Rosenbaum v. First American National Bank of Nashville
690 S.W.2d 873, 1985 Tenn. App. LEXIS 2700 (1985)
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Rule of Law:
Under Tennessee's contribution statute, a judgment against a non-settling tortfeasor must be reduced by the amount paid in settlement by another party for the same injury, regardless of whether the settling party is ultimately proven to be liable in tort. The only requirement is that the settling party was sued as a tortfeasor for that injury.
Facts:
- In the fall of 1981, First American National Bank of Nashville (Bank) relocated a branch and erected a separate drive-through building with a night depository in the parking lot.
- The Bank hired Earl Swensson Associates (ESA) as the architect for the project.
- A robbery occurred at the night depository facility on June 2, 1982.
- Following the first robbery, the Bank hired Murray Guard, Inc. (Murray) to provide guards in the general area of the night depository.
- On August 5, 1982, Richard P. Rosenbaum was robbed and shot while making a deposit at the Bank's night depository.
Procedural Posture:
- Richard and Joann Rosenbaum (plaintiffs) filed a complaint in trial court against First American National Bank (Bank), alleging negligence.
- The complaint also named Murray Guard, Inc. (Murray) and was later amended to add Earl Swensson Associates (ESA) as defendants, alleging their negligence also caused the plaintiffs' injuries.
- Prior to trial, the Rosenbaums settled their claims against Murray for $20,000 and against ESA for $4,000, executing releases for both.
- The case proceeded to a jury trial against the Bank only.
- The jury returned a verdict in favor of the Rosenbaums, awarding $75,000 to Richard and $15,000 to Joann.
- The Bank filed a post-trial motion to alter the judgment, requesting credit for the $24,000 paid in settlements by Murray and ESA.
- The Trial Judge granted the Bank's motion, reducing the judgments accordingly.
- The Rosenbaums (plaintiffs-appellants) appealed the trial court's decision to grant the credit to the Court of Appeals of Tennessee.
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Issue:
Does Tennessee's contribution statute, Tenn. Code Ann. § 29-11-105, which reduces a plaintiff's judgment by the amount of a settlement with another person 'liable in tort,' require proof of the settling party's actual tort liability before the reduction can be applied?
Opinions:
Majority - Lewis, Judge
No. The statute does not require proof of a settling party's actual tort liability for the reduction to apply; it is sufficient that the settling party was sued as a tortfeasor for the same injury. The court reasoned that the fundamental principle is that there can be only one satisfaction for a single injury, preventing a plaintiff from receiving a double recovery. Requiring proof of the settling defendant's liability would undermine the strong public policy of encouraging settlements, as it would necessitate a mini-trial on the settling party's fault. The determinative test is whether the party was sued as a tortfeasor and paid consideration to be released from the suit, not whether that party was actually liable.
Analysis:
This decision clarifies the application of Tennessee's version of the Uniform Contribution Among Tort-feasors Act, prioritizing the 'one satisfaction' rule over a plaintiff's ability to challenge the fault of a settling party. By establishing that the act of being sued as a tortfeasor is sufficient to trigger the credit, the ruling simplifies post-judgment proceedings and strengthens the incentive for parties to settle. This precedent makes it very difficult for a plaintiff to claim a settlement came from a mere 'volunteer' and thus avoid a reduction in a subsequent jury award against a non-settling defendant.
