IN COURT OF APPEALS
A.P.I., Inc., et al.,
Mac Arthur Company, et al.,
Illinois Tool Works, Inc., et al.,
Egan Companies, Inc.,
Filed June 7, 2005
Dakota County District Court
File No. C3-03-7424
Kyle B. Mansfield, Stephen L. Wilson, Foley & Mansfield, P.L.L.P., 250 Marquette Avenue, Suite, 1200, Minneapolis, MN 55401 (for appellants Illinois Tool Works, Inc., et al.)
Jon P. Parrington, Pustorino, Tilton, Parrington & Lindquist, PLLC, 4005 West 65th Street, Suite 200, Minneapolis, MN 55435 (for appellant Egan Companies, Inc.)
Thomas R. Thibodeau, David M. Johnson, Thibodeau, Johnson, & Feriancek, PLLP, 800 Lonsdale Building, 302 West Superior Street, Duluth, MN 55802 (for respondent A.P.I., Inc.)
Considered and decided by Randall, Presiding Judge, Schumacher, Judge, and Wright, Judge.
S Y L L A B U S
1. Where plaintiff executed a standard Pierringer release with defendant and third-party plaintiff, the defendant and third-party plaintiff cannot then pursue claims for contribution and indemnity against non-settling third-party defendants.
2. Under a standard Pierringer release, the settling tortfeasor does not pay more than its fair share of liability. Any possible claims the settling tortfeasor says it retains for contribution or indemnity will never accrue.
O P I N I O N
Following the district court’s denial of appellants’ motion for summary judgment, the following two questions were certified for appeal: (a) given that plaintiff executed a Pierringer release in exchange for a money payment from defendant and third-party plaintiff A.P.I (respondent), can respondent A.P.I. pursue claims for indemnity or contribution against non-settling third-party defendants (appellants); and (b) does the doctrine of claim preclusion or the fact that the plaintiff died change the effect that the Pierringer release has on respondent A.P.I.’s indemnity and contribution claims?
Plaintiff Larry Bunce was employed as an ironworker from 1961 to 1994. On April 4, 2003, Bunce brought suit against 14 defendants, including respondent A.P.I., Inc., alleging that he contracted mesothelioma as a result of his exposure to asbestos-containing products that were manufactured, sold, or distributed by the defendants. Respondent subsequently filed third-party complaints against several entities, including appellants Illinois Tool Works, Inc.; Turner Construction Company; Gagnon, Inc.; Azco, Inc.; Insulation Sales Company; and Egan Companies, Inc., who were not sued directly by Bunce. Respondent alleged in its third-party complaints that if Bunce sustained the damages as alleged in his complaint, those injuries and damages were caused by negligence, strict liability, and breach of warranty of the third-party defendants. Respondent alleged that if Bunce recovered a judgment against respondent, respondent would be entitled to full indemnity or contribution from the third-party defendants.
9, 2003, the district court granted Bunce’s motion to sever respondent’s
third-party claims so that Bunce’s claims could proceed to trial without
delay. On the morning of his scheduled
trial, Bunce settled his case against respondent with a Pierringer release. See Pierringer
v. Hoger, 124 N.W.2d 106 (
In September 2003, appellants and third-party defendants Illinois Tool Works, Inc., Turner Construction, Gagnon, Azco, and Insulation Sales moved for summary judgment on respondent’s contribution claim, arguing that respondent had no contribution or indemnity rights against the third-party defendants because it had settled its differences with a Pierringer release. Appellant Egan Companies joined in the motion. The district court denied appellants’ motion. On February 25, 2004, appellants sought the district court’s permission to file a motion to reconsider its ruling. In the alternative, appellants filed a motion seeking to have the district court certify two questions presented as important and doubtful. The district court denied permission to bring the proposed motion to reconsider, but granted the motion to certify to this court the two questions as important and doubtful. This court consolidated the appeals by Illinois Tool Works, et al. and by Egan Companies.
After plaintiff Bunce executed a Pierringer release in exchange for a settlement payment from defendant and third-party plaintiff A.P.I., can A.P.I. now pursue claims for contribution and indemnity against nonsettling third-party defendants?
When certified questions arise from
a denial of summary judgment, this court reviews the record to determine
whether genuine issues of material fact remain for trial and whether the
district court erred in applying the law.
Employers Mut. Cas. Co. v. A.C.C.T., Inc., 580 N.W.2d 490, 493 (
that because respondent and Bunce executed a standard Pierringer
release, respondent cannot pursue claims for contribution or indemnity against
nonsettling third-party defendants. We
agree. Derived from Pierringer
v. Hoger, 124 N.W.2d 106 (Wis. 1963), the basic elements of a Pierringer
release are: (1) The release of the
settling defendants from the action and the discharge of a part of the cause of
action equal to that part attributable to the settling defendants’ causal
negligence; (2) the reservation of the remainder of plaintiff’s causes of
action against the nonsettling defendants; and (3) plaintiff’s agreement to
indemnify the settling defendants from any claims of contribution made by the
nonsettling parties and to satisfy any judgment obtained from the nonsettling
defendants to the extent the settling defendants have been released. Frey v. Snelgrove, 269 N.W.2d 918, 920
Here, respondent claims a difference in the standard Pierringer law, arguing that it is not improperly asserting claims for contribution and indemnity against nonsettling “sued” defendants; but, rather is seeking contribution and indemnity from third-party defendants (appellants) who were not sued directly by the original plaintiff (Bunce). We cannot find that this distinction makes any difference in the long-settled law surrounding Pierringer releases.
Respondent asserts, and the
district court agreed, that respondent could proceed with its claims for
contribution and indemnity against appellants because
Appellants correctly argue that pursuant to a Pierringer
release, the settling tortfeasor will never pay more than its fair share and,
thus, any claims that respondent has for contribution or indemnity will never
accrue or mature. A Pierringer release cuts off the nonsettling defendants’
cross-claims for contribution as a matter of law. See Alumax Mill Prods., Inc.
v. Congress Fin. Corp.,
912 F.2d 996, 1007-9 (8th Cir. 1990) (applying
[t]he Pierringer release is based on the formula that each joint tortfeasor including the nonsettling defendant is liable only for that part of the award which is [its] percentage of casual [sic] negligence. Since the nonsettling defendant is relieved from paying more than [its] fair share of the verdict, the [settling] defendants may properly be dismissed from further participation in the trial.
Frey, 269 N.W.2d at 922. Because the jury then determines the relative fault of all parties, including that of the settling defendants, even though the settling defendants have been dismissed,
[t]he settling tortfeasor who uses a Pierringer release does not settle for less than [its] share, but precisely for [its] share– no less.
. . .
[T]he non-settling party will never pay more than [its] share, because [its] exposure is limited to [its] own percentage of causal negligence–exactly [its] share–attributed to [it] at trial.
Alumax, 912 F.2d at 1009 (quoting John
Simonett, Release of Joint
Tortfeasors: Use of the Pierringer
Release in Minnesota, 1, 3 Wm.
Mitchell L. Rev. 18 (footnote omitted)).
The legal effect of the Pierringer release is that each
tortfeasor pays only its proportionate share of liability, and no more, and,
thus, there can be no liability for contribution.
It can do
this because the Pierringer release
protects the nonsettling defendants who choose to go to trial with the
plaintiff from ever having to pay more than their fair share of the
verdict. At trial, they are free to try
and shift all, or as much as they can, of the negligence blame onto the
settling defendant. That will hold down
their share of the verdict. The settling
defendant, who is not in court, is protected because the money it paid the
plaintiff through a Pierringer
release settles once and for all the fixed amount it owes the plaintiff. If not all of the defendants settle and there
is a trial, and if the jury lays all the negligence on the nonsettling
defendants, they must pay and the settling defendant may have “overpaid” for
the protection of not having to go to trial and face the unknown. If the nonsettling defendants are able to lay
off the negligence on the settling defendant, they only pay the small part, if
any, attributable to them and the plaintiff cannot recover any more from the
settling (Pierringer) defendant than
it already has. The Pierringer theory is bottomed as a plus for plaintiffs. It allows them to get money out of some
defendants, in a multi-defendant lawsuit, and retain the right to continue with
the suit against those who choose not to settle. Were it not for Pierringer, the plaintiff would be brick-walled by the old common-law
rule, “you release one defendant, you release them all.” Thus, without Pierringer law, multiple defendants could stonewall a plaintiff
together, refuse to settle, and hope the plaintiff wears down before
trial. Pierringer law allows the plaintiff to collect sums certain and
then use that money to continue the lawsuit against others, if it chooses. As appellants vigorously point out, Pierringer law in
Here, it is undisputed that Bunce and respondent entered into a Pierringer release. Paragraph seven states that:
It is understood and agreed that the purpose, intent, and legal effect of this document is to bar forever any recovery, contribution, indemnity, or subrogation against releasees by any other party as a result of the accident except and other than such elements as are cognizable under the workers’ compensation statute and in accordance with NAIG v. Bloomington Sanitation, 258 N.W.2d 891 (1977). It is further understood and agreed that this document shall have the same effect as the releases described in [Pierringer] and in [Frey], and shall be so construed.”
provides that “[t]his release shall be construed and interpreted in accordance
with the laws of the State of
Paragraph two of the Bunce Pierringer release provides that:
In accepting the sum referred to in paragraph 1, releasors [Bunce] release and discharge that fraction, portion, or percentage of the total cause of action and claim for damages that releasors now has or may hereafter possess against all parties responsible for releasors’s [sic] damages which may by trial or other disposition, be determined to be the sum of the fractions, portions, or percentage of causal conduct for which releasees [respondent] are found to be liable to releasors as a consequence of the accident.
accordance with this Pierringer release and the applicable caselaw
analyzing Pierringer releases, respondent paid only its fair share of
common liability to Bunce. It is settled
law that a claim for contribution does not accrue or mature until the person
entitled to the contribution has sustained damage by paying more than his fair
share of the joint obligation. Calder
v. City of
Respondent acknowledges that if the agreement was a standard Pierringer agreement, respondent would lose on the merits. But respondent argues that it can proceed with its claims for contribution and indemnity because the Pierringer release entered into here is a “modified” Pierringer agreement. Respondent points to paragraph five, which purports to reserve respondent’s contribution claims against appellants.
Paragraph five of the Bunce Pierringer release provides:
This release is intended to release only [Bunce’s] claim against [respondent]. [Bunce] expressly reserve[s] the balance of the whole cause of action or any other claim of whatever kind or nature not released which [Bunce] may have or hereafter have against any other persons or entities arising out of the above-described dispute. It is also specifically agreed that [respondent] reserve all claims [respondent] may have for contribution, indemnity, or subrogation against other persons or entities who may be found liable to [Bunce], or who may be jointly or severally liable to [Bunce] with [respondent].
We simply conclude that respondent and Bunce cannot, for their own self-interest, rewrite Pierringer/Frey law and make appellants, non-signatories to the A.P.I./Bunce release, bound by it.
To finish off the inescapable conclusion that respondents, who drafted the document, knew all along that it was a Pierringer release (and wanted it to be that) protecting them from other possible third-parties/cross-claims, paragraph 7 unambiguously states that the release shall have the same effect as the releases described in Pierringer and Frey. No one made a mistake here. Respondent crafted its own legal theory to attempt to build in a chance to recoup more money, while remaining absolutely immune from having to pay anybody one dollar more than it paid Bunce, the original plaintiff. Under Pierringer/Frey, it just can’t be done.
Respondent argues that because Bunce chose not to pursue direct claims against third-party defendants (appellants), Bunce is now precluded from pursuing those claims under the doctrine of claim preclusion and, thus, since appellants are not liable from suit by Bunce, they equitably remain fair game for contribution and indemnity claims by A.P.I., a direct defendant and a third-party plaintiff. We disagree. The Pierringer/Frey shadow is a large one. First, as noted, in paragraph five of the release, Bunce specifically reserved claims against nonsettling defendants.
One of the “basic elements” of a standard
Pierringer release is that it does
reserve the remainder of the plaintiff’s causes of action against the nonsettling
parties. Frey, 269 N.W.2d at 920 n.1.
Parties not released by a plaintiff’s Pierringer release remain jointly and severally liable to the
plaintiff. See Hosley v. Armstrong Cork Co., 383 N.W.2d 289, 292 (
Bunce’s death, certainly untimely and not in contemplation by any of the parties, does not eradicate Pierringer/Frey. Appellants correctly argue that the district court erred in allowing respondent to proceed with its contribution and indemnity claims on the theory that all possible claims against appellants have disappeared. Bunce’s next of kin may have a wrongful death action against appellants. We are not asked to decide today whether they do or they don’t. We can only note that no court of law has said that they do not. If Bunce’s next of kin bring a wrongful death action(s), then those defendants are free to implead A.P.I. for contribution and/or indemnity. The first thing A.P.I. will say to Bunce’s next of kin is that they are estopped from collecting any money from A.P.I. because A.P.I. will insist that it settled all of its differences relating to his injuries directly with Bunce while he was alive. A.P.I. will argue that Bunce’s death now from those same injuries does not affect the previous full and final settlement. In that argument, respondent would be correct.
The Pierringer agreement expressly reserved Bunce’s potential claims against appellants. Appellants’ attorneys are correct that their clients still have possible legal exposure. Bunce’s next of kin have not yet brought a wrongful death against against appellants nor has any court said that, as a matter of law, they cannot. A wrongful death action would potentially involve Bunce’s next of kin and appellants, but not respondent because of respondent’s carefully drafted Pierringer release. That Pierringer release both forevermore protects respondent, and forevermore keeps respondent from new contribution and indemnity rights against appellants.
D E C I S I O N
Based on the plain language of the Bunce Pierringer release, the release was to be construed as a standard Pierringer release. Under the Bunce Pierringer release, respondent did not pay more than its fair share of common liability. Respondent is protected from future monetary claims by Bunce and/or his next of kin, and/or cross-claims/third-party claims by nonsettling defendants and potential (by definition non-settling) defendants. Bunce reserved potential claims against appellants, so appellants are entitled to the protection of Pierringer/Frey.
Accordingly, we conclude that respondent, having signed a Pierringer release, cannot pursue claims for contribution and indemnity against appellants.