Thursday, March 29, 2012

Georgia Supreme Court Ruling Regarding Apportionment

The Georgia Supreme Court has ruled on a key point of the state's tort reform from 2005. The case is McReynolds v. Krebs.   

In the underlying action, Krebs was injured when the vehicle she rode in was struck by a vehicle driven by McReynolds. Krebs sued McReynolds for negligence, and the manufacturer of the vehicle, General Motors, alleging uncrashworthiness. 

McReynolds then filed a crossclaim against GM. GM settled Krebs’ claims against it, and McReynolds tried  to force disclosure of the terms of the confidential settlement. GM moved to dismissed McReynolds’ crossclaim claiming the Tort Reform Act of 2005 abolished joint and several liability, and McReynolds responded that the amendments did not abolish her right to contribution or setoff. The trial court dismissed the cross-claim against GM and denied McReynolds’ motion for summary judgment that she reached an enforceable settlement with Krebs based on correspondence from her insurer.
The Court of Appeals unanimously affirmed the trial court’s decision.
McReynolds petitioned for certiorari  on the interpretation of the Tort Reform Act related to contributions, apportionment and setoff, and also the enforceability of the settlement agreement. 
The issues for the Georgia Supreme Court were: 
  1. Did the Court of Appeals correctly construe OCGA § 51-12-33 to require a trier of fact to apportion an award of damages among multiple defendants when the plaintiff is not at fault?
  2. Did the Court of Appeals correctly find that McReynolds’s insurer made a counteroffer in response to Krebs’s settlement demand?
Last week, the Supreme Court affirmed  the Court of Appeal. Justice Nahmias first explained that apportionment of damages must take place regardless of whether the plaintiff is at fault. In light of this holding, the Court found there was no error in dismissing the cross-claim and set-off. 

"Damages are apportioned among tortfeasors according to their percentages of fault, regardless of whether the total amount of damages was first reduced under subsection (a) to account for the plaintiff's share of liability," the justice wrote.

"Accordingly, we hold that in applying § 51-12-33, the trier of fact must 'apportion its award of damages among the persons who are liable according to the percentage of fault of each person' even if the plaintiff is not at fault for the injury or damages claimed.

"In light of this holding, there was no error in the dismissal of McReynolds' cross-claims for contribution and set-off against GM."

As to the counteroffer issue, the Court noted that Krebs' offer made no mention of liens, nor did it contemplate any particular resolution of the hospital lien or any other liens as a condition of settlement.

"As we explained in Frickey, while a 'mere request for confirmation that no liens exist' will not transform a purported acceptance into a counteroffer, an added condition involving the 'resolution of... actual and potential liens of the health care providers' will," Nahmias wrote.

"Thus, like the trial court and the Court of Appeals, we construe the response by McReynolds' insurer to Krebs' settlement offer, proposing to resolve the hospital and other liens 'as part of this settlement,' as a counteroffer rather than an unconditional and unequivocal acceptance. Accordingly, no binding settlement agreement was formed."
Six Justices also found that response by the insurer was a counteroffer rather than an acceptance. Justice Melton dissented from this portion of the opinion, and would have found the insurance carrier fully accepted the offer.