Rock v. Reed-Prentice Div. of Package Mach. Co., 39 N.Y.2d 34 (1976)
A settlement between a plaintiff and one tortfeasor does not preclude the settling tortfeasor from enforcing a previously obtained judgment for contribution against another tortfeasor, but the amount of contribution is limited to the non-settling tortfeasor’s equitable share of the settlement amount.
Summary
David Rock sued Reed-Prentice for injuries sustained while using their machine. Reed-Prentice then sued Rock’s employer, Westbury Plastics, for contribution. The jury apportioned liability. Reed-Prentice settled with Rock for $250,000 after a $400,000 verdict. Reed-Prentice sought to enforce its judgment against Westbury. The New York Court of Appeals held that Reed-Prentice could enforce the contribution judgment, but only to the extent of Westbury’s equitable share of the settlement amount, not the original judgment amount. The court reasoned that the settlement satisfied the judgment, entitling Reed-Prentice to contribution, and that General Obligations Law § 15-108 was intended to promote settlements, not nullify existing judgments.
Facts
David Rock was injured operating a plastic molding machine manufactured by Reed-Prentice while employed by Westbury Plastics. Rock sued Reed-Prentice for negligence and breach of implied warranty. Reed-Prentice initiated a third-party action against Westbury Plastics, claiming Westbury’s negligence caused the injury.
Procedural History
The trial court instructed the jury to determine the proportionate share of liability if both defendants were negligent. The jury found both Reed-Prentice and Westbury negligent, awarding Rock $400,000 against Reed-Prentice and Reed-Prentice $50,000 against Westbury. Reed-Prentice settled with Rock for $250,000 while appealing to the Appellate Division. Westbury declined to join the settlement, and both defendants proceeded with the appeal concerning the third-party judgment. The Appellate Division affirmed. Westbury appealed to the New York Court of Appeals.
Issue(s)
Whether the settlement between Rock and Reed-Prentice precludes Reed-Prentice from enforcing the judgment for contribution against Westbury.
Holding
No, because the settlement does not extinguish Reed-Prentice’s right to enforce the contribution judgment, but the amount is limited to Westbury’s equitable share of the settlement amount.
Court’s Reasoning
The Court of Appeals reasoned that Reed-Prentice’s judgment against Westbury was based on contribution within the meaning of CPLR 1402 and General Obligations Law § 15-108, which codified the apportionment rule from Dole v. Dow Chem. Co. The court distinguished between contribution and indemnity, noting that contribution involves proportional reimbursement, while indemnity involves a shifting of culpability. While CPLR 1402 states the amount of contribution is the excess paid over the defendant’s equitable share, Reed-Prentice did fully satisfy the judgment. The court found that General Obligations Law § 15-108 aims to promote settlements by defining their effect on collateral rights, not to nullify existing judgments. The court stated the intent of the statute was to alter rules that inhibited settlements. Specifically, the court noted, “The overall scheme and purpose of the section is to promote settlements in multiple-party tort cases by clearly defining the effect the settlement will have on collateral rights and liabilities in future litigation. There is nothing at all to suggest that this statute was ever intended to nullify a pre-existing judgment.” However, Westbury is not obligated to pay the full $50,000. Because the jury allocated Westbury’s responsibility at 12.5% of the loss, Reed-Prentice is only entitled to 12.5% of the $250,000 settlement, or $31,250.