California Civil Jury Instructions (CACI)

3926. Settlement Deduction

You have heard evidence that [name of plaintiff] has settled [his/ her/its] claim against [name of defendant]. Your award of damages to [name of plaintiff] should be made without considering any amount that [he/she/it] may have received under this settlement. After you have returned your verdict, I will make the proper deduction from your award of damages.

Sources and Authority

Code of Civil Procedure section 877 provides, in pertinent part: "Where a release, dismissal with or without prejudice, or a covenant not to sue or not to enforce judgment is given in good faith before verdict or judgment to one or more of a number of tortfeasors claimed to be liable for the same tort . . . it shall have the following effect: . . . It shall not discharge any other such party from liability unless its terms so provide, but it shall reduce the claims against the others in the amount stipulated by the release, the dismissal or the covenant, or in the amount of the consideration paid for it whichever is the greater."

"When the plaintiff stipulates to the fact and amount of settlement before the court, an approved procedure is for the court to reduce the verdict award by the amount paid in settlement before entering judgment on the verdict." (Syverson v. Heitmann (1985) 171 Cal.App.3d 106, 111 [214 Cal.Rptr. 581], internal citations omitted.)

Courts have held that it is "proper to exclude evidence of the pretrial settlement by one joint tortfeasor from the jury's consideration, leaving it to the court to apply Code of Civil Procedure section 877 to reduce the verdict." (Knox v. County of Los Angeles (1980) 109 Cal.App.3d 825, 834-835 [167 Cal.Rptr. 463], internal citation omitted.)

"[W]here there is an admission 'that a settlement has been made with one or more joint tortfeasors in a certain amount there is no factual question to be resolved by the jury respecting the settlement.' " (Albrecht v. Braughton (1970) 6 Cal.App.3d 173, 177 [85 Cal.Rptr. 659], internal citation omitted.)

"Where the purpose of introducing evidence of a settlement is to reduce any recovery that might be awarded pro tanto, this result can be achieved by a simple calculation made by the court after the verdict as been rendered." (Shepherd v. Walley (1972) 28 Cal.App.3d 1079, 1082 [105 Cal.Rptr. 387], footnote omitted.)

"The presentation of evidence concerning the amount or fact of settlement to the jury . . . is not only confusing, but also can lead to abuse in argument as it did here." (Shepherd, supra, 28 Cal.App.3d at p. 1083.)

"[E]vidence of the fact and amount of settlement made by [plaintiff] with [settling witness] might be admissible under proper limiting instructions for the purpose of showing bias since he was a witness." (Shepherd, supra, 28 Cal.App.3d at p. 1082, fn. 2, internal citation omitted.)

"Under Civil Code section 1431.2, a defendant is only responsible for its share of noneconomic damages as that share has been determined by the jury. 'Therefore, a nonsettling defendant may not receive any setoff under [Code of Civil Procedure] section 877 for the portion of a settlement by another defendant that is attributable to noneconomic damages.' After application of Civil Code section 1431.2, '. . . there is no amount that represents a common claim for noneconomic damages against the settling and nonsettling defendants' and thus Code of Civil Procedure section 877 has no applicability to noneconomic damages." (Ehret v. Congoleum Corp. (1999) 73 Cal.App.4th 1308, 1319 [87 Cal.Rptr.2d 363], internal citations omitted.)

"[A]n undifferentiated settlement must be apportioned between economic and noneconomic damages so that the setoff applies only to economic damages." (Ehret, supra, 73 Cal.App.4th at p. 1320, internal citation omitted.)

It has been held that, "[i]n the absence of any other allocation . . . the percentage of economic damages reflected in the jury verdict [should] be applied to determine the percentage of the settlements to be offset." (Ehret, supra, 73 Cal.App.4th at p. 1320, internal citation omitted.)

"Where there is a complete dismissal of a defendant, and a plaintiff seeks an allocation of the settlement with that defendant for purposes of limiting the setoff against another defendant's liability, the burden is on the plaintiff to establish facts to justify the allocation." (Ehret, supra, 73 Cal.App.4th at p. 1322, internal citation omitted.)

Secondary Sources

5 Witkin, Summary of California Law (9th ed. 1988) Torts, § 76, pp. 148- 149

4 Levy et al., California Torts, Ch. 74, Resolving Multiparty Tort Litigation, §§ 74.20-74.28 (Matthew Bender)

California Tort Damages (Cont.Ed.Bar 1988) Restrictions on Recovery, § 15.12

15 California Forms of Pleading and Practice, Ch. 177, Damages (Matthew Bender)

6 California Points and Authorities, Ch. 65, Damages (Matthew Bender)

(New September 2003)