Chilcote v. Von Der Ahe Van Lines

RODOWSKY, Judge. On this appeal we address a fundamental question under the Maryland version of the Uniform Contribution Among Tort-Feasors Act (the Md. Act). 1 Three tortfeasors are ¹⁰⁹ involved, M, a master, M’s servant, S, and a third defendant, T. The plaintiffs and T settled before trial under a pro rata release. M and S went to trial and a jury has valued the plaintiffs’ claims. Under the Md. Act and the terms of T’s release the total verdict is to be reduced by T’s pro rata share.

Is that share one-half or one-third? Our answer is one-half, as explained below. The case arises out of a three-vehicle collision. One vehicle was owned and operated by the plaintiff, Carmen F. Chilcote (Carmen), husband of the plaintiff, Gloria May Chilcote (collectively, the Plaintiffs).

Defendant, Von Der Ahe Van Lines (Van Lines), owned the second vehicle, which was being operated by Van Lines’ servant, the defendant Eiber Vincent, Jr. (Vincent). The remaining defendant is Amos E. Webb, Jr. (Webb), owner and operator of the third vehicle involved. Webb settled before trial for $18,500 and received a release in which the Plaintiffs agreed that their right to recover damages from Vincent and Van Lines was thereby “reduced to the extent of the pro rata share of [Webb] of the damages of the [Plaintiffs] recoverable against [Vincent and Van Lines] should [Webb] be found jointly liable with them.” The release further stated the intention of the Plaintiffs “to relieve [Webb] from any liability to make contribution to” Vincent and Van Lines. In response to special interrogatories the jury found that negligence of both Vincent and Webb proximately caused the accident, that Carmen’s damages were $85,000 and that damages to the Plaintiffs’ marital relationship were $25,000.

The trial court reduced the verdicts by 50%, representing the pro rata share of Webb, and entered judgments against Van Lines and Vincent for $42,500 in favor of Carmen and ¹¹⁰ for $12,500 in favor of the Plaintiffs. The Court of Special Appeals affirmed. Chilcote v. Von Der Ahe Van Lines, 55 Md.App. 291 , 462 A.2d 536 (1983). On the joint petition of the Plaintiffs, Van Lines and Vincent, we granted certiorari to review two issues: “[WJhether a subsequent verdict against non-released defendants is reduced by the amount of the consideration for the joint tortfeasor release or reduced by a percentage share[; and,] [I]f the reduction is a percentage reduction, the manner in which the percentage is calculated when one of the non-released defendants is vicariously liable only.” [ 2 ] (I) Plaintiffs’ first contention is that the total of the verdicts, $110,000, should have been reduced only by the $18,500 actually paid by Webb as consideration for the pro rata release furnished to him.

Martinez v. Lopez, 300 Md. 91 , 476 A.2d 197 (1984) controls and refutes Plaintiffs’ position. We there held that the effect of a release, including a pro rata release, on the injured person’s claim is governed by § 19 of the Md. Act. It says that a release “reduces the claim against the other tort-feasors in the amount of the consideration paid for the release, or in any amount or proportion by which the release provides that the total claim shall be reduced, if greater than the consideration paid.” No “amount” of reduction is provided in the release to Webb. A “proportion,” which in this release is a pro rata share, is provided.

Whether Webb’s pro rata share is a half or a third, it is greater than the consideration paid for the ¹¹¹ release. 3 Under those circumstances, § 19 directs using the pro rata share and not the consideration paid to determine the amount of the reduction. See Martinez, supra and Swigert v. Welk, 213 Md. 613, 619 , 133 A.2d 428, 431 (1957) (illustrating in two tortfeasors-two shares context a claim of $8,000, release consideration of $3,500 and a pro rata reduction of $4,000). The two points with which Plaintiffs support their position are not well taken. One rests on dicta in Brooks v. Daley, 242 Md. 185, 193 , 218 A.2d 184, 188 (1966).

There we commented that, if the jury had found a defendant and a third-party defendant jointly liable, the defendant "would have been entitled to a reduction in the amount of the judgment owed [the plaintiff] equal to the amount of the consideration paid by [the third-party defendant] to purchase her release.” In Brooks the amount of consideration paid for the release was not in the record so that no comparisons of pro rata share and consideration were made. In the context of the Brooks ’ opinion the statement was not intended to be a definitive construction of § 19 of the Md. Act applicable to any combination of relevant facts. Dicta in Lahocki v. Contee Sand & Gravel Co., 41 Md.App. 579 , 398 A.2d 490 (1979), rev’d on other grounds, ¹¹² 286 Md. 714 , 410 A.2d 1039 (1980) is the source of Plaintiffs’ second point. The Court of Special Appeals’ Lahocki , in which there was no agency relationship between any of the tortfeasors, held that the “pro rata share” referred to in the release meant, as a matter of that contract’s interpretation, a numerical share based upon the number of tortfeasors.

The opinion recognized that Maryland lawyers generally accepted and used that construction but suggested that the correct statutory interpretation of “pro rata share” might be “proportionate to the consideration paid by the released tortfeasor.” Id. at 618 , 398 A.2d at 512 . In our view such a “proportionate” reduction becomes simply the subtraction from the claim of the amount of consideration. If a pro rata share always equals the amount of consideration paid, the second clause of § 19 of the Md. Act becomes redundant in the overwhelming majority of cases because releases in joint tortfeasor cases ordinarily credit the releasee’s pro rata share. Thus § 19 in such cases would in effect look to the greater of (1) the consideration paid, or (2) the amount provided, or (3) the consideration paid.

For reasons similar to those on which we relied in deciding Martinez , we reject the notion that pro rata share always equals the consideration paid by the releasee. Consequently, the $18,500 paid by Webb in the instant matter is not the limit of the reduction of the Plaintiffs’ verdict. 4 ¹¹³ (II) Alternatively Plaintiffs assert that the reduction of the verdict should be by one-third. The judgment debtors argue that the reduction by one-half was correct. Plaintiffs base their argument entirely on the Md. Act’s definition of “ ‘[jjoint tortfeasors’ ” as “two or more persons jointly or severally liable in tort for the same injury to person or property....” Sec. 16(a).

That definition is broad enough to include a person liable solely by reason of respondeat superior. We agree that Van Lines falls within the § 16(a) definition. See Associates Discount v. Hillary, 262 Md. 570 , 278 A.2d 592 (1971). However, that is not dispositive.

Under the Martinez analysis the issue to be decided is the meaning of “pro rata share.” In Martinez we explained that the reduction in the plaintiff’s claim called for by § 19 of the Md. Act may be in the “proportion by which the release provides ... if greater than the consideration paid.” The release may provide, as does Webb’s, that that “proportion” is the “pro rata share” referred to in §§ 17 and 20. Here, where either proportion contended for is greater than the consideration paid for the release, the reduction is to the extent of Webb’s pro rata share. The question is whether a pro rata share is always determined by dividing the plaintiff’s claim, here valued by the jury, by the number of joint tortfeasors. Van Lines argues that, where the liability of a master to a plaintiff is entirely vicarious and arises under the doctrine of respondeat superior because of the negligence of a servant, the joint and several liabilities of the servant and master to the plaintiff comprise but one pro rata share among the joint tortfeasors.

Defendants say that master and servant count as one share when reducing the plaintiff’s claim under § 19, when determining freedom from liability to pay contribution under § 20 or when determining the right to collect contribution under § 17. Comprising the Md. Act are most, but not all, of the sections of the 1939 version of the Uniform Contribution ¹¹⁴ Among Tort-Feasors Act (the 1939 Model Act). See 1939 Handbook of the National Conference of Commissioners on Uniform State Laws and Proceedings of the Forty-Ninth Annual Conference 240-252. Even though the Md. Act has been in effect in substantially its present form since 1941 (Ch. 344), the question under consideration seems never squarely to have been decided by this Court.

However, the history of the 1939 Model Act, court decisions, particularly those applying the Md. Act or the 1939 Model Act, the opinions of commentators and the ramifications of indemnification of a master by a servant, which § 21 of the Md. Act preserves, persuade us that, where the liability of the master is vicarious, master and servant comprise but one “pro rata share.” The first tentative draft of the 1939 Model Act contained a provision (§ 2(3)) which expressly addressed the issue presented here. That proposal read: In determining the pro rata shares of joint tortfeasors, a person whose act or omission constitutes a tort and any other person made liable therefor without fault on his part shall be considered as one tortfeasor. See Report of Committee on Uniform Act Conferring Upon Joint Tortfeasor Discharging Liability the Right of Contribution From His Joint Tortfeasors, 1938 Handbook of the National Conference of Commissioners on Uniform State Laws and Proceedings of the Forty-Eighth Annual Conference 390, 393. Comments to that draft advise that § 2(3) was “intended to prevent the consideration of one who is liable vicariously ... in determining the pro rata shares of the common liability.” Id.

In promulgating thé 1939 Model Act, draft § 2(3) was completely omitted. See 1939 Handbook of the National Conference, supra, 240-252. We have been unable definitively to determine the reason for this difference between the first tentative draft and the official version of the 1939 Model Act. The first draft was discussed at the Sixteenth Annual Meeting of the American Law Institute held in May of 1938 where § 2(3) seems to have been described by different participants as “not ade ¹¹⁵ quate” and as a provision which “need not even be included.” See 15 A.L.I.Proc. 359 (1938).

Serving as Reporter to the National Conference for the 1939 Model Act was Professor Charles 0. Gregory of the University of Chicago School of Law. In his opinion it was “hardly conceivable that courts would ever fail to interpret ... a general statutory provision creating contribution among tortfeasors” to impose on a master liability for contribution in excess of the servant’s share. Gregory, Contribution Among Tortfeasors: A Uniform Practice, 1938 Wis.L.Rev. 365, 375-76. 5 Under Gregory’s analysis the 1939 Model Act and the ¹¹⁶ Md. Act would be interpreted as if § 2(3) of the first tentative draft were expressly included, even though the text does not specify that result.

The 1939 Model Act was withdrawn by the National Conference in favor of a 1955 version (the 1955 Model Act). Section 2 of the later act in part provides that “[i]n determining the pro rata shares of tortfeasors in the entire liability ... (b) if equity requires[,] the collective liability of some as a group shall constitute a single share____” 12 U.L.A. 87 (1975). The Commissioners’ Comment to § 2 is introduced by the statement' that “[t]his section in positive terms resolves several difficult questions of policy.” Id.

The portion of the Comment most relevant to § 2(b) advises that it invokes the rule of equity which requires class liability, including the common liability arising from vicarious relationships, to be treated as a single share. For instance the liability of a master and servant for the wrong of the servant should in fairness be treated as a single share. Ud.] Other examples given in the Commissioners’ Comment are “those situations involving co-owners of property, members of an unincorporated association, those engaged in a joint enterprise and the like .... ” Id. The policy as to master and servant favored by the Commissioners would be implemented in this case by adopting the interpretation advocated by Van Lines.

The only decision of this Court applying the Md. Act in a case where both a. negligent servant and his vicariously liable master were sued apparently is O’Keefe v. Baltimore Transit Co., 201 Md. 345 , 94 A.2d 26 (1953). The plaintiffs were passengers in a taxicab owned by M 1 and driven by ¹¹⁷ S 1 which collided with a streetcar owned by M2 and operated by a student motorman, S 2, who was then being instructed by S3. After buying the release of all five defendants the streetcar company sued M 1 for 50% contribution. Judgment for 50% contribution was affirmed, without any discussion of how it was determined.

Nevertheless the judgment necessarily treated the liabilities of M 1 and S 1 as one of two shares and those of M 2, S 2 and S 3 as the other share. If each tortfeasor’s liability to a plaintiff created a separate pro rata share, even when master and servant liabilities are based on the same negligent act or omission, then O’Keefe would have involved five shares and the pro rata share of M1 would have been 20%. If we assume that M 1 was vicariously liable for the contribution share of S 1 as well, the judgment against M 1 should have been for 40%, not 50%. Former Chief Judge Thomsen of the United States District Court for the District of Maryland had occasion to apply the Md. Act in Durham v. United States, 174 F.Supp. 410 (D.Md.1959).

Passengers in a vehicle which had collided with a mail truck sued the United States. It impleaded M2, the owner of the host vehicle, and S 2, its driver, for whose negligence M2 was held to be responsible. Id. at 411 . Damages were awarded against the United States and a judgment for one-half of those amounts was entered on the third-party claim against M2 and S 2. 6 Once again, the court did not directly discuss the issue presented here.

Under the per capita theory of the Plaintiffs in the instant case Durham should not have held S2 jointly liable with M2 for 50% of the plaintiffs’ judgments. Rather, the share of S 2 for purposes of paying contribution should have been ¹¹⁸ only 25%. 7 But, implicitly, Judge Thomsen treated master and servant as one pro rata share. Pennsylvania is one of the states which has adopted the 1939 Model Act. See 42 Pa.Cons.Stat.Ann. §§ 8321 to 8327 (Purdon 1982). 8 The definition of “ ‘joint tort-feasors’ ” in § 8322 of the Pennsylvania statute is identical to that in § 16(a) of the Md. Act.

The second clause of § 8326 of the Pennsylvania Act, dealing with reduction of the plaintiff’s claim, is identical to the second clause of § 19 of the Md. Act. The Supreme - Court of Pennsylvania has held that master and servant are one share in computing pro rata shares under the 1939 Model Act. See Jones v. Harrisburg Polyclinic Hospital, 496 Pa. 465 , 437 A.2d 1134 (1981). In that malpractice case the plaintiffs sued M, a hospital, S, an anesthetist, and T, a private physician.

M and S settled for $25,000. The jury found M, S and T to be jointly and severally liable to the plaintiffs in