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Friday, August 24, 2012

California Abolishes the Release Rule

The common law release rule provides that a plaintiff’s settlement with, and release from liability of, one joint tortfeasor also releases from liability all other joint tortfeasors.

The California Supreme Court repudiated the common law release rule yesterday in Lueng v. Verdugo Hills Hospital, No. S192768 (Cal. August 23, 2012).  The unanamous court wrote:

The rationale for the common law release rule was “that there could be only one compensation for a joint wrong and since each joint tortfeasor was responsible for the whole damage, payment by any one of them satisfied plaintiff’s claim against all.”  That rationale assumes that the amount paid in settlement to a plaintiff in return for releasing one joint tortfeasor from liability always provides full compensation for all of the plaintiff’s injuries, and that therefore anything recovered by the plaintiff beyond that amount necessarily constitutes a double or excess recovery.  The assumption, however, is unjustified.  For a variety of reasons — such as the settling defendant’s limited resources or relatively minor role in causing the plaintiff’s injury — a plaintiff may be willing to release one tortfeasor for an amount far less than the total necessary to fully compensate the plaintiff for all injuries incurred.  As Dean Prosser observed in his criticism of the common law release rule:  “There is a genuine distinction between a satisfaction and a release.”

Craig Estlinbaum 

http://lawprofessors.typepad.com/adjunctprofs/2012/08/california-abolishes-the-release-rule.html

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