Posted by Christina Cribbs
What is the right to contribution? Simply stated, the right to contribution arises when the negligent act(s) of one party combines with the negligent act(s) of another party and cause a single injury to the plaintiff. In this situation, if one of the at-fault parties compensates the plaintiff for his injuries, he can then seek recovery from the other at-fault party, also known as a joint tortfeasor. In other words, the at-fault party that paid the plaintiff can require the other at-fault party to pay him back, so he is not stuck “holding the bag.” This right of recovery is known as contribution.
In 2005, the Georgia General Assembly enacted a new statute that allowed the judge or jury to apportion damages by percentage of liability to any person at fault for the plaintiff’s injuries, whether or not that person is a party to the suit. The statute also says that when damages are apportioned in this way, there is no right to contribution. Under the statute, if a judge or jury assigns a percentage of fault to multiple parties, the parties are stuck with those numbers. They have no right to seek recovery from the other at-fault party. The 2005 apportionment statute seemed to be a nail in the coffin for the right to contribution.
On March 28, 2013, the Georgia Court of Appeals clarified the relationship between contribution and apportionment when it decided Zurich American Ins. Co. v. Heard, et al. 2013 Ga. App. Lexis 348. Heard is a complex case involving breach of contract and professional negligence claims arising from the design and construction of a hotel in Brunswick, Georgia. In Heard, the general contractor’s insurer reached a large settlement with the hotel’s owner and made a payment of more than $2 million to resolve the claim. The general contractor assigned its right of contribution to the insurer and the insurer sought repayment from the other parties involved, a subcontractor and architect. Among other arguments, the subcontractor and architect asserted that under the 2005 apportionment statute, the insurer had no right of contribution; therefore, the insurer’s claims were invalid. The trial court agreed and granted summary judgment in favor of the subcontractor and architect. The insurer appealed. (The subcontractor and architect also made arguments that (1) they were independent tortfeasors, rather than joint tortfeasors, therefore, contribution did not apply, and (2) any payments made by the insurer were voluntary, therefore, the subcontractor and architect could not be held responsible for the payments.)
The Georgia Court of Appeals reversed the trial court’s decision, finding that the plain language of the apportionment statute made it applicable only in situations where a judge or jury made a determination about the liability of multiple parties. In Heard, however, there was no judge or jury involved. The parties agreed to a settlement before the case ever reached trial. The Court held that “the right of contribution between joint tortfeasors has not been completely abolished” by the apportionment statute; in fact, the right to contribution is still available to defendants that settle claims before a judge or jury become involved. This is good news for defendants. It means that defendants can seek repayment from joint tortfeasors whenever a case is settled before trial. Because the majority of claims result in settlement, rather than trial, the Heard case will likely have widespread application. It certainly provides clear authority for a defendant’s right to seek reimbursement for payments made to a plaintiff when he is not the sole party that caused plaintiff’s injury. After Heard, there is no question that the right of contribution is alive and well in Georgia!