The City and Massand paid $1,350,000 in exchange for general
releases and a partial satisfaction of judgment. The settlement
agreement explicitly reserves the Gravatts' rights against SB. At
the same time, the City, Massand, and SB settled their
cross-claims for indemnity and contribution.
SB has moved for reconsideration of the judgment pursuant to
Rule 59(e). To prevail on a motion for reconsideration under Rule
59(e), the movant must present "[factual] matters or controlling
decisions the court overlooked that might materially have
influenced its earlier decision." Robins v. Max Mara, U.S.A.,
Inc., 923 F. Supp. 460, 472 (S.D.N.Y. 1996) (quoting Morser v.
AT&T. Info. Sys., 715 F. Supp. 516, 517 (S.D.N.Y. 1989)).
Alternatively, the movant must demonstrate "the need to correct a
clear error or prevent manifest injustice." Fruit of the Loom,
Inc. v. American Mktg. Enters., Inc., 97 Civ. 3510(HB), 1999 WL
527989, at *1 (S.D.N.Y. July 22, 1999) (quoting Morales v.
Quintiles Transnational Corp., 25 F. Supp.2d 369, 372 (S.D.N Y
1998)). These criteria are strictly construed against the moving
party so as to avoid repetitive arguments on issues that have
been considered fully by the court. See Monaghan v. SZS 33
Assocs., 153 F.R.D. 60, 65 (S.D.N.Y. 1994).
Since the settlement between the Gravatts, the City, and
Massand took place after this Court entered judgment, SB clearly
satisfies the threshold requirements for a 59(e) motion. Indeed,
Singer v. Olympia Brewing Company, 878 F.2d 596 (2d Cir. 1989),
the case upon which SB's motion is grounded, affirmed a district
court's granting of a 59(e) motion to reduce a judgment based on
a post-verdict settlement. See Singer, 878 F.2d at 601.
However, as set forth herewith, the current law does not support
a reduction of the judgment on the facts of this case.
Singer, decided by this Circuit in 1989, held that "under
[the one satisfaction rule], when a plaintiff receives a
settlement from one defendant, a nonsettling defendant is
entitled to a credit of the settlement amount against any
judgment obtained by the plaintiff against the nonsettling
defendant as long as both the settlement and judgment represent
common damages." Id. at 600. Singer did not distinguish
between pre- and post-judgment settlements. SB maintains that
Singer is still controlling in this circuit.
According to the Gravatts, Singer is no longer good law, in
light of the Supreme Court's subsequent decision in McDermott
Inc. v. AmClyde and River Don Castings Ltd., 511 U.S. 202, 114
S.Ct. 1461, 128 L.Ed.2d 148 (1994). McDermott squarely rejects
the one-satisfaction rule in favor of a proportionate share
approach, in which "the money paid [by the settling tortfeasors]
extinguishes any claim that the injured party has against the
[settling] tortfeasor[s] and also diminishes the claim that the
injured party has against the other tortfeasors by the amount of
the equitable share[s] of the obligation of the released
tortfeasor[s]." McDermott, 511 U.S. at 209, 114 S.Ct. 1461.
Although McDermott involved a pretrial settlement, the
Court's reasons for adopting the proportionate share approach
apply in a post-judgment context as well. The McDermott Court
considered three factors in choosing the proportionate share
approach over the two versions of the protanto approach which
incorporate the one-satisfaction rule: (1) consistency with the
proportionate fault approach of United States v. Reliable
Transfer, 421 U.S. 397, 95 S.Ct. 1708, 44 L.Ed.2d 251 (1975);
(2) promotion of settlement; and (3) judicial economy. See
McDermott, 511 U.S. at 211, 114 S.Ct. 1461. The Court concluded
that factors (2) and (3) were a wash as between the proportionate
share and protanto approaches, but that factor (1) favored the
proportionate share approach.
Parties are motivated to settle at various stages in the
progress of an action, based, in part, on their perceptions of
the possible outcomes and the cost of continuing to
litigate. The willingness of parties to settle post-judgment
reflects, in part, the uncertainties and costs of the appeal
process. While the proportionate share approach applied to
post-judgment cases is no more nor less likely to promote
settlement or judicial economy than the pro tanto approach, it is
consistent with Reliable Transfer. There is thus no reason why
the McDermott holding should not apply to post-judgment
settlements. McDermott itself certainly does not restrict its
holding to pre-judgment settlements; moreover, the case
specifically repudiated the one-satisfaction rule:
[A] plaintiff's good fortune in striking a favorable
bargain with one defendant gives other defendants no
claim to pay less than their proportionate share of
the total loss. In fact, one of the virtues of the
proportionate share rule is that, unlike the pro
tanto rule, it does not make a litigating
defendant's liability dependent on the amount of a
settlement negotiated by others without regard to its
Id. at 220, 114 S.Ct. 1461.
Shortly after McDermott, this Circuit, in the course of
dismissing an appeal in a case that had become moot pending
appeal, noted that "it would seem unwise . . . to leave standing
the district court ruling that any judgment against appellant be
reduced on a pro tanto basis. We think it imprudent in light of
[McDermott], that at least in admiralty suits for damages, the
proportional reduction approach is best." Bragger v. Trinity
Capital Enter. Corp., 30 F.3d 14, 17 (2d Cir. 1994). SB does not
cite — nor has this Court located — any case in this Circuit
since 1994 citing Singer for the proposition advanced by SB.
Having determined, then, that the proportionate share approach
under McDermott applies to the post-judgment settlement in this
case, the next step is to determine SB's proportionate share.
(Due to the settlement, it is unnecessary to determine the
proportionate shares of the City and of Massand.) The matter is
complicated somewhat by SB's failure to request an allocation of
fault among the defendants.
Under New York law, when a defendant argues that other parties
share liability for a tort, the defendant has the burden of
proving the parties' individual degrees of fault. See Joseph M.
McLaughlin, Practice Commentaries, McKinney's Gen.Ob.Law §
15-108, at 701 (1989); see also In Re Joint Southern and Eastern
District Asbestos Litigation, 741 F. Supp. 50, 51 n. 2 (E.D.N Y
1990). There is no reason why that burden should be any different
under federal law. SB has failed to meet the burden by failing to
request an allocation of fault at trial. Therefore, SB is not
entitled to any reduction of the judgment based on the settlement
between plaintiffs, the City, and Massand.
For the reasons set forth above, SB's motion is denied.
It is so ordered.
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