The opinion of the court was delivered by: JAMES WARE
The judgment against AVCO was arrived at after a jury trial. The case arose from the crash of a Piper PA-28R-200 aircraft on December 5, 1987 in San Jose, California. Three passengers, Sherman, Jones and Smith died as a result of the crash and the pilot, Verbil sustained serious injuries. The families of the deceased passengers and Verbil filed separate actions against AVCO and Piper Aircraft which were consolidated for trial and pretrial proceedings. Prior to the trial, Piper Aircraft was dismissed from the suit and Verbil's insurer paid awards to Plaintiffs Sherman, Jones and Smith in settlement of claims against Verbil.
A. Jury Verdict and Judgment
The jury found AVCO liable for Plaintiffs' injuries and found comparative fault on the part of Plaintiff Verbil. The jury held Verbil responsible for 16% of the injury to Plaintiffs and AVCO responsible for 84%. The awards to each Plaintiff were identified as either economic or non-economic damages and in entering the judgment, the Court applied Cal. Civ. Code § 1431.2 and reduced AVCO's liability for non-economic damages based on the 16% comparative fault attributed to Plaintiff Verbil.
The jury was not informed of the pre-verdict settlement awards paid by Verbil's insurer. However, the jury's award figures were adjusted so that the judgment against AVCO reflected a partial credit based on that percentage of the settlement award which represented Plaintiffs' economic damages. The adjustment to the jury awards were based on recommendations submitted in Plaintiffs' ADJUSTMENTS TO THE JURY'S AWARD OF DAMAGES.
See also Judgment.
Several motions are before the Court. The Defendant moves for an alteration in the judgment under Fed. R. Civ. P. 59 and seeks an order compelling a set off for the total amounts paid by Verbil's insurance to the remaining three Plaintiffs in the preverdict settlement agreement. AVCO also seeks to strike the award of prejudgment interest on the ground that it was not included in the jury award nor is it appropriate for this case.
Finally, the Defendant moves for a new trial and for judgment notwithstanding the verdict and Plaintiff Verbil presents a motion for judgment notwithstanding the verdict. The Court does not find the motions for a new trial and for judgment notwithstanding the verdict compelling.
In its motion for an order compelling a set off, AVCO argues that the Court erred by failing to apply Cal. Code Civ. Proc. § 877(a) which would have provided a set off to AVCO for the total amount paid to the Plaintiffs by Verbil's insurer. Plaintiffs agree that AVCO is entitled to a set off for the economic damages which they recovered through the prior settlement agreement. Moreover, Plaintiffs note that the judgment entered reflects a partial credit for AVCO based on the proportion of the settlement recovery which represented economic damages. But they argue that under the applicable provisions of Cal. Civ. Code, § § 1431.1, 1431.2, AVCO is not entitled to a set off for any non-economic damages paid as part of the settlement.
A. The Statutory Provisions
1. Applicability of Cal. Code Civ. Proc. § 877(a)
Section 877(a) provides that a judgment against a nonsettling tortfeasor shall be reduced by the amount paid prior to verdict by a settling joint tortfeasor. Sub-Section (a) states in pertinent part that a settlement entered into in good faith before judgment or verdict:
Shall not discharge any other such party from liability . . . but it shall reduce the claims against the others in the amount stipulated by the release, the dismissal or the covenant, or in the amount of the consideration paid for it whichever is the greater.
Cal. Code Civ. Proc. § 877(a) (West 1980 & Supp. 1992).
AVCO notes that as joint tortfeasors, Verbil and AVCO are jointly liable for all economic damages sustained by the Plaintiffs. AVCO reasons that the awards entered through the settlement agreement must be set off from the awards entered by way of judgment from the trial without distinguishing whether the settlement amounts are economic or non-economic.
Plaintiffs accede that AVCO is entitled to a set off for economic damages paid by Verbil's insurance company to each of the remaining three Plaintiffs. They note that such a set off was included in the adjustments submitted to the Court and reflected in the Judgment. However, Plaintiffs maintain that Cal. Civ. Code § 1431.2 is also applicable to the instant situation and reason that AVCO is not entitled to a set off for any non-economic damages awarded as part of the pre-verdict settlement agreement with Verbil.
The language of the first paragraph of § 877 provides that the release be entered in good faith.
Here, there have been no allegations that the pre-verdict settlement was not a good faith settlement which would preclude the applicability of § 877. See, Federal Sav. and Loan Ins. Corp. v. Butler, 904 F.2d 505, 512 (9th Cir. 1990)(noting that provisions of section 877 require that settlement must be in good faith.); Tech-Bilt, Inc. v. Woodward-Clyde & Assoc., 38 Cal. 3d 488, 698 P.2d 159, 163-65 ( Cal. 1985, 213 Cal. Rptr. 256 )(reviewing history preceding enactment of § 877 and § 877.6 and rationale of good faith provision); American Motorcycle Ass'n v. Superior Court, 20 Cal. 3d 578, 578 P.2d 899, 915 ( Cal. 1978, 146 Cal. Rptr. 182 )(noting good faith ...