Summary
applying McDermott after plaintiff voluntarily dismissed one defendant with prejudice, rejecting plaintiff's argument that McDermott was inapplicable because "no formal settlement agreement was confected (i.e. no money changed hands)," noting that "there is no requirement under AmClyde that the settlement be for a reasonable amount, or for any amount of money at all"
Summary of this case from Horizon Navigation Ltd. v. Progressive Barge Line, Inc.Opinion
No. 98-3825, Section "K"(3)
November 13, 2001
Before the Court is a Motion to Dismiss Third Party Complaint (Doc. 28) filed by Bossclip Ltd. ("Bossclip"). Having reviewed the pleadings, memoranda and the relevant law, the Court finds the motion to have merit for the reasons that follow.
Background
This cases arises out of damage to steel coils contained in Holds 1, 2, and 3 in the M/V PRINCESS MARGHERITA. This vessel is owned by Friendship Marine Co., Ltd. ("Friendship") and operated by Cyprus Maritime Co., Ltd. (Cyprus). The vessel was time chartered to Boss Lines Ltd., then subchartered to Bossclip. Bossclip then voyage chartered the vessel to Cargill Ferrous International ("Cargill"). The relevant charter between Cargill and Bossclip contained an arbitration clause which required disputes to be resolved by arbitration in London.
Cargill sued the vessel in rem, Bossclip, Friendship, Cyprus and the relevant insurer for damages to the cargo. Bossclip filed a Motion to Stay Pending Arbitration, which motion was granted on August 27, 1999. Subsequently, Cargill, without the benefit of a settlement with Bossclip, dismissed with prejudice Bossclip. Subsequently, Friendship and Cyprus filed a Third-Party Complaint against Bossclip seeking contribution and tort indemnity. In response, Bossclip filed the subject motion.
Analysis
Bossclip argues that based on the Supreme Court's decision in McDermott Inc. v. AmClyde, 114 S.Ct. 1461 (1994), the claims for contribution and indemnity should be dismissed. In AmClyde, the Supreme Court adopted the proportionate share approach in resolving claims between settling and non-settling defendants in a maritime setting. As a result of that rule, all claims against the settling defendant are extinguished including claims for contribution and tort indemnity by non-settling defendants. Friendship and Cyprus argue that because no formal settlement agreement was confected (i.e. no money changed hands), AmClyde is inapplicable. However, the Court finds otherwise.
Actions for contractual indemnity would not be barred byAmClyde.
The thrust of AmClyde is that no suit for contribution from the settling defendants is neither permitted, nor necessary, because the non-settling defendants pay no more than their share of the judgment. There is no requirement under AmClyde that the settlement be for a reasonable amount, or for any amount of money at all. If the plaintiff chooses to dismiss a defendant with prejudice, there is no logical reason that the rule of AmClyde would not apply. There is absolutely no prejudice to the remaining defendants as they will only be liable for their respective percentages of negligence, if any. Additionally, they will have the advantage of pointing to an empty chair.
Although AmClyde did not specifically discuss actions for tort indemnity, it is clear that the analysis is applicable to such a claim.D.N.H. Towing Co., Inc., 1998 WL 51835 (Feb. 5, 1998) (Vance, J.), the court held that as a result of settlement, the claims for contribution and indemnity were barred. See Pacific Employers Ins. Co. v. M/T IVER CHAMPION, 1996 WL 139724 (March 27, 1996); Mayer v. Cornell Uni., Inc., 1995 WL 94575. In Luke v. Signal Oil Gas Co., 523 F.2d 1190, 1191 (5th Cir. 1975), the court stated that a dismissal with prejudice has the force and effect of a full release. Clearly a dismissal with prejudice is a full release, and the released party would have the identical rights as a party that is released by a formal settlement agreement under theAmClyde rule. Accordingly,
IT IS ORDERED that Bossclip Ltd.'s Motion to Dismiss is GRANTED.