"When a release . . . is given in good faith to one of two or more persons liable in tort for the same injury: . . . (b) It shall discharge the tort-feasor to whom it is given from all liability for contribution to any other tort-feasor."
Slocum v. Donahue
Donahue ran over Slocums' eighteen-month-old child while driving. Slocum had been drinking vodka in his vehicle, but he also alleged that a defective floor mat interfered with the power brakes, removing his ability to stop. Donahue pled guilty to motor vehicle homicide.
Slocums then filed a civil action against the Donahues alleging negligence and gross negligence. Prior to trial, Slocums and Ford signed a settlement agreement providing that Ford would pay the Slocums $150,000 for a release of any claim. Donahues filed a third-party complaint against Ford, denying negligence alternatively seeking contribution and indemnity, alleging that Ford was negligent and in breach of warranties of merchantability and fitness for a particular use.
Ford moved for summary judgment as to the Donahues' claim on the ground that the settlement was in good faith so all claims for contribution were extinguished. Trial court granted summary judgment.
Did the settlement release Ford from contribution and indemnification?
- Page 415, Paragraph 2
- Page 416, Paragraph 3, Bottom
"Indemnity is permitted only when the would-be indemnitee does not join in the negligent act." "This right to indemnity is limited to those cases in which the would-be indemnitee is held derivatively or vicariously liable for the wrongful act of another."
Settlement was not made in good faith and was collusive because it was for less than the case's value and because Ford told Slocums that it would allow them to use its experts to defeat Donahues' attempt to show Ford's liability.
Donahue had been drinking vodka and had a bottle under his seat, so it was reasonable that the jury would find Donahue completely liable and not Ford.
A low settlement alone is not evidence of bad faith. Ford offered Donahue a joint settlement but Donahue declined. There is only speculation of collusion and not enough for a hearing on good faith.
- Page 416, Paragraph 4
If the claim against Ford had gone to trial and Ford had been found liable to the Donahues, to the text of the note it would have been as a result of its negligence or breach of warranty. to the text of the note "Such liability will not be derivative or vicarious in nature, nor will it be constructive rather than actual. Accordingly, the third-party plaintiffs are not entitled to indemnification
Donahue could have claimed that he was not liable because it was cause by Ford's negligence, but the jury could not have held Donahue liable for Ford's negligence, so Donahue could not receive contribution. Indemnification and contribution are mutually exclusive.
Donahue's claim to contribution was extinguished, and Donahue had no claim to indemnification. Affirmed.
: Indemnity allows one not at fault but liable because of some operation of law to make good any damage or loss incurred by the indemnitee.