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Trepanier MacGillis Battina P.A. 8000 Flour Exchange Building 310 Fourth Avenue South Minneapolis, MN 55415 612.455.0500

Minnesota Supreme Court Rejects Reallocation of Damages to Severally Liable Parties

Under the law, parties can be held either “severally” or “jointly and severally” liable for damages. Under the first category, called several liability, a party is only liable for the harm it caused. Under the second category, called joint and several liability, a party is liable for the harm both parties caused. What if two parties are severally liable but one of the parties cannot afford to pay? What should the court do? This article discusses how Minnesota courts have addressed this civil liability problem in a series of cases entitled Staab v. Diocese of St. Cloud.
Background Regarding Joint and Several Liability
Minnesota Statute § 604.02 governs the apportionment of damages in a civil suit. Generally, liable parties are responsible for a contribution to an award that is proportional to their fault except when their fault exceeds fifty percent, they act in a common scheme resulting in injury, they commit an intentional tort, or their liability arises under certain chapters of Minnesota Statutes. When a party is only responsible for the harm it caused, it is “severally liable.” Normally, a party that is severally liable is only responsible for a contribution that is proportional to the harm that party contributed. The exceptions to this rule are called “joint and several liability.”
One of the exceptions which establishes joint and several liability involves a situation where one or more of the responsible parties cannot satisfy the judgment, in which case their share of liability can be allocated to the other parties responsible for the harm. Minnesota Statutes § 604.02, subdivision 2 provides that, upon motion, “the court shall determine whether all or part of a party’s equitable share of [an] obligation is uncollectible from that party and shall reallocate any uncollectible amount among the other parties, including a claimant at fault, according to their respective percentages of fault.”
Facts in the Staab v. Diocese of St. Cloud Case
Plaintiff Alice Staab suffered injuries when her husband, Richard Staab, pushed her wheelchair over an unmarked five-inch drop-off located on the property of Holy Cross Parish School, owned by Defendant Diocese of St. Cloud. A jury found the Diocese severally liable for fifty percent of Plaintiff’s injuries and Richard Staab severally liable for the other fifty percent. The district court ordered the reallocation of a portion of the jury verdict to the Diocese. The Minnesota Court of Appeals affirmed a reallocation pursuant to Minn. Stat. § 604.02, subd. 2, of Richard Staab’s contribution to the Diocese on the basis that it was uncollectible. The Diocese appealed to the Minnesota Supreme Court.

The Minnesota Supreme Court’s Decision
The issue decided by the Supreme Court was whether § 604.02 allows reallocation of an uncollectible contribution of one party to another party who is only severally liable. The Supreme Court found that § 604.02 is ambiguous. Staab contended that the statute “. . . must be applied as written, requiring reallocation to the solvent tortfeasor of the insolvent tortfeasor’s uncollectable equitable share based on their respective percentages of fault.” The Diocese contends that the 2003 amendment which applied to a different subdivision of § 604.02 also “silently amended” the subdivision of § 604.02 in question. This silent amendment would thereby prohibit reallocation except in four exceptional categories not at issue in this case. The Supreme Court settled on the latter interpretation, thus reversing the Court of Appeals. The Court emphasized that Minnesota legislators, by the explicit language of the statute and the legislative history of the statute, have indicated a desire to limit “joint and several” liability within Minnesota. The Court concluded that reallocations of damages to those who are only severally liable would burden people with the cost of harms they did not cause, thereby expanding the scope of “joint and several” liability contrary to public policy. For this reason, the Court ruled against the plaintiff.

The Minnesota Supreme Court’s decision in Staab demonstrates that Minnesota law is averse to imposing joint and several liability. The default, as set forth in § 604.02, is several liability, which means that parties are responsible for contributions proportional to the harm they cause individually. This default position makes it easier for plaintiffs to predict from whom they can expect to collect damages and for defendants to predict how big of a contribution they can expect to pay if they are found liable for a tort. Generally, if you are a plaintiff and your claim does not fall under one of the four exceptions, you will not be able to shift uncollectible contributions to another contributing party without joint and several liability. Conversely, if you are a defendant and you do not fall under one of the four exceptions, you can rest well knowing that the uncollected contributions of others will not become your burden.
If you have questions about the application of the Staab decision or if you are a party to a civil lawsuit in Minnesota, contact one of the Minnesota civil litigation attorneys of Trepanier MacGillis Battina P.A.
About the Author:
Minnesota litigation attorney Bryan R. Battina is a seasoned litigator with extensive experience in civil litigation. Bryan may be reached at 612.455.0505 or Trepanier MacGillis Battina P.A. is a Minnesota commercial litigation law firm located in Minneapolis, Minnesota.
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