Laster v. Gottschalk

75 Mich. App. 290 (1977) 255 N.W.2d 210 LASTER v. GOTTSCHALK Docket No. 25569. Michigan Court of Appeals. Decided May 2, 1977. Davidson, Gotshall, Kohl, Secrest, Wardle, Lynch & Clark, for Charles and Ronald Gottschalk. Daner, Freeman, McKenzie & Matthews, P.C., for the Board of County Road Commissioners of the County of Macomb. *293 Before: M.J. KELLY, P.J., and J.H. GILLIS and R.M. MAHER, JJ. J.H. GILLIS, J. This case arises from a January 1, 1971 head-on collision between cars driven by Hershel Laster and Ronald Gottschalk. Elayne and Nadine Laster sued the Gottschalks. The Gottschalks added the Board of County Road Commissioners of the County of Macomb (hereinafter referred to as the Board) as third-party defendant, alleging that it had built too narrow a road at the place of the accident, constructed or maintained the contour of the roadway so that it increased the danger, and removed and piled snow in a manner that further decreased the width of the road. The Lasters then amended their complaint to include the Board. Following settlement between the Gottschalks and the Lasters, the Gottschalks were discontinued as parties by order and stipulation. The Board then filed a third-party complaint against the Gottschalks and Hershel Laster. The trial court denied the Gottschalks' motion for accelerated judgment and they appeal, asserting that the Board has no substantive right against them. The Board counters, claiming the rights to indemnification and contribution. Our Court granted leave to appeal and we now proceed to consider the issues raised. This case is substantially similar to Witucke v Presque Isle Bank, 68 Mich App 599; 243 NW2d 907 (1976), lv den, 397 Mich 842 (1976), and on that basis we affirm the trial court in denying accelerated judgment. As in Witucke, indemnification is not at issue in the instant case. 68 Mich App 599, 613. See also Minster Machine Co v Diamond Stamping Co, 72 Mich App 58; 248 NW2d 676 (1976), and cases cited therein. We interpret Witucke to mean that contribution may *294 be at issue here; however, we feel the need to offer further guidance to the trial court in view of the factual situation presented in this case. In Witucke, the plaintiff had to show negligence on the part of the settling party in order to recover from the remaining defendant. Such is not the case here; a jury could determine that both the Gottschalks and the Board were negligent, that neither was negligent, or that one or the other was negligent. The settlement does not admit liability; therefore the issue of negligence on the part of the Gottschalks is at issue in the case of the Lasters versus the Board. We point out that this case involves concurrent tortfeasors (if both defendants are determined negligent), not joint tortfeasors. Therefore, MCLA 600.2925; MSA 27A.2925 does not apply. See Witucke v Presque Isle Bank, supra, at 604-609. Although the settlement between the Lasters and the Gottschalks prohibits the Lasters from suing the Gottschalks, it does not resolve all of the conflicts between the Board and the Gottschalks. Boucher v Thomsen, 328 Mich 312; 43 NW2d 866 (1950). The Lasters and the Gottschalks cannot negotiate away the rights of the Board. The decision of the Lasters to settle with the Gottschalks does not determine the Board's right to contribution. "The right to contribution may be established by third-party plaintiffs' (here original defendants'), proofs alone". Caldwell v Fox, 394 Mich 401, 420-421; 231 NW2d 46 (1975). (Citation omitted.) We are somewhat troubled with the fact that one who has settled out of a lawsuit may be forced back into it. However, it is equally unfair that the Board, having objected to the settlement and not being made a party thereto, should be denied the opportunity to adequately defend itself. *295 We note that the settlement agreement provided that it would operate to satisfy the pro rata share of the Gottschalks for any judgment rendered against them. Although this prevents the Board from actually paying more than its pro rata share should the Gottschalks and the Board be determined to be concurrent tortfeasors, it does not determine liability. Therefore, if the jury is only allowed to deliberate on the Board's negligence, any finding of liability will be total. The settlement could not be introduced by the Board to show the Gottschalks' payment of part of the judgment if there is no determination of the Gottschalks' liability. Upon trial of this matter, if it is determined that both the Gottschalks and the Board are liable, then the Board will be liable for their pro rata share only, the pro rata share of the Gottschalks having been satisfied by the settlement. Krevsky v Naccarato, 56 Mich App 704; 224 NW2d 731 (1974), lv den, 394 Mich 772 (1975). If it is determined that the Gottschalks are solely liable, obviously the Board will be discharged from liability, and the judgment would be deemed satisfied by the settlement. If it is determined that the Board is solely liable, then it will be liable for the entire judgment minus the amount of the settlement pro tanto, therefore preventing double recovery. If neither are deemed negligent, then plaintiffs receive the settlement only, the consideration being plaintiffs' promise not to sue the Gottschalks. Affirmed. Costs to appellees. R.M. MAHER, J., concurred. M.J. KELLY, P.J. (dissenting). I respectfully suggest *296 that if the law is as the majority finds it to be, then it ought to be changed. Why should the law give lip service to favoring settlements and then construct a maze of procedural obstacles effectively prohibiting a defendant from settling his lawsuit and walking away from the courthouse? The Gottschalks (or their insurance carrier) paid $17,900 for peace. They were discontinued as parties to this proceeding by stipulation and order duly entered in the court below. The instruments of release were skillfully worded to preclude any further potential enforcement of liability against appellants by way of "any further liability for the * * * accident or any consequences resulting therefrom, by way of contribution or otherwise". Let us be clear at the outset. The Gottschalks (or their carrier) are not going to pay one dollar more, over and above their negotiated release, either to the plaintiff or to the road commission. The road commission's purpose in keeping them in the lawsuit need not be the subject of speculation here, but it must be tactical and not substantive. The majority and I read Witucke v Presque Isle Bank, 68 Mich App 599; 243 NW2d 907 (1976), lv den, 397 Mich 842 (1976), differently. Apparently we agree that under no circumstances would the road commission be entitled to indemnification from the Gottschalks. The majority however reads Witucke to mean that contribution is an issue here. I do not see how. The road commission has no possible right to contribution against the Gottschalks.[1]Krevsky v Naccarato, 56 Mich App 704; 224 NW2d 731 *297 (1974), lv den, 394 Mich 772 (1975), holds that where a plaintiff and defendant enter a settlement, by its terms, limiting the defendant's liability, the plaintiff cannot indirectly recover more from that defendant by recovering from a non-settling defendant more than the latter's pro rata share, and forcing him or her to sue the defendant for contribution. What is proposed is a charade. The road commission would have the ordinary and normal right of subpoena to secure the presence and testimony of the Gottschalks. Keeping them in as parties defendant presents a distorted picture. I cannot see how the jury could be instructed to assess or compute damages against the Gottschalks in favor of the plaintiffs or the commission. In order for a pro rata share to be found there must be at least two culpable parties. A settlement is not evidence of culpability unless its terms so state. Therefore, where in the present case, unlike that in Naccarato, the settlement occurred before judgment and the settling party was dismissed as a party, no pro rata share can be determined. The remaining defendant (road commission) will therefore be liable for any judgment against it less a pro tanto reduction for the amount that the settling party paid. A pro tanto reduction does not require a finding that the settling party was in fact a tortfeasor. GCR 1963, 204 requires that a third-party plaintiff have a substantive right against a third-party defendant, see, 1 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 508. Since the road commission has no right to indemnification or contribution, and no other substantive right is alleged, there are no grounds for a third-party complaint.[2] The appellant has met the requirements of GCR *298 1963, 116 for accelerated judgment. The trial court's decision denying the third-party defendants' motion for accelerated judgment should be reversed. NOTES [1] The current MCLA 600.2925a-d; MSA 27A.2925(1)-(4) apply only to torts committed on or after January 1, 1975 (1974 PA 318, § 3). Therefore, the applicable law is MCLA 600.2925; MSA 27A.2925, which was repealed by 1974 PA 318. This opinion makes no comment on the effect of the new law had it been in force. [2] Moyses v Spartan Asphalt Paving Co, 383 Mich 314, 334; 174 NW2d 797 (1970), which overruled what was "left of Michigan's common law bar of contribution between or among `wrongdoers,' wilful or intentional wrongdoers excepted" has no applicability here. The controlling issue here is the settlement and its attendant provisions. This Court has indicated that when one defendant settles, another defendant's liability is reduced by the pro tanto share. Sobotta v Vogel, 37 Mich App 59; 194 NW2d 564 (1971).