In many complex civil litigation matters, there exists a possibility that certain parties – but not all – will settle before trial.  The question then arises is there an “offset” of the settlement monies paid to plaintiff(s) that remaining defendant(s) could rely upon should plaintiffs prevail?  As always, the answer is, it depends.

Multiple Defendants Joint and Severally Liable for the Same Damages

Under Florida law, there are two relevant statutes to consider—Fla. Stat. §§ 46.015(3) and 768.041(3).  “Each of these statutes presupposes the existence of multiple defendants jointly and severally liable for the same damages.” Osheroff v. Rauch Weaver Millsaps & Co., 882 So.2d 503, 506 (Fla. 4th DCA 2004).  These statutes require the court to set-off the full amount of all settlements to which the plaintiff would otherwise be entitled at the time of rendering judgment. 

Are the Damages identical?

In certain tort contexts, the damages may not be identical.  For instance, in some cases, fraud is alleged against certain defendants but not against others.   In such case, where one defendant settles tort claims other than fraud, a plausible argument could be made that the damages are not identical so there is no “setoff.”    

When Is a Defendant a Joint Tortfeasor or Joint Obligor?

A plaintiff could argue that neither of the set-off statutes applies to a pre-trial claim reduction because the remaining defendant(s) is not a joint tortfeasor or a joint obligor within the meaning of the statutes.  See, e.g., NationsBank, N.A. v. KPMG Peat Marwick, LLP, 813 So.2d 964, 969 (Fla. 4th DCA 2004) (“only payments made by joint tortfeasors, i.e. persons jointly liable with the nonsettling defendant, qualify for a setoff under 768.041.”).

Pretrial v. Post Trial

Under Florida law, the procedural safeguards that exist are post-verdict— to prevent plaintiffs from “recovering twice for the same damages.” Blasland, Bouck, & Lee v. City of North Miami,  283 F.3d 1286, 1295 (11th Cir. 2002).  Without same, courts would be required visit the issue of plaintiff(s)’ entitlement to a set-off—and the extent of that set-off—by examining the commonality of damages between the settlement figure and the pending claim(s),  which would be procedurally premature given that defendants’ has not been adjudicated.  See, e.g., Osheroff, supra (“settlement of a breach of contract action does not preclude recovery on a tortious interference claim involving the same contract because while the damages recoverable by each cause of action are overlapping, they are not necessarily coextensive.”).

 The foregoing is not intended as legal advices and is provided for informational purposes only.