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Redland Insurance Company, as Assignee of Charlene Harvell and Lonnie Joe Harvell v. Shelter Mutual Insurance Company, Robert McAdams Douglas G. Voyles, Redland Insurance Company, as Assignee of Charlene Harvell and Lonnie Joe Harvell v. Shelter Mutual Insurance Company, Robert McAdams Douglas G. Voyles
Citations: 193 F.3d 1021; 1999 U.S. App. LEXIS 25473Docket: 98-3726
Court: Court of Appeals for the Eighth Circuit; October 12, 1999; Federal Appellate Court
Redland Insurance Company, as the assignee of Charlene and Lonnie Joe Harvell, is involved in a legal dispute with Shelter Mutual Insurance Company over the right to seek contribution as a joint tortfeasor. In a previous appeal, the Eighth Circuit ruled that Redland could not evade its duty as an insurer by acquiring an assignment of the judgment from the Harvells and collecting the full amount from other joint tortfeasors. The court allowed Redland to present an alternative cause of action for contribution, remanding the case for further proceedings. On remand, the district court found that Arkansas law permits Redland to seek contribution from Shelter but deemed the record insufficient to prove that Redland had fully satisfied the Harvells' judgment, leading to the dismissal of Redland's contribution action without prejudice. Shelter appealed the allowance of the contribution claim, while Redland cross-appealed the dismissal of its action. Redland subsequently sought to supplement the appeal record with evidence of a satisfaction of judgment indicating it had paid the Harvells $505,782.21. The appellate court affirmed the district court’s ruling allowing Redland to pursue contribution, granted the motion to supplement the record, reversed the dismissal of Redland’s action, and remanded the case for judgment in favor of Redland. Redland is permitted to seek contribution from Shelter under Arkansas law despite the federally-mandated MCS-90 endorsement, which only addresses public liability and does not determine liabilities between insurers. The silence of applicable regulations does not preempt state laws that govern the allocation of financial burdens among tortfeasors, as long as injured parties are compensated. The court rejects the Fifth Circuit's contrary stance and emphasizes that allowing financial burdens to be allocated post-compensation aligns with the regulatory goal of ensuring timely payments to victims. Under Arkansas law, Redland qualifies as a "joint tortfeasor" and can pursue contribution from Shelter regardless of the vicarious liability context. The court acknowledges that while satisfaction of judgment may be a condition for seeking contribution, it is sufficient that Redland extinguished the shared liability. Consequently, Redland's motion to supplement the record is granted, and the case is remanded for judgment in favor of Redland for $252,891.11, which includes 50% of the amount paid to the Harvells plus interest.