SNOWDEN v. D. C. TRANSIT SYSTEM, INC.

TAMM, Circuit Judge:

Appellant, Constance Snowden, a passenger for hire on a bus owned by appellee, D.C. Transit System, Inc., sustained personal injuries when the bus collided with an automobile owned and operated by James Ivey.1 Mrs. Snowden filed suit against both D.C. Transit and Ivey who in turn filed cross-claims against each other for contribution. During the course of the trial, at a bench conference, counsel for Snowden and counsel for Ivey jointly announced that their respective clients had entered into a settlement agreement.2 Since the jury was not informed of the settlement,3 the trial continued, ostensibly against both defendants. At the conclusion of the trial the jury was instructed as to Mrs. Snowden's suit against both defendants. The jury returned a verdict for Mrs. Snowden against D.C. Transit in the amount of $12,500 and exonerated Ivey from liability to Mrs. Snowden and D.C. Transit. Following entry of judgment, D.C. Transit filed a motion to reduce its judgment liability to plaintiff by $5,000 — the amount of the settlement between Ivey and Snowden — from $12,500 to $7,500. The motion was denied.4 We reverse.

A cardinal principle of law is that in the absence of punitive damages a plaintiff can recover no more than the loss actually suffered. "[W]hen the plaintiff has accepted satisfaction in full for the injury done him, from whatever source it may come, he is so far affected in equity and good conscience, that the law will not permit him to recover again for the same damages." Lovejoy v. Murray, 70 U.S.(3 Wall.) 1, 17, 18 L.Ed. 129 (1865). The purpose of the rule — prevention of unjust enrichment — has been invoked by this court on several occasions. In McKenna v. Austin, 77 U.S. App.D.C. 228, 233, 134 F.2d 659, 664 (1943) we observed that an "injured person may [not] have more than full satisfaction, except as punitive damages. He has no right to make profit from his harm because several share in causing it." See also Brightheart v. McKay, 136 U.S.App.D.C. 400, 401, 420 F.2d 242, 243 (1969) citing Martello v. Hawley, 112 U.S.App.D.C. 129, 300 F.2d 721 (1962); Hudson v. Lazarus, 95 U.S.App.D.C. 16, 217 F.2d 344 (1954). The jury has determined that the full extent of Mrs. Snowden's injuries is $12,500. She can recover no more.

Apparently, appellee contends that the settlement payment should not fall within the general rule cited above since is, in effect, a gratuity from a collateral source which does not operate to reduce the amount of the judgment.5 Indeed a minority of jurisdictions have so held. Carruba v. Speno, 418 S.W.2d 398 (Ky. 1967); Papenfus v. Shell Oil Co., 254 Wis. 233, 35 N.W.2d 920 (1949).

We find these cases unpersuasive. A settlement made by one liable potentially, but not in fact, is made under Damoclean pressure, not gratuitously. The collateral source rule which applies to gratuitous or pre-planned benefits such as insurance and sick pay cannot be tortured to encompass the settlement made herein. See Bryant v. Mathis, 107 U.S. App.D.C. 339, 278 F.2d 19 (1960); Hudson v. Lazarus, supra. Other courts when faced with the precise facts at bar have so held. Gill v. United States, 429 F.2d 1072, 1078-1079 (5th Cir. 1970) citing McMullen v. Coleman, 135 S.W.2d 776 (Tex.Civ.App.1940); Riexinger v. Ashton Co., 9 Ariz.App. 406, 453 P.2d 235 (1969); Steger v. Egyud, 219 Md. 331, 149 A.2d 762 (1959); Klotz v. Lee, 36 N.J.Super. 6, 114 A.2d 746 (1955); Jacobsen v. Woerner, 149 Kan. 598, 89 P.2d 24 (1939). See also Sweep v. Lear Jet Corp., 412 F.2d 457, 461 (5th Cir. 1969); W. Prosser, Law of Torts § 50, p. 305 (4th ed. 1971).

Although considerably obfuscated by the extraordinary factual situations which inevitably arise in joint tortfeasor litigation, a glance at our own decisions reveals that we have recognized the principal of credit where there has been no exoneration of the settling tortfeasor. See McKenna v. Austin, supra, 77 U.S.App.D.C. at 234, 134 F.2d at 665. We now hold that a settlement with one later proven not to have been a tortfeasor also requires a reduction in the judgment against the tortfeasor. Our holding achieves a salutory result in that it precludes potential chicanery on the part of plaintiffs in similar circumstances. Were we to hold otherwise a plaintiff would be in the anomalous position of benefiting by losing at trial to tortfeasors with whom he has settled.

The main thrust of appellee's contentions in its brief and at oral argument is that our cases barring contribution where there is no finding of joint liability in tort preclude a credit where liability is not joint. The flaw in appellee's argument is her failure to distinguish between the concepts of credit and contribution. Under the circumstances of this case it would obviously be unfair to force Ivey, the settling tortfeasor, to contribute since he has already bought his peace. Jones v. Schramm, 141 U. S.App.D.C. 169, 436 F.2d 899 (1970); McKenna v. Austin, supra. However, unlike the concept of contribution no unfairness results from a credit. The settling tortfeasor is not forced to make any additional payment. Furthermore, and just as importantly, plaintiff-appellee is getting full satisfaction for her injuries.

The judgment appealed from is reversed and the cause remanded with instructions to reduce the judgment liability of appellant D.C. Transit by the $5,000 paid in settlement.6

So ordered.