White v. McKinley et al

Filing 419

ORDER by Judge Nanette Laughrey. ORDERED that McKinley's Motion to Grant Credit for Settlement 403 is DENIED.(Smith, Fran)

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I N THE UNITED STATES DISTRICT COURT FOR THE W E S T E R N DISTRICT OF MISSOURI W E S T E R N DIVISION T H E O D O R E W. WHITE, P l a in tif f , v. R IC H A R D McKINLEY, et al, D e f e n d a n ts . ) ) ) ) ) ) ) ) ) ) ) C as e No. 05-0203-CV-W-NKL ORDER Before the Court is Defendant Richard McKinley's Motion to Grant Credit for S e ttle m e n t with Defendant Tina McKinley [Doc. # 403]. For the following reasons, the C o u rt denies the motion. I. B a c k gro u n d P lain tiff Theodore White ("White") sought recovery from, among others, Defendants R ic h a rd ("Richard") and Tina ("Tina") McKinley under 42 U.S.C. 1983. He alleged that th e y deprived him of his Constitutional right to a fair trial. He claimed damages for his re su ltin g incarceration in Costa Rica and the United States, as well as numerous other in ju rie s. Before trial, the Court ruled that evidence of White's Costa Rican incarceration was in a d m is s ib le . 1 S h o r tly thereafter, White entered a partial settlement with Tina for $600,000, to be p a id by two of her insurance companies. The settlement agreement begins with a general s t a te m e n t that White sought monetary damages in this case as a result of "being i n c a rc e ra te d ." According to the settlement agreement, the settlement amount was "s p e c if ica lly allocated to compensate him only for the personal injuries sustained by him w h ile incarcerated in" Costa Rica. The settlement agreement states that White would c o n tin u e to prosecute his claim against Tina; however, White agreed not to seek satisfaction o f any judgment against Tina from her personal assets. The settlement agreement states that W h i t e released the settling insurance companies, but indicates that White would pursue c o ll e c tio n of judgment from Tina's other insurance companies, which were disputing c o v e ra g e . At trial, the parties did not introduce evidence of White's Costa Rican incarceration. T h e jury rendered a $16 million judgment in favor of White against Richard and Tina. R ic h a rd filed post-trial motions. More than two months after the Court entered judgment, R ich a rd filed his motion for settlement credit. II. D is c u s s io n W h ite argues that Richard's motion is untimely. Nothing in the rules or applicable c a se law dictates a deadline for filing settlement credit motions. The Court is still actively c o n sid e rin g the substantive issues in this case. The Court will consider Richard's motion as tim e ly. See generally K.C. 1986 Ltd. P'ship v. Reade Mfg., 472 F.3d 1009, 1013 (8th Cir. 2 2 0 0 7 ) (finding abuse of discretion in the district court's failure to consider based on u n tim e lin e s s a motion for settlement credit concerning environmental litigation). The parties do not discuss choice of law principles applicable to Richard's motion, th o u g h they cite primarily to Missouri state law. Regardless of whether state or federal law c o n tro ls , the Court would reach the same conclusion. "Under federal law, where a settlement p a ym e n t and the jury's award pertain inseparably to one and the same loss, the verdict must b e credited with the payment on settlement." Arthur Young & Co. v. Reves, 937 F.2d 1310 (8 th Cir. 1991) (citation and internal punctuation omitted). Similarly, in Missouri, the " p u r p o s e of . . . setoff is to prevent double compensation for one injury." Sisco v. Board of T ru ste e s of Police Retirement Sys. of St. Louis, 31 S.W.3d 114, 119 (Mo. App. Ct. 2000). Thus, settlement credit is not appropriate where a verdict does not relate to injuries c o m p e n s a te d by a settlement. In Dowd v. United Steelworkers of America, Local No. 286, 2 5 3 F.3d 1093, 1103 (8th Cir. 2001), the court denied setoff of a settlement with an employer in a Title VII case, where the case was brought against both the employer and a union. Id. T h e re , the jury had been instructed to render a judgment based solely upon the union's c o n d u c t. Id. The Dowd court found that the verdict excluded the employer's conduct and, th u s , the employer's settlement did not duplicate the verdict award. Id. at 1104. The q u estio n , then, is whether White's settlement with Tina compensated him for the same injury a s did the jury verdict against Richard and Tina. 3 O b v io u sly, White and Tina intended to avoid settlement credit against the verdict in e x e cu tin g the agreement. At the time of the agreement, the Court had already barred from th e trial evidence of Costa Rican incarceration. The verdict could not have encompassed an a w a rd for such injury. Certainly, White and Tina crafted their settlement agreement with the in te n t that it not be considered as compensating White for losses that would be addressed by a jury verdict. The issue then becomes whether, despite its stated purpose, the settlement agreement n e v e rth e le ss compensates White for the same injury as does the verdict. The settlement a g re e m e n t left standing the bulk of White's claims against Tina; indeed, it left standing c la im s against Tina which were identical to those against Richard. Though the settlement agre e m e n t states that White would not pursue collection of judgment against Tina personally, it indicates that White would be free to pursue collection from her non-settling insurance c o m p a n ies . Where the settlement agreement left open the possibility that White would re c e i v e and collect a judgment on the remainder of his claims against Tina, it was only a p a rtia l settlement. That settlement expressly related to Costa Rican incarceration only, which w a s not an element of the verdict's award. It cannot be said that the strategic crafting at issue demonstrates bad faith which w o u ld entitle Richard to settlement credit. See generally Daniel v. Indiana Mills & Mfg., In c ., 103 S.W.3d 302, 318 (Mo. App. Ct. 2003) (suggesting in dicta that a stipulated s e ttle m e n t amount that was not stated in good faith because the actual amount paid was 4 g re a te r might render the verdict subject to higher settlement credit). This was not a sham a g re e m e n t in which one side did not benefit. Tina benefitted from the agreement: she e lim in a te d the possibility that White would collect a judgment from her personally; m o re o v e r, she eliminated the possibility that White would collect a subsequent judgment a g a in s t her based on Costa Rican incarceration if the Court's ruling concerning damages from C o s ta Rican prison conditions is reversed on appeal. The parties were free to place a dollar v a lu e on those benefits as they saw fit, as parties do when settling a case after verdict but p e n d in g appeal. III. C o n c lu s io n A c c o rd in g ly, it is hereby ORDERED that McKinley's Motion to Grant Credit for S e ttle m en t [Doc. # 403] is DENIED. s / Nanette K. Laughrey NANETTE K. LAUGHREY U n ite d States District Judge D a te d : March 26, 2009 K an sas City, Missouri 5

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