R.L. McCoy, Inc. v. Jack

Summary

The Indiana Supreme Court held that, under Indiana's Comparative Fault Act and several-liability regime, a nonsettling defendant is not entitled to a credit or setoff for amounts paid by a settling nonparty defendant. Because the settlement agreement conditioned repayment on an amount that would otherwise reduce another defendant's liability, the plaintiffs were not required to repay the excess settlement payment to McCoy. The court affirmed the trial court's judgment.

Holdings

1. Under Indiana's comparative-fault regime, a defendant that is severally liable and that asserted a nonparty defense is not entitled to a credit or setoff for amounts paid by a nonparty defendant that settled the plaintiffs' claims. Each defendant remains responsible for its own apportioned share of the total liability.
2. The loan-receipt agreement did not require the Jacks to repay McCoy the $960,000 excess settlement payment because, by its terms, repayment was required only to the extent the payment would reduce the amount another defendant was obligated to pay, and Johnson was not entitled to such a credit.

Questions Presented

1. Under Indiana's Comparative Fault Act, may a defendant severally liable for its apportioned share of fault obtain a credit or setoff for amounts paid by a nonparty defendant that settled before trial?
2. Did the loan-receipt settlement agreement require the Jacks to repay McCoy the $960,000 by which McCoy's settlement payment exceeded the jury's determination of McCoy's comparative-fault share?

Disposition

affirmed