Defendant Does Not Get Benefit of Plaintiff’s Settlement With Co-Defendant

A defendant found 100% at fault claimed it should get the benefit of plaintiff’s settlement with a prior defendant. The Tennessee Supreme Court said “No” in an opinion authored by Justice Anderson.

This result is correct. While it is true that the plaintiff here recovered 150% of his damages (because the prior settlement gave plaintiff 50% of his damages) the plaintiff took the risk of getting less than 100% of his damages by settling with one defendant and leaving an “empty chair.” This is a calculated risk that worked out well for the plaintiff in this case, but could have just as easily resulted in the plaintiff receiving no additional recovery whatsoever.

The defendant had the right to prove the fault of the settling defendant and did not do so. It failed to carry its burden of proof, and the plaintiff got the benefit of that failure. If the defendant had carried its burden and proved that the settling defendant was 100% at fault the plaintiff would have had to “eat” the whatever amount of fault was assessed to the settling defendant over the 50% threshold.

Plaintiffs must have the upside benefit of a “good” deal if they have to face the risk of downside risk of a “bad” deal. The later was clearly the law, and the former had to be the law. A contrary ruling would have made it difficult one of multiple defendants to ever settle out – the plaintiff would have to increase the settlement demand from any one defendant to compensate for the risk.