Lamson, Dugan and Murray, LLP, Attorneys at Law

Economic Damages and Joint and Several Liability, Part IV

Posted in In-House Counsel, Legislation

As noted in Part III of this series, we are going to examine the reasoning behind the Nebraska Supreme Court determining joint and several liability ceases when one of two liable parties settle with a claimant as set forth in Tadros v. City of Omaha, 273 Neb. 935, 735 N.W.2d 377 (2007).

In reaching its determination, the Court first considered the plain language of the Neb.Rev.Stat. §§ 25-21,185.09 to 25-21,185.11.  In doing so, the Court first determined Neb.Rev.Stat. § 25-21,185.10 to be inapplicable because the matter was no longer an “action involving one or more defendant.”  The Court went on to determine Neb.Rev.Stat. § 25-21,185.11 specifically addresses the rights of the parties when a settlement is entered into between a claimant and a person liable to the claimant.  This is because the language of § 25-21,185.11 “plainly states that after the claimant settles with a joint tort-feasor, the claimant’s claim against other persons ‘shall be reduced by the amount of the released person’s share of the obligation as determined by the trier of fact’.”  The Court also determined Neb.Rev.Stat. § 25-21,185.11 abrogated the common law pro tanto rule in existence in the state of Nebraska. 

Most importantly, the Court determined a claimant’s settlement with a joint tort-feasor forfeits “that joint and several liability ” and “a claimant cannot recover from the non-settling joint tort-feasor more than that tort-feasor’s proportionate share in order to compensate for the fact that the claimant made a settlement with another party that may prove to be inadequate.”  The Court determined this analysis would encourage settlement as it creates finality.  In other words, the scheme discharges any need for a joint tort-feasor to seek contribution against the settling tort-feasor.  Lastly, the Court stated this scheme is in accord with the Uniform Comparative Fault Act and the Restatement (Third) of Torts.  As such, the Court concluded pro rata reductions are the rule in Nebraska and reversed the ruling of the trial court. 

Moving forward with this series, we will take a look at some possible exceptions and cases involving more than two liable parties.

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