Encouragement of Settlement In California
The policies favoring maximization of recovery, encouragement of settlement, and equitable apportionment (Mullin Lumber Co. v. Chandler (1986)) must be viewed in light of the shift from joint and several liability to partial several liability.
Maximization of recovery is in some cases enhanced.
A plaintiff who settles with certain defendants and pursues others to trial may well end up with a greater recovery than a full settlement would have yielded.
Indeed, some plaintiffs may recover more through settlement and litigation than the total amount of damages ultimately determined by the jury, a result not formerly possible. (See Hoch v. Allied-Signal, Inc. (1994) 24 Cal. App. 4th 48, 65-68 [29 Cal. Rptr. 2d 615].)
While the plaintiff must bear the risk of inability to collect from some defendants, it was the express purpose of Proposition 51 to shift that risk away from defendants with "deep pockets." ( Civ. Code, 1431.1.)
And while a complete recovery may be delayed because full settlement cannot be obtained from a defendant willing to shoulder the burden of seeking indemnity, this is an inevitable ramification of Proposition 51's restriction on joint and several liability.
It is analogous to the added expense and effort required to sue all tortfeasors to obtain a complete recovery, as opposed to the formerly available practice of pursuing a limited number of defendants who in turn could assert their indemnity rights against concurrent tortfeasors. (See Evangelatos v. Superior Court, supra, 44 Cal. 3d at p. 1215.)
No defendant should be deterred from settling its own liability with the plaintiff.
By obtaining a determination of good faith settlement, defendants can protect themselves from claims for contribution or indemnity by other tortfeasors, thus limiting their liability with more assurance than is gained by settling and proceeding with an indemnity claim. ( Code Civ. Proc., 877.6; see Neverkovec v. Fredericks (1999) 74 Cal. App. 4th 337, 352-353 [87 Cal. Rptr. 2d 856].)
Alternatively, the option of settling the entire economic damage claim and seeking comparative indemnity for that payment remains open.
The goal of equitable apportionment is furthered by barring defendants from seeking indemnity for their settlement of concurrent tortfeasors' several liability.
Each defendant is free to make its own assessment of the relative risks and benefits of settlement and litigation.
Defendants settling in good faith cap their liability at an amount they deem appropriate in view of the hazards of litigation.
If the plaintiff takes other defendants to trial, the trier of fact determines the fault attributable to all parties and determines the plaintiff's economic and noneconomic damages.
The nonsettling defendants receive an offset for the portion of any settlement that reflects economic damages. (See, e.g., Ehret v. Congoleum Corp. (1999) 73 Cal. App. 4th 1308, 1320-1322 [87 Cal. Rptr. 2d 363]; Torres v. Xomox Corp., supra, 49 Cal. App. 4th at pp. 33-37.)
If a settling defendant pursues an indemnity claim against a nonsettling defendant, the jury apportions the economic damages in its verdict and each defendant remains responsible for settling or litigating its own several liability for noneconomic damages.