Calise v. Hidden Valley Condominium Ass'n

773 A.2d 834, 2001 R.I. LEXIS 160, 2001 WL 674147

• Court: Supreme Court of Rhode Island
• Decided: June 11, 2001
• Docket: 1999-452-Appeal
• Status: Published

Opinions

OPINION

BOURCIER, Justice.

In this appeal we hold that a Superior court trial justice, at a hearing held pursuant to G.L.1956 § 9-20-2 to determine the amount of the plaintiffs damages,¹ committed no error in precluding two defaulted defendants from attempting to question and litigate their liability to the plaintiffs by seeking to introduce evidence of probable comparative negligence on the part of two former defendants, who because of settlement stipulations, had been dismissed with prejudice as parties in the ease.

I

Facts/Procedural History

On July 3, 1992, Jeanette Calise was injured when she slipped and fell on a common walkway leading to her condominium at 19 Trellis Drive in West Warwick. She attributed her fall to the negligence of the Hidden Valley Condominium Association, Inc. (the Association) and, as a result, she filed a negligence action against the Association. In that action she sought damages for her personal injuries. Her husband, Vincent Calise, alleged a loss of consortium and sought damages, pursuant to G.L.1956 § 9-1-41.

The Association filed an answer to the plaintiffs’ complaint and denied any alleged liability. During pretrial discovery, it indicated that other parties might be responsible for the negligent condition alleged to have caused Jeanette’s slip and fall. Jeanette and her husband (hereinafter collectively referred to as the plaintiffs) then moved to amend their complaint to include as party defendants, the Downing Corporation (Downing), Downing/Hidden Valley, Inc. (Hidden Valley), D’Ambra Construction Company, Inc. (D’Ambra), and Lincoln Sealcoating Company (Lincoln). On June 5, 1995, the motion was granted and the plaintiffs amended their complaint accordingly.

Subsequently, D’Ambra and Lincoln each duly filed answers to the plaintiffs’ amended complaint.² Downing and Hidden Valley (collectively, the defendants), however, neglected to file answers to the plaintiffs’ amended complaint, as required by Rule 12 of the Superior Court Rules of Civil Procedure. Subsequently, on April 7, 1997, they were defaulted pursuant to Rule 55(a) of the Superior Court Rules of Civil Procedure.

Six months after the default orders had been entered against Downing and Hidden Valley, an attorney representing both parties filed an appearance for them; however, he failed to move to vacate the defaults, or move to file answers out of time. In the meantime, pretrial discovery took place between the plaintiffs and the co-defendants, D’Ambra and the Association, in preparation for trial.

On January 13, 1999, about twenty-one months after they both had been defaulted, Downing and Hidden Valley somehow stumbled into the continuing litigation and filed motions for leave to file cross-claims against the defendants, D’Ambra and the Association. In response, D’Ambra and the Association objected to the motions and filed their own motions for leave to file cross-claims against the two, defaulted and now awakened defendants. The record indicates that no ruling ever was made on these motions. Thereafter, both D’Ambra and the Association elected to settle with the plaintiffs and were given full releases. Orders were duly entered dismissing them with prejudice as party defendants in the case.³

At this juncture, the only parties left remaining in the case were the plaintiffs and the two long-defaulted parties, Downing and Hidden Valley. Because the defaults of Downing and Hidden Valley had served to establish their liability to the plaintiffs, no trial on that issue was required. Accordingly, pursuant to § 9-20-2, the plaintiffs moved for hearing at which to present evidence of their damages.

At the damages hearing, Downing and Hidden Valley, believing that their former co-defendants might be hable for some proportionate share of the plaintiffs’ damages, attempted to introduce evidence of the purported “comparative negligence” of those parties, pursuant to G.L.1956 chapter 6 of title 10, entitled Contribution Among Joint Tortfeasors (Uniform Contribution Among Tortfeasors Act). The trial justice excluded the proffered evidence and, after hearing the evidence and reviewing the record, found the plaintiffs’ damages to be $60,000, plus interest and costs to Jeanette, and $5,000, plus interest and costs to Vincent.⁴ The final judgment amount was not offset by the settlement amounts previously paid to the plaintiffs by the joint tortfeasors in consideration of their releases.⁵ Downing and Hidden Valley timely appealed.

II

Analysis

1. Comparative Negligence of the Joint Tortfeasors

The defendants initially concede that the entry of default for their failure to answer the plaintiffs’ complaint precluded them from introducing evidence of the plaintiff Jeanette’s comparative negligence at the hearing held to assess the plaintiffs’ damages. However, they maintain that each defendant that ever was in the case is hable only for its proportionate share of the plaintiffs’ damages. Accordingly, they contend that, for purposes of indemnification and/or contribution pursuant to our Uniform Contribution Among Tortfeasors Act, their right both to fully participate at the hearing on damages and to mitigate their own damages necessarily- entitled them to introduce evidence of the comparative negligence of the settling joint tort-feasors who no longer were parties to the case.

This contention, as it involves any comparative negligence on the part of the defendants who formerly were in the case, basically is flawed. If, as the defendants concede, they may not show comparative negligence on the part of the plaintiffs then, because no other defendant ever has established any negligence attributable to the plaintiffs, comparative negligence is not at issue in this case.

Our comparative negligence statute, § 9-20-4, is not a comparative fault statute. It comes into play only after negligence is first established on the part of both the plaintiff and the defendant. Once that is established, the plaintiff’s “damages shall be diminished by the finder of fact in proportion to the amount of negligence attributable” to the plaintiff. Section 9-20-4. Our comparative negligence statute, it must be noted, only permits comparison of either the negligence between a plaintiff and a defendant or, in the case of multiple defendants, the comparison of any negligence on the part of the plaintiff and on the part of each particular defendant. It does not contemplate or address the proportionate negligence between the various defendants. It is perhaps for this reason that § 9-20-4.1 provides that there is no set-off permitted under the comparative negligence statute. Accordingly, we are concerned with consideration of our Uniform Contribution Among Tortfeasors Act and its probable application to the particular fact scenario before us.

The defendants assert that the trial justice erred in precluding them from introducing evidence that might show contributing negligence on the part of the settling defendants at the hearing to establish the plaintiffs’ damages. This is an issue of first impression for this Court.

Rule 12(h) states that “[a] party waives all defenses and objections which the party does not present either by motion as hereinbefore provided or, if the party has made no motion, in the party’s answer or reply * * “[T]he failure to raise an affirmative defense in a timely manner constitutes a waiver of that defense.” World-Wide Computer Resources, Inc. v. Arthur Kaufman Sales Co., 615 A.2d 122, 124 (R.I.1992). “Failing to plead or answer bespeaks an implied concession that the party is liable, or perhaps an indifference to the outcome of the litigation.” Kalamazoo Oil Co. v. Boerman, 242 Mich.App. 75, 618 N.W.2d 66, 73 (2000). Although “a default does not concede the amount of damages[,] * * * the factual allegations of a complaint will be taken as true upon default[.]” Bashforth v. Zampini, 576 A.2d 1197, 1200 (R.I.1990). Thus, “ ‘[d]ue to [their] default, defendants are] in a position of having admitted each and every material allegation of the plaintiffs’] complaint except as to the amount of damages suffered by plaintiffs].’” Kalamazoo Oil Co., 618 N.W.2d at 72. “‘The element of proximate cause, as well as negligence, having been alleged in plaintiffs’] complaint is admitted due to the default of defendants] and requires no further proof.’” Id.

“[A] default judgment may not be entered without a hearing on damages unless the amount claimed is liquidated or ascertainable from definite figures contained in documentary evidence or detailed affidavits.” Bashforth, 576 A.2d at 1200.⁶ Thus, “[w]hile a default judgment constitutes an admission of liability, the quantum of damages remains to be established by proof [at the hearing] unless the amount is liquidated or susceptible of mathematical computation.” Id. (quoting Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir.1974)). (Emphasis added.) Such a hearing “is limited to the question of damages.” Id. (Emphasis added.)

In Bashforth, this Court concluded that a defaulted defendant is entitled to discovery in personal injury litigation to determine the causal relationship between a plaintiff’s injuries and the plaintiffs amount of claimed damages. See Bashforth, 576 A.2d at 1200. Such discovery facilitates the ascertainment of a reasonable figure for the plaintiff’s unliquidated damages. See id. In this case, it is important to note that at the hearing to determine the plaintiffs’ damages,- pursuant to § 9-20-2, the plaintiffs only burden was to prove the amount of damages they were entitled to recover from the defaulted parties, and not the comparative negligence, if any, of the settling defendants in relation to that of the two defaulted defendants. In addition, because liability was not at issue, Jeanette’s comparative negligence, if any, that would have reduced the plaintiffs’ damages could not be determined. If a reduction in damages had been warranted, it necessarily would have reduced the proportionate liability of all defendants, settling and defaulting alike.

“There are three recognized categories of damages; they are compensatory, punitive, or nominal damages.” Murphy v. United Steelworkers of America Local No. 5705, AFL-CIO, 507 A.2d 1342, 1346 (R.I.1986). “Compensatory damages are awarded to a person in satisfaction of or in response to a loss or injury sustained.” Id. In the present case, the damages claimed by the plaintiffs were compensatory because they were “in satisfaction of or in response to a loss or injury sustained.” Id.

“Our policy is always to encourage settlement. Voluntary settlement of disputes has long been favored by the courts.” Homar, Inc. v. North Farm Associates, 445 A.2d 288, 290 (R.I.1982). “Settlement of a disputed liability is as conclusive of the parties’ rights as is a judgment that terminates litigation between them.” Id. A joint tortfeasor has a valid and substantial interest in “ ‘buying his peace’ through a release-and-settlement agreement.” Cooney v. Molis, 640 A.2d 527, 530 (R.I.1994). “On many occasions parties settle a suit not only to limit their potential liability but also to ‘avoid the continuing pressures, vexations and unpleasantness involved in litigation,’ as well as the associated legal expenses.” Id.

As we have noted previously, the policy of the Uniform Contribution Among Tortfeasors Act:

“is to encourage rather than discourage settlements. The tortfeasor who settles removes himself entirely from the case so far as contribution is concerned if he is able and chooses to buy his peace for less than the entire liability. If he discharges the entire obligation it is only fair to give him contribution from those whose liability he has discharged.” Hawkins v. Gadoury, 713 A.2d 799, 806 (R.I.1998) (quoting with approval Uniform Act, 12 U.L.A. 194,196 § 1 cmt. (d) (1955 revision) (1996)).

“To encourage early settlement of claims * * * the injured party ought to be able to structure an early settlement with any willing alleged tortfeasor in a manner that enables him or her to be made whole, or as near thereto as possible, without providing him or her with a windfall or any excess recovery.” Merrill v. Trenn, 706 A.2d 1305, 1311 (R.I.1998).

The record reveals that the defendants failed to answer the complaint and a default order was entered against them. This default order operated as an unqualified admission of their liability to the plaintiffs and precluded them from raising any affirmative defenses, all of which had been waived pursuant to Rule 12(h).

Because the plaintiffs’ damages were un-liquidated and not susceptible of mathematical computation, the defendants were entitled to contest only the causal relationship, if any, between the plaintiffs’ injuries and the damages alleged. However, in an attempt to possibly reduce their own liability for the plaintiffs’ damages, the defendants asserted that they should have been permitted to introduce evidence of any negligence on the part of their former co-defendants.

The record, we observe, reveals that after D’Ambra and the Association settled with, and paid consideration to, the plaintiffs in exchange for being fully released from the litigation and for having the plaintiffs’ claims against them dismissed with prejudice, they were not parties to the subsequent hearing to determine the extent of the plaintiffs’ damages. Indeed, considering that they no longer were parties to the litigation, even if they had wanted to challenge the plaintiffs’ claimed damages, it is not clear that they would have had standing to do so.

“It is a well-settled doctrine that a plaintiff may recover 100 percent of his or her damages from a joint tortfeasor who has contributed to the injury in any degree. * * * The joint tortfeasor may then seek contribution pursuant to statute either by a separate action or by impleading the fellow joint tortfeasor under third-party practice.” Roberts-Robertson v. Lombardi, 598 A.2d 1380, 1381 (R.I.1991) (per curiam). (Emphasis added.)

Neither remedy was employed here by the defendants who are the defaulted parties in this case.

We believe that “[a] default should have consequences * * Rogers v. J.B. Hunt Transport, Inc., 244 Mich.App. 600, 624 N.W.2d 532, 537 (2001). If we were to accept the defendants’ proposed theory of recovery then, pursuant to § 10-6-5,⁷ if the settlement amounts paid to the plaintiffs by the co-defendants had exceeded the plaintiffs’ total damages, the defendants would not have been liable to the plaintiffs for any damages whatsoever. Conversely, if the co-defendants’ proportionate share of damages exceeded the settlement amount, the defendants’ proportionate share of damages automatically would be reduced. The results of this would be either (a) having settled a case in good faith, and having obtained a release from the plaintiff, a settling co-defendant would be hable for contribution to a defaulting defendant for his or her proportionate share of damages, as determined by the trial justice at the hearing; or, (b) a plaintiff would not be made whole because the defaulting party would pay only his or her proportionate amount of damages and, in view of the co-defendant’s full release, the plaintiff could not collect the difference from the settling co-defendant. As a result, plaintiffs might very well be discouraged from entering into any pre-trial settlements with less than all defendants in a multi-defendant case. In addition, defendants would not want to settle if they thought it possible that they could be forced later to defend themselves against defaulting defendants on the merits of the lawsuit.

Consequently, rather than encourage the settlement of disputes, the opposite would occur. Such discouragement of settlements would be in direct contravention to the purpose and policy of the Uniform Contribution Among Tortfeasors Act. Thus, we conclude that the trial justice did not err when he excluded evidence of the alleged negligence of the settling joint tortfeasors. Because the defendants have not disputed the actual amount of damages awarded by the trial justice and because the plaintiffs concede that the award should be offset by the amount paid them in settlement by the former co-defendants in consideration of being fully released, the defendants, as the defaulting parties, are liable for paying only the balance remaining of the plaintiffs’ judgment for damages.

We respectfully disagree with the contention presented in the dissent that the Uniform Contribution Among Tortfeasors Act negates the consequences of the default by the defendants. Under the theory advanced by the dissent, the plaintiffs would bear the burden of proving not only the liability of the defaulting defendants but also the specific proportion of their liability as a percentage of the total liability borne by all defendants, including those who have settled with the plaintiffs. This is precisely the burden that plaintiffs would have been required to sustain if the defendants had not been defaulted and if the plaintiffs had not settled with the other defendants.⁸

Such a theory would place the defendants in a position more advantageous than that which they would have enjoyed had they answered the case. It must be remembered that under the dissent’s theory, the plaintiffs would have the burden of proving liability without the benefit of discovery at a hearing on what traditionally has been designed to be only for proof of the plaintiffs’ damages. The entire theory of a default is that a defaulting defendant has forfeited the privilege of disputing liability. This sanction would apply to the proportion of liability, as well as the totality thereof. The greater necessarily must include the lesser. Otherwise, without taking any action whatever in his, her, or its own defense, a defaulting defendant might, just wait until the hearing on proof of plaintiff’s damages and then force the plaintiff to bear the burden of proving all elements of liability, including the defaulted defendant’s proportional share thereof in respect to other defendants who no longer are parties to the case by reason of settlement. Such a burden would be greater than that which would be placed upon a plaintiff in respect to a non-defaulting defendant who would in the course of the pretrial proceedings be required to respond to all the discovery requests that would prepare the plaintiff to meet such a burden.

The position the dissent advocates also would serve to effectively discourage, if not eliminate, pretrial settlements by defendants in any negligence case involving two or more defendants. If one of those defendants by initially ignoring the litigation and being defaulted can later at a § 9-20-2 proof-of-damage hearing reopen the question of the propriety of each pretrial settlement and litigate each former defendant’s comparative negligence, if any, that might have contributed to the plaintiff’s damages, such a radical procedure would turn upside down the long-established procedure that always has been followed in this state in a plaintiffs proof of damages hearing. We do not propose to reward a defaulting defendant in such a manner.

For the foregoing reasons, the defendants’ appeals are denied and dismissed. The judgment appealed from is affirmed, and the papers in the case are remanded to the Superior Court.

Chief Justice WILLIAMS did not participate.

1 . The defendants here, were defaulted for failing to answer or otherwise defend as required by Rule 12 of the Superior Court Rules of Civil Procedure, and default judgments were duly entered thereafter, pursuant to Rules 55 and 54(b) of the Superior Court Rules of Civil Procedure.

2 . On February 27, 1997, the trial court granted Lincoln Sealcoating's motion for summary judgment and final judgment in favor of Lincoln was entered pursuant to Rule 54(b).

3 . In consideration of their respective settlements, D'Ambra paid the plaintiffs $7,500 and Hidden Valley Condominium Association paid them $10,000.

4 . The record contains only a transcript of the hearing; there is neither a transcript of counsels’ final arguments nor of the trial justice’s bench decision. The award for damages was entered as a final judgment by the trial justice.

5 . The defendants assert that the trial justice erred when he did not offset the damages award by the amount already paid by the joint tortfeasors in consideration of their releases. However, because this point has been conceded by the plaintiffs, we need not address the issue on appeal. The plaintiffs' damages are in fact being offset by the amount of the previous settlements. There is no double recovery for the plaintiffs in this case.

6 . General Laws 1956 § 9-20-2 provides in pertinent part that:

"In all cases, except where otherwise provided, if judgment is rendered on default * * * damages shall be assessed by the court, with the intervention of a jury unless cause is shown why there should be no intervention of a jury. The claimant in any case may waive the intervention of a jury.”

7 . General Laws 1956 § 10-6-5 provides that: "A joint tortfeasor who enters into a settlement with the injured person is not entitled to recover contribution from another joint tortfeasor whose liability to the injured person is not extinguished by the settlement.”

8 . The dissent's reliance upon Bashforth v. Zampini, 576 A.2d 1197 (R.I.1990) and LaBounty v. LaBounty, 497 A.2d 302 (R.I.1985) is misplaced entirely.

Bashforth, it should be noted, did not involve any pretrial settlement by either of the two defaulted defendants in that case. All that was at issue was whether the defaulted defendants could, before hearing on the plaintiff’s proof of damages, engage in pretrial discovery to enable them to defend against the plaintiff’s claimed injuries and resulting damages. Nothing in Bashforth says, as the dissent does here, that the defendants could litigate their respective comparative negligence, if any, that may have contributed to the plaintiff's injuries and damages. In fact, in Bashforth, this Court, in citing to the Arizona case of Dungan v. Superior Court, 20 Ariz.App. 289, 512 P.2d 52, 53 (1973), noted that prehearing discovery should be permitted to allow a defaulted defendant to discover facts "concerning the plaintiffs injuries and the amount of the plaintiffs claimed damages.” Bashforth, 576 A.2d at 1200.

LaBounty is completely inapposite to the case now before us. In LaBounty, there was no defaulted defendant and no proof of damage hearing. There, a full-blown trial on liability and damages had taken place. In that case involving two defendants, each defendant’s liability and particular percentage of comparative negligence had been established after a Superior Court jury trial. All that LaBounty holds is that a trial justice is required to apportion each defendant’s share of liability to satisfy the plaintiffs total verdict in proportion to the percentage of each defendant’s negligence that was found to have contributed to the total of that verdict.

The dissent, it appears, reads into Bashforth and LaBounty what is not really written in those cases.