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Armstrong v. Antique Automobile Club of America

November 9, 2009

EILEEN A. ARMSTRONG, PLAINTIFF,
v.
ANTIQUE AUTOMOBILE CLUB OF AMERICA, HERSHEY REGION OF THE ANTIQUE AUTOMOBILE CLUB OF AMERICA, INC. AND HERSHEY ENTERTAINMENT & RESORTS COMPANY DEFENDANTS
v.
HYLAN GRAY, THIRD PARTY DEFENDANT



The opinion of the court was delivered by: Magistrate Judge Smyser

MEMORANDUM AND ORDER

A. Background

The plaintiff, Eileen A. Armstrong, commenced this action in the United States District Court for the Northern District of Illinois against Hylan Gray ("Gray") and the Antique Automobile Club of America, Inc. ("AACA"). The plaintiff alleged that while attending an AACA meet in Hershey, Pennsylvania in October 2006 she was struck by a vehicle driven by Gray and injured.

The case was subsequently transferred to this court. On September 22, 2008, with leave of court, the plaintiff filed an amended complaint. The amended complaint names as defendants AACA, the Hershey Region of the Antique Automobile Club of America ("HRAACA") and Hershey Entertainment & Resorts Company ("HE&R"). The defendants filed third party complaints against Hylan Gray seeking indemnity or contribution. Also, HE&R filed crossclaims seeking indemnity or contribution against defendants AACA and HRAACA and defendants AACA and HRAACA filed crossclaims seeking indemnity or contribution against HE&R.

This Order addresses the following in limine motions: Motion in Limine of Defendants Hershey Entertainment and Resorts Company, Antique Automobile Club of America, Inc. and Hershey Region of the Antique Automobile Club of America, Inc. (Doc. 103); Plaintiff's Motion in Limine to Support the Admissibility of Economic Damages (Doc. 119); Plaintiff's Motion in Limine to Preclude the Testimony of Defendants' Proffered Expert, Len McCuen (Doc. 109); Defendants' Motion in Limine to Limit the Amount of Plaintiff's Medical Bills Pursuant to Moorehead v. Crozer (Doc. 110); Plaintiff's Motion in Limine to Preclude Evidence of or Reference to Her Previous Back Surgeries, Fibromyalgia, and Depression (Doc. 115); and Plaintiff's Motion in Limine to Preclude Evidence of Her Settlement with Hylan Gray (Doc. 117).

B. Discussion

1. Defendants' Joint Motion in Limine and Plaintiff's Motion in Limine to Support the Admissibility of Economic Damages

We will initially address the joint motion (Doc. 103) in limine of defendants HE&R, AACA and HRAACA. This motion presents two issues: 1) whether the defendants are permitted to pursue their contribution claims against third-party defendant Gray, and 2) whether the plaintiff is precluded from offering evidence of or referring to any medical expenses that were paid, or will be paid, by first party insurance benefits. The second issue is also the subject of the plaintiff's motion (Doc. 119) in limine to support the admissibility of economic damages.

The first issue raised by the defendants' joint motion in limine is whether they are permitted to pursue their contribution claims against third-party defendant Gray notwithstanding a release by the plaintiff of third-party defendant Gray.

The plaintiff and third-party defendant Gray came to a settlement arrangement during the pendency of this case, and the plaintiff executed a release. See Doc. 103-3.

The release is titled "Release of All Claims." Id. The release provides that for a lump sum of $250,000.00 the plaintiff does: release, acquit and forever discharge Hylan Gray, Lynn Gray and Allied Property and Casualty Insurance Company, a Nationwide Company of and from any and all past, present and future actions, causes of action, claims, demands, damages, costs, loss of services, expenses, compensation, third party actions, suits at law or in equity, including claims or suits for contribution and/or indemnity, of whatever nature, and all consequential damages on account of, or in any way growing out of any and all known and unknown personal injuries, death and/or property damage resulting or to result from an accident that occurred on or about the 4th day of October, 2006, at or near Old Hershey Park Entrance and Hershey Park Access, Derry Township, Dauphin County, Pennsylvania.

Id. The release further provides that the plaintiff acknowledges that she is responsible for the satisfaction of any applicable liens and claims and that she agrees to indemnify and hold "Hylan Gray, Lynn Gray and Allied Property and Casualty Insurance Company, a Nationwide Company" harmless from "any such liens and claims should they be asserted against such individual and/or Insurance Company." Id.

The defendants argue that the effect of the release on their contribution claims against Gray is governed by Pennsylvania law and that under Pennsylvania law they may pursue their contribution claims against Gray notwithstanding the release. In their motion in limine, the defendants state that "upon information and belief, Defendant Gray intends to take the position that Illinois law applies to the Release in this case." Doc. 103 at 6.

Under Pennsylvania law, a "release by the injured person of one joint tort-feasor does not relieve him from liability to make contribution to another tort-feasor, unless the release is given before the right of the other tortfeasor to secure a money judgment for contribution has accrued and provides for a reduction to the extent of the pro rata share of the released tort-feasor of the injured person's damages recoverable against all the other tortfeasors." 42 Pa.C.S.A. § 8327. In contrast, under Illinois law, a tortfeasor who in good faith settles with a claimant "is discharged from all liability for any contribution to any other tortfeasor." 740 Ill. Comp. Stat. 100/2(d).

Although the defendants state in their motion in limine their belief that third-party defendant Gray intends to take the position that Illinois law applies to the release, third-party defendant Gray has not taken that position. In his brief in opposition to the defendants' motion in limine, third-party defendant Gray does not contend that Illinois law governs the effect of the release on the defendants' contribution claims against him.*fn1 Rather, citing a Pennsylvania case, third-party defendant Gray contends that the release at issue, although not expressly providing for a pro rata set-off mechanism, has the effect of a pro rata release and that, therefore, the defendants can not pursue their contribution claims against him. We construe third-party defendant Gray's argument to be that under Pennsylvania law the defendants can not pursue their contribution claims against him because the release is in effect a pro rata release.

Given that no party has argued that any law other than Pennsylvania law applies to the issue of the effect of the release on the defendants' contribution claims against third-party defendant Gray, we will not engage in an extended discussion of the choice-of-law issue. Nevertheless, having considered the issue and given that the accident occurred in Pennsylvania, that the plaintiff was injured in Pennsylvania, that the defendants are Pennsylvania corporations, that the relationship of the parties is centered in Pennsylvania in that all parties were purposefully in Pennsylvania when the accident occurred, that Pennsylvania has a substantial interest in having its law applied to a dispute that concerns the consequences of torts committed within its borders and that Pennsylvania's interest in having its law applied outweighs any interest on the part of Illinois of having its law applied regarding the effect of a release, we conclude that Pennsylvania law applies. See Restatement (Second) Conflict of Laws § 145 and § 173. See also Shields v. Consolidated Rail Corp., 810 F.2d 397 (3d Cir. 1987) (discussing Pennsylvania choice-of-law issues with respect to third-party action for contribution).

We next turn to the question whether under Pennsylvania law the defendants may pursue their contribution claims against third-party defendant Gray notwithstanding the release. As set forth above, under Pennsylvania law, a release by the plaintiff of one tortfeasor does not relieve the tortfeasor from liability to make contribution to other tortfeasors, unless the release "provides for a reduction to the extent of the pro rata share of the released tort-feasor of the injured person's damages recoverable against all the other tort-feasors." 42 Pa.C.S.A. § 8327. Thus, resolution of the issue in this case turns on whether the release is a pro rata release.

The Pennsylvania Supreme Court has explained the difference in effect between a pro tanto release and a pro rata release:

Where a plaintiff and settling defendant sign a pro tanto release, then the plaintiff's ultimate recovery against the non-settling joint tortfeasors is the total award of damages reduced by the amount of consideration paid for the release. In contrast, if the parties sign a pro rata release (which is also known as an "apportioned share set-off" release), then the plaintiff's ultimate recovery against the non-settling tortfeasors is the total award of damages reduced by the settling party's allocated share of the liability."

Baker v. ACandS, 755 A.2d 664, 666 n.1 (Pa. 2000). If the release is silent on the issue, then the set-off mechanism defaults to a pro tanto set-off. Id. at 667.

Third-party defendant Gray acknowledges that a pro rata set-off mechanism is not expressly set forth in the release. Nevertheless, he contends, the release obligates the plaintiff to indemnify and hold him harmless from any contribution claims of the defendants and, therefore, the release has the same effect as a pro rata release.

There is a difference between a provision in a release that provides for a reduction of any award to the plaintiff to the extent of the pro rata share of the released tortfeasor and a provision that the plaintiff must indemnify the released tortfeasor for any contribution claims made against the released tortfeasor. Although the net ...


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