Legal Memorandum: Settlement and Restitution by Joint Tortfeasors

Issue: In Arkansas, what is the effect on a civil monetary judgment where only one party is named as a defendant but other parties are jointly and severally liable or have settled and begun to make restitution?

The general rule is that a release by an injured party of one joint tortfeasor, whether before or after judgment, does not discharge other tortfeasors unless the release so provides.  However, the release reduces the claim against the other tortfeasors in the amount of the consideration paid for the release.  Scalf v. Payne, 266 Ark. 231, 583 S.W.2d 51 (1979).  Under Arkansas law, settlement payments must be credited against the verdict if the settling party is jointly liable with the party against whom a verdict is rendered.  Arthur Young & Co. v. Reves, 937 F.2d 1310 (8th Cir. 1991), aff’d sub nom. Ernst & Young v. Reves, 507 U.S. 170 (1993). 

Clearly, settlement payments or restitution made by joint tortfeasors will be credited against the verdict of a nonsettling joint tortfeasor.  The issue thus becomes whether the jury will be informed of the settlement and restitution payments of joint tortfeasors or whether the judge will deduct these amounts post-verdict.  Arkansas courts have not uniformly addressed this issue.

In Bailey v. Stewart, 238 Ark. 666, 385 S.W.2d 20 (1965), the court held that after one alleged tortfeasor settled for $9000, an interrogatory submitted to the jury properly showed that the $9000 should be deducted from any award against the second tortfeasor.  But see Arhart v. Micro Switch Mfg. Co., 798 F.2d 291 (8th Cir. 1986) (where settlement made during trial by one or more joint tortfeasors, trial court […]