Baker v. ACandS

755 A.2d 664, 562 Pa. 290, 2000 Pa. LEXIS 1572
CourtSupreme Court of Pennsylvania
DecidedJune 26, 2000
Docket43 E.D. Appeal Docket 1999
StatusPublished
Cited by46 cases

This text of 755 A.2d 664 (Baker v. ACandS) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baker v. ACandS, 755 A.2d 664, 562 Pa. 290, 2000 Pa. LEXIS 1572 (Pa. 2000).

Opinions

[293]*293CAPPY, Justice.

OPINION

The question at issue concerns which method of set-off applies in this strict liability matter: pro tanto or pro rata set-off. For the following reasons, we find that pro tanto methodology of set-off is warranted. Accordingly, we now affirm the order of the Superior Court.

Albert and Suzanne Baker filed a civil action against several manufacturers and/or sellers of asbestos-containing products, seeking damages resulting from Mr. Baker’s exposure to asbestos and Mrs. Baker’s loss of consortium. This first complaint was dismissed without prejudice on January 13, 1994 as Mr. Baker had not manifested any symptoms, impairment, or disability due to his exposure to asbestos.

Mr. Baker subsequently developed malignant mesothelioma. The Bakers amended their complaint and reactivated their case on March 31, 1995. The trial was reverse-bifurcated, with the medical causation and damages phase being tried before a jury. On June 2, 1995, the jury entered an award of $2,000,000.00 in favor of Mr. Baker and $200,000.00 for Mrs. Baker’s loss of consortium claim.

Prior to the start of the liability phase, several defendants were dismissed from the case on motions for summary judgment. Additionally, the Bakers settled with four of the remaining defendants. The joint tortfeasor settlement agreements the Bakers executed with Owens-Coming Fiberglass Corporation (“Owens-Corning”), Pfizer, Inc. (“Pfizer”), and Asbestos Claims Management Corporation (“ACME”) (formerly known as National Gypsum) specified that they were pro rata releases.1

[294]*294The Bakers also settled with the Manville Personal Injury-Settlement Trust (“the Manville Trust”) pursuant to a joint tortfeasor release. As stated by the Superior Court below, the Manville Trust was created in 1988 “to pay all health claims brought against the Johns-Manville Corporation (‘Man-ville’) as a result of asbestos exposure.” Super. Ct. slip op. at 6. The settlement agreement the Bakers and the Manville Trust executed specified that the release was a pro tanto release, for which the Manville Trust paid $30,000 in consideration.2

Prior to the commencement of the liability phase, Mr. Baker died. Mrs. Baker, as administratrix of Mr. Baker’s estate, was thereafter substituted as a party for Mr. Baker. At the liability phase of the trial, the only remaining defendant was ACandS, against whom Mrs. Baker proceeded on a strict liability theory only. The trial court, sitting without a jury, found ACandS, Owens Corning, Pfizer, ACME, and the Man-ville Trust jointly liable. The trial court proceeded to apportion the damages among each of these defendants, determining that each was responsible for an equal, one-fifth share of the award, or $440,000.00.

The trial court then turned to the question of which set-off method should apply in determining how much of the Manville Trust’s portion of the verdict ACandS could set-off. The trial court rejected Mrs. Baker’s contention that the pro tanto method applied, and instead applied the pro rata method, thereby setting off the Manville Trust’s entire $440,000.00 [295]*295share of the verdict. Thus, it entered judgment against ACandS (the only non-settling, remaining defendant) in the amount of $440,000.00.3

Both Mrs. Baker and ACandS appealed to the Superior Court. Mrs. Baker claimed that the terms of the pro tanto release between her and the Manville Trust should be enforced. The effect of enforcing the terms of the release would be that ACandS would be liable for the $410,000.00 shortfall between the consideration the Manville Trust paid in settlement (i.e., $30,000.00) and the Manville Trust’s allocated share of the damages awarded to the plaintiff (i.e., $440,000.00). ACandS appealed to the Superior Court on the basis that the evidence was insufficient to show that it was liable.

The procedural history of this matter before the Superior Court is rather involved. Initially, a three-judge panel of the Superior Court filed an opinion on May 18, 1998; this opinion was withdrawn by order of the court on June 1, 1998. On June 2, 1998, another opinion was filed in this matter which affirmed the order of the trial court. Subsequently, on July 30, 1998, the court granted reargument on the motion of Mrs. Baker. Our analysis of this matter is limited to a discussion of the Superior Court’s en banc opinion which was filed on March 30, 1999. In that opinion, the Superior Court rejected ACandS’ claim that the evidence was insufficient to support the verdict; it therefore affirmed that portion of the trial court’s order which denied ACandS’ motion for judgment notwithstanding the verdict.

The majority of the Superior Court, however, found that the trial court erred when it did not enforce the terms of the pro tanto release, and therefore reversed the trial court’s denial of Mrs. Baker’s request to mold the verdict pursuant to the pro tanto release. Thus, the Superior Court directed that Mrs. Baker could recover from ACandS the shortfall between the consideration she received from the Manville Trust in the [296]*296settlement and the amount of the Manville Trust’s share of the damages.

ACandS subsequently filed a petition for allowance of appeal. ACandS abandoned its sufficiency of the evidence claim in its request that this court hear its appeal, and instead presented the sole issue of whether the Superior Court’s determination of the set-off issue was correct. We granted allocatur.4

At the outset of our review, we note that the parties agree that they are bound by the terms of the TDP. The TDP, in turn, contains a rather involved mechanism for determining how set-off is to be calculated. TDP § H.3. Mrs. Baker and ACandS disagree about which particular subsection of TDP § H.3 applies to this matter. These arguments are fairly complicated. Yet, it is not necessary for us to resolve the rather thorny issue of which of these particular subsections of the TDP applies as both of these subsections declare that the method for performing the set-off calculation is to be made with reference to state law. See TDP H.3.(c) and (f). Thus, we can now turn to the crux of this dispute, which is whether state law mandates that ACandS should receive a pro tanto or pro rata set-off.

To answer this question, we turn to the Uniform Contribution Among Tort-feasors Act, 42 Pa.C.S. §§ 8321-8327 (“UCA-TA”). This is a comprehensive act which dictates the effect of a release as to other tortfeasors, the method for computing set-off, and under what circumstances an action in contribution is to be allowed. The provision which controls set-off is found at 42 Pa.C.S. § 8326. That provision states that a release by the plaintiff of one tortfeasor

does not discharge the other tort-feasors unless the release so provides, but reduces the claim against the other tortfeasors in the amount of the consideration paid for the [297]*297release or in any amount or proportion by which the release provides that the total claim shall be reduced if greater than the consideration paid.

42 Pa.C.S. § 8326.

Thus, in Pennsylvania, the UCATA contemplates three separate set-off scenarios.

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Bluebook (online)
755 A.2d 664, 562 Pa. 290, 2000 Pa. LEXIS 1572, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baker-v-acands-pa-2000.