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Tegman v. Accident & Medical Investigations
Citation: 75 P.3d 497Docket: 71811-3
Court: Washington Supreme Court; August 28, 2003; Washington; State Supreme Court
The Washington Supreme Court addressed the issue of joint and several liability of negligent defendants for damages arising from both negligent and intentional acts. The Court held that, pursuant to RCW 4.22.070, damages resulting from negligence must be distinctly separated from those arising from intentional acts. Consequently, negligent defendants are jointly and severally liable only for damages stemming from their negligence, and not for the intentional acts of others. The Court reversed the Court of Appeals' decision and remanded the case for the segregation of damages and a reassessment of Lorinda Noble's liability. The facts of the case involve Maria Tegman, who suffered injuries from an automobile accident on April 26, 1989, and subsequently engaged G. Richard McClellan and Accident and Medical Investigations, Inc. (AMI) for legal representation, mistakenly believing McClellan was a licensed attorney. Throughout the representation, McClellan and AMI advanced funds for Tegman's therapy and submitted settlement offers without proper communication. McClellan, who was never an attorney, processed settlement funds through his personal bank account instead of an attorney's trust account, with the knowledge of licensed attorneys Camille Jescavage and Lorinda Noble. Noble, while employed by AMI, failed to inform Tegman of McClellan's unauthorized practice of law or the mishandling of her case. After six months, Noble resigned, and Delores Mullen later joined AMI as a paralegal, working under Jescavage's limited supervision. After Jescavage's departure in September 1991, McClellan suggested James Bailey as Mullen's supervising attorney, but Bailey later clarified he was not her supervisor. Despite this, Mullen continued providing legal services for AMI clients, aware of McClellan's questionable practices and significant improprieties. She worked on 50 to 60 cases, including Tegman's, but failed to inform Tegman of these improprieties. In December 1991, McClellan settled Tegman's case without Mullen's knowledge or consent, forged her signature, and misappropriated the $35,000 settlement funds. He subsequently sent Mullen a check for her share after obtaining a release from her. In 1993, Tegman and two others sued McClellan, AMI, Mullen, and Jescavage for various claims, leading to consolidated cases and discovery from 1993 to 1998. The trial court found McClellan and AMI liable for multiple offenses, including negligence and legal malpractice, while holding Mullen, Noble, and Jescavage liable specifically for Tegman's case. Noble appealed, arguing that the trial court wrongly imposed joint and several liability for both negligent and intentional torts. The Court of Appeals affirmed the lower court's decision, clarifying that joint and several liability was only for damages resulting from negligence. Noble's petition for review was granted, focusing on the segregation of damages due to intentional torts under RCW 4.22.070(1)(b). The analysis referenced the 1986 tort reform act aimed at creating a fairer distribution of costs and risks associated with injury, addressing escalating legal costs and professional liability insurance rates. The legislature aimed to lower tort system costs while ensuring adequate compensation for injury victims. It initiated reforms starting with comparative negligence in 1973 and abolished joint and several liability in most cases. RCW 4.22.070, part of the 1986 tort reform act, established several liability as the general rule, although it is often misinterpreted as an exception. Under RCW 4.22.070(1), the trier of fact determines the percentage of fault attributable to each entity when multiple parties contribute to a claimant's damages. Importantly, the definition of "fault" under RCW 4.22.015 excludes intentional acts or omissions, reinforcing that intentional torts are not considered in fault determinations for liability under RCW 4.22.070. The court confirmed that a negligent defendant cannot apportion liability to a third party who committed an intentional tort, affirming that such intentional conduct is outside the purview of RCW 4.22.070(1). In cases involving both negligent and intentional acts leading to harm, the liability of a negligent defendant is governed solely by RCW 4.22.070, which does not apply to intentional acts. The dissent's emphasis on the liability of the intentional tortfeasor diverts attention from the legislature's clear intent regarding negligence liability reform. RCW 4.22.070 governs the determination of liability among at-fault entities, mandating that a trier of fact assess the percentage of fault attributable to each entity involved in causing the plaintiff's damages. This assessment excludes intentional acts and is confined to negligent, reckless, or strict liability actions. The statute specifies that the total percentages of fault attributed to at-fault entities must equal 100 percent, but this total represents fault, not liability. The entities whose fault is assessed include the claimant, defendants, third-party defendants, and others with specific defenses or immunity, except those released from liability. Judgments against defendants reflect their proportionate share of the damages, affirming a rule of several liability, which means defendants are only responsible for their respective shares, not jointly liable overall. However, an exception exists: if the claimant is found to be fault-free, the defendants are jointly and severally liable for their proportionate shares of total damages. This exception focuses on apportioning liability among at-fault defendants, reinforcing that joint liability pertains only to those found at fault. The terms used in RCW 4.22.070(1)(b) mirror those in subsection (1), indicating legislative intent to restrict joint and several liability to at-fault defendants whose fault percentages have been determined. The consistent terminology throughout the statute suggests a unified meaning is intended, as supported by case law interpretations. RCW 4.22.070(1)(b) does not impose liability for damages resulting from intentional acts or omissions and does not establish joint and several liability for such actions. The statute does not recognize full joint and several liability as understood in common law, particularly when a fault-free plaintiff is involved. Under this statute, joint and several liability is modified; it applies only to the proportionate shares of at-fault defendants, excluding released parties, those with individual defenses, and immune parties from liability calculations. Furthermore, joint and several liability under RCW 4.22.070(1)(b) only pertains to defendants against whom a judgment is entered. This means that at-fault defendants are liable only for the damages they caused, excluding damages from intentional torts. The dissent's interpretation, which suggests that the statute maintains joint and several liability for fault-free plaintiffs consistent with previous law, is incorrect. The clear language of the statute confirms it addresses only fault-based damages and the responsibilities of at-fault defendants, without extending to intentional tortfeasors. The court emphasizes that it cannot alter the statute's wording or meaning as clearly expressed by the legislature. The statute has modified joint and several liability, distinguishing between damages from intentional acts and those from fault-based acts or omissions. All defendants remain jointly and severally liable, but only for the damages relevant to their conduct. Intentional tortfeasors’ liability is not governed by RCW 4.22.070(1), which pertains only to at-fault entities. Damages attributed to intentional actions must be separated from those resulting from negligence. The dissent argues that this ruling improperly allows negligent defendants to apportion fault to intentional tortfeasors, contrary to the precedent set in Welch, where it was determined that intentional tortfeasors do not benefit from proportionate liability under RCW 4.22.070. The court clarifies that no fault can be assigned to intentional tortfeasors under this statute, as established in Welch. The process of segregating fault-based damages from intentional acts is consistent with existing statutory frameworks, aligning with Washington State's shift to comparative negligence principles, which reject the notion that harms are indivisible and thus unassignable. The focus of liability should be on the responsibility for causing harm, allowing for apportionment based on culpability among multiple parties. Washington's legal framework has embraced comparative fault as central to determining responsibility in cases involving multiple tortfeasors. Under Washington's comparative fault principles, liability is allocated between a negligent plaintiff and a negligent defendant, as outlined in RCW 4.22.005. Damages resulting from both intentional acts and negligence must be segregated, per RCW 4.22.070(1). The dissent argues that this segregation is complex and unprecedented, but the court notes that such segregation has been part of state law since the adoption of comparative negligence. The case involves multiple defendants, specifically McClellan and AMI, whose intentional acts caused harm to the plaintiff, Tegman. The trial court found McClellan and AMI liable for a total of $15,067.25 due to negligence, legal malpractice, and other violations. This amount encompasses damages from both intentional and negligent actions. While the court determined that McClellan and AMI were 75% responsible for the total damages, this percentage cannot be directly applied to their share of fault for non-intentional acts, as it includes both types of harm. After segregating the intentional damages, the remaining fault-based liability is determined under RCW 4.22.070, where all defendants are jointly and severally liable for their proportionate shares of these damages. McClellan and AMI are liable for both intentional and fault-based damages, whereas other defendants are only liable for fault-based damages. This framework aligns with the legislative intent expressed in RCW 4.22.070, allowing the plaintiff to recover from all liable defendants for their respective contributions to the damages. The legislative framework aims to alleviate the burden on negligent defendants whose actions are less severe than those of intentional tortfeasors, promoting a fairer allocation of injury costs and enhancing insurance affordability. Specifically, negligent defendants will face reduced liability costs, mitigating the financial impact stemming from potential awards and insurance premiums. The document concludes that Noble is jointly and severally liable only for damages linked to defendant fault, excluding damages from intentional acts. A remand is ordered to separate damages resulting from intentional conduct from those stemming from negligence. In dissent, Justice Chambers argues that the majority's interpretation will complicate trials by requiring juries to segregate liability based on conduct and the nature of damages (negligent versus intentional), leading to confusion. He illustrates this through examples of complex cases involving mixed claims of negligence and intentional wrongdoing, asserting that the legislative intent was not to impose such a convoluted process. Under current Washington State law, fault-free plaintiffs are entitled to joint and several liabilities from all defendants found liable, without necessitating a division of damages between negligent and intentional actions. The dissent emphasizes that the 1986 tort reform aimed to clarify existing law rather than introduce a radical change in how damages are assessed. Common law has historically not allowed intentional tortfeasors to lessen their liability by comparing their actions with those of other intentional or negligent actors, nor with the plaintiff's conduct. This principle is rooted in the idea that harm caused by intentional torts is indivisible and should not be apportioned among wrongdoers. Consequently, a defendant who pays the entire damages cannot seek contribution from other tortfeasors. This rule has persisted even after the introduction of comparative negligence principles, which do not apply to intentional torts. With the 1973 enactment of Washington's comparative liability statute, the legal landscape shifted, allowing for a comparison of negligence between plaintiffs and negligent defendants, thereby enabling the latter to reduce their liability based on the plaintiff's fault. However, the Washington legislature explicitly maintained the distinction between negligent and intentional torts, opting to exclude intentional torts from the comparative fault framework. As a result, since 1986, intentional tortfeasors in Washington cannot compare their fault for liability allocation, a standard that remains consistent nationwide. Negligent actors can reduce their liability based on the fault of other negligent parties, but not in comparison to intentional tortfeasors. Intentional tortfeasors have historically been jointly and severally liable for their actions, a principle established at common law since the 1799 case of Merryweather v. Nixon. This liability remains largely intact despite modifications to joint and several liability statutes in many states during the 1980s, with commentators noting that most states preserved this standard for intentional actors. No appellate decisions have been found that negate or alter the joint and several liability of intentional tortfeasors. Under Washington law, as of 1986, intentional actors are fully liable for their conduct and cannot diminish their liability by comparing it to the plaintiff's conduct or benefit from contribution from other tortfeasors. Furthermore, both before and after 1986, negligent actors also remain unable to reduce their liability by comparing their actions to those of intentional actors. This principle is supported by common law and has been reinforced by the majority of states following the adoption of comparative responsibility schemes. Washington law aligns with this majority perspective, as highlighted in cases like Schmidt v. Cornerstone Investments Inc., which addressed the issue of liability in the context of a real estate dispute involving both negligent and intentional claims. Remand for apportionment between intentional and negligent claims was declined due to the joint and several liability of defendants. The legislature intentionally excluded intentional conduct from the definition of "fault," aiming to encompass all forms of fault short of intentional harm, such as negligence and recklessness, allowing a reduction in recovery only for plaintiffs’ own share of fault. In the case of Welch, the court rejected Southland's argument to compare intentional and negligent conduct, emphasizing that the statute did not permit such apportionment. Well-established policy reasons support this position, particularly when a negligent actor fails to foresee and prevent an intentional tort. Common law principles uphold that negligent tortfeasors cannot expect liability reduction based on the actions of intentional tortfeasors, a stance reinforced by similar rulings in other jurisdictions. Negligent tortfeasors cannot reduce their liability by attributing fault to the intentional misconduct of others whom they had a duty to prevent. This principle is supported by various case laws, including Veazey and Cortez, and emphasizes that negligent parties must take responsibility for risks they are better positioned to manage, such as through insurance. The duty to prevent harm is particularly relevant in the case of lawyers who failed to protect their client, Tegman, from harm that they were legally obligated to prevent. The distinction between intentional wrongdoing and negligence is significant, affecting how fault is assessed, as intentional acts carry a different legal weight and social condemnation. Furthermore, the complexities of apportioning liability among parties with both negligent and intentional actions present administrative challenges. Historical context from prior tort reform acts illustrates that intentional actors were fully liable to plaintiffs without the ability to reduce liability based on comparative fault, reinforcing the need for consistency in legal interpretations related to liability. In Legion Post No. 32 v. City of Walla Walla, the Washington Supreme Court emphasizes that the primary goal of interpreting statutes is to fulfill the legislature's intent, with legislative definitions being authoritative. The court identifies that the 1981 definition of "fault" and the 1986 amendments concerning contribution and apportionment must be read in conjunction. It concludes that the legislature intentionally excluded intentional conduct from the definition of "fault" under chapter 4.22 RCW. The 1986 amendments to RCW 4.22.030 established joint and several liability as the default for multiple parties liable for a singular claim, unless specified otherwise. Notably, RCW 4.22.070 does not indicate that intentional actors are liable separately; instead, it stipulates that if a claimant is fault-free, the defendants found liable must be jointly and severally responsible for their proportionate shares of the total damages. The court critiques any interpretation that would imply that only "fault-based" defendants are liable for total damages, affirming that fault-free claimants retain the right to joint and several liability against all defendants, regardless of whether their conduct was negligent or intentional. The ruling reinforces the legislature's intent to maintain the status quo between intentional and negligent tortfeasors regarding liability, ensuring that intentional tortfeasors remain fully accountable to plaintiffs. Legislative intent dictates that intentional tortfeasors are fully liable (100%) to plaintiffs, while only the non-intentional parties' fault percentages are aggregated to reach a total of 100%. This interpretation aligns with Senate Journal references, allowing the fact-finder to assess all conduct that does not constitute an intentional tort. Intentional actors remain jointly and severally liable for damages to an innocent plaintiff, while negligent actors are similarly liable for damages to a fault-free claimant. The text critiques the majority's interpretation of RCW 4.22.070, arguing that it misapplies the statute's language regarding "all actions involving fault" and overlooks the preservation of joint and several liability for intentional actors. It asserts that RCW 4.22.030 establishes joint and several liability for multiple defendants on an indivisible claim and cautions against interpreting exceptions as the general rule. The legislature has not indicated an intention to allow negligent parties to offset their liabilities by damages attributed to intentional actors, nor has it modified existing jurisprudence that prevents negligent actors from reducing their liability through comparisons with intentional conduct. The excerpt warns that under the majority's ruling, a plaintiff seeking damages for both negligent and intentional acts will face challenges in segregating damages, despite their indivisible nature. This creates a strategic advantage for claimants to pursue only negligence claims to maintain joint and several liability. Ultimately, the text argues that negligent tortfeasors remain responsible for foreseeable consequences stemming from their actions, including those caused by others. In Niece v. Elmview Group Home, the Washington Supreme Court ruled that negligent actors cannot apportion liability to intentional tort-feasors. The trial court determined that plaintiff Tegman was fault-free and awarded her nearly $150,000 in exemplary damages against intentional defendants McClellan and AMI, alongside $15,000 in compensatory damages. These damages were deemed indivisible, with all defendants found jointly and severally liable for the compensatory amount. The court noted that if Tegman had not been fault-free, remand for apportionment might have been necessary. However, since McClellan and AMI were held jointly and severally liable for their intentional conduct, and others were liable for negligent conduct, remand was deemed unnecessary. It was also highlighted that Noble, a negligent defendant, benefited from protections for merely negligent tortfeasors, as she was not liable for the $150,000 assessed only against intentional actors. The conclusion reaffirmed that all defendants were jointly and severally liable for Tegman's total damages, leading to the affirmation of the trial court's decision. Additionally, a note mentioned McClellan's guilty plea to mail fraud in 1997 and the broader context of tort reform aimed at creating equitable distribution of liability costs and improving insurance availability. Escalating malpractice insurance premiums are hindering healthcare providers from starting or maintaining their practices, thereby increasing consumer healthcare costs. Similar challenges affect other professionals like architects and engineers, who face financial instability due to high insurance costs. Many businesses, individuals, and nonprofits are finding general liability insurance increasingly unavailable or prohibitively expensive, leading to a lack of adequate coverage for potential losses. The legislature aims to reduce tort system costs while ensuring sufficient compensation for those injured due to others' fault. Under the principle of proportionate liability, a negligent party is liable only for their share of fault, as established in Kottler v. State. Although RCW 4.22.070 refers to "several" liability as equivalent to "proportionate share" liability, this is technically incorrect; the legislature has nonetheless created a scheme reflecting proportionate liability. The statute does not address intentional acts, focusing instead on negligence and other non-intentional misconduct. Washington is one of 25 jurisdictions that do not allow comparisons between intentional and negligent conduct. Under RCW 4.22.070(1)(b), entities immune from liability under Title 51 RCW are not assigned a percentage of total fault, which may prevent fault-free plaintiffs from receiving full recovery. Furthermore, intentional tortfeasors are treated differently in tort liability, as seen in cases like Morgan v. Johnson, where comparative fault does not apply to intentional torts. Some states have developed systems allowing for fault allocation to intentional tortfeasors, which the majority may be exploring in the current context. North Dakota's tort statutes define fault to encompass negligent or reckless acts that lead to tort liability, but the state's legislature did not amend the definition of fault, which would have changed the adjudication process. In contrast, Washington adopted a "pure" comparative negligence system, allowing plaintiffs to recover damages even if their fault exceeds that of the defendants. Former RCW 4.22.010 states that contributory negligence does not bar recovery for negligence-related damages. The concept of tort liability is integral, meaning that each tortfeasor is liable for the entire harm caused, allowing the injured party to pursue any or all responsible parties. Various states, including Florida and New York, explicitly recognize joint and several liability for intentional tortfeasors, while others, like North Dakota and Washington, have statutes that may be interpreted as imposing similar liability. Courts in Kansas and California have recognized joint and several liability for intentional actors, whereas Kentucky, Oklahoma, and Tennessee have not yet addressed this issue. The majority opinion does not consider negligent supervision, which has been addressed in previous Washington cases. The established rule of several liability typically pertains to negligent or reckless defendants, leaving the question of intentional tort liability unresolved in current jurisprudence.