filed from an Order of of the Court of part and reversed the Orders part these Pleas of and remanded Philadelphia County Common opinion. consistent with its proceeding cases for further following factual matrix. The instant issues arise from 1978, pilot- Earl Dennis McCracken was September On Robbinsville, Carolina. a near North ing helicopter Tincher, James passenger, Billy was ferrying McCracken Inc., Jordan, Phillips and employee was an who Hughes manufactured and sold helicopter, owner Inc., Corpora- appellant, Summa Helicopter, a division of manufactured incorporated engine tion. had into Both McCracken Corporation helicopter. the Avco helicop- in the engine lost lives Tincher their when and A crash. causing the aircraft mid-flight, seized ter the accident had revealed that subsequent investigation occurred due to the failure of an oil pump which was a component of the engine manufactured by Avco. November of complaints against were filed both Summa, Avco and (hereinafter “Hughes”), by Glenda C. Walton, as Administratrix the Estate of Dennis Earl McCracken wife, and his Glenda D. McCracken, (hereinafter “Waltons”), and by Tincher, Maeburl as Administratrix of the estate of Tincher, (hereinafter Billie James “Tinchers”). Avco filed answers to both complaints, which answers con- tained cross-claims Hughes for indemnity and/or contribution should any award be made in favor of plain- tiffs. The two cases were consolidated for purposes of and discovery trial.

There is no dispute in the present case concerning the claim by the Tinchers, Waltons and the and the subsequent jury finding, that engine manufactured by Avco awas product defective under Section 402A of the Restatement (Second) Of Torts.1 It is also undisputed that when Avco became aware of the defective construction of its engine, it issued Service Instruction 1341 on July 1976. The service instruction advised the specific defect in the Avco engine which eventually caused the crash of the McCracken helicopter, and procedure detailed a for correcting this specific defect. Avco listed time for compliance with the. Service Instruction 1314 as the next overhaul of the air- craft. Hughes received the Service Instruction from Avco Special 1. Liability 402A. of Seller Physical or Products for Harm to User or Consumer. (1) any One product who sells in a defective condition unreason- ably dangerous to the user or consumer property subject or to his physical thereby harm caused to the ultimate user or consumer, property, or to his if (a) engaged the seller is selling in the business product, such a (b) expected it is to and does reach the user or consumer without change substantial (2) in the condition in which it is sold. (1) The rule applies stated in Subsection although (a) possible the seller has exercised all preparation care in the product, and sale of his (b) the user bought or consumer has product not from or any entered into contractual relation with the seller. (Second) Restatement of Torts 402A § Jordan, Phillips never forwarded it to and unfortunately but Inc., helicopter or service centers advised the authorized Jordan, Inc., the heli- Phillips about its contents. and had 1977, September on thirteen-and-one- copter overhauled months had Instruction 1341. half Avco issued Service after by Be- performed Helicopters. The overhaul was Executive had advised of Helicopter cause not been Service Executive helicopter defect in particular Instruction engine was not remedied. negotiated

Avco and the estates the two victims Walton The action settlement of the consolidated cases. and the Tincher $922,355.00, settled to Avco was as $1,000,000.00. Releases action was settled as to Avco for 4, 1984, executed on June and Avco filed amended were Walton the releases. The release and the pleading answers Tincher release both right Avco’s specifically preserved Hughes. seek contribution from Although against Hughes origi- the suits Avco and were theories, brought a number of the case was nally legal on ultimately products liability to the on strict jury submitted finding Hughes theories alone. The both Avco and jury, liable, $891,203.00 and to the strictly primarily awarded $415,902.00 and to the Tinchers. Waltons (manufactured Avco) engine The jury found (manufactured Hughes) was defective helicopter of the such defect a substantial contribut- design, and that causing resulting factor the accident and deaths ing also determined that plaintiffs’ jury decedents. The Jordan, Inc., the had Hughes Phillips failed warn an Helicopters, and Executive helicopter, owner Center located Atlanta who Hughes authorized Service helicopter September on performed had an overhaul design. deter- engine’s jury defective independent Hughes’ mined that failure warn was contributing factor to design defect and a substantial resulting accident death. trial contribution court awarded basis, of fifty percent rata on a in the amount pro jury’s the to the Superior award Walton case.2 The

Court affirmed the award contribution but on reversed owed, the holding amount that contribution should be made on a comparative fault basis. The case was remanded for a comparative determination of the percentages damages attributable to both defendants.

The trial court denied for requests Avco's prejudgment interest damages on the amount delay of contribution against Hughes. awarded Avco This denial was affirmed Superior The trial Hughes Court.3 court held that was damages liable to the Waltons for delay period beginning filing with the of their Complaint ending with the date of their settlement with Avco. The amount was to (i.e., be calculated based on one-half Hughes’ pro rata share) of the Superior Walton’s verdict. The Court vacated award favor of reevaluation on comparative based causation.

Hughes’ request for indemnification from Avco was de- nied by the trial court based on the jury’s finding that both defendants were primarily plaintiffs. liable This denial affirmed by Court. following issues are presented (i) to this Court: Hughes,

Whether as an end-line manufacturer of helicop- ters, had an independent duty to warn of a compo- defective engine Avco, nent manufactured by Hughes which incorporated helicopter, into its Hughes where had been defect; (ii) Avco, notified of the engine Whether manu- facturer, is entitled to contribution from Hughes from the amount of Hughes’ as determined liability, by the judgment of the jury, as a result of having Avco’s settled with the plaintiff an amount which exceeded portion Avco’s and, so, if judgment whether Avco is entitled to prejudg- Pleas, 2. It should be noted post- here that the Court of Common on a motion, granted trial the Tinchers a new trial as to certain items of damages. following relating damages discussion of issues and, therefore, only to the Walton case. reflects this refers 3. Because we conclude that Avco is not entitled to contribution from Hughes opinion, for reasons set forth later in this this issue will not be addressed this Court. on the Hughes from damages delay ment interest or plaintiffs Conversely, whether of contribution. amount full share of liabili- from to recover are entitled to obtain and, therefore, Hughes is entitled whether ty, Avco; manufacturer, component indemnification from introduced negligence properly (iii) comparative Whether that the by requiring action a strict products into 402A of the to section damages pursuant allocation based (Second) among litigants Torts be Restatement Of plaintiff’s causation” litigant’s “comparative on each these issues seriatim. We will address injuries.

I. Hughes’ duty issue of First, address the we will forms the basis its existence subsequent liability because in For the appeals. raised these for the other issues Hughes did have we conclude that reasons that follow knowledge of warn, from its derived independent duty engine. defect in the a dis- begin must with Hughes’ liability The analysis seller’s that underlies a policy social cussion of the broad 402A of the Restatement Section liability as established as the law of adopted 402A was (Second) of Torts.4 Section Zern, 422 424, v. in Pa. by this Court Webb Pennsylvania on the (1966). imposes liability “This section 220 A.2d 853 of the lack of product regardless of a defective seller ... relation or the lack of contractual negligence proven [sic] v. Salvador party.” and the injured the seller between 903, Co., 24, 30, 906 319 A.2d Boiler 457 Pa. Atlantic Steel imposition in the (1974). policy social reflected released into product a is clear. When liability seller’s commerce, seller or manufacturer it is the the stream of the costs and to administer to shoulder who is best able engaging from Having derived a benefit risks involved. allocate the losses business, particularly are able they assign- This increases and insurance. through cost incurred referred to as Professor Prosser liability is what ment of See, supra, the Section. 1 for the text of 4. note

“social adjustment”. Prosser, (4th W. Law Torts at 495 1979). ed. exigencies of our complex technologies required

the development adoption strict liability when it clear became that the circumstances behind some injuries would make negligence practically impossible for an injured plaintiff to prove. Brothers, See Azzarello v. Inc., Black (1978). 480 Pa. 402A, A.2d 1020 therefore, Section requires only proof product was sold in a defective condition unreasonably dangerous to the consumer, user or and that the defect proximate was the cause plaintiffs injuries. Berkebile v. Brantly Helicopter Corp., 462 Pa. (1975). The 402A burden for proving that a product sold “unreasonably dangerous” as to the user is met by proving both defect and the causation. long Id. It has been the law Pennsylvania that a “defective condition” includes the lack of adequate warn ings or required instructions for a product’s Id.; safe use. See Jacobini v. V & O Press Company, 527 Pa. (1991); A.2d 476 Thomas v. Co., Arvon Products 365, 227 Berkebile, A.2d 897 a Pennsylvania case involving the strict of a helicopter manufacturer, wrote, Court its plurality opinion,

A “defective condition” is not limited to defects design or manufacture. The seller provide must with the product every element necessary to make it safe for use. One such element may warnings be and/or instructions use concerning product. A give seller must such warnings and instructions as are required to inform the user or consumer of the possible risks and inherent product. limitations of his (Second) Restatement of Torts 402A, Section comment h. If the product is defective absent such warnings, and the defect proximate is a cause of plaintiff’s injury, the seller is strictly liable without proof negligence____ Where warnings or instructions are required product non-defective, to make a it is the duty of the manufacturer provide to such warn- ings in a form that will reach that ultimate consumer and

577 product. limits of the inherent inform of the risks and non-delega- product a non-defective provide to duty ble____ omitted). (citations 100-103, A.2d at 902-903

462 Pa. at 337 engine does the defective Avco, Hughes, not built That warn; Hughes’ duty duty its not relieve into the engine of the defective incorporation with its begins helicopter. 334, 344, 237 A.2d Corp., Oil v. Forry Gulf 400 of the Re- Section (1968) adopted this Court puts who Torts, provides, “One (Second) of which

statement another is manufactured his a chattel product out as own its manufac- he were though as liability to the same subject Torts, this 400. While (Second) of Restatement turer.” § engaged retailers applied has been traditionally section by an- manufactured selling goods wholly the business imposition behind company, policy other is also product the seller of a result when calls for the same is, seller there- parts, as the component of its an assembler condition when fore, for its defective especially responsible sold. incorporated having from only stems not

Hughes’ liability its subse- also from helicopter, its but part a defective into Hughes was of the defect. knowledge quent, undisputed and had pump the oil of the defect informed Avco concern- or “bulletins” service instructions periodic received pump. Specifically, the oil changes to ing recommended 30, 1976, July issued on Instruction Avco’s Service impeller idler shaft pump of the oil tendency addressed passage of an oil “seize,” drilling for the and called to pre- sufficient received lubrication that the shaft assure recommended happening. this from vent their next overhaul. modified on be so engines defect, Hughes of this informed Having been and, importantly, more its service centers to warn required Berke See helicopters. affected purchased those who Pa. at 337 A.2d Corp., Helicopter Brantly bile v. for the provides specifically 402A Section at protection of the “user or consumer” of products. defective (Second) 402A Section Restatement Of Torts 402A. The § responsibility to warn of known defects can not satisfied be merely by alerting participating service centers. Because purchaser the likelihood that a product will have a serviced technicians or own unaffiliated service center, all, possibly or not serviced at sellers must make attempts reasonable warn user or consumer directly. Berkebile, See Thomas v. (1975); 337 A.2d Co., Arvon Products Pa. case,

In Hughes attempt this made no Phillips warn Jordan, Inc., the owner of the nor its helicopters, authorized centers of the service defect or its solution. As result, engine when the was overhauled on September 1977, the crucial modifications were not made. out,

As the Superior pointed peculiarities Court industry go support imposition also far to of responsi- bility. Helicopters “ordinary goods.” are not their By nature they types objects get are not the that could swept commerce, in the currents of away becoming impossi- ble to track or difficult to locate. are not Helicopters mass- produced products; or mass-marketed to the contrary, they are sold in a small and distinct market. Additionally, estab- helicopters are logical service convenient and lishments points important, case, of contact. Even more in this component part manufacturer of the crucial remained in contact for the Hughes very purpose with of keeping on Hughes pertinent current all information. presented of the evidence to the jury, view and intend- ing preserve promote policies and to the social behind 402A, that it entirely proper impose we believe was strict on for its failure to liability warn of the known defect. Hughes’

Having independent established warn, through dispose its failure to we can also of its claim Hughes argues for indemnification from Avco. that it because, claims, to indemnification from entitled it

579 Air dictate Regulations5 law and the Federal Pennsylvania non-delegable provide complete that Avco had a and duty in warnings, and that justified rely- effective was to meet ing upon responsibility. Appellant this right Brief at 18. The common law of Hughes’ indemnity delineated in recently Nugent this Court Sirianni v. Brothers, Inc., 564, (1986): 509 Pa. 506 A.2d 868 contribution,

“... comparative negligence and [UJnlike right sharing the common law is not a fault indemnity responsi- mechanism between one who was predominantly negligence ble for an accident and one whose was rela- Rather, mechanism, it is a fault tively shifting minor. operable only when a defendant who has liable to a been law, seeks to his plaintiff solely by operation recover responsible loss from a defendant who was actually the accident which occasioned the loss.” Brothers, Inc., 570-571, Sirianni v. 509 Pa. at Nugent (1986) added). (emphasis A.2d at 871 As this Court conclud- ed, party where a seeks the issue is whether that indemnity, Id., in any part causing “had 509 Pa. at party injury.” 571, (1986) 506 A.2d at 871 in (emphasis original).

Hughes attempts to dissuade us from the conclusion Court, reached itself “secondari- by labeling McCabe, as ly” per liable Builders Co. v. 366 Pa. Supply 322, (1951). 77 A.2d 368 As in we said Builders Supply: tort-feasors, having the case concurrent or no joint another, relation to one

legal owning each of them same to the in duty injured party, and involved an acci- occurs, dent which the there is unanim- injury complete ity among everywhere right the authorities that no other, exists on indemnity behalf either case, such a there is a common and not a only one, primary secondary though may even one have much more very negligent been than the other. 328, original).

366 Pa. at 77 A.2d at 371 (emphasis “[Ijndemnity ... shifts the entire loss from one tort- compelled pay feasor who has been it to the shoulders of 21.3, by Hughes specific raised 21.99. §§ 5. The sections are C.F.R. Prosser, another should it instead.” W. Law of who bear (4th 1979) added). (emphasis Torts at 310 ed. Indemnifica tion has also to achieve between employed equity been See, negligent tort-feasors. “primarily” “secondarily” Inc., e.g., Hospital, Vattimo v. Lower Bucks (1983); 465 A.2d 1231 v. Burbage Engineering Boiler & (1969); Inc., 433 Pa. 249 A.2d 563 Supply Company, v. Patterson-Emerson-Com Pittsburgh Company Steel stock, Inc., 404 Pa. The relation case, however, ship parties establishes concur primary precludes any right rent liabilities and therefore depen indemnification. Neither defendant’s liability was to, the upon, precursor jury dent or a other’s. The found acts, independent them liable for their own one both that the Superior another. For these reasons we believe Hughes Court ruled that is not entitled to indemni correctly fication.

II. is the The next issue to be addressed determination damages. of whom owes its share Avco has under the Uniform right claimed a contribution Contribu Act, 8321, Among tion Tort-Feasors Pa.C.S. et seq., argued, estates conversely, Decedents’ have [UCATA]. they Hughes’ pro that are entitled to full rata share of the damage award.

A addressed question similar Court (1987). Eagle, Charles v. Giant there, the “non-settling Our conclusion that tort-feasor [re- his full share” of the dam- proportionate liable for mains] age regardless paid by settling award of the amount defen- dant, Id., in this case. 513 Pa. at controlling is A.2d at 3.

In of encour- opinion crystallized importance and stressed the aging necessity respecting settlements a finality, their we said that it would be “disservice a provide settlement a windfall to a non- supportive policy the settlement more settling proves tort-feasor where to be verdict____ generous subsequent than the The actual amount of the release consequence ... is no satisfaction of judgment remaining defendants.” Id., 477-79, 513 Pa. at 522 A.2d at 3 Eagle Giant

It is clear that mandates recovery by plaintiffs in this case. promoting We remain committed to the policies that fueled our decision in that case. As we Eagle: Giant said in

[Cjoncern plaintiff, over a windfall to the if appellee were required share, to be its full is pay pro-rate far overshadowed injustice they urge. of the result addition to the erosion such position upon a would have a settlements, policy encouraging it is also on bottomed a fundamentally premise. flawed It assumes that the jury verdict more measures the tort-feasor’s accurately obli- gation agreed than that which is upon par- between ties by way of settlement. Such an assumption is without foundation either reason or experience. There no for concluding basis verdict must a jury cap serve as on the recovery plaintiff total that a may receive. Id., 513 Pa. at 522 A.2d at 3.

While this precludes result alone necessarily recovery contribution by (Hughes Avco under UCATA cannot be twice), made to its share pay compelled we are to note important another factor barring recovery that for Avco. right to contribution asserted is from derived the Act, Uniform Contribution Among Tort-Feasors 42 Pa.C.S. 8321 et seq. provides which that a joint tort-feasor has a § of right against contribution another joint tort-feasor where discharged he has the liability joint second tort-feasor pro rata share paid and, or more than his of liability thereby, extinguished the liability the other tort- joint right feasor. “The to equitable right contribution is an John W. based on a common to the liability plaintiff.” Brown, Jr. v. Dickey Equipment Corp., Rental 397 Pa. (1959). 155 A.2d developed prevent It was to prejudice settling to tort-feasors joint encourage and settle- encouraged ment. Settlements are because result in they early receipt by plaintiffs of funds and reduced volume of See,

litigation. Eagle, Charles v. Giant 1A.2d the of this issue is requirement

Crucial to consideration non-settling joint the tort-feasor be that the If, as right a to contribution arises. extinguished before case, settling in acts a defendant happened we believe litigation, from uncertainties to himself only remove non-settling not ask the defendant to “cover may he then out that has made if, losses” it turns he upon judgment, his business decision. a bad entered into Avco the decedents’ releases being re- Hughes’ similarly no mention of

estates make claim it intended reserve a Avco cannot now that to leased. in place. that it not have the first to did right contribution create a right operate to a not to Claiming reserve will what turned out to be right. by overpaying Merely can- jury-determined liability, amount excess of intending Hughes to release actually not claim it was any not such action on its as did consent well. behalf, relationship to force such unjust and it would be settling, gamble Avco took a parties. the two between litigating costs of claim weighing potential must suffer the consequences offer. It now its settlement bargain. a bad We hindsight proves have been of what misinterpreted this Court’s hold that Court affirming erred Eagle thereby decision Giant had a to seek right that Avco trial court’s determination Hughes.6 from contribution

III. is a determination The final issue be resolved strictly between damages two proper apportionment determine what amount order liable tortfeasors plaintiffs and Avco plaintiffs. Both Hughes owes to prejudg- juncture point Avco’s reiterate the that claim for 6. At this we damages delay any of on the amount contribution ment interest or Hughes pursuant Rule 238 is moot rendered awarded Avco by Avco is entitled to contribution. our that not conclusion

583 holding that Superior that Court erred argue in appor- fault comparative employed of should be principles strictly two liable tioning liability damages between defendants, the apportionment and claim instead that as the trial by made on a held pro should be rata basis court. intro Superior agree and conclude that the Court’s

We allocating damage “comparative duction of fault” liable defendants was erroneous. strictly award between adopted Section 402A Restatement When Court Zern, 424, (1966), 422 220 A.2d 853 we v. Pa. Webb equita of this with an citizens Commonwealth provided damage-causing of defects recovery avenue based on ble guaran are as regard to fault. Manufacturers held without See, e.g., a causation. upon finding tors of defect and Inc., 547, 391 A.2d Co., v. Brothers Azzarello Black 462 (1978); Helicopters Corp., 1020 v. Brantly Berkebile 83, (1975); v. Pa. Atlantic Steel Salvador 24, (1974); Co., al., Pa. A.2d 903 v. Boiler et 457 319 Webb Zern, 424, (1966). 422 220 A.2d Pa. 853 liable, tort-feasors, strictly

Presented with both joint award, we determine the allocation lump a sum must jury deci- damages Superior of between the two. Court’s allocation on fault proportional sion to remand for an based claims, was, theory liability it “not affected which against each of plaintiff successfully has established Pa.Super. 383 Corp., at trial.” v. Avco defendants Walton 545-546, That A.2d court based 386 fault-apportionment between policy decision on the the law in its effort liable defendants “will aid strictly Id., Pa.Superi- our products safer consumers.” bring A.2d at at 385. or Ct. goal, clearly merit as is recognize the such

We throughout the devel- the decisions this Court evinced law, accept cannot products liability but we opment as deter- Court’s the basis rejection place stage. attempts in the allocation our minative positioned on to bear financial burdens those best inevitable them, we have continually protected the injured plaintiffs and held responsible manufacturers for products the they put have into the stream of commerce. The facts of this unfortunate point case out the undeniable necessity “liability without fault.” Berkebile v. Brantly Helicopter Corp., (1975). 462 Pa. 337 A.2d 893 this, In a case such as where neither defendant liable theory under the negligence, we believe it found improper is concepts introduce in the damage- of fault apportionment Each process. defendant was found wholly liable for having caused the death of the victims. Avco was liable for the manufacturing engine, defective and Hughes, failing to warn the victims the defect. It is impossi- ble determine that one was more liable than the other. Had engine defect, not had a no crash would have resulted. Had put knowledge action, into defect would have cured and been the accident prevented.

This Court has continually fortified the theoretical dam negligence between notions of and strict “no fault” See, liability. e.g., Co., Azzarello v. Inc., Black Brothers (1978); 480 Pa. 391 A.2d 1020 Berkebile v. Brantly Helicopter Corp., It would serve only muddy the waters to comparative introduce fault into an action solely based on strict liability. the order of the

Accordingly, Superior Court is affirmed in part and reversed in and the part, matter is remanded to the trial court for proceedings consistent this opinion. with

PAPADAKOS, J., joins majority opinion and also files a concurring opinion.

ZAPPALA, J., concurring files a dissenting opinion. PAPADAKOS, Justice, concurring.

I join I majority opinion because believe it says following:

I; The manufacturer of a component part defective which is placed the stream of commerce and thereafter is the proximate injury cause of to the ultimate consumer is liable, though even notice of the and remains so

strictly take corrective who fails to defect is to the assembler given action. component parts, including

II. The assembler of part, places into the stream component defective who knowledge with product, commerce the finished liable component part, strictly existence of the defective com- by caused that defective any injuries proximately for part to the ultimate consumer. ponent defendants, among III. liable strictly As between and to plaintiffs prior has settled with any defendant who of the verdict and pro-rata settled share verdict has from other defendant any is not entitled to contribution greater or liable, is for a found whether the verdict strictly than the settlement amount. lesser amount to obligated defendants are non-settling liable strictly not verdict and are plaintiffs pro-rata for a share the settling, liable strictly entitled contribution from defendants. $922,355.00 us, keeps the

In the matter before Walton and also receives funds from AVCO settlement received Hughes. Tincher $445,601.50, damages from plus delay received from $1,000,000.00 settlement funds keeps $207,951.00, delay damages plus also AVCO and receives opinion with our keeping from This result is Hughes. A.2d 1 Pa. Eagle, 513 Charles v. Giant Justice, concurring dissenting. ZAPPALA, and the issues set disposition in the majority’s I join While I dissent from the opinion, I and III forth Parts erred in affirm- holding that the Court majority’s had a right that Avco ing the trial court’s determination Hughes. from seek contribution agreement executed settlement plaintiffs Avco and the and Indemni- entitled, Tortfeasor Release “Contingent Joint agreement pro- indemnity Agreement”. release ty vided, part: in relevant

... It is further agreed understood and and it is the express intent of the parties agreement that this release shall not in any affect the way rights of Avco ... pursue claims for contribution and/or indemnity aris- ing out of the same accident Corporation Summa and/or Atlanta, Helicopters, Executive Inc. of Georgia.

IT IS AGREED, FURTHER UNDERSTOOD AND however, that if it should be determined that any person, firm or corporation being not released by terms of this release is or jointly severally liable to the claimants released, with any party otherwise, herein tort or claim against damages recoverable from such other person, firm corporation or shall be reduced great- er of the amounts determined as follows: a. The amount of the consideration paid release; for this or

b. The amount determined the sum of pro-rata legal share of responsibility legal or liability for which the parties herein released are found to be liable as a conse- quence of the aforesaid September 1, accident of 1978. The figure $922,355.00 settlement of in the Walton action exceeded the jury damages award in the amount of $891,203.00 against which was entered both Avco and Hughes.

Consistent specific with the terms of parties’ the release agreement, the granted trial court post-trial Avco’s motion seeking Hughes contribution from and awarded one- half of the jury verdict entered favor the Walton plaintiffs. appeal Court, On to the Superior the Walton plaintiffs complained that Avco was not entitled to receive any contribution from upon based this Court’s decision in Markets, Charles v. Eagle Giant Charles,

In the issue non-settling was whether a tortfea- sor is relieved of for responsibility payment of his propor- tionate damages share of to the extent that the consider- ation paid by settling a tortfeasor for a release from the plaintiff settling exceeds the proportionate tortfeasor’s the under jury the damages by as determined

share of 7102, and the Act, 42 Pa.C.S. Negligence Comparative § (“UCATA”), Act Tortfeasors Among Contribution Uniform that the non- held majority et The seq. 42 Pa.C.S. § share. pro his full rata pay required tortfeasor settling brought against an action Charles, had plaintiff the an entrance to Markets, he fell near Inc. after Eagle Giant Door, Magic Stanley Eagle joined Giant one of its stores. trial, plaintiff Prior to additional defendant. Inc. as an $22,500.00. A Eagle against his claim Giant settled recovery any that plaintiff provided by release executed Eagle shall other than Giant corporation against obtained rata share Giant pro extent of the to the be reduced Eagle. in the plaintiff of the a verdict favor

The returned jury Eagle was found Giant $31,000.00. The jury amount forty percent to be Stanley negligent and sixty percent Charles, taking the $8,500.00 to paid negligent. Stanley reduced by it should be the verdict that position plaintiff to the Eagle’s payment Giant by amount which percent of the verdict. sixty exceeded Stanley was concluded A of this Court majority $12,400.00 full amount pay plaintiff required —the to Charles. verdict jury share of forty percent settling that, responsibility “The stated majority the terms of the by resolved finally should be tortfeasor A.2d at 3. at Charles, 513 Pa. settlement.” supported interpretation that its concluded majority states: which 8326 of UCATA Section tortfeasor, joint of one person injured A release discharge not does or after judgment, before whether re- but provides, the release so unless other tortfeasors in the tortfeasors the other against claim duces the or in any the release paid for of the consideration amount provides that the release by which proportion amount or than the greater if reduced total claim shall be the paid. consideration

588 42 Pa.C.S.A. 8326. majority The held that 8326 affords § § the parties option to the release an to determine the amount proportion or by which the total claim shall be reduced provided total greater the claim is than the consider- paid. ation

In upholding seek right Avco’s to contribution in this case Hughes, Superior from upon the Court relied particular the terms the conditional release and indemnity agreement executed between Avco and the plaintiffs. Walton The Superior that, “In Court stated the final it is analysis, particularly difficult to accept the plaintiffs’ claim to Hughes’ share the jury verdict because the plaintiffs’ accepted agreed to the clear terms of the release [sic] agreement they executed with Avco.” Walton v. Avco Corporation, Pa.Super. at A.2d at 385. The Superior Court found that its holding particular under the facts this case furthered the policy considerations an- Charles, nounced majority that, reasoning plaintiff is to encouraged settle in view of the fact that he will recover at least the amount of the jury verdict joint entered defendants and perhaps a greater amount where the release consideration exceeds the total jury The nonsettling defendant, verdict. where the settling preserved defendant has the right seek contribution, no has incentive to go allow case to in hopes trial of securing a windfall settling at the defen- expense. defendant, dant’s The settling protected who rights, his contribution appropriately has reached agreement which satisfactory plaintiff has at the same time protected his own interests a fair and reasonable manner. Pa.Super. at 557 A.2d at 384. distinguished Court release executed parties in the release, instant case from the Charles

stating: settling Charles,

Unlike the settling tortfeasor Avco, here, tortfeasor not pay did consideration plaintiffs to released unconditionally be from further

589 specif- the Avco contrary, in the On involvement lawsuit. plaintiffs with agreement in release ically provided its in the continue so its in lawsuit would that involvement right to seek contribution. as retained the far Avco on the of settlement monies payment the conditioned to the if overestimated its own that had basis [sic] pursuing its remedy by could this mistake it plaintiffs, parties. The rights against other liable contribution right agreement controls Avco’s terms Avco’s release in this Hughes. from Our result to seek contribution the decision simply by unaffected Charles regard had mere- agreement to the settlement parties where the Giant by that the total claim would be reduced provided ly pro jury rata share the verdict. Eagle’s 518, 540-41, (1989)(Empha- 557 A.2d Pa.Super. supplied). sis in a valiant analysis this case was Court’s apply principles majority effort to the the

and erudite though the support to in Charles. Even Charles appeared settling the of the responsibility that majority emphasized terms of the settlement be defined the by tortfeasor should this first principle that at agreement, quickly it abandoned unambiguous the when the to address issue opportunity settling tortfeasor permit would a agreement terms the non-settling from the tortfeasor. seek contribution however, dissenting majori- in the my opinion, As I stated Among the ty in rewrote Uniform Contribution Charles render it and obliterat- meaningless Tortfeasors Act so as to right among exists legislated ed the contribution which I examples that used to demonstrate joint tortfeasors. por- analysis consequences majority’s the Charles seeks majority that now

tended the harsh result examples not one of showed justify. Notably, settling right tortfeasor have a the cases would contribution. case, analysis contractual majority’s

Under right as well. A to contri- agreement disregarded may be involving a settlement a case upheld bution will never be one of joint Despite tortfeasors. the explicit terms agreed release to plaintiffs, the Walton no right contribution can be enforced.

In perpetuating Charles, error analytical made majority hides behind its “commitment to promoting the policies that fueled its decision” in that case. The majority stands policy settlements, of encouraging as if settlements would be discouraged by requiring plaintiffs to up part live to their of the bargain. In exchange for the payment $922,355.00, plaintiffs agreed Walton claim against a non-settling tortfeasor would be reduced by (a) the greater of the amount of the consideration paid; or (b) the amount determined by the sum of the pro rata share of legal responsibility which Avco was held liable.

I would enforce the terms of the release and indemnity agreement. Avco satisfied obligation to pay the stated So, too, consideration for the release. should the Walton plaintiffs satisfy obligation. their I find that to be a social policy worth equally promoting. Pennsylvania, Appellant,

COMMONWEALTH of v. HATFIELD, Hatfield, Steven Elaine Intervenor.

Supreme Court of Pennsylvania.

Argued May 1992. Aug. Decided 1992.

Case Details

Case Name: Walton v. Avco Corp.

Court Name: Supreme Court of Pennsylvania

Date Published: May 22, 1992

Citation: 610 A.2d 454

Docket Number: 138-140 E.D. Appeal Docket 1989

Court Abbreviation: Pa.