Report Title:

Joint Liability; Release; Settlement

 

Description:

Establishes the effect of a release, dismissal with or without prejudice, or covenant not to sue or not to enforce judgment on joint tortfeasors or co-obligors. Allows parties to petition a court for a hearing on the good faith of a settlement with alleged joint tortfeasors or co-obligors.

 

HOUSE OF REPRESENTATIVES

H.B. NO.

1078

TWENTY-FIRST LEGISLATURE, 2001

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO JOINT LIABILITY.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The Hawaii Revised Statutes is amended by adding two new sections to be appropriately designated and to read as follows:

"§ - Release of one or more joint tortfeasors or co—obligors; effect upon liability of others. (a) 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, or to one or more other co-obligors mutually subject to contribution rights, it shall have the following effect:

(1) 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; and

(2) It shall discharge the party to whom it is given from all liability for any contribution to any other parties.

(b) This section shall not apply to co-obligors who have expressly agreed in writing to an apportionment of liability for losses or claims among themselves.

§ - Determination of good faith of settlement with one or more tortfeasors or co-obligors; court approval; tolling of time limitations. (a) Any party to an action in which it is alleged that two or more parties are joint tortfeasors, or co-obligors on a contract debt, shall petition the court for a hearing on the issue of the good faith of a settlement entered into by the plaintiff or other claimant and one or more alleged tortfeasors or co-obligors, giving notice to all other known joint tortfeasors or co-obligors. Upon a showing of good cause, the court may shorten the time for giving the required notice to permit the determination of the issue to be made before the commencement of the trial of the action, or before the verdict or judgment if settlement is made after the trial has commenced.

The petition shall indicate the settling parties, and the basis, terms, and amount of the settlement. The notice, petition, and proposed order shall be given by certified mail, return receipt requested. Proof of service shall be filed with the court. Within twenty-five days of the mailing of the notice, petition, and proposed order, a nonsettling party may file an objection to contest the good faith of the settlement. If none of the nonsettling parties files an objection within twenty-five days of mailing of the notice, petition, and proposed order, the court may approve the settlement without a hearing. An objection by a nonsettling party shall be served upon all other parties. However, this paragraph shall not apply to settlements in which a confidentiality agreement has been entered into regarding the case or the terms of the settlement.

(b) The issue of the good faith of a settlement may be determined by the court on the basis of affidavits or declarations served with the petition, and any affidavits or declarations filed in response, or the court, in its discretion, may receive other evidence at the hearing.

(c) A determination by the court that the settlement was made in good faith shall bar any other joint tortfeasor or co-obligor from any further claims against the settling tortfeasor or co-obligor for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.

(d) The party asserting the lack of good faith shall have the burden of proof on that issue.

(e) When a determination of the good faith or lack of good faith of a settlement is made, any party agqrieved by the determination may appeal the determination. The appeal shall be filed within twenty days after service of written notice of the determination, or within any additional time not exceeding twenty days as the court may allow.

(f) The running of any statute of limitations or other time limitations shall be tolled during the period of review of a determination pursuant to this section."

SECTION 2. This Act shall not apply to a release, dismissal with or without prejudice, or a covenant not to sue or not to enforce judgment given to a co-obligor on an alleged contract debt where the contract was made prior to January 1, 2002.

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:

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