By Steven J. Parrott
Choosing the right release is an important part of settling any tort claim asserted against the Insured. In a case where there is only one defendant, and it is unlikely that there will be other parties that will be alleged to have caused the injury, a broad, general release which releases a plaintiff’s claims against the settling defendant, and also releases claims “against all other parties who are or may be alleged to have caused the plaintiff’s injuries, whether such parties are named in the release”, may suffice to protect against claims for contribution by other parties alleged to be responsible for the plaintiff’s injuries. Such language has been held to be enforceable. See Pembroke, Inc. v. Essco Co., Inc., 252 Md. 374, 379 -80, 249 A. 2d 711(1969); Buckley v. Bretheren Mut. Ins. Co., 207 Md. App. 574, 598, 53 A. 3d 456 (2012) aff’d 437 Md. 332, 86 A. 3d 665 (2014). However, such broad release language may give rise to questions as to whether the plaintiff intended to release certain parties not specifically named in the release. See Spangler v. McQuitty, 449 Md. 33, 72 – 75, 141 A. 3d 156 (2016); Morgan v. Cohen, 309 Md. 304, 316 – 321, 523 A. 2d 1003 (1987). In addition, in cases involving multiple defendants, it is unlikely that a plaintiff will agree to release all claims against all other parties in exchange for settlement with one defendant. In mass tort cases, where dozens of defendants may be joined, the use of a broad, general release for settlement of claims against one defendant is not possible. For these reasons, it is suggested that, when settling tort claims asserted against an Insured, the release include joint tort-feasor release language which protects against claims for contribution, even in cases where other joint tort-feasors are not named as parties in the lawsuit, and even where the existence of joint tort-feasors is not apparent.
The Maryland Uniform Contribution Among Joint Tort-feasors Act
Maryland has not adopted comparative negligence, and instead recognizes that all defendants whose conduct has been found to have caused or substantially contributed to the plaintiff’s injuries are jointly and severally liable to the plaintiff for the entire amount of the verdict. See Gables Constr. Inc. v. Red Coats, Inc., 468 Md. 632, 649, 228 A. 3d 736 (2020). At common law, contribution among joint tort-feasors was not permitted. A release of one joint tort-feasor constituted a release of all joint tort-feasors. The rule precluding contribution among joint tort-feasors began to change in 1939 when the American Law Institute and the National Conference of Commissioners on Uniform Laws promulgated the Uniform Contribution Among Joint Tort-Feasors Act. The Uniform Act was said to provide the societal benefit of allowing for the broader distribution of loss, promote fairness, and provide certainty for joint tort-feasors regarding the extent of their liability. Mercy Med. Ctr. v. Julian, 429 Md. 348, 355 – 356, 56 A. 3d 147 (2012). In 1941, the Maryland General Assembly adopted the Maryland Contribution Among Joint Tort-Feasors Act, which currently is codified at MD CTS & JUD PROC CODE, ANN, §§3-401 through 3–1409. Section 3–1402(b) of the current Maryland Act provides that a claim for contribution arises where a joint tort-feasor “has by payment discharged the common liability or has paid more than a pro rata share of the common liability”. Contribution requires that there be joint liability in tort to the injured party. Gables Constr., Inc., supra, 468 Md. at 669–671. Under §3-1404 of the Act, instead of a release of one being a release of all, the release of one joint tort-feasor does not discharge the other joint tort-feasors unless the release so provides, but reduces the claim against the others in the amount of the consideration paid, or in any other amount as provided in the release, if the amount is greater than the consideration paid. Under §3–1405, the release by the injured person of one joint tort-feasor does not relieve the released joint tort-feasor from liability to make contribution to other joint tort-feasors unless the release is given before the right of the other joint tort-feasors to obtain a money judgment for contribution accrued, and “the release provides for a reduction, to the extent of the pro rata share of the released joint tort-feasor, of the injured person’s damages recoverable against the other joint tort-feasors.” A pro rata share is the amount of the damages awarded, divided by the number of joint tort-feasors. Mercy Med. Ctr. v. Julian, supra, 429 Md. at 357.
Necessary to the existence of a contribution claim is the determination of joint tort-feasor status. In order to obtain a judgment for contribution against a party, or a reduction of a verdict based upon a release given by the injured person to a settled defendant, that settled defendant must be determined to be a joint tort-feasor. The joint tort-feasor status of a party may be determined through adjudication of the party as a joint tort-feasor, or the injured party may agree in the release that the released party shall be considered a joint tort-feasor. Id., 429 Md. at 356–357.
A release which does not provide for the reduction of the injured person’s damages to the extent of the released party’s pro rata share of the damages recoverable against all other joint tort-feasors reduces the released party’s liability for contribution to other joint tort-feasors by the amount of the consideration paid. It does not protect the released party from claims for contribution to the extent that the released party’s pro rata share of damages exceeds the consideration paid for the release. For purposes of illustration of the effect of a release which does not provide for a pro rata reduction, assume that a case involves four defendants whose alleged negligence jointly resulted in injury to the plaintiff. Further assume that the plaintiff settles with and releases one defendant for the consideration of $10,000.00, and a verdict subsequently is returned for $100,000.00 against all four defendants based upon a finding that all four are joint tort-feasors. If the release given to the settling defendant does not provide for a reduction of the verdict to the extent of the released defendant’s pro rata share of the damages recoverable against all of the defendants, the settling defendant is subject to liability for contribution to the other defendants in the amount of $15,000.00 (the settling defendant’s pro rata share of the verdict, which is $25,000.00, less the $10,000.00 consideration paid to plaintiff for the release). The plaintiff’s verdict recoverable against the non-settling defendants is reduced to $90,000.00. On the other hand, under that same scenario, if the settling defendant had obtained a joint tort-feasor release which provided for a reduction in plaintiff’s damages to the extent of the settling defendant’s pro rata share of damages recoverable against all defendants, then under §3–1405 of the Act, the claims against the settling defendant for contribution would be fully discharged. The plaintiff’s verdict recoverable against the non-settling defendants would be reduced to $75,000.00. Under both scenarios, if the settling defendant was found not to be a joint tort-feasor, the settling defendant would be considered a volunteer, and the plaintiff’s verdict would not be reduced by the $10,000.00 consideration paid. Plaintiff would be entitled to recover the full $100,000.00 verdict against the non-settling defendants found to be joint tort-feasors.
In order to protect a settling defendant from potential claims for contribution, it is important to obtain a release under which the plaintiff agrees that any verdict against non-settling defendants will be reduced by the amount of the consideration paid by the settling defendant, or the settling defendant’s pro rata share of plaintiff’s damages recoverable against all joint tort-feasors, whichever is greater. Under §3–1405 of the Maryland Act, such language will cut off claims which the non-settling defendants (or other potential joint tort-feasors) have for contribution against the settling defendant.
Jones/Griffin Type Release
The right of the non-settling defendants (or other joint tort-feasors) to contribution, or to have any verdict reduced based upon the release given by the plaintiff to a settling defendant is dependent upon the determination of the settling defendant’s joint tort-feasor status. Joint tort-feasor releases can address the joint tort-feasor status of the settling defendant. The plaintiff can agree in the release that the settling defendant will be considered to have been adjudicated to be a joint tort-feasor for purposes of reduction of damages recoverable against other joint tort-feasors, and that any damages recoverable by plaintiff, or verdict in favor of plaintiff, automatically will be reduced by the settling defendant’s pro rata share of damages recoverable against all other joint tort-feasors, or in the amount of the consideration paid for the release, whichever is greater. Such a release is commonly referred to as a Jones or Griffin type release, named for the decisions in Jones v. Hurst, 54 Md. App. 607, 459 A. 2d 219 (1983) and Griffin v. United States, 500 F. 2d 1059 (3 rd Cir. 1974). See Mercy Med. Ctr. v. Julian, supra, 429 Md. at 369. This type of release is favorable to a settling defendant because there is no need for an adjudication of the settling defendant’s joint tort-feasor status by the court or jury, and no need for the settling defendant to participate at trial or (under most circumstances) produce discovery information. The language used in a Jones/Griffin type release to accomplish the pro rata reduction of damages and verdict is as follows:
RELEASOR further agrees that this RELEASE shall be governed by the provisions of the Maryland Contribution Among Joint Tort-Feasors Act, MD CTS & JUD PROC CODE ANN., sections 3-1401, et seq. RELEASOR agrees that in the event that RELEASOR asserts any claim or lawsuit against any other party, person, individual, entity, company or corporation arising out of, relating to, or in any way connected to the occurrence that is the subject of the above lawsuit alleging that such other party, person, entity, company or corporation’s negligence and/or wrongful conduct caused and/or substantially contributed to RELEASOR’s injuries, then for purposes of this RELEASE, the RELEASEES shall be deemed to be joint tort-feasors with such other party, person, entity, company or corporation, as if adjudicated to be joint tort-feasors , and any damages recoverable by RELASOR, and any verdict entered in favor of the RELEASOR and against any other such party, person, individual, entity, company and/or corporation shall be reduced automatically by RELEASEES’ pro rata share of the damages recoverable by RELEASOR, and/or any verdict entered in favor of RELEASOR and against all joint tort-feasors, including such other party, person, individual, entity, company and/or corporation, or by the consideration paid hereunder, whichever is greater, it being the intention of the RELEASOR to release and discharge and protect the RELEASEES from all claims for contribution by any other such party, person, individual, entity, company and/or corporation against which RELASOR may assert a claim or lawsuit arising out of, relating to, or in any way connected to the occurrence that is the subject of the above lawsuit, and to allow the RELEASEES to avoid having to appear at trial, defend, or remain as an active party to any other lawsuit initiated by RELEASORS and involving the subject matter of the above lawsuit.
In some situations, a Jones/Griffin type release may not be acceptable to a plaintiff, particularly where the liability of the settling defendant is in question, because the release automatically reduces the plaintiff’s potential verdict, even where a jury determines that the settling defendant is not a joint tort- feasor. Using the example above, if a plaintiff settles with one of four defendants using a Jones/Griffin type release, and assuming a $100,000.00 verdict, the amount of the verdict recoverable against the three non-settling defendants automatically would be reduced to $75,000.00. The amount of the plaintiff’s recoverable verdict is reduced to $75,000.00, even if the jury determines that the settling defendant was not a joint tort-feasor.
Swigert Type Release
In many cases, a plaintiff may prefer a release providing that there will be no pro rata reduction of the verdict unless it is adjudicated by the jury that the settling defendant is a joint tort-feasor. A release which makes pro rata reduction of any verdict contingent upon the settling defendant being adjudicated to be a joint tort-feasor is known as a Swigert type release, named for the case of Swigert v. Welk, 213 Md. 613, 133 A. 2d 428 (1957). A Swigert type release provides that there will be a reduction of the damages recoverable by the plaintiff and against all joint tort-feasors in the greater of the amount of the settling defendant’s pro rata share of such damages, or in the amount of the consideration paid for the release, only if the settling defendant is adjudicated to be a joint tort-feasor. See Mercy Med. Ctr. v. Julian, supra. With a Swigert type release, in order for the non-settling defendants to obtain a reduction of any verdict based upon the release given to the settling defendant, the non-settling defendants must prove that the settling defendant’s conduct was a substantial contributing factor to the plaintiffs’ injuries and damages. The settling defendant remains on the verdict form to allow the jury to determine its joint tort-feasor status. If the settling defendant is adjudicated to be a joint tort-feasor, the release reduces the verdict against the non-settling defendants in the amount agreed. If the settling defendant is not found to be a joint tort-feasor, the settling defendant is considered a volunteer, and the plaintiff is entitled to recover the full amount of the verdict against the non-settling defendants. Allgood v. Miller, 307 Md. 350, 354, 513 A. 2d 915 (1986). Where a Swigert type release is given, a plaintiff has the right to participate in the determination of the settling defendant’s joint tort-feasor status, and may argue against a finding of joint tort-feasor status. See Collier v. Eagle Picher Industries, 86 Md. App. 38, 45, 585 A. 2d 256 (1991).
The suggested language to be used for a Swigert type release is as follows:
RELEASOR further agrees that this RELEASE shall be governed by the provisions of the Maryland Contribution Among Joint Tort-Feasors Act, MD CTS & JUD PROC CODE ANN., sections 3-1401, et seq. RELEASOR agrees that this RELEASE shall release the claims against RELEASEES, and shall not release any other party, person, individual, entity, company or corporation unless the RELEASEES, or any of them are adjudicated to be joint tort-feasors with regard to the occurrence that is the subject of the above lawsuit and/or the injuries and damages which were or could have been claimed in the above lawsuit. In the event that the RELEASOR asserts any claim or lawsuit against any other party, person, individual, entity, company or corporation arising out of, relating to, or in any way connected to the occurrence that is the subject of the above lawsuit and/or the injuries and damages which were or could have been claimed therein, and in the event that RELEASEES, or any of them are adjudicated to be joint tort-feasors with regard to the occurrence that is the subject of the above lawsuit, and/or the injuries and damages that were or could have been claimed by RELEASOR in said lawsuit, it is agreed that any damages recoverable by RELEASOR, and any verdict and/or judgment rendered in favor of the RELEASOR and against any other such party, person, individual, entity, company and/or corporation shall be reduced by the RELEASEES’ pro rata share of the damages recoverable by RELEASOR, and/or RELEASEES’ pro rata share of any verdict rendered herein in favor of RELEASOR and against all other joint tort-feasors, including such other person, individual, entity, company or corporation, or in the amount of the consideration paid hereunder, whichever is greater, it being the intention of the RELEASOR to release and discharge and protect the RELEASEES from all claims for contribution by any other such party, person, individual, entity, company and/or corporation against which RELASOR may assert a claim or lawsuit arising out of, relating to and/or in any way connected to the occurrence that is the subject of the above lawsuit and/or for the damages which were or could have been claimed in such lawsuit, and to allow the RELEASEES to avoid having to appear at trial, defend, or remain as active parties to any other claim or lawsuit initiated by RELEASOR and involving the subject matter of the above lawsuit, and the injuries and damages claimed or that could have been claimed therein.
Plaintiffs typically prefer to give a Swigert type release, rather than a Jones/Griffin type release, because plaintiffs typically prefer to gamble on whether the settling defendant will be found to be a joint tort-feasor, rather than agree to automatically reduce a potential verdict. The protection against claims for contribution against the settling defendant is the same under both types of releases. Using the example from above, if one of four defendants settles in exchange for a Swigert type release, and a jury returns a verdict of $100,000.00 against all four defendants, determining that each defendant is a joint tort-feasor, the plaintiff’s verdict is reduced to $75,000.00. If the jury returns a verdict for $100,000.00, but does not find the settling defendant to be a joint tort-feasor, the settling defendant is considered to be a volunteer, and the amount of plaintiff’s recoverable verdict against the three non-settling defendants remains at $100,000.00. Under both scenarios, the claims for contribution against the settling defendant are discharged.
Indemnification
The joint tort- feasor release language protects a settling defendant from claims for contribution, but does not impair claims by non-settling defendants or other parties for indemnification. See §3–1406 of the Maryland Act. In tort cases involving multiple defendants, the basis for claims among the defendants for indemnification typically are limited. Such claims may be based upon an agreement to indemnify. In some cases, co-defendants may attempt to assert a tort based common law claim for indemnification alleging that the negligence of the party against which indemnification is sought was active and the proximate cause of the plaintiff’s injuries, while the negligence of the defendant seeking indemnification was passive, or that the party seeking indemnification’s liability arises by operation of law. For the most part, the tort based common law claim cannot properly be asserted by a defendant in a case where the defendant attempting to assert the claim is alleged to have been actively negligent. See Franklin v. Morrison, 350 Md. 144, 163, 711 A. 2d 177 (1998). If such claims are attempted, a motion to dismiss for failure to state a claim is suggested.
In addition, to try to avoid potential non-contract based indemnification claims, it is suggested that the following language be made a part of the release:
RELEASOR further agrees that in the event that RELEASOR asserts claims against any other party, person, individual, entity, company and/or corporation and arising out of and/or involving the occurrence that is the subject of the above lawsuit, RELEASOR shall take all actions reasonably necessary to indemnify RELEASEES, and hold RELEASEES harmless from all claims by said other parties, persons, individuals, entities, companies and/or corporations for indemnification against RELEASEES, and arising out of or connected to any such claims or lawsuit by RELEASOR against such other parties, persons, individuals, entities, companies and/or corporations, including the release or dismissal by RELEASOR of any such claims and/or lawsuits, and including the release, discharge or dismissal of all or part of any verdict or judgment obtained by RELEASOR against such other parties, persons, individuals, entities, companies and/or corporations, to the extent necessary to meet RELEASOR’S obligation hereunder to protect and hold the RELEASEES harmless from all claims for indemnification.
Conclusion
In order to protect a settling defendant from potential claims for contribution, the release utilized for the settlement of tort claims should include joint tort-feasor release language providing for the reduction in the amount of the verdict or damages claimed by the plaintiff against all joint tort-feasors in the amount of the settling defendant’s pro rata share of such verdict or damages, or in the amount of the consideration paid for the release, whichever is greater. The language should be used in all releases used to settle tort based claims even where there are no additional named defendants in the case, and even where the existence of additional joint tort-feasors is not apparent. The use of a clause addressing claims for indemnification also should be considered.