K.S. v. Detroit Public Schools et al
Filing
174
MEMORANDUM ORDER for Entry of Judgments. Signed by District Judge David M. Lawson. (SPin)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
K.S.,
Plaintiff,
v.
Case Number 14-12214
Honorable David M. Lawson
DETROIT PUBLIC SCHOOLS,
CHARLES PUGH, ROY ROBERTS,
ROBERT BOBB, BERRY GREER,
and MONIQUE MCMURTRY,
Defendants.
_________________________________/
MEMORANDUM ORDER FOR ENTRY OF JUDGMENTS
The present dispute in this case concerns the terms of a judgment — or judgments — that
ought to be entered against the defendants following a settlement and a jury verdict. Plaintiff Khody
Sanford brought claims against the several defendants for damages incurred as a result of the sexual
misconduct by defendant Charles Pugh to which Sanford was subjected while a student at the
Frederick Douglass Academy for Young Men in Detroit. Advancing various legal theories, Sanford
accused defendants Detroit Public Schools and district officials Roy Roberts, Robert Bobb, Berry
Greer, and Monique McMurtry (the DPS defendants) of maintaining a sexually harassing
educational environment and depriving him of educational opportunities. He accused defendant
Charles Pugh of inflicting emotional pain, suffering, and distress upon him.
In his first amended complaint, the plaintiff set out claims against the DPS defendants for
violating his rights under the Due Process Clause and Equal Protection Clause of the Fourteenth
Amendment via 42 U.S.C. § 1983; sexual harassment and gender discrimination under the Michigan
Elliott-Larsen Civil Rights Act (ELCRA); and, against defendant DPS only, “gender harassment”
under Title IX of the Education Amendments of 1972. The plaintiff’s claims against defendant
Charles Pugh were framed as violations of the Due Process Clause via 42 U.S.C. § 1983; sexual
harassment and gender discrimination under ELCRA; assault; battery; and intentional infliction of
emotional distress (IIED). The section 1983 claims were dismissed before trial. Trial began on
November 3, 2015 on the ELCRA and Title IX claims against the DPS defendants and the ELCRA,
assault, battery, and IIED claims against defendant Pugh.
On November 4, 2015, the DPS defendants reached a settlement with the plaintiff and placed
the settlement on the record. The terms of the settlement (discussed in more detail below) called for
the entry of a consent judgment for the plaintiff in the amount of $350,000, to be paid within a year,
which would resolve the ELCRA and Title IX claims against all of the DPS defendants. Trial
continued against Pugh, and the Court dismissed the assault claim against him before the case went
to the jury. On November 9, 2015, the jury returned a verdict in favor of defendant Pugh on the
ELCRA claim, and for the plaintiff on the battery and IIED claims, awarding him damages of
$250,000.
The plaintiff and the DPS defendants have not been able to agree on the form of the consent
judgment, which prompted the plaintiff to file a motion for its entry. Defendant Pugh contends that
the judgment against him should recognize the plaintiff’s settlement with the DPS defendants by
giving him credit for a setoff in the amount of the settlement, effectively reducing his exposure to
$0. The plaintiff contends that he is entitled to a judgment against Pugh in the full amount of the
jury’s verdict, irrespective of the settlement with the other defendants. The plaintiff and defendant
Pugh have submitted briefs on that aspect of the case.
For the reasons discussed below, the Court will enter judgment against the DPS defendants
for $350,000, which will require payment by November 1, 2016 as agreed, forestall collection efforts
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by the plaintiff until then, and allow the plaintiff to pursue collection remedies against all DPS
defendants if the amount is not paid by the agreed deadline. Defendant Pugh is not entitled to set
off the settlement amount against the jury verdict because the claims against him are several and not
joint (Michigan abolished joint liability in nearly all tort cases in 1995), and a separate judgment will
be entered against him. Moreover, the “one recovery rule” will not stand as an obstacle to the
plaintiff’s collection of the full judgment against Pugh, because the settlement with the DPS
defendants compensated the plaintiff for damages that were different in their nature than those for
which the jury compensated him.
I. The DPS Defendants’ Settlement
The plaintiff and the DPS defendants agree on the terms of the settlement, except for one
important provision. The plaintiff contends that if the $350,000 settlement amount is not paid by
the November 1, 2016 deadline, then he may resort to collection remedies against all the DPS
defendants. The DPS defendants insist that if there is a payment default, then the settlement
agreement limits the plaintiff’s collection options to enrollment on the public tax rolls of a judgment
levy against defendant Detroit Public Schools, and he would forever forego any right to recover
against the individual defendants.
As noted above, the settlement was reached on the second day of trial. When the settlement
agreement was placed on the record, the following colloquy took place:
MR. CLEMONS:
Your Honor, I have been granted the authority to settle this
matter as we discussed in chambers.
THE COURT:
Well, the record should reflect that there have been ongoing
discussions, but nothing has been finalized as of yet, and the
parties have been working since the pretrial conference to see
if they could come to a resolution, so far unsuccessfully. And
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I take it you have reached an accord with Mr. Seikaly’s client
and Mr. Seikaly?
MR. CLEMONS:
Yes.
THE COURT:
Go ahead.
MR. CLEMONS:
And with the valued assistance of the Court, we have been
able to reach a settlement of this matter. The amount is
$350,000. There will be a dismissal with prejudice as to all
parties; Detroit Public Schools, Roy Roberts, Robert Bobb,
Berry Greer and Monique McMurtry. The settlement will be
by way of consent judgment. The consent judgment would be
satisfied by a placement on the judgment levy for payment by
November 1, 2016. No interest would accrue on the
judgment unless the judgment is not paid by November 1,
2016. Defendants admit no liability, however, for the
purpose of settling, for capping any additional expenses, any
additional costs, any additional potential attorney fees in the
event we move forward, we are making the decision to
resolve this matter. If not paid by . . . November 1, 2016,
then the interest will be future interest only, which would
begin on the day after November 1, 2016, and would accrue
through the date of payment. There will be no attempt at
execution on any of the Defendants of any description; none
against the DPS, Robert Bobb, Roy Roberts, Berry Greer or
Monique McMurtry.
THE COURT:
With the exception of enrolling the judgment according to the
statute.
MR. CLEMONS:
Yes, your Honor. It will be enrolled according to Michigan
statute. Additionally, the consent judgment will include
language, specific language stating that the Defendants DPS,
Roy Roberts, Robert Bobb, Berry Greer and Monique
McMurtry retain and reserve the rights to contest any and all
Title IX and Elliott-Larsen claims and elements of those
claims in any and all other litigation.
THE COURT:
In order words, it’s the intent that the consent judgment
resolve the dispute between the parties only and not have any
preclusive or non-defensive collateral estoppel effects, is that
correct?
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MR. CLEMONS:
Yes. No collateral estoppel or res judicata effects as to any
future — as to any claims, whether present or future.
THE COURT:
By anyone else?
MR. CLEMONS:
...
THE COURT:
By anyone else.
All right. I understand that. Is there anything further from
you, Mr. Clemons?
...
MR. CLEMONS:
No, your Honor.
THE COURT:
Very well. Mr. Seikaly, do you have anything to add?
MR. SEIKALY:
Just a few points, your Honor. One, we’re not indemnifying
or agreeing to indemnify as to any collateral matters. I just
wanted to make sure that’s clear. And that we’re acting —
we’re doing this pursuant to a consent judgment. So when he
says — this is the issue I really want to make clear. So when
he says that we will agree not to collect the judgment — or,
I’m sorry — when he says it’s a dismissal with prejudice, the
with-prejudice dismissal will not occur until we receive the
funds. We will not seek to collect, my client agrees to that,
but the dismissal with prejudice obviously can’t occur until
the payment is made.
THE COURT:
Correct?
MR. CLEMONS:
Yes. And the consent judgment will have language to that
effect.
THE COURT:
All right.
MR. CLEMONS:
But it will be, again, dismissal with prejudice.
Following the settlement, the parties exchanged drafts of a proposed consent judgment, but
they could not agree on whether the plaintiff would have a collection option, other than enrolling
the judgment on the tax rolls, if the money was not paid by November 1, 2016. The plaintiff’s
proposed draft contains the following language:
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Plaintiff shall make no attempt at collection as to any Defendants unless Defendant
DPS has failed to pay the full amount of the Consent Judgment ($350,000) on or
before November 1, 2016.
The defendants propose the following alternative wording of that provision:
DPS shall pay this judgment by November 1, 2016. There will be no attempt to
execute this judgment on Robert Bobb, Roy Roberts, Berry Greer, or Monique
McMurtry.
The defendants also include a paragraph stating that “at the time of payment of the Consent
Judgment Plaintiff will execute a release of any and all claims against Defendants, their heirs,
employees and agents substantially in the form attached hereto.”
District courts “retain the inherent power to enforce agreements entered into in settlement
of litigation pending before them.” Brock v. Scheuner Corp., 841 F.2d 151, 154 (6th Cir. 1988).
But enforcement is limited to the parties’ agreement; a court “is not permitted to alter the terms of
the agreement.” Ibid. Settlement agreements, including those that take the form of consent
judgments, are viewed as contracts, and as such are subject to the rules of contract interpretation.
Bamerilease Capital Corp. v. Nearburg, 958 F.2d 150, 152 (6th Cir. 1992). The prime directive of
contract interpretation is to “honor the intent of the parties,” Rasheed v. Chrysler Corp., 445 Mich.
109, 127 n.28, 517 N.W.2d 19, 29 n.28 (1994), as it may be discerned from the plain language of
the agreement, Wilkie v. Auto-Owners Ins. Co., 469 Mich. 41, 61, 664 N.W.2d 776, 787 (2003).
If the language of the agreement is unambiguous — that is, it “fairly admits of but one
interpretation,” Allstate Ins. Co. v. Goldwater, 163 Mich. App. 646, 648-49, 415 N.W.2d 2, 4 (1987)
— the Court need not look beyond the agreement to find the parties’ intent. Haywood v. Fowler,
190 Mich. App. 253, 258, 475 N.W.2d 458, 461 (1991). But if the terms are ambiguous — which
means that they are susceptible to multiple meanings, Port Huron Educ. Ass’n MEA/NEA v. Port
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Huron Area Sch. Dist., 452 Mich. 309, 323, 550 N.W.2d 228, 237 (1996) — the Court must look
to extrinsic facts along with the terms of the agreement to determine the parties’ intentions. Klapp
v. United Ins. Grp. Agency, Inc. 468 Mich. 459, 463, 663 N.W.2d 447, 454 (2003).
The parties did not sign a written settlement document. Only their on-the-record oral
pronouncement exists. The terms spoken by the lawyers are clear and unambiguous on all of the
following points. First, the parties agreed to a settlement of all of the plaintiff’s claims against
defendants Detroit Public Schools, Roy Roberts, Robert Bobb, Berry Greer, and Monique
McMurtry. Second, the plaintiff agreed to dismiss with prejudice all of his claims against those
defendants upon receipt of a settlement payment of $350,000. Third, the settlement was to be
consummated by the entry of a consent judgment. Fourth, no interest would accrue on that
judgment unless it was not paid by November 1, 2016, and, if it was not paid by that date, then the
judgment would begin to accrue future interest only, starting on November 2, 2016 and running
through the date of payment in full of the agreed amount. Fifth, the settling defendants reserved the
right to contest all Title IX and Elliott-Larsen claims and the elements of those claims that might be
brought against them by anyone else in any other litigation, and the judgment was deemed by the
parties to resolve all claims by and against the settling parties only, with no claim- or issuepreclusive effect on any claims that might be brought by anyone else against them. Sixth, the parties
agreed that the settlement did not impose any obligation on the plaintiff to indemnify any of the
defendants against any claims that might be brought against them by anyone else.
What happens, however, if the judgment is not paid by November 1, 2016? There is a
reference to “enrolling the judgment according to the statute.” Under Michigan law, if a judgment
creditor has an unsatisfied judgment against a school district, the treasurer of the school district must
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take steps to certify that judgment to taxing authorities, so that the residents of the district can be
assessed. See Mich. Comp. Laws § 600.6094(4). That procedure explains how the DPS defendants
contemplated raising money to pay the settlement amount, which is the reason the settlement took
the form of a “judgment.” But it does not provide the plaintiff with a collection remedy.
The attorney for the DPS defendants stated on the record that “[t]here will be no attempt at
execution on any of the defendants of any description; none against the DPS, Robert Bobb, Roy
Roberts, Berry Greer or Monique McMurtry.” The DPS defendants now insist that, by assenting
to that representation, the plaintiff agreed that there would be no attempt by him to collect the
judgment against the individual defendants ever, at any time, under any circumstances, whether DPS
honors its obligation to pay the full settlement amount or not. If that were true, then what would be
the reason for entry of a judgment against those defendants? That construction is nonsensical and
at odds with other material representations made by the attorneys for both parties, which were not
challenged by either side during the colloquy. The defendants’ reading of the record is not
consistent either with the plain meaning of the word “judgment,” or with the context in which it was
used.
There are several reasons for reading the settlement agreement as treating the payment
obligation as applying equally to all the DPS defendants, and requiring the plaintiff to forebear from
collection efforts until November 1, 2016 — while the DPS defendants raised the money by
enrolling the judgment under Mich. Comp. Laws § 600.6094(4) — but not thereafter. First, contrary
to the defendants’ desired interpretation, their attorney did not, at any time, in any context during
the hearing, make any assertion indicating that the school district and the individual defendants
would be treated in any way differently in the consummation or execution of the agreement. The
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defendants agreed that the settlement would be executed “by way of consent judgment.” There was
no statement by any party that reasonably can be read as indicating that the contemplated judgment
would be entered against only some of the DPS defendants and not others. The defendants now
attempt to construe the record to indicate that the plaintiff agreed never to attempt to collect against
the individual defendants, regardless of any success he might have sooner or later in recovering
against the school district. But no such distinction was stated on the record, and the language in the
record, plainly read, cannot be viewed as making any distinction between the plaintiff’s right of
recovery against the school district versus the other defendants.
Second, the defendants’ attorney’s statement about the agreement by the plaintiff to forebear
from exercising his right to execution was made immediately following, and in the context of, the
discussion of the parties’ agreement to allow the school district a lengthy time to procure payment
in full of the settlement amount. The plaintiff apparently was willing to make that concession
because he appreciated that the usual process of statutory enrollment of a judgment against a public
entity requires some time to complete. Notwithstanding the plaintiff’s agreement to delay execution,
there is nothing in the record that indicates that the plaintiff assented to any term by which he could
be understood entirely to abandon that right for all time.
Accepting the DPS defendants’ interpretation of the settlement agreement would compel the
further conclusion that the plaintiff would have no right to execute on the uncollected judgment
against any defendant, ever. But a judgment upon which there can be no execution is no “judgment”
at all. That interpretation would undermine the entire agreement to settle the case by entering a
“judgment.” The procedure for collection on a federal court money judgment is governed generally
by “the procedure of the state where the [federal] court is located.” Fed. R. Civ. P. 69(a); Apostolic
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Pentecostal Church v. Colbert, 169 F.3d 409, 414 (6th Cir. 1999). It is well established under
Michigan law that “[t]he right to execute is implicit in any judgment for money,” Landy v. Landy,
131 Mich. App. 519, 522, 345 N.W.2d 720, 722 (1984) (citing Mich. Comp. Laws § 600.6001
(“Whenever a judgment is rendered in any court, execution to collect the same may be issued to the
sheriff, bailiff, or other proper officer of any county, district, court district or municipality of this
state.”)), and “[a] judgment creditor is entitled to execution as a matter of right,” Behrens v. Chevrie,
255 Mich. 79, 80, 237 N.W. 551, 551 (1931).
If the individual defendants desired insulation from the effects of a judgment against them,
then they could have insisted that the judgment be confined to the school district, and the case
against them would be dismissed. Nothing in the record indicates that the parties agreed to such a
concession. To the contrary, the DPS defendants agreed, and they concede that they agreed, to entry
of a judgment against all of them.
The defendants’ attorney recently suggested during a post-trial status conference with the
Court that no consent judgment could be entered on the terms proposed by the plaintiff because a
consent judgment requires the consent of the parties, and defendants’ counsel asserts that he lacked
authority from the individual defendants to consent to any settlement that would result in entry of
an effective judgment against them. However, counsel of record for all of the DPS defendants
outlined the settlement agreement on the record, expressly representing that he had authority to do
so. His clients are bound by his representations. Link v. Wabash R. Co., 370 U.S. 626, 634 (1962)
(“Any other notion would be wholly inconsistent with our system of representative litigation, in
which each party is deemed bound by the acts of his lawyer-agent.”). “Thus, unfortunately, [the
defendants] are bound by the representations of their counsel as to the formation of the settlement.”
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Tsakanikas v. Nationstar Mortgage, LLC, No. 12-176, 2013 WL 3155777, at *4 (S.D. Ohio June 20,
2013) (citing Moore v. U.S. Postal Serv., 369 F. App’x 712, 718 (6th Cir. 2010) (“In our legal
system, litigants are generally bound by the acts and representations of their attorneys.”)).
Read in its entirety, the settlement agreement requires all the DPS defendants to be treated
the same; they agreed that a judgment would be entered against them for $350,000; no interest
would accrue before November 1, 2016; and the plaintiff would not be able to execute on the
judgment against any defendant before that date. The Court will enter a judgment incorporating
those terms. That judgment conclusively terminates the action as to the DPS defendants. There is
no likelihood that further action in this Court would affect the viability of any claim for review of
the judgment, and there is no possibility that a reviewing court would have to consider any of these
issues a second time. Nor are there any claims that could result in a setoff against this judgment.
And, as discussed below, the settlement resolves claims for damages that arise from the DPS’s
defendants’ liability for certain harms that are different from the loss the plaintiff suffered by certain
acts committed by defendant Pugh. Therefore, the Court finds no just reason for delay in entering
a final judgment confirming the settlement agreement against the DPS defendants. See Fed. R. Civ.
Pro. 54(b); Akers v. Alvey, 338 F.3d 491, 495 (6th Cir. 2003) (citing Corrosioneering v. Thyssen
Envtl. Sys., 807 F.2d 1279, 1282 (6th Cir. 1986)).
B. Defendant Pugh’s Claim for a Setoff
Despite the fact that the plaintiff has received no money yet from his settlement with the DPS
defendants, defendant Pugh argues that he is entitled to credit against the verdict for the amount of
the settlement the plaintiff reached with the co-defendants. He bases his argument on a common law
right of setoff, and contends that the jury award compensated the plaintiff for damages already
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covered by the settlement with the DPS defendants. He acknowledges that this claim may not be
ripe yet, because no money has actually changed hands. But he insists that he is entitled to some
recognition of the settlement’s impact on his obligation under the jury verdict. He also argues that
the plaintiff is prohibited from recovering more than once for the same injury, which was determined
by the jury to amount to $250,000 in damages.
The plaintiff contends that Michigan abrogated the common law rule of setoff when it
abolished joint liability in a batch of laws that has come to be known as “tort reform” legislation in
1995. Therefore, the plaintiff argues, Pugh is not entitled to a setoff based on the settlement with
the DPS co-defendants.
These arguments invoke “distinct, but not necessarily incompatible, legal concepts.”
StoneMor Operating, LLC v. Bush, No. 08-631, 2015 WL 5474761, at *3 (W.D. Mich. Sept. 16,
2015). Because joint liability has been abolished in Michigan — at least in the context of this case
— and the common law setoff rule has been “abrogated” in cases where joint liability has been
abolished, Herteg v. Somerset Collection GP, Inc., No. 227936, 2002 WL 31105000, at *7 (Mich.
Ct. App. Sept. 20, 2002), defendant Pugh is not entitled to offset the settlement by his alleged joint
tortfeasors against the jury verdict under that theory. On the other hand, Michigan has long honored
the fundamental rule that says that “[g]enerally . . . only one recovery is allowed for an injury.”
Grace v. Grace, 253 Mich. App. 357, 368, 655 N.W.2d 595, 602 (2002) (citations omitted). That
rule mandates that when “a recovery is obtained for any injury identical with another in nature, time,
and place, that recovery must be deducted from the plaintiff’s other award.” Id. at 369, 655 N.W.2d
at 602 (emphasis added). The setoff rule generally governed the relationship of joint tortfeasors to
a plaintiff and to each other and their respective responsibility for the damages that they caused. The
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single recovery rule addresses and limits a plaintiff’s right to recover for a single injury from
multiple sources, regardless whether the defendants are jointly liable.
A. Setoff Rule
Before the 1995 enactment of its “tort reform” legislation, Michigan operated under a general
scheme of “joint and several liability.” Under that regime, “where the negligence of two or more
persons produce[d] a single, indivisible injury, the tortfeasors [were] jointly and severally liable
despite there being no common duty, common design, or concert of action.” Markley v. Oak Health
Care Investors of Coldwater, Inc., 255 Mich. App. 245, 252, 660 N.W.2d 344, 347 (2003). As a
corollary to joint-and-several liability, under the pre-1995 governing statutes and case law, Michigan
also generally honored “‘the common-law rule that where a negligence action [was] brought against
joint tortfeasors, and one alleged tortfeasor agree[d] to settle his potential liability by paying a lump
sum in exchange for a release, and a judgment [was] subsequently entered against the non-settling
tortfeasor, the judgment [was] reduced pro tanto by the settlement amount.’” Id. at 250, 660 N.W.2d
at 346 (quoting Thick v. Lapeer Metal Products Co., 419 Mich. 342, 349 n.1, 353 N.W.2d 464, 466
n.1 (1984)). Before the 1995 reforms, the statutory provision governing the effect of settlements in
tort cases also contained a subsection that codified the common-law rule of setoff, but that provision
later was “deleted because the tort reform legislation, for the most part, abolished joint and several
liability in favor of allocation of fault or several liability.” Id. at 254-55, 660 N.W.2d at 349 (citing
Mich. Comp. Laws § 600.2925d (1974)).
The 1995 legislation replaced joint and several liability with several liability in most
instances, Mich. Comp. Laws § 600.2956, and required the factfinder at trial to allocate the
percentage of fault among all those responsible for producing the injury to the plaintiff, “unless
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otherwise agreed by all parties to the action,” Mich. Comp. Laws § 600.6304(1). Under that regime,
sometimes called “fair share liability,” “each tortfeasor only pays the portion of the total damages
award that reflects that tortfeasor’s percentage of fault.” Bell v. Ren–Pharm, Inc., 269 Mich. App.
464, 467, 713 N.W.2d 285, 287 (2006). Eliminating the common law (and theretofore statutory)
right of setoff was appropriate, therefore, because there would be “no danger that the plaintiff will
be overcompensated for the injury by the failure to set off the amount of another tortfeasor’s
settlement.” Velez v. Tuma, 492 Mich. 1, 12, 821 N.W.2d 432, 437 (2012). Joint and several
liability — and therefore the setoff rule — remains in a few narrow categories of cases, see Mich.
Comp. Laws § 600.6304(6) (medical malpractice cases); § 600.6312 (certain criminal acts); Kaiser
v. Allen, 480 Mich. 31, 36, 746 N.W.2d 92, 94 (2008) (vehicle-owner vicarious-liability cases), but
the present case does not fall into any of those categories.
The common-law rule of setoff does not apply in this case for several reasons. First, that
rule generally has been abrogated in Michigan, as discussed above. This is “an action based on tort
or another legal theory seeking damages for personal injury . . . involving fault of more than 1
person.” Mich. Comp. Laws § 600.6304(1). Joint liability rules no longer govern; the setoff rule
has been abrogated. Second, Pugh never asked that the jury be instructed to determine his
percentage of fault compared to the other defendants in the case. Instead, he agreed with the
instructions given to the jury, which did not include a directive to consider the fault of the settling
defendants. He cannot insist now that he should benefit from the fair share liability rule by claiming
credit for the full amount to be paid by the settling defendants to absolve him of all liability. Third,
there could be no liability under the verdict returned by the jury on the battery and IIED claims other
than solely and individually against defendant Pugh. In this case, no party ever has alleged, nor was
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it ever argued to the jury, that anyone other than Charles Pugh was liable for the strictly intentional
and individual conduct described in the battery and IIED counts of the amended complaint. Pugh
was the sole defendant named in those counts, and, although the plaintiff alleged that the DPS was
vicariously liable for Pugh’s conduct under the separate Elliott-Larsen claims, he never made any
such allegation as to the state law intentional tort claims, which were the sole basis of the jury’s
verdict at trial. In this case, the jury returned a verdict in favor of the defendant on the only claim
to which vicarious liability — and, accordingly, the old rule of common law setoff — could apply.
Where the jury found the defendant liable solely on the surviving intentional tort claims that were
premised exclusively on his individual, intentional conduct, there simply is no basis for honoring
a rule of setoff that applies only in cases where the jury returns a verdict against several defendants
deemed to be jointly liable.
B. One Recovery Rule
That Pugh is not entitled to reduce the judgment against him pro tanto by the settlement
amount under the setoff rule does not mean that the plaintiff may obtain a double recovery. Instead
he may recover only once for an “injury identical with another in nature, time, and place.” Grace,
253 Mich. App. at 369, 655 N.W.2d at 602. When determining whether the DPS defendants’
settlement payment will compensate the plaintiff for the “identical injury” for which the jury
returned its verdict, “the nature of the conduct causing the injury and the label attached to the
plaintiff’s claims are of little relevance.” Chicilo v. Marshall, 185 Mich. App. 68, 70, 460 N.W.2d
231, 232 (1990). In assessing whether a double recovery would occur, “it is necessary to go beyond
the theoretical damages and look at the actual damages sought and proved by plaintiff in the case
at bar to determine the extent of the overlap of damages, if any.” Great N. Packaging, Inc. v. Gen.
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Tire & Rubber Co., 154 Mich. App. 777, 785, 399 N.W.2d 408, 412 (1986). The Court “begin[s]
by looking at the [damages alleged and sought in the] complaint.” Ibid. When assessing the nature
and extent of the injury for which the jury awarded the plaintiff damages, “[t]he court should
consider the verdict form in combination with the jury instructions.” Armstrong v. Shirvell, 596 F.
App’x 433, 450 (6th Cir. 2015).
One illustration of the application of the one recovery rule can be found in Chicilo v.
Marshall, where the plaintiff recovered compensatory damages in an action under 42 U.S.C. § 1983
for illegal arrest and detention, and later also secured a jury verdict in state court on claims of false
arrest and imprisonment. The court of appeals held that emotional trauma that the plaintiff suffered
as a result of the deprivation of her civil rights was inseparable from the emotional distress that was
caused by the same arrest and imprisonment for which the jury returned a verdict in the state court
case. Because “the damage awards received in both the federal court action and the state court
action compensate the same injuries, those being injuries to plaintiff’s emotional and psychological
well-being,” the court ordered that the judgment be adjusted to reflect an offset for the federal court
damages. 185 Mich. App. at 71, 460 N.W.2d at 232 (1990).
Another example is Grace v. Grace, where a woman recovered damages from her exhusband for fraudulently concealing marital assets. She previously had recovered a settlement in
a legal malpractice case against her divorce attorney, whom she accused of failing to uncover those
same marital assets in the divorce proceeding. The court of appeals held that the settlement amount
properly was set off against the jury verdict in the fraud case, because the “plaintiff has sought to
recover damages for an injury identical in nature, time, and place against both defendant and her
divorce attorney.” 253 Mich. App. at 369, 655 N.W.2d at 603.
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According to the amended complaint in this case, the plaintiff sought recovery from both
Pugh and the DPS defendants on the ELCRA claim for “emotional, psychological, and physical
injuries, and the permanent and serious impairment of plaintiff’s academic and social development.”
On the Title IX claim against the DPS only, the plaintiff’s damages claim was based on “physical
injuries, mental and emotional distress, pain, grief and anguish, medical expenses and the loss of
earning capacity, all past, present, and future.” He also sought damages against Pugh alone on the
battery claim for “emotional, psychological, and physical injuries, and the permanent and serious
impairment of plaintiff’s academic and social development” and on the IIED claim for “severe
emotional distress to plaintiff.” There is considerable overlap in the nature of the damages requested
against the DPS defendants and against Pugh in the amended complaint. However, those damages
are not identical.
The settlement with the DPS defendants, as described on the record, was meant to cover the
plaintiff’s claim for damages — which included loss of earning capacity — plus attorney’s fees, for
which the DPS defendants could be liable under Title IX, see 42 U.S.C. § 1998(b), and ELCRA, see
Mich. Comp. Laws § 37.2802. The jury verdict addressed only the plaintiff’s damages for emotional
distress or emotional suffering, which was limited by the jury instructions to “mental anguish[] and
. . . embarrassment, humiliation, or mortification.” Because the jury returned a verdict in Pugh’s
favor on the ELCRA claim, the plaintiff cannot recover attorney’s fees against him. There was no
economic component in the verdict, such as the loss of earning capacity, which was included in the
settlement with the DPS defendants. It can fairly be said that the DPS defendants’ settlement was
meant to compensate the plaintiff for a certain measure of emotional suffering. But despite some
overlap, there is a distinct identity in the damages awarded by the jury and the amount to be paid by
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the school district. Therefore, requiring defendant Pugh to pay the full judgment would not offend
the one recovery rule.
On another level, allowing Pugh a pro tanto reduction of his liability to the plaintiff based
on the DPS defendants’ settlement would not do substantial justice. It has been observed that the
one recovery rule was intended to prevent unjust enrichment to a plaintiff by preventing
overcompensation, although those “financial and judicial economy policies . . . appear to convey
more solicitude towards fairness to the nonsettling tortfeasor than to the injured party.” Banks ex
rel. Banks v. Yokemick, 177 F. Supp. 2d 239, 260 (S.D.N.Y. 2001). But “[t]he law contains no rigid
rule against overcompensation.” McDermott, Inc. v. AmClyde, 511 U.S. 202, 219 (1994). And
“[s]everal doctrines . . . recognize that making tortfeasors pay for the damage they cause can be more
important than preventing overcompensation.” Ibid. As one court noted:
The one-compensation rule, grounded in unjust enrichment, is not to be applied in
such a way as to generate unjust enrichment to the only litigating defendant. . . . It
would be unjust enrichment . . . to give the only defendant who was eventually found
liable . . . a full pro tanto credit for the full amount paid by the others.
Rose v. Associated Anesthesiologists, 501 F.2d 806, 809 (D.C. Cir. 1974). This is particularly true
where the conduct by defendant Pugh amounted to intentional torts that caused the damages that the
jury found, and set in motion the chain of events that prompted the settlement — funded by the
taxpayers — by the other defendants.
Defendant Pugh is not entitled to any setoff or credit against his liability to the plaintiff based
on the settlement by the DPS defendants.
III.
For the reasons stated, the Court will enter a consent judgment in favor of the plaintiff and
against the DPS defendants that incorporates the terms described in this order. That judgment will
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be final as to those parties under Rule 54(b). The Court also will enter judgment against defendant
Charles Pugh in the amount of the jury’s verdict.
Accordingly, it is ORDERED that the plaintiff’s motion for entry of consent judgment [dkt.
#168] is GRANTED. Final judgment will enter against defendants Detroit Public Schools and
district officials Roy Roberts, Robert Bobb, Berry Greer, and Monique McMurtry under Federal
Rule of Civil Procedure 54(b).
It is further ORDERED that judgment will enter against defendant Charles Pugh on the jury
verdict.
s/David M. Lawson
DAVID M. LAWSON
United States District Judge
Dated: December 21, 2015
PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on December 21, 2015.
s/Susan Pinkowski
SUSAN PINKOWSKI
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