Pierringer: The Promise and Peril
By: Taylor Asen and Ben Gideon
The “Master of Torts,” Dean Prosser, wrote that “[t]he effect of a settlement with the plaintiff by the contribution defendant, in which he received a release or a covenant not to sue, has perhaps given more difficulty than any other problem.” Prosser, Law of Torts (4th ed. 1971), § 50 at 309. States have attempted to solve this problem in different ways. Maine has adopted the “Pierringer” framework, which was first blessed by the Supreme Court of Wisconsin in Pierringer v. Hoger, 124 N.W.2d 106 (Wisc. 1964). Maine’s Pierringer framework was codified in 2000, in 14 M.R.S. § 156 and 14 M.R.S. § 163.
Prior to the codification of Pierringer in Maine, a defendant could not settle a claim with a plaintiff over the objection of a co-defendant, as such a settlement would deprive the non-settling defendant of “the opportunity to litigate its cross-claims.” Lavoie v. Celotex Corp., 505 A.2d 481, 483 (Me. 1986). Pierringer changes that rule, allowing one defendant to settle with a plaintiff in a manner that “bars all related claims for contribution assertable by remaining parties against the released defendant.” 14 M.R.S. § 156(1).
The Pierringer framework provides obvious benefits to plaintiffs, as well as to defendants who wish to extricate themselves from multi-party litigation before trial. From the plaintiff’s perspective, the Pierringer rule allows the plaintiff to simplify and streamline her case for trial. It also can allow the plaintiff to reduce the costs of the litigation (as the cost of proving claims against multiple tortfeasors is typically more costly than proving the cast against one tortfeasor) and hedge against the risk of a loss at trial. For many clients, the prospect of going to trial is less daunting where, through settlement with some tortfeasors, she has already received a partial settlement.
The Right to Elect
But Pierringer also comes with some significant costs for the plaintiff. First, in exchange for being forced to relinquish its right to seek contribution at trial, the non-settling defendant receives a powerful weapon at trial: the choice to either request an allocation of fault between itself and the settling defendant, or else to receive an offset of “the value of the consideration given to the plaintiff for the settlement.” 14 M.R.S. § 163.
How problematic is the non-settling defendant’s right to elect for the plaintiff? That depends on a critical, unanswered question: when the non-settling defendant must make its election of allocation versus offset.
Arguably, the plain language of § 163 suggests that the defendant may wait until after the jury returns its verdict to make its election. Section 163 reads, in relevant part: “After the jury has returned its verdict, the trial judge shall inquire of the attorneys for the parties whether such a settlement or release has occurred.” Only after this provision does § 163 discuss the non-settling defendant’s election.
As then-Superior Court Justice Horton noted in a recent opinion, however, the above-quoted language predated the provisions of § 163 “that were intended specifically to address Pierringer settlements.” Laudermilk. Wellpath LLC, 2019 Me. Super. LEXIS 135, at *6-7 (Me. Sup. Ct. Dec. 2, 2019). Moreover, there are obvious problems with allowing a defendant to make an election after the conclusion of the trial. Without notice of the defendant’s intent, the plaintiff cannot know what evidence to put on during trial, or what arguments to make during closing argument. For example, suppose the plaintiff has a witness on her witness list whose testimony would weaken the potential claim that the settling defendant was substantially at fault. Unless the plaintiff knows whether the non-settling defendant is seeking allocation, how can she decide whether to put on this evidence? Likewise, how can the Court know whether such evidence should be admitted, or whether it is simply a waste of the jury’s time?
Despite the logic of the Laudermilk opinion, it is far from clear when the non-settling defendant must elect allocation versus offset. For plaintiffs, the possibility that the trial court will allow the defendant to elect after the trial, or late in the trial, creates a danger for plaintiffs in the setting of a trial following a Pierringer settlement.
The Empty Chair
Pierringer provides another potential problem for the plaintiff: it leaves an “empty chair” in the courtroom, so that the settling defendant can become the punching bag for the non-settling defendant.
For the plaintiff, the empty chair comes with risks irrespective of whether the non-settling defendant elects allocation or offset. If it elects allocation, there is a risk that the settling defendant, lacking any financial motivation to defend itself in court, will bear more than its fair share of responsibility. Alternatively, if the non-settling defendant elects offset, the jury is left without a mechanism to express its views against the joint tortfeasor, and, potentially, with serious concerns about the fairness of holding the non-settling defendant responsible for the entirety of the plaintiff’s damages. After all, the jury does not know that the non-settling defendant will receive an offset; it does not even know that the plaintiff has settled with the other tortfeasor.
We believe that, where a defendant chooses to put on a case against the joint tortfeasor, the plaintiff should be permitted to request an allocation by the jury. In our opinion, that view is not inconsistent with the language of the statute. It also has some support in the case law. See Austin v. Universal Cheerleaders Ass’n, 812 A.2d 253, 255 (Me. 2002). However, this position is a controversial one; in fact, a Superior Court Judge rejected it in a case that we tried earlier this year.
The Pierringer agreement can provide significant benefit to plaintiffs. It can also create landmines at trial against non-settling defendants. Whether the benefit outweighs the risk depends on the circumstances of a particular case. It is one of those judgment calls that, for the moment, prevents lawyering from being completely superseded by ChatGPT.