Philip Morris USA Inc., and R.J. Reynolds Tobacco Company v. Beatrice Skolnick, as personal representative of the Estate of Leo Skolnick , 171 So. 3d 747 ( 2015 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
PHILIP MORRIS USA INC., and
R.J. REYNOLDS TOBACCO COMPANY,
Appellants,
v.
BEATRICE SKOLNICK, as personal representative of the
ESTATE OF LEO SKOLNICK, deceased,
Appellee.
No. 4D13-4696
[July 15, 2015]
Appeal and cross-appeal from the Circuit Court for the Fifteenth
Judicial Circuit, Palm Beach County; David F. Crow, Judge; L.T. Case No.
502009CA004045-AG.
Amir C. Tayrani of Gibson, Dunn & Crutcher, LLP, Washington, D.C.,
Joseph H. Lang, Jr. of Carlton Fields Jorden Burt, P.A., Tampa, and Peter
M. Henk of Shook Hardy & Bacon, L.L.P., Houston, Texas, for appellant,
Philip Morris USA, Inc.
Gregory G. Katsas of Jones Day, Washington, D.C., for appellant, R.J.
Reynolds Tobacco Company.
David J. Sales of David J. Sales, P.A., Jupiter, John S. Mills of The Mills
Firm, P.A., Tallahassee, and Jonathan R. Gdanski of Schlessinger Law
Offices, P.A., Fort Lauderdale, for appellee.
GROSS, J.
In this Engle1 progeny case, plaintiff Beatrice Skolnick recovered
compensatory damages from two tobacco companies—Philip Morris USA
Inc. and R.J. Reynolds Tobacco Company. The jury found for the
defendants on claims of fraudulent concealment and conspiracy to commit
fraudulent concealment.
1Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006).
We confront a novel issue in an Engle case. In 2004, as a plaintiff in a
New York class action, Beatrice executed a settlement agreement,
containing a release and covenant not to sue concurrent tortfeasors, where
the injury at issue was her husband’s lung cancer. We hold that this
settlement agreement applies to bar the strict liability and negligence
causes of action in this case. However, under New York law, the release
and covenant not to sue do not bar the intentional tort claims of fraudulent
concealment and conspiracy to commit fraudulent concealment.
Beatrice cross-appealed from the defense verdict on the intentional tort
counts. As to those counts, the trial court applied our decision in Philip
Morris USA, Inc. v. Hess, 95 So. 3d 254 (Fla. 4th DCA 2012). The Florida
Supreme Court quashed this decision in April 2015. See Hess v. Philip
Morris USA, Inc., 40 Fla. L. Weekly S188 (Fla. Apr. 2, 2015).
We reverse the judgment for the plaintiff on the strict liability and
negligence counts and remand to the circuit court for the entry of a
judgment for the defendants. On the cross-appeal, we reverse the
judgment for the defendants on the fraudulent concealment and
conspiracy counts and remand for a new trial.
The Release in the New York Action
In 2002, Beatrice joined hundreds of plaintiffs in a New York class
action lawsuit against Verizon Communications Inc. and other defendants
responsible for the operation of the Sylvania Plant (“the Hicksville Action”),
which was located just 500 meters from Beatrice and Leo Skolnick’s
Westbury home. The complaint alleged the “facility emitted toxins into the
surrounding environment located in Hicksville, New York,” which
“contaminated the air, soil, surface water and ground water in the
surrounding communities.” As it concerned Leo Skolnick, the complaint
set forth the following:
Beatrice Skolnick, individually, and as Administratrix of the
Estate of Leo Skolnick (“decedent”), . . . brings an action for
both conscious pain and suffering and wrongful death on
behalf of the decedent. From the time period beginning in July
of 1959 and ending in September of 1984, decedent resided
[in] Westbury, New York, within close proximity of the
Sylvania facility sites. As a result of Defendants’ repeated
releases of toxic, hazardous and/or radioactive
substances into the area surrounding their operations on
or near the Sylvania facility, decedent developed colon
and lung cancer. While prior to the development of his
disease, decedent had been a healthy and active person, the
onset of the cancers had a debilitating effect on his life,
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causing him severe physical injury, pain and suffering, and
mental and emotional damage, as well as causing him to incur
extensive medical and related expenses and lost income. This
same disease ultimately lead to his death in 1993.
(Emphasis added).
The class action settled for $10,400,000, with Beatrice receiving a
$60,000 share. In a 38-page settlement agreement, which states that it is
to be governed by New York law, the Hicksville parties settled “the claims
described herein against” the listed defendants and the plaintiffs agreed to
a release. The settlement agreement indicated that the “Hicksville Actions
concern[ed] the operations of and alleged emissions and discharges from
a facility that manufactured nuclear fuel elements from approximately
1952 until 1966.” Consistent with this description, the agreement defined
“Released Claims” as including any and all actions “which ar[o]se out of or
relate[d] to”:
(1) any claim asserted, or that could have been asserted, in
the Hicksville Actions . . . or (2) (a) the operation or conduct of
the Hicksville Facility and/or the Hicksville Sites, and/or (b)
any condition of the premises, the exterior or interior
environment at the Hicksville Facility and/or the Hicksville
Sites, and/or (c) any condition, result, effect or impact
allegedly created, endured or caused by the business,
manufacturing, waste removal or activities performed or
taking place at the Hicksville Facility and/or the Hicksville
Sites.
The persons to be “released” were defined to include a number of
corporations and entities filling two-and-a-half pages.
Beginning on page 24, the settlement agreement sets the contours of
the plaintiffs’ release, stating initially that upon an identified “effective
date” the releasers—i.e., the class plaintiffs—“shall be deemed to have, and
by operation of th[e] Agreement shall have[] . . . fully, finally, and forever
released, relinquished and discharged the Released Persons from any and
all of the Released Claims.” The agreement further stated that the
agreement and release “may be pled as a full and complete defense to any
Released Claims that may be instituted, prosecuted or attempted in breach
of th[e] agreement.”
Paragraph 26 then expanded from the release into the plaintiffs’
covenant not to sue “any other tortfeasors, whether joint or concurrent
and whether now known or unknown,” stating:
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26. Releasors covenant not to sue any other tortfeasors,
whether joint or concurrent and whether now known or
unknown, for losses or injuries alleged in the Hicksville
Actions or at issue in the Released Claims. This covenant
does not apply to future claims based on the aggravation of
the losses or injuries alleged in the Hicksville Actions.
Releasors may sue future tortfeasors if such tortfeasors
aggravate and/or increase the severity of a loss or injury
alleged in the Hicksville Actions.
(Emphasis added).
As required by the settlement agreement, in 2004 Beatrice executed a
“Verified Declaration for Allocation of Settlement Proceeds” for her
“Wrongful Death Claim.” In the declaration, Beatrice asserted that the
“illness[] or injur[y] . . . that caused the decedent’s death” was “lung
cancer.” Beatrice further attested that the lung cancer “diagnosis was
ultimately confirmed at [Leo’s] death” as dictated in his death certificate.
Motion for Summary Judgment
Prior to trial, the defendants moved for summary judgment on their
affirmative defense that Beatrice’s tobacco claims were barred by
Paragraph 26’s covenant not to sue since Beatrice was suing “other
tortfeasors” for the same “loss[] or injur[y] alleged in the Hicksville
Actions”—i.e., that Leo died from lung cancer. The defendants argued that
because the settlement agreement was defined to include Beatrice’s “claim
for [Leo’s] lung cancer and death,” the covenant not to sue “bar[red her]
from suing ‘any other tortfeasors’ for [Leo’s] lung cancer, even if those
tortfeasors were ‘unknown’ to her at the time she entered into the
Settlement Agreement.” Beatrice responded with numerous
counterarguments, one of which was that the defendants’ interpretation
of the release was unreasonable since the release and settlement
agreement sought to resolve an entirely separate action and the “only
losses or injuries alleged in the Hicksville Actions or at issue in the
Released Claims were those caused by releases of contaminants from the
New York defendants[].” “Had the New York defendants intended the
[covenant not to sue] to achieve the extraordinary result that the tobacco
defendants now claim for it,” Beatrice argued, their “sophisticated counsel
certainly would have expressed that intent more clearly.”
At a hearing on the motion, the trial court questioned the merits of the
defendants’ motion because Beatrice’s tobacco claims and Hicksville
claims were “totally different, essentially different torts altogether.” Three
days later, the trial court entered a written order denying the summary
judgment motion, citing New York’s General Obligations Law § 15-108 and
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two cases—Long Island Pipe Fabrication & Supply Corp. v. S & S Fire
Suppression Sys., Inc., 641 N.Y.S.2d 477 (N.Y. App. Div. 1966), and Wells
v. Shearson Lehman/Am. Express, Inc., 526 N.E.2d 8 (N.Y. 1988).
The release and covenant not to sue in the Hicksville Action barred
the negligence and strict liability causes of action, but not the
intentional torts of fraudulent concealment or conspiracy to
commit fraudulent concealment
The crucial issue in this case concerns whether these provisions of the
settlement agreement for the Hicksville class action—in particular,
Paragraph 26—bar Beatrice from bringing her tobacco suit, since both are
predicated on the Leo’s death from lung cancer. The covenant not to sue
covers “joint or concurrent” tortfeasors, “whether now known or
unknown.” The tobacco companies here are concurrent tortfeasors with
the Hicksville defendants, so they stand under the umbrella of the
covenant not to sue.
Standard of Review
Because this issue arises from a summary judgment and the
construction of an unambiguous contract, our review is de novo. See
Dennis v. Kline, 120 So. 3d 11, 20 (Fla. 4th DCA 2013) (orders on summary
judgment motions are reviewed de novo); Berman v. Parco, 986 F. Supp.
195, 208-09 (S.D.N.Y. 1997). Furthermore, since the Hicksville settlement
agreement so dictates, we apply New York law in interpreting its language.
See Blechman v. Estate of Blechman, 160 So. 3d 152, 157-58 (Fla. 4th DCA
2015).
Analysis
Releases and covenants not to sue are a species of contract construed
under the principles of contract law. See Bank of Am. Nat’l Trust and Sav.
Ass'n v. Gillaizeau, 766 F.2d 709, 715 (2d Cir. 1985). The threshold
inquiry in interpreting a release or covenant not to sue is whether its terms
are unambiguous, see Revson v. Cinque & Cinque, P.C., 221 F.3d 59, 66
(2d Cir. 2000), i.e., whether “there is no reasonable basis for a difference
of opinion.” Greenfield v. Phillies Records, 780 N.Y.S.2d 562, 569-70 (N.Y.
2002) (internal quotation omitted). If the release or covenant not to sue is
clear on its face, its construction is “a matter of law, appropriate for
summary judgment resolution.” Berman, 986 F. Supp. at 208-09
(applying New York law).
In construing an unambiguous release or covenant not to sue, “effect
must be given to the intent of the parties as indicated by the language
employed.” Shklovskiy v. Khan, 709 N.Y.S.2d 208, 209 (N.Y. App. Div.
2000). In gleaning intent, “[t]he meaning and coverage of a release
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necessarily depends upon the controversy being settled and upon the
purpose for which the release was given,” Apfel v. Prestia, 838 N.Y.S.2d
605, 606 (N.Y. App. Div. 2007); see also Nucci v. Nucci, 987 N.Y.S.2d 176,
177 (N.Y. App. Div. 2014). “Obviously, ‘a release may not be read to cover
matters which the parties did not desire or intend to dispose of.’” Peterson
v. Regina, 935 F. Supp. 2d 628, 636 (S.D.N.Y. 2013) (quoting Cahill v.
Regan, 184 N.Y.S.2d 348, 157 N.E.2d 505, 510 (N.Y. 1959)). “Moreover,
because the ‘law looks with disfavor upon agreements intended to absolve
[a party] from the consequences of his [wrongdoing],’ a release which
purports to excuse a party from responsibility for misconduct is subject to
the ‘closest of judicial scrutiny.’” Golden Pac. Bancorp v. F.D.I.C., 273 F.3d
509, 515 (2d Cir. 2001) (quoting Abramowitz v. N.Y. Univ. Dental Ctr., Coll.
of Dentistry, 494 N.Y.S.2d 721, 723 (N.Y. App. Div. 1985)).
The intent of the parties is not the only consideration when evaluating
a release or covenant not to sue. Under New York’s General Obligations
Law § 15-108(a), a release or covenant not to sue given to one tortfeasor
will not discharge other tortfeasors liable for the same injury—whether
under theories of joint, successive, or vicarious liability—unless the terms
of the release “expressly so provide.” Tufail v. Hionas, 549 N.Y.S.2d 436,
437 (N.Y. App. Div. 1989). Section 15-108(a)’s purpose is to abrogate the
harsh common law principle that the “release of one joint tort-feasor
automatically released all.”2 Wells v. Shearson Lehman/Am. Exp., Inc., 526
N.E.2d 8, 12 (N.Y. 1988). By enacting Section 15-108(a), the New York
Legislature sought “to prevent the automatic release of unnamed parties
by limiting the effect of a release to that of the language it contains.” Id.
at 14. “What it achieved was a requirement that a release not discharge
‘everyone’ or ‘anyone’ without saying so.” Id. The sentiment is that “a
2Asthe 1972 Law Revision Commission explained in a report supporting the bill’s
passage in the New York Legislature:
The [common-law] rule sets a trap for the average man, who quite
reasonably assumes that settling his claim with one person does
not have any effect on his rights against others with whom he did
not deal. At present it is necessary for the claimant to make an
express disclaimer in his release of any intent to release persons
other than those named in it. It is more in accord with common
understanding to provide that the release means just what it says;
if it does not purport to release a party by its express terms, it
should not affect his liability.
Wells, 526 N.E.2d at 14 (quoting 1972 Report of N.Y. Law Rev. Commn., 1972
N.Y. Legis Doc. No. 65[K], 1972 McKinney’s Session Laws of N.Y., at 3237, 3239).
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plaintiff should never be deprived of a cause of action against any
wrongdoer when the plaintiff has neither intentionally surrendered the
cause of action nor received substantially full compensation.” Keeton, et
al., Prosser and Keeton, Law of Torts, § 49, at 335 (5th ed. 1984).
When the language of a release or covenant not to sue, as here, is
general, without identifying specific defendants, there are three
approaches to interpreting the “expressly so provide[s]” statutory
language: (1) the “flat bar” rule, (2) the “specific intent” rule, and (3) the
“intent” rule. New York subscribes to the “flat bar” rule, which, in the
context of releases, says “that a general release discharging all other
parties who might be liable for damages in addition to a named tortfeasor
is sufficient to release a joint tortfeasor not named or specifically identified
in the release.” Moore v. Missouri Pac. R.R., 773 S.W.2d 78, 80 (Ark. 1989);
Luther v. Danner, 995 P.2d 865, 868 (Kan. 2000); Dobson v. Citizens Gas
& Coke Utility, 634 N.E.2d 1343, 1344-45 (Ind. App. 1994). “Most ‘flat bar’
courts hold that, because a release purporting to discharge . . . other
parties from liability is unambiguous, it must be construed with reference
only to the language used and not to any extrinsic evidence of the parties’
intent.” Sims v. Honda Motor Co., 623 A.2d 995, 999 (Conn. 1993). Thus,
it is not “relevant, under the flat bar rule, that the unnamed tortfeasor
(who seeks to assert the release as an affirmative defense) failed to pay
consideration.” Noonan v. Williams, 686 A.2d 237, 242 (D.C. 1996).3
New York’s adoption—and application—of the “flat bar” rule arose in
Wells v. Shearson Lehman/American Express, Inc., 526 N.E.2d 8, a case
cited by the trial court in its summary judgment order. In Wells, the
plaintiff and other members of a class action lawsuit entered into a
settlement agreement with Metromedia, its directors, and a separate
company to resolve a dispute over a buyout. Id. at 15-16. The settlement
agreement contained a release, which provided that:
all claims . . . that have been or could have been asserted by
plaintiffs herein or any members of the Class against any
3In comparison, the “specific identity” rule “plac[es] a requirement that for a
release given to one tortfeasor to discharge other potential tortfeasors from
liability[,] the release must name or otherwise specifically identify such other
tortfeasors.” Moss v. City of Oklahoma City, 897 P.2d 280, 286 (Okla. 1995);
Young v. State, 455 P.2d 889m 893 (Alaska 1969); Moore, 773 S.W.2d at 80-81.
The “intent” rule represents the middle road approach; “[r]ather than presume
that the parties’ intent was fully expressed within the four corners of the release
or that, despite the broad language of the release, the parties did not intend it to
discharge all joint tortfeasors from liability, these courts consider extrinsic
evidence of the parties’ intent to determine the scope of the release.” Sims, 623
A.2d at 1001.
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defendant, or against any of the officers, directors, agents,
attorneys, representatives, affiliates and general and limited
partners of any defendant, or against anyone else in
connection with or that arise now or hereafter out of the
Action, the Settlement (except for compliance with the
Settlement), or any matters, transactions or occurrences
referred to in the complaint or in the Stipulation, including
the recitals herein (the ‘Settled Claims’) shall be compromised,
settled, released and dismissed with prejudice.
Id. at 16. Twice, the release expressed the parties’ “intention to put
plaintiffs’ claims regarding the buyout finally to rest.” Id.
After entering into the settlement agreement, the plaintiff instituted an
action against Metromedia’s financial advisors for damages related to the
buyout. Id. at 11. The New York Court of Appeals affirmed the lawsuit’s
dismissal on the grounds the latter action fell within the scope of the
release, which “expressly provided” for “the release of persons other than
the named defendants in the class action”—namely, “anyone else in
connection with the buyout.” Id. at 14. Considering the release’s
expansive language, the court held the plaintiff “had to have known, from
the face of th[e] release, that she was discharging . . . ‘anyone else’ for
claims connected to or arising out of the buyout.” Id. Such intent was
further bolstered by the release’s language indicating that it sought to
resolve the buyout situation in its entirety. Id. at 15.
Beatrice argues Wells militates in her favor since it “emphasize[s] the
need to take stock of the purpose of a given release”—which in this case
was to resolve the radiation action. This argument views the Hicksville
settlement agreement with tunnel vision. No one disputes the Hicksville
defendants sought to wipe their hands clean of further litigation with that
action. What Beatrice misses, however, is that the language contained
within the covenant not to sue—which is prospective—does not simply bar
the plaintiffs from bringing suit against those involved with the radiation
exposure. Nor does the covenant not to sue constrain itself to the
underlying cause of action. It speaks to shielding “other tortfeasors,
whether joint or concurrent” from suits for “losses or injuries alleged in
the Hicksville Actions or at issue in the Released Claims.” In other words,
the plaintiffs were barred from suing anyone who would be a joint or
concurrent tortfeasor should the allegations of the Hicksville actions have
been proven. As will be discussed, the Hicksville defendants chose those
words for a reason—to put an end to related litigation by protecting
themselves from future contribution and apportionment claims.
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Joint and Concurrent Tortfeasors under the Hicksville
Settlement Agreement
Contribution permits a “tortfeasor who pays more than his appropriate
share . . . to recover contribution from other tortfeasors, by separate suit
or by asserting third party claims against them in the plaintiff’s suit.” Dan
B. Dobbs, The Law of Torts § 386, at 1079 (2000); see also Bd. of Educ. of
Hudson City Sch. Dist. v. Sargent, Webster, Crenshaw & Folley, 517 N.E.2d
1360, 1363 (N.Y. 1987) (stating that the “adjudicated tort-feasor [can] seek
contribution, or ‘partial indemnity’, from another tort-feasor whether or
not the second tort-feasor had been made a party to the action”). In New
York, “[t]he ‘critical requirement’ for apportionment by contribution . . . is
that ‘the breach of duty by the contributing party must have had a part in
causing or augmenting the injury for which contribution is sought.’”
Raquet v. Braun, 681 N.E.2d 404, 407 (N.Y. 1997) (quoting Nassau Roofing
& Sheet Metal Co., Inc. v. Facilities Dev. Corp., 523 N.E.2d 803, 805 (N.Y.
1988)). “Thus, contribution is available whether or not the culpable
parties are allegedly liable for the injury under the same or different
theories and the remedy may be invoked against concurrent, successive,
independent, alternative and even intentional tortfeasors.” Id. (internal
citations and quotation marks omitted) (emphasis added).
In New York, the principle allowing apportionment among tortfeasors
arose from Dole v. Dow Chemical Co., 282 N.E.2d 288 (N.Y. 1972), where
the court “permit[ted] apportionment of damages among joint or
concurrent tort-feasors regardless of the degree or nature of the
concurring fault.” Kelly v. Long Island Lighting Co., 286 N.E.2d 241, 243
(N.Y. 1972). As espoused by Dole, and later codified by statute, the
principle would apply “where the negligence of an alleged joint and
concurrent tort-feasor, albeit entirely passive, is alleged to have shared in
the causation of the injuries and damage giving rise to the apportionment-
seeker's liability.” O’Sullivan v. State, 371 N.Y.S.2d 766, 781 (N.Y. Ct. Cl.
1975); see also Rogers v. Dorchester Assocs., 300 N.E.2d 403, 409 (N.Y.
1973) (stating that apportionment would “appl[y] when two or more tort-
feasors have shared, albeit in various degrees, in the responsibility by their
conduct or omissions in causing an accident, in violation of the duties they
respectively owed to the injured person”).
Why is this important? Under their worst case scenario, the Hicksville
defendants and the tobacco Defendants would have been concurrent
tortfeasors because their independent tortious acts combined to cause the
same injury—Leo’s lung cancer and wrongful death. Tortfeasors work
concurrently “when their independent acts concur to produce a single or
indivisible injury.” Kirkpatrick v. Chrysler Corp., 920 P.2d 122, 126 (Okla.
1996) (citation omitted); see also Dobbs, supra, § 174, at 423 n.5 (“Courts
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now say that tortfeasors are concurrent tortfeasors if their independent
acts lead to an indivisible injury.”).
Smoking and other cancer-inducing agents—such as asbestos—can
give rise to a concurrent tortfeasor scenerio where both contribute to the
same disease or illness. See, e.g., Carter v. Wallace & Gale Asbestos
Settlement Trust, 96 A.3d 147, 158 (Md. 2014) (“If a tobacco company could
have been joined as a joint tortfeasor in this litigation, we could have had
a concurrent tortfeasor scenario.”); see also Kan M. Nawaday, Apportioning
Asbestos-Tobacco Liability in Falise v. American Tobacco, 88 Cornell L. Rev.
1142, 1146-49 (2003) (discussing the attempts by asbestos defendants to
seek apportionment and contribution from tobacco companies as joint or
concurrent tortfeasors). The reason is that smoking and other harmful
products can have a synergistic effect towards causing cancer. As
commentators have explained in the context of asbestos:
asbestos and tobacco smoke are complex carcinogens that
can affect multiple steps in the multistage process of cancer
evolution, and that the combined effects will depend on the
relative magnitude of each carcinogen at each stage. As
reported in different studies, the interactive effect ranges from
less than additive to supramultiplicative, but the model for
insulation workers approximates a multiplicative effect. If the
multistage model of carcinogenesis holds, and asbestos and
smoking act at different stages, then a multiplicative
relationship follows.
George A. Peters & Barbara J. Peters, Asbestos Pathogenesis and
Litigation, Vol. 13 of the Sourcebook on Asbestos Diseases: Medical, Legal,
and Technical Aspects 149 (1996).
The Hicksville “radiation” defendants and the tobacco companies are
concurrent tortfeasors. Leo died of lung cancer, whether caused by
exposure to radiation, smoking, or a combination of both. If it were indeed
the latter—if the radiation, like asbestos, functioned synergistically with
tobacco carcinogens to cause Leo’s lung cancer—then Beatrice could have
filed her wrongful death lawsuit against either the Hicksville defendants
or the tobacco defendants, just as she did. Either defendant, as occurred
in this case, could have asserted the other was the true cause of Leo
contracting lung cancer. And the tobacco companies could have at least
attempted to seek contribution from the Hicksville defendants. Cf.
Nawaday, supra, at 1146-49.
A prime goal of many class action defendants is to put an end to
litigation. Had the Hicksville defendants not entered into the covenant not
to sue, they may have left “themselves open to an action for contribution
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to a judgment obtained by the Plaintiff against another tortfeasor.”
Morison v. Gen. Motors Corp., 428 F.2d 952, 954 (5th Cir. 1970). As the
Eighth Circuit has explained, “[t]he defendant who originally procures the
release gains nothing if the plaintiff can sue other joint or concurrent
tortfeasors. In such a case, the original defendant is left open to claims
for contribution and/or indemnity and may wind up having to litigate the
case anyway.” Douglas v. U.S. Tobacco Co., 670 F.2d 791, 794 (8th Cir.
1982).
New York resolved this issue in 1974 by passing General Obligation
Law § 15-108(b), which states that “[a] release given in good faith by the
injured person to one tortfeasor . . . relieves [the tortfeasor] from liability
to any other person for contribution.” However, “[a] minority of states with
a statutory right of contribution . . . allow nonsettling tortfeasors to obtain
contribution from released joint tortfeasors to the extent and in the
manner that contribution is allowable in the jurisdiction and provided that
the liability has accrued.” Jean Macchiaroli Eggen, Understanding State
Contribution Laws and Their Effect on the Settlement of Mass Tort Actions,
73 Tex. L. Rev. 1701, 1707-08 (1995).
Here, the Hicksville action was a mass tort involving hundreds of
plaintiffs. The radiation exposure occurred decades before the settlement,
meaning many of the plaintiffs—such as the Skolnicks—had moved from
New York. Without question the Hicksville defendants wanted to avoid the
headache of numerous contribution and indemnity claims. Beatrice’s
covenant not to sue other concurrent tortfeasors thus served an important
purpose in the settlement agreement.
We reject Beatrice’s argument that the covenant not to sue is
prospective only and thus does not apply to her lawsuit, which she
contends relates back in time to when the Engle class action was originally
filed. First, the release was sufficiently broad to cover her tobacco lawsuit.
Second, and more importantly, Beatrice overlooks the mechanics of joining
the Engle class. The covenant not to sue was signed in 2004, years before
the Supreme Court decertified the Engle class. While we agree that “Engle
progeny plaintiffs are in the same position they would have been in had
they filed a complaint identical to the Engle class-action complaint on the
same date the original complaint was filed,” R.J. Reynolds Tobacco Co. v.
Ciccone, 123 So. 3d 604, 616 (Fla. 4th DCA 2013), rev. granted, 147 So.
3d 526 (Fla. 2014) (quoting Soffer v. R.J. Reynolds Tobacco Co., 106 So. 3d
456, 460 (Fla. 1st DCA 2012)), Beatrice had to take the further step,
following the Florida Supreme Court’s decertification in Engle, to file an
individual action. See Graham v. R.J. Reynolds Tobacco Co., 782 F.3d
1261, 1264 (11th Cir. 2015); Philip Morris USA, Inc. v. Douglas, 110 So. 3d
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419, 432 (Fla. 2013). Filing an individual action is precisely what she
promised not to do in the Hicksville settlement.
The Hicksville covenant not to sue does not apply to intentional torts
New York public policy precludes an exculpatory clause, such as a
covenant not to sue, from applying to intentional torts. “[N]o matter how
flat and unqualified its terms,” an “exculpatory agreement” “will not
exonerate a party from liability under all circumstances. Under
announced public policy, it will not apply to exemption of willful or grossly
negligent acts.” Kalish-Jarcho, Inc. v. City of New York, 448 N.E.2d 413,
416 (N.Y. 1983). As the New York Court of Appeals has written,
an exculpatory clause is unenforceable when, in
contravention of acceptable notions of morality, the
misconduct for which it would grant immunity smacks of
intentional wrongdoing. This can be explicit, as when it is
fraudulent, malicious or prompted by the sinister intention of
one acting in bad faith.
Id. at 416-17 (footnotes omitted). An agreement which “purports to grant
exemption from liability for willful” acts “will be viewed as wholly void.”
Lago v. Krollage, 575 N.E.2d 107, 110 (N.Y. 1991).
The egregious nature of the fraudulent concealment and conspiracy to
commit fraudulent concealment at issue in this case renders the release
and covenant not to sue in the Hicksville settlement agreement
inapplicable to these intentional torts.
The trial court erred by relying upon this Court’s decision in Philip Morris
USA, Inc. v. Hess, 95 So. 3d 254 (Fla. 4th DCA 2012), to provide an
improper instruction on the statute of repose
On her cross-appeal, Beatrice contends the trial court reversibly erred
by relying upon this Court’s decision in Philip Morris USA, Inc. v. Hess, 95
So. 3d 254 (Fla. 4th DCA 2012), in providing an improper instruction on
the statute of repose. Pursuant to the statute of repose, fraud claims
“must be begun within 12 years after the date of the commission of the
alleged fraud.” § 95.031(2)(a), Fla. Stat. (2012). In Hess, this Court held
that the statute of repose barred a claim for damages based on fraudulent
concealment, where the jury specifically found that the plaintiff relied only
on conduct that occurred more than twelve years before the filing date for
the Engle class action—May 5, 1994. Recently, the Florida Supreme Court
reversed Hess, holding that “the defendant's last act or omission triggers
Florida’s fraud statute of repose.” Hess v. Philip Morris USA, Inc., 40 Fla.
L. Weekly S188 (Fla. Apr. 2, 2015). Therefore, the court reasoned that “for
statute of repose purposes it is not necessary that the smoker relied during
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the twelve-year repose period. Where there is evidence of the defendant's
wrongful conduct within the repose period, the statute of repose will not
bar a plaintiff's fraudulent concealment claim.” Id. Plaintiffs could
therefore rely on statements made prior to May 5, 1982.
In this case, the trial judge instructed the jury that in resolving the
fraudulent concealment and conspiracy claims it could not consider any
evidence of “alleged statements, concealment or other conduct that
occurred before May 5th, 1982.” This was error because our precedent
was in error. The error was hardly harmless. Beatrice provided extensive
testimony of misleading and untruthful statements by the tobacco
industry prior to 1982, while Leo was in the prime of his life. We cannot
say beyond a reasonable doubt that the erroneous instruction did not
contribute to the defense verdict on the intentional tort claims. See Special
v. W. Boca Med. Ctr., 160 So. 3d 1251, 1256 (Fla. 2014).
We reverse the judgment on the intentional tort claims and remand for
a new trial. We reverse the judgment on the negligence and product
liability claims and remand for the entry of a judgment for the defendants.
CIKLIN, C.J., and STEVENSON, J., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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