Through legal doctrines such as those pertaining to dangerous instruments (e.g., motor vehicles), principals & agents, and employers & employees, passive tortfeasors can be held liable for the active negligence of others. An active tortfeasor is the person whose negligence has caused an accident, while a passive tortfeasor is the person or company made liable through one or more legal doctrines such as those mentioned above. This type of liability on the part of the passive tortfeasor is known as vicarious liability.
Examples: #1: Through the dangerous instrumentality doctrine, the owner of a motor vehicle will be liable for damages caused by the permissive driver of that vehicle. #2: An employer will be responsible for the damages caused by its employee in the course and scope of the employment. (Our law firm is currently in suit against Mears Destination Services, Inc. for an accident caused by the driver of one of its buses. Mears is vicariously liable under both examples.)
For various practical and strategic reasons, it is sometimes beneficial for the Plaintiff (the party harmed) to reach a settlement with the active tortfeasor, while the passive tortfeasor remains a Defendant in the case. Can this be done without [the Plaintiff] losing the right to continue his or her fight against the passive tortfeasor? Although it may seem counterintuitive, the answer is Yes.
This wasn’t always so. It took statutes then court opinions based on the statutes to change the law. The first positive Florida statute was enacted in 1957, while the first good appellate decision interpreting the statute was Hertz Corp. v. Hellens, 140 So.2d 73 (Fla. 2d DCA 1962). Since then, Florida law has become even clearer on the subject through the following authorities:
- 768.041 Release or covenant not to sue.
- 46.015 Release of parties.
- 768.31(5) Release or covenant not to sue.
- Florida Tomato Packers, Inc. v. Wilson, 296 So. 2d 536 (Fla. 3d DCA 1974) (The plaintiff settled before trial and executed a release in favor of the only active tortfeasor).
Another aspect that was, but is no longer problematic when settling with active tortfeasors concerns dismissals with prejudice. In JFK Medical Center, Inc. v. Price, 647 So. 2d 833 (Fla. 1994), a medical malpractice case, the Plaintiff settled with the active tortfeasor doctor, agreeing to dismiss the case against him with prejudice. The passive hospital, which was a party due to its alleged employer/employee relationship with the doctor, moved for summary judgment on the theory of res judicata, arguing that the claim against it was barred by the active tortfeasor being dismissed with prejudice. The trial court granted the hospital’s motion. The 4th DCA reversed the trial court and the Florida Supreme Court approved the appellate court’s decision, holding “that a voluntary dismissal of the active tortfeasor, with prejudice, entered by agreement of the parties pursuant to settlement, is not the equivalent of an adjudication on the merits that will serve as a bar to continued litigation against the passive tortfeasor.” 647 So. 2d at 834.
The Price decision was reaffirmed by the Supreme Court in Crosby v. Jones, 705 So. 2d 1356 (Fla. 1998), a case involving settlement with the driver of a motor vehicle and the filing of a joint motion of dismissal as to the driver.
- Be sure to include clear language in the release that it is not intended as a release of any claims against any other persons or entities, including the vicariously (passively) liable defendant or defendants.
- Try to avoid giving release language naming the defendant’s insurance company. This is because the released carrier may also be the vicariously liable defendant’s insurer. If the defendant insists on such language in the release, add clear language that the release of the carrier pertains only to its capacity as insurer for the released defendant.
- Be extremely cautious of indemnity clauses. Such clauses may require the plaintiff to indemnify the released defendant from claims brought by others. Unless the clause is spelled out clearly, “others” could include non-settling defendants, whose rights to seek indemnification do not end with the active tortfeasor’s case being settled. (As stated by the Supreme Court in Price, supra, “We also hold that voluntary dismissal of the active tortfeasor shall not impair the passive tortfeasor’s right to indemnification. It would be unconscionable to require a passive tortfeasor to compensate an injured party, while at the same time barring indemnification from the active party.” 647 So. 2d at 834.) Accordingly, include indemnity language limiting its provisions to such things as insurance subrogation rights, hosptital liens, Medicare and Medicaid, and similar benefits.
KNOW ALL MEN BY THESE PRESENTS: That We, Plaintiffs, for and in consideration of the sum of settlement amount, paid by or on behalf of Defendant, the receipt of which is hereby acknowledged, do hereby and by these presents, for us, our heirs, our personal representatives, successors and assigns fully acquit, release and forever discharge Defendant from any and all claims, demands, damages, both compensatory and punitive, costs, attorney’s fees, actions and causes of action whether arising at law or in equity which we may have had, may now have, or may hereafter have because of or arising out of an accident that occurred on or about the date of accident.
The undersigned agree to satisfy or otherwise resolve any lien or subrogated interest for workers compensation and health care benefits paid or payable to them as a consequence of the occurrence settled pursuant to this agreement.
It is further acknowledged and specifically understood that the payment hereunder may not satisfy all of the damages to the undersigned parties resulting from the accident, including, but not limited to past and future medical and health care expenses, and that we have not relied upon any representation of Defendant, regarding the personal financial status or financial responsibility of the insured party(ies) herein to me, beyond the insurance coverage available.
The undersigned reserve the right to pursue and recover any uncompensated expenses from any person, firm or entity who may be responsible for payment of the expenses, including any first-party health and any other insurance coverage available and any governmental benefits. This reservation does not apply to any of the parties released herein.
To procure payment of the consideration referred to herein, we do hereby declare and represent that we have no qualifying disability and qualifying dependent(s) which would enable a claim to be made by or on behalf of any unmarried dependent, as defined by section 768.0415, Florida Statutes (2001).
This Release in no way, shape or form releases any claims against any other person or entity, including but not limited to Defendant(s) remaining in case.
We further represent that we have read and understand this Release.
Signed and sealed this ______ day of _____________, __________________.
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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.