Aye, Aye to the Full Release: The Fifth Circuit Clarifies How a Joint Tortfeasor Can Settle Successfully and Seek Contribution

Lauren E. Burk | Comment

In 2009, in Ondimar Transportes Maritimos v. Beatty Street Properties, Inc., the United States Court of Appeals for the Fifth Circuit rejected assignment of plaintiff’s claims to a settling defendant. The court adopted into the general maritime law the rule that an injured party cannot assign tort claims to a settling defendant for the purpose of proceeding against any other joint, nonsettling defendants. To reach this decision, the court looked to a Texas Supreme Court decision, Beech Aircraft Corp. v. Jinkins, which reasoned that assignment was not available to a settling defendant even when he “obtain[ed] a complete release for all other parties allegedly responsible.” The Ondimar court seemed to announce that there was no way for a settling tortfeasor to seek contribution from any nonsettling tortfeasors. This was troublesome because it could discourage settlement and increase litigation over the common practice of one tortfeasor settling with the plaintiff and then allowing the joint tortfeasors to battle amongst themselves to determine their respective shares of liability.

In response to the questions that the court’s decision in Ondimar raised, the Fifth Circuit clarified how settling tortfeasors can seek contribution from joint, nonsettling tortfeasors in 2010 with its decision in Combo Maritime, Inc. v. U.S. United Bulk Terminal, LLC.