Opinion
No. A06-693.
Filed March 20, 2007.
Appeal from the District Court, Ramsey County, File No. C5-03-8884.
Judith Mlinar Seeberger, Reding Pilney, P.L.L.P., Lake Elmo, MN, (for respondent Market America Corporation).
Brian N. Johnson, Halleland Lewis Nilan Johnson, P.A., Minneapolis, MN, (for respondents Jeff Reinert, et al.).
Stanford P. Hill, David A. Turner, Bassford Remele, P.A., Minneapolis, MN, (for appellant).
Considered and decided by KALITOWSKI, Presiding Judge; HALBROOKS, Judge; and ROSS, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2006).
UNPUBLISHED OPINION
Appellant Edina Realty, Inc., (Edina) challenges the district court's determination that a settlement between respondent Market America Corporation (Market America) and respondent Jeff Reinert/Natural By Design Inc. (Reinert) was not a complete release, but rather a Pierringer release. Although the district court erred in characterizing the release as a Pierringer, because none of the parties were prejudiced by this error in the conduct of the subsequent trial, we affirm as modified.
DECISION
Market America brought suit against Reinert and Edina seeking joint and several damages totaling $491,726. Market America and Reinert participated in mediation which resulted in a settlement. Edina chose not to participate in the mediation. Over Edina's objection, the district court ruled that the settlement between Reinert and Market America was a Pierringer release and allowed Market America to proceed to trial with its claim against Edina.
At trial, the jury was instructed that Reinert and Market America had settled their dispute but that this settlement should not influence the jury's determinations. The jury determined that Market America had proved its claims and awarded $85,000 in total damages, apportioning fault as follows: Market America 10%, Reinert 40%, Edina 50%.
We agree with Edina that the district court erred in its pretrial determination that the settlement is a Pierringer release. But we reject Edina's argument that, if the settlement was not a Pierringer release, the settlement was a general release and the district court erred by allowing Market America to proceed to trial on its claims against Edina.
A Pierringer release "reserves the plaintiff's right to maintain a cause of action against any nonsettling defendant, but releases from liability any defendant who is a party to the settlement agreement." Hosley v. Armstrong Cork Co., 383 N.W.2d 289, 292 (Minn. 1986). The basic elements of a Pierringer release are:
(1) The release of the settling defendants from the action and the discharge of a part of the cause of action equal to that part attributable to the settling defendants' causal negligence;
(2) the reservation of the remainder of plaintiff's causes of action against the nonsettling defendants; and
(3) plaintiff's agreement to indemnify the settling defendants from any claims of contribution made by the nonsettling parties and to satisfy any judgment obtained from the nonsettling defendants to the extent the settling defendants have been released.
Frey v. Snelgrove, 269 N.W.2d 918, 920 n. 1 (Minn. 1978).
Here, the terms of the settlement provided that Reinert would pay Market America $20,000 in exchange for "mutual complete releases and stipulations of dismissals with prejudice and without costs to any party" with no exceptions. The settlement does not contain any language reserving Market America's claims against Edina or any agreement by Market America to indemnify Reinert against any future claims for contribution from Edina. Because the agreement lacked the essential elements of a Pierringer release, the district court erred by labeling the settlement agreement a Pierringer release.
Edina agues that by reaching a settlement with Reinert without a Pierringer release, Market America released Edina. We disagree. When a settlement agreement does not contain a Pierringer release, the "release of one alleged tortfeasor will release all others only if the settlement agreement manifests such an intent, or if the plaintiff received full compensation in law or in fact for damages sought against the remaining tortfeasors." Johnson v. Brown, 401 N.W.2d 85, 88 (Minn.App. 1987), review denied (Minn. Apr. 23, 1987); see also Bixler by Bixler v. J.C. Penney Co., 376 N.W.2d 209, 214-15 (Minn. 1985); Gronquist v. Olson, 242 Minn. 119, 128, 64 N.W.2d 159, 165 (1954). Thus,
regardless of what form [a] release may take, as long as it does not constitute an accord and satisfaction or an unqualified or absolute release, and there is no manifestation of any intention to the contrary in the agreement, the injured party should not be denied his right to pursue the remaining wrongdoers until he has received full satisfaction.
Gronquist, 242 Minn. at 128, 64 N.W.2d at 165.
Here, the district court did not specifically determine whether the settlement between Reinert and Market America was intended to release Edina. But the record indicates that the postsettlement disagreement between Reinert and Market America involved the defense against Edina's cross-claim and that neither party evidenced an intent to release Edina. In addition, although the district court did not make a finding as to whether the $20,000 settlement with Reinert fully compensated Market America's damages, the matter was presented to a jury and the jury determined that Market America had proved its claims and awarded $85,000 in damages. Because neither party to the settlement agreement intended to release Edina and the $20,000 settlement did not fully compensate Market America, we conclude that the district court did not err by allowing Market America to proceed to trial against Edina.
But where the parties to the settlement do not intend to release all alleged tortfeasors or the plaintiff has not been fully compensated, the settlement operates as satisfaction pro tanto to the remaining tortfeasors. Johnson, 401 N.W.2d at 88; Gronquist, 242 Minn. at 128, 64 N.W.2d at 165. Therefore, we reduce the $85,000 jury verdict by 10% (Market America's percentage of fault) and further reduce the award by Reinert's $20,000 settlement payment to determine Edina's remaining liability of $56,500. Consistent with this analysis, we modify the district court's damage award and order Edina to pay Market America damages of $56,500.