Case Update: Minnesota Supreme Court Holds Severally Liable Defendants Who Are 50% Or Less At Fault Pay Only Their Fair Share.

The Minnesota Supreme Court recently issued its long-awaited “Staab II” decision, holding a defendant who is severally, but not jointly, liable but is apportioned 50% or less of the fault by the jury is liability for its percentage share of fault, not the entire verdict, under Minn. Stat. § 604.02.  The “uncollectable” portion of the verdict is not “reallocated” to a defendant who is less than 50% at fault.

In Staab v. Diocese of St. Cloud, — N.W.2d —, A12-1575, (Minn. Sept. 10, 2014), plaintiff fell from her wheelchair after her husband pushed her over an unmarked step at the Diocese in St. Cloud.  Plaintiff sued the Diocese of St. Cloud.  She and the Diocese did not name her husband as a defendant.  The jury “split the baby” and found the Diocese 50% at fault and the husband 50% at fault for plaintiff’s injuries.  Initially, the trial court found that the Diocese had to pay 100% of the damages under Minnesota’s reallocation statute, Minn. Stat. § 604.02, subd. 1.  On appeal, the Minnesota Supreme Court in Staab I held that where a jury attributes 50% of the negligence to the sole defendant and 50% to a nonparty, Minn. Stat. § 604.02, subd. 1, requires that the defendant contribute only that proportion of fault attributed to the defendant by the jury. Staab v. Diocese of St. Cloud, 813 N.W.2d 68, 70 (Minn. 2012) (“Staab I”).  The Court remanded the case to the district court.

On remand, plaintiff moved to reallocate the husband’s “uncollectable” share of the damages to the Diocese under Minn. Stat. § 604.02, subd. 2.  The trial court and court of appeals agreed that the share of damages attributable to plaintiff’s husband were “uncollectable” and could be reallocated to Diocese, making it responsible for all of plaintiff’s damages.

The Minnesota Supreme Court reversed.  It held that where a severally, but not jointly, liable defendant is 50% or less at fault, it must only pay its percentage share of the verdict.  The Court reasoned this interpretation comports with the purpose of Minn. Stat. § 604.02, which was to limit defendants’ several liability.  This decision does not alter the long-standing rule that where a defendant is 50% or more at fault, the entire “uncollectable” portion may be reallocated to that defendant.

This case impacts all verdicts involving multiple defendants because it significantly limits reallocation under Minn. Stat. § 604.02.  Importantly, it ensures that severally liable defendants, who are minimally at fault, do not pay for damages caused by other defendants.  Thus, the “deep pocket” defendant who is 50% or less at fault will not owe the entire award.  We will continue to monitor cases and legislative action involving joint and several liability and the reallocation of damages.  If you have any questions about this, or any other matter, please contact us.