Summary
In Miller v. Bock Laundry Machine Co. (1980), 64 Ohio St.2d 265, at 266 [18 O.O.3d 455], we addressed the scope of the Full Faith and Credit Clause and quoted with approval, Comment b to 1 Restatement of the Law 2d, Conflict of Laws (1971) 306, Section 101, which provides: "A foreign judgment for the payment of money will not be enforced in an amount greater than the amount, including costs, for which the judgment is enforceable in the state where it was rendered.
Summary of this case from Security Pacific Natl. Bank v. RouletteOpinion
No. 80-307
Decided December 30, 1980.
Conflict of laws — Texas judgment — Enforceability in Ohio — Offset to judgment granted, when.
APPEAL from the Court of Appeals for Lucas County.
This cause had its origin as a products liability action filed in Texas by plaintiff-appellee, George Miller, Sr., seeking damages for injuries to his son, George Miller, Jr. On September 1, 1975, at a laundromat in Henderson, Texas, young Miller had his arm severed when it became caught in a centrifugal extractor, a clothes dryer manufactured by defendant-appellant, Bock Laundry Machine Co., an Ohio corporation.
Suit was filed against appellant, as well as Luther Jenkins, owner of the laundromat, and United Furniture Co. which sold the extractor to Jenkins. Prior to trial, Jenkins paid Miller $45,000 as a settlement, in exchange for Miller's promise to hold Jenkins harmless from any plea by Bock for indemnity or contribution. However, Jenkins remained as a party defendant, and the trial court refused to permit Bock to present evidence of the settlement to the jury.
The jury found that Jenkins and United Furniture were negligent, but that such negligence did not proximately cause the injuries. Rather, liability was placed solely on Bock for defective design of its equipment. Verdict was therefore rendered against Bock in the sum of $250,000 for young Miller's injuries and $1,000 for medical expenses incurred by appellee.
The trial court, nevertheless, entered judgment n.o.v. for Bock, and the Texas Court of Appeals affirmed this ruling. The Texas Supreme Court subsequently reversed the judgments of the lower courts and granted "judgment as it should have been rendered below," in accordance with the jury verdict. A mandate to that effect was issued on July 31, 1978.
Appellee filed a petition on August 10, 1978, in the Court of Common Pleas of Lucas County, seeking to have the foregoing Texas judgment "reduced to a binding and enforceable Ohio judgment." In opposing plaintiff's motion for summary judgment, Bock claimed a set-off or credit of the $45,000 settlement against the Texas judgment. The trial court denied this credit and granted summary judgment for plaintiff for the full amount of the Texas judgment, plus costs and interest.
The Court of Appeals affirmed on the basis that Section I, Article IV of the United States Constitution, the full faith and credit clause, required courts of this state to enforce the Texas judgment for the full jury verdict amount, with no credit for the $45,000 settlement.
Kitchen, Kitchen Associates Co., L.P.A., and Mr. John W. Kitchen, for appellee.
Messrs. Marshall, Melhorn, Cole, Hummer Spitzer, Mr. Richard M. Kerger and Ms. M. McCormick Krueger, for appellant.
To say that the United States Constitution requires Ohio courts to give full faith and credit to foreign judgments begins, rather than ends, our inquiry. This command has been codified in Section 1738, Title 28, United States Code, which provides, in pertinent part, that such judgments "shall have the same full faith and credit in every court within the United States***as they have by law or usage in the courts of such State***from which they are taken."
Our task, therefore, is to determine what credit or effect Texas courts would have given the foregoing judgment had enforcement been attempted in that state. In this regard, 1 Restatement of Conflict of Laws 2d 306, Section 101, expresses the view that "[a] valid judgment for the payment of money will be enforced in other states only in the amount for which it is enforceable in the state where it was rendered." Comment b thereto expounds upon this principle, as follows:
"A foreign judgment for the payment of money will not be enforced in an amount greater than the amount, including costs, for which the judgment is enforceable in the state where it was rendered. This is true even though the judgment has been rendered in a larger amount.***"
It is quite apparent from a review of Texas law in this area that, in that forum, appellant would be entitled to a credit on the judgment for the amount paid in settlement of the claim against Jenkins. "It is the settled rule of law that any judgment rendered against one or all of the defendants must be credited with the amount of money received by plaintiffs in their settlements with other original defendants." Riley v. Industrial Finance Service Co. (1957), 157 Tex. 306, 312, 302 S.W.2d 652. This rule is based on the oft-repeated precept that "an injured party is entitled to but one satisfaction for the injuries sustained by him." Bradshaw v. Baylor Univ. (Tex.Comm.App. 1935), 126 Tex. 99, 104, 84 S.W.2d 703. Accord McMullen v. Coleman (Tex.Civ.App. 1940), 135 S.W.2d 776, 778; McMillen v. Klingensmith (Tex. 1971), 467 S.W.2d 193, 196-197; T.L. James Co., Inc., v. Statham (Tex. 1977), 558 S.W.2d 865, 868; McCrary v. Taylor (Tex.Civ.App. 1979), 579 S.W.2d 347, 350; and Schering Corp. v. Giesecke (Tex.Civ.App. 1979), 589 S.W.2d 516, 519.
"This rule prevails even though it be found that the one released [by settlement] was in fact not liable." McMullen v. Coleman, supra, at 778. Several Texas courts have cited 4 Restatement of Torts 2d 333, Section 885(3), as the accepted approach to be taken in crediting monies received in settlement against a judgment amount. That section specifies, as follows:
See McCrary, supra, at 350; Schering Corp., supra, at 519; and Lubbock Mfg. Co. v. Perez (Tex.Civ.App. 1979), 591 S.W.2d 907, 923-924. See, also, 34 Texas Jurisprudence 2d 745, Judgments, Section 637.
"A payment by any person made in compensation of a claim for a harm for which others are liable as tortfeasors diminishes the claim against the tortfeasors, at least to the extent of the payment made, whether or not the person making the payment is liable to the injured person and whether or not it is so agreed at the time of payment or the payment is made before or after judgment."
The payment of $45,000 by Jenkins was made in compensation of appellee's claim against him; and the fact that the jury absolved Jenkins from liability has no effect on the Texas rule that such payment should be credited against the final judgment entered against appellant.
The Court of Appeals' conclusion that res judicata bars a reduction of the final judgment by the settlement amount misconceives the nature of this credit. In its present posture it is analogous to a claim of partial satisfaction of the judgment. Had execution on the judgment been attempted in Texas, appellant could have proceeded to have it set aside to the extent of the settlement. However, instead of obtaining execution on the Texas judgment in that forum, appellee sought to have it reduced to an enforceable Ohio judgment. This is an appropriate opportunity for appellant to assert its entitlement to the settlement credit, and for the trial court to enter judgment in the amount for which it would be enforceable in Texas.
"In a proper case, enforcement of a judgment may be enjoined in order that the debtor may establish his right to offset his claims against it." 34 Texas Jurisprudence 2d 737, Judgments, Section 624.
Similarly, 33 Corpus Juris Secundum 216, Section 75, indicates:
"***Where the writ [of execution] issues for too large an amount, the proper practice is***to move to set aside to the extent of the excess***.
"The writ should not issue for a greater amount than is due on the judgment at the time of its issuance.***An execution not showing a credit is not void but may be quashed only to the extent of the excess."
For the foregoing reasons, the judgment of the Court of Appeals is reversed and the cause is remanded to the Court of Common Pleas for recomputation of the judgment sum after subtraction of the $45,000 settlement.
Judgment reversed and cause remanded.
CELEBREZZE, C.J., W. BROWN, P. BROWN, SWEENEY, LOCHER, HOLMES and DOWD, JJ., concur.