No joint and several liability? No credit for other tortfeasor’s payments

Where a trial court’s judgment did not include a finding of joint-and-several liability, a defendant against whom a judgment was entered could not be credited with payments made by another defendant or by a non-party.

In Gerrish & McCreary, P.C. v. Lane, No. W2022-01441-COA-R3-CV (Tenn. Ct. App. Dec. 5, 2023), plaintiff originally filed suit against defendant, who was plaintiff’s bookkeeper, for fraud, misrepresentation, conversion, and negligence. Plaintiff also brought a claim against defendant’s husband for conversion. The trial court found for plaintiff, and it entered a judgment for over $600,000 against defendant. A judgment of approximately $44,000 was entered against defendant’s husband. The judgment was entered in 2003 and did not find defendant and her husband jointly and severally liable. Later, in 2005, an order of judgment satisfied was entered as to the husband, and the order specifically noted that it was “not intended, nor shall it be construed, as having any applicability to the separate judgment rendered against the other defendant in this cause[.]”

In addition to the case against defendant and her husband, plaintiff reached a confidential settlement with a bank related to the fraud. The settlement was for $140,000, but the bank was never made a party to this action.

After having the judgment extended, plaintiff filed a garnishment against defendant in 2021 for the remaining balance of her judgment plus interest. Defendant argued that she should have been credited with the payments made to plaintiff by her husband and by the bank. The trial court, however, rejected defendant’s arguments, and the Court of Appeals affirmed.

In affirming the trial court’s ruling that defendant would not be credited with payments made by her husband or the bank, the Court of Appeals pointed out that, to the extent defendant sought relief from the final judgment based on error or mistake under Rule 60.02(1), such a motion was untimely. Rule 60.02 requires that motions thereunder be filed within a year after the judgment, and the final judgment in this case was filed in 2003. Although the trial court’s order indicated that it might have considered a mistake argument as to its failure to find the conversion portion of the award joint-and-several, the Court of Appeals agreed that the motion was time-barred.

Regarding the payments from the bank to plaintiff, the Court first pointed out that “there can be no joint-and-several liability” with the bank because it was not a party to the lawsuit. Defendant argued that the doctrine of one loss/one recovery should apply, but the Court stated that it was unclear whether plaintiff’s claims against the bank were separate from those against defendant, as the claims against the bank appeared to sound in contract. Further, during oral argument plaintiff’s attorney had stated that the judgment amount did not fully compensate plaintiff for the loss incurred, but was instead the amount that could be forensically proven. Accordingly, the Court of Appeals found that it could not conclude that plaintiff “was fully compensated in this case, much less that it received any overlap in recovery.”

Because there was no joint and several liability finding with the only other defendant, and because the bank was a non-party, the ruling that defendant did not get credit for payments made by the bank or her husband was affirmed.

This decision was published 1.5 months after oral arguments in this case.


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