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Sharing the Cost of Liability: What is Contribution?
Let’s say there’s an accident that leaves a person injured. The injured party sues the party at fault – the tortfeasor – who ends up paying damages. The injured party has received compensation for their injury, and the tortfeasor has paid what they owe. End of story.
But what if more than one party is liable for the accident? What is a party to do when they have paid the full amount of damages for an accident they’re only partly responsible for?
The answer: seek contribution.
What is Contribution in Civil Law?
Contribution is the “tortfeasor’s right to collect from others responsible for the same tort after the tortfeasor has paid more than his or her proportionate share, the shares being determined as a percentage of fault,” as defined in United States v. Atl. Research Corp.
In other words, a defendant (tortfeasor) who has paid out more than their fair share of money to a plaintiff has the right to seek contribution (money) from other parties who also bear liability for the injury or wrongful death in question. That money must be in a proportional amount, so the tortfeasor is limited to recovering an amount equal to the excess paid to the plaintiff.
This right of contribution does not exist for any party that intentionally caused or contributed to the injury or wrongful death in question. (For more on the ins and outs of contribution, read the South Carolina Contribution Among Tortfeasors Act in the SC Code here.)
A Case Concerning Contribution: The Background
The South Carolina Court of Appeals heard a case in December 2018 that concerned contribution, Charleston Electrical Services, Inc. v. Rahall. (Find the decision here.) The situation is nuanced and involves a party seeking contribution from a daughter for an injury to her mother, which makes it especially interesting.
In August 2010, Wanda Rahall and her mother, Elsie Rabon, visited Rahall’s fiancé at his apartment in Charleston. The apartment of her fiancé, George Kornahrens, was located in a building on property he owned but was leasing to Charleston Electrical Services (CES). He was the business manager of CES but had no ownership in the company.
During the August visit to the property to see Kornahrens, Rabon was knocked down and injured by Gunner, an “overly friendly” German shepherd owned by CES. Rabon was hospitalized and it was determined she had a broken hip.
In December 2010, Rabon filed a lawsuit against CES for negligence and strict liability. The parties later settled for $200,000, and Rabon released CES, Rahall, and Kornahrens from liability.
In July 2013, CES and Selective, its insurance carrier, filed a lawsuit against Rahall seeking contribution in the amount of half the settlement paid to Rahall’s mother Rabon. The issue went before a master-in-equity in August 2016, who found against CES and Selective. They appealed to the SC Court of Appeals.
Here’s Where Contribution Comes In
A party can only successfully seek contribution if there is another party partially responsible for the injury. CES and Selective needed to show that Rahall was also responsible for her mother’s injury in order to recover money from her.
CES and Selective argued that Rahall was negligent, and therefore was partially liable for the accident. To show negligence, the following points must be established: 1) the defendant (Rahall) owed a duty of care to the plaintiff (Rabon); 2) the defendant breached the duty of care by negligent act or omission; 3) the defendant’s breach was the cause of the plaintiff’s injury; and 4) the plaintiff suffered damages as a result.
Rahall owed her mother a duty of care, CES and Selective argued, under a premises liability theory. In SC, a landowner owes a duty of care to guests on their property. This includes a duty to warn a guest of potential dangers they should know about.
Remember that Rahall was not the owner of the property where the accident occurred; her fiancé was, and he was leasing it to CES who had full control of the property at the time when the injury occurred. However, Rahall had been engaged to her fiancé for four years and lived in the apartment on the property with him when she was in Charleston. She kept things there and had a key. Based on this, CES and Selective argued that she was a “possessor of the Property” and therefore owed a duty of care to Rabon.
The Court of Appeals disagreed. Rahall didn’t pay utilities, rent, or taxes on the apartment, she kept a separate home in a different city, and she had no ownership interest or control of any part of the property. (The master had even called the idea that she was liable under a theory of premises liability “patently meritless.”) Therefore, she had no duty of care and negligence could not be established as a basis of liability under a premises liability theory.
Special relationship exception
In SC, no one owes a duty to warn another person about potential danger or to control their conduct with these five exceptions: 1) where the defendant has a special relationship to the victim; 2) where the defendant has a special relationship to the injurer; 3) where the defendant voluntarily undertakes a duty; 4) where the defendant negligently or intentionally creates the risk; and 5) where a statute imposes a duty on the defendant.
CES and Selective argued that Rahall owed a duty to Rabon under this “special relationship exception” rule. She knew that Gunner had previously jumped on visitors, they asserted, and should have known that the dog would pose a threat to her elderly mother – and warned her.
But the master and later the Court of Appeals disagreed with this argument. “Our jurisprudence has not extended a legal duty to children to protect, warn, or supervise a parent,” stated the Court of Appeals in its decision.
Ultimately, the Court of Appeals affirmed the master-in-equity’s decision, and CES and Selective were unsuccessful in their attempt to seek contribution.
The Challenges of Seeking Contribution
CES believed it was not wholly responsible for the accident that injured Rabon and so sought contribution from another party they believed was also partially liable. But you can see that seeking contribution can be challenging – they had to prove liability, and they failed. It’s also a large commitment of time and finances on the part of the defendant. It’s something no business wants to go through.
In situations like these, sound legal advice is a necessity. If you’re a business owner looking for help with a legal issue, contact Gem McDowell and his team at the Gem McDowell Law Group in Mt. Pleasant, SC. With over 25 years in business law in SC, Gem has the experience to not only handle legal matters but also offer sound strategic advice that can protect your business and help it grow. Schedule a free consultation to discuss your business with him by calling 843-284-1021 today.