Colorado § 13-50.5-105 - Release or covenant not to sue.

§ 13-50.5-105. Release or covenant not to sue.

(1) When a release or a covenant not to sue or not to enforce judgment is given in good faith to one of two or more persons liable in tort for the same injury or the same wrongful death:

(a) It does not discharge any of the other tortfeasors from liability for their several pro rata shares of liability for the injury, death, damage, or loss unless its terms so provide; but it reduces the aggregate claim against the others to the extent of any degree or percentage of fault or negligence attributable by the finder of fact, pursuant to section 13-21-111 (2) or (3) or section 13-21-111.5, to the tortfeasor to whom the release or covenant is given; and

(b) It discharges the tortfeasor to whom it is given from all liability for contribution to any other tortfeasor.

Source: L. 77: Entire article added, p. 810, § 1, effective July 1. L. 86: (1)(a) amended, p. 681, § 3, effective July 1.

ANNOTATION

Law reviews. For article, "Collecting Pre- and Post-Judgment Interest in Colorado: A Primer", see 15 Colo. Law. 753 (1986). For article, "1986 Colorado Tort Reform Legislation", see 15 Colo. Law. 1363 (1986). For article, "New Role for Nonparties in Tort Actions — The Empty Chair", see 15 Colo. Law. 1650 (1986). For article, "Partial Settlements in Multiparty Tort Actions: The Latest Chapter", see 22 Colo. Law. 2529 (1993). For article, "Protecting the Professional: Contribution Bar Orders in Securities Cases", see 24 Colo. Law. 775 (1995). For comment, "Settlements with Nonparties: A Closer Look at Colorado's Collateral Source and Contribution Statutes", see 66 U. Colo. L. Rev. 195 (1995).

Formerly, release of one constituted release of all. Prior to July 1, 1977, the effective date of this section, absent a manifestation of a contrary intent, a release of one joint tortfeasor released all joint tortfeasors. Mills v. Standard Title Ins. Co., 195 Colo. 281, 577 P.2d 756 (1978).

This section overrules the common-law rule that the release of an original tortfeasor operates to release a subsequent treating physician, absent specific language in the release to the contrary. Summey v. Lacy, 42 Colo. App. 1, 588 P.2d 892 (1978).

This section was currently formulated to encourage settlements and combined with the retention of the joint and several liability rule means that nonsettling tortfeasors may be forced to bear more than the portion of damages attributed to their relative degree of fault. Kussman v. City and County of Denver, 706 P.2d 776 (Colo. 1985).

For history of common-law joint tortfeasor release rule in Colorado, see Cingoranelli v. St. Paul Fire & Marine Ins. Co., 658 P.2d 863 (Colo. 1983).

Release rule inapplicable to personal injury protection claims. The original rationale for the general joint tortfeasor release rule — that there is only one cause of action — is clearly not applicable to personal injury protection claims under § 10-4-701 et seq., which gives rise to a separate cause of action in contract. Cingoranelli v. St. Paul Fire & Marine Ins. Co., 658 P.2d 863 (Colo. 1983).

Within the meaning of this section tortfeasors are "liable in tort for the same injury" only when judgment is rendered against the nonsettling tortfeasor for an amount greater than its proportionate share of damages as measured by its degree of fault. Where tortfeasor is found liable for an amount in excess of its proportionate shall of damages, it may deduct the settlement amount paid by another tortfeasor from its liability up to the judgment amount in excess of its proportionate share of damages. Kussman v. City and County of Denver, 706 P.2d 776 (Colo. 1985).

Tortfeasors' contribution from joint tortfeasor was not barred where a release was given by the injured parties to all persons liable in tort for the same injury and where the tortfeasors paid the injured parties the full amount of the settlement and then sought contribution from the joint tortfeasors for their pro rata share. Miller v. Jarrell, 684 P.2d 954 (Colo. App. 1984).

A release that one tortfeasor received from the plaintiffs as part of a settlement did not discharge the tortfeasor's contribution liability to the other tortfeasor under this section. The settlement between the tortfeasor and the plaintiffs did not resolve any common liability shared by the two tortfeasors. LB Rose Ranch v. Hansen Constr., 2019 COA 141, 477 P.3d 739.

Release or covenant not to sue from claimant insulates tortfeasor from contribution to other tortfeasors. W. Ins. Co. v. Brochner, 682 P.2d 1213 (Colo. App. 1983), rev'd on other grounds, 724 P.2d 1293 (Colo. 1986); Kussman v. City & County of Denver, 706 P.2d 776 (Colo. 1985).

Section not applicable where joint tortfeasors were not liable for the "same injury". Panther v. Raybestos-Manhattan, Inc., 701 P.2d 145 (Colo. App. 1985).

Settlement amount deducted from the total judgment rather than from the joint and several portion only, which means that a nonsettling tortfeasor will be liable for any part of the settling tortfeasor's pro rate share of damages that is greater than the amount paid in settlement. Perlmutter v. Blessing, 706 P.2d 777 (Colo. 1985); Greenmeier by Redington v. Spencer, 719 P.2d 710 (Colo. 1986).

Absent special circumstances, jury should be informed of the fact of settlement, but not the amount paid. Greenemeier by Redington v. Spencer, 719 P.2d 710 (Colo. 1986).

Failure to inform jury of settlement not reversible error. When jury was explicitly instructed to award damages which would reasonably compensate plaintiffs for injuries, and to consider any physical pain, mental suffering, or permanent injury or disability plaintiffs have suffered, plaintiffs were not prejudiced by jury's lack of knowledge of prior settlement. Greenemeier by Redington v. Spencer, 719 P.2d 710 (Colo. 1986).

This section and § 13-21-111.6 must be reconciled, if possible, to give effect to both sections. Therefore, this section should apply when a percentage of negligence has been attributed by the fact finder to the non-party while § 13-21-111.6 should control if the fact finder attributes no fault to the non-party. Gutierrez v. Bussey, 837 P.2d 272 (Colo. App. 1992).

Parole evidence may be used to vary or contradict a general release when the litigation is between a party to the release and a stranger thereto. Neves v. Potter, 769 P.2d 1047 (Colo. 1989).

Money received under loan receipt agreement not a payment entitling co-tortfeasors to a reduction in judgment, because plaintiff's contingent obligation to return money advanced by settling defendants precludes double recovery. Balistreri Greenhouses v. Roper Corp., 767 P.2d 736 (Colo. App. 1988) (decided under former law).

Because under the original statute there typically was no determination made at trial as to whether those who had settled were "liable in tort", the current statute, which created a procedure for the fact finder at trial routinely to determine the liability of a tortfeasor who had settled before the trial, should not be construed to require such a finding before a reduction in the amount of the settlement is permitted. Simon v. Coppola, 876 P.2d 10 (Colo. App. 1993).

This section applies to those who pay compensation to an injury victim because they are facing exposure to being held "liable in tort" at trial, as distinct from those who provide payments from a collateral source, such as an insurance contract. Simon v. Coppola, 876 P.2d 10 (Colo. App. 1993).

Right to setoff by joint tortfeasors is limited to the amounts actually collected from settling defendants, rather than the amounts provided for in settlement agreements. Fireboard Corp. v. Fenton, 845 P.2d 1168 (Colo. 1993).

Full compensation for plaintiff, as intended by the general assembly, was ensured where the trial court set off the judgment against defendants for any amount collected by plaintiff in settlement of claims against defendants no longer parties and where in the event the settlement from one defendant could not be collected, other defendants remained liable. Fenton v. Fibreboard Corp., 827 P.2d 564 (Colo. App. 1991).

When the jury assigns fault to a settling party as a nonparty pursuant to § 13-21-111.6, the trial verdict shall be reduced by an amount equal to the cumulative percentage of fault attributed to the settling nonparties. The amount to be reduced from the trial verdict shall be calculated by multiplying the total percentage of liability attributed to the settling nonparties by the total trial verdict awarded the plaintiff. Smith v. Zufelt, 880 P.2d 1178 (Colo. 1994).

Settlement of lawsuit brought by one partner "d/b/a" the partnership precluded subsequent claim by other partner and partnership itself under the common law theory of claim preclusion. Cruz v. Benine, 984 P.2d 1173 (Colo. 1999).

Release of one partner and limited partnership did not bar claims against remaining partner or employee of limited partnership who were sued as joint tortfeasors. However, recovery in the second action must be reduced by any degree or percentage of fault attributed to the released partner and limited partnership. Cruz v. Benine, 984 P.2d 1173 (Colo. 1999).

The duty of good faith extends to non-settling tortfeasors. Stubbs v. Copper Mtn., Inc., 862 P.2d 978 (Colo. App. 1993), aff'd sub nom. Copper Mtn., Inc. v. Poma of Am., Inc., 890 P.2d 100 (Colo. 1995).

The test for determining if a settlement was made in bad faith is whether the agreement was the product of collusive conduct intended to prejudice the interests of non-settling defendants. Whether a settlement is low compared with plaintiff's estimate of total damage is not sufficient to establish bad faith. Stubbs v. Copper Mtn., Inc., 862 P.2d 978 (Colo. App. 1993), aff'd sub nom. Copper Mtn., Inc. v. Poma of Am., Inc., 890 P.2d 100 (Colo. 1995).

Proof of collusion requires more than an agreement which results in the termination of a right of contribution. Stubbs v. Copper Mtn., Inc., 862 P.2d 978 (Colo. App. 1993), aff'd sub nom. Copper Mtn., Inc. v. Poma of Am., Inc., 890 P.2d 100 (Colo. 1995).

The party challenging the good faith of a settlement barring a claim for contribution has the burden of establishing that the settlement was collusive. Stubbs v. Copper Mtn., Inc., 862 P.2d 978 (Colo. App. 1993), aff'd sub nom. Copper Mtn., Inc. v. Poma of Am., Inc., 890 P.2d 100 (Colo. 1995).

The settlement agreement did not indicate a lack of good faith when it required a party to remain in a case to provide its own expert witnesses to respond to an "empty chair" defense and afforded an injured person prompt payment of funds for her losses. Stubbs v. Copper Mtn., Inc., 862 P.2d 978 (Colo. App. 1993), aff'd sub nom. Copper Mtn., Inc. v. Poma of Am., Inc., 890 P.2d 100 (Colo. 1995).

Since none of the amount paid by defendant to settle a remaining claim could be attributed to breach of warranty by a co-defendant, the trial court did not err in refusing to allow defendant to proceed with a cross claim against the co-defendant for damages paid based on such a claim. Stubbs v. Copper Mtn., Inc., 862 P.2d 978 (Colo. App. 1993), aff'd sub nom. Copper Mtn., Inc. v. Poma of Am., Inc., 890 P.2d 100 (Colo. 1995).

This section does not apply to reduce a defendant's liability under § 13-21-111.5 (4) where two or more persons act in concert to commit a tort. The joint liability provision, as the more recently enacted statute, must be deemed controlling to the extent of any inconsistency. Pierce v. Wiglesworth, 903 P.2d 656 (Colo. App. 1994); Toothman v. Freeborn & Peters, 80 P.3d 804 (Colo. App. 2002).

Plaintiff's fault may not reduce an intentional tortfeasor's liability. Toothman v. Freeborn & Peters, 80 P.3d 804 (Colo. App. 2002).

Proportionate fault is not applicable in a securities law context. Toothman v. Freeborn & Peters, 80 P.3d 804 (Colo. App. 2002).

Right to setoff does not apply to action under the Colorado Consumer Protection Act that is brought by the attorney general. People v. Shifrin, 2014 COA 14, 342 P.3d 506.

Applied in Cingoranelli v. St. Paul Fire & Marine Ins. Co., 636 P.2d 1285 (Colo. App. 1981); McCall v. Roper, 685 P.2d 230 (Colo. App. 1984); Rupert v. Clayton Brokerage Co. of St. Louis, 705 P.2d 988 (Colo. App. 1985); Forsyth v. Associated Grocers of Colo., 724 P.2d 1360 (Colo. App. 1986); Hauser v. Pub. Serv. Co., 797 F.2d 876 (10th Cir. 1986); Rupert v. Clayton Brokerage Co., 737 P.2d 1106 (Colo. 1987), overruling on other grounds Rupert v. Clayton Brokerage Co., 705 P.2d 988 (Colo. App. 1985); McKown-Katy v. Rego Co., 776 P.2d 1130 (Colo. App. 1989), rev'd in part on other grounds, 801 P.2d 536 (Colo. 1990); Padilla v. Ghuman, 183 P.3d 653 (Colo. App. 2007).