Settlement Set-Off in Vicarious Liability Situations

Oftentimes, defense counsel is retained to represent both a defendant driver and the owner of the vehicle who has been sued solely under a theory of vicarious liability. In these matters, it is not uncommon for a Plaintiff to serve either: 1) a Proposal for Settlement to only one of the two defendants, or 2) to split proposals for settlement between the two defendants in a fashion where Plaintiff will prevail on at least one of the Proposals, but together they are above an amount at which the case would be reasonably evaluated.

Such tactics are meant to try to discourage acceptance of the proposals due to the understanding that acceptance of one of the proposals (although it individually may be reasonable) will not end the litigation against the other defendant. When situations like this occur, it is important to realize that when one of the parties is alleged to only be vicariously liable, the settlement can be set-off against an eventual judgment against the other. See J.R. Brooks & Son, Inc. v. Quiroz, 707 So. 2d 861, 863 (Fla. 3d DCA 1998) (“Where an individual’s liability is solely vicarious, a plaintiff is entitled to only one satisfaction for the same loss and, thus, damages for which the nonsettling defendant is ultimately responsible must be reduced pro tanto by the amount obtained from any settlement previously entered into between the injured party and the person who actually committed the negligent act. Hence, if the defendants’ responsibility for the [injury] were found to rest solely upon the theory of vicarious liability, they would be entitled to reduce the damages awarded by the jury against them by the amount of the settlement.”) See also Grobman v. Posey, 863 So. 2d 1230 (Fla. 4th DCA 2003); Fla. Stat. § 46.015; and Fla. Stat. § 768.041.

For example: A Plaintiff has served two separate $100,000 Proposals for Settlement to a driver and owner in a case that has a settlement value of $150,000. If the owner accepts the Proposal for Settlement and the jury returns a verdict against the driver for $150,000, the driver will be able to reduce the award to $50,000 based on the settlement by the owner. Thus, after the reduction, the driver will not be subject to pay the Plaintiff’s attorneys fees.