$10M settlement; Plaintiff wins $11M judgment against fleet company after fatal brake-failure crash, settles for $10M

In a rare case brought pursuant to the Uniform Contribution Among Tortfeasors Act, plaintiff Ferguson Enterprises obtained a $11.04 million judgment against fleet-servicing company Pee Dee Fleet after a bench trial. The case arose from a tragic incident in which a box truck ran over and killed two pedestrians working for SCDOT. The truck belonged to Ferguson Enterprises and was operated by Ferguson’s driver. It was ultimately determined that the incident occurred because the truck’s brakes were in a state of disrepair and prevented the truck from stopping. The pedestrians’ estates brought suit against Ferguson for wrongful death and survival, which the estates ultimately settled with Ferguson for $10 million each ($20 million total).

During the litigation, it was discovered that Pee Dee Fleet, a fleet-servicing company that serviced Ferguson’s trucks, had performed an inspection of the subject box truck just ten days before the incident. Ferguson alleged Pee Dee Fleet had negligently failed to discover and repair the brake problems or at least let Ferguson know not to put the truck back on the road. Ferguson alleged Pee Dee Fleet had undertaken and breached a duty to the pedestrians and was thus a joint tortfeasor along with Ferguson. Consequently, after settling with the pedestrians’ estates, Ferguson brought an action against Pee Dee Fleet for contribution.

Ferguson took the position that as a joint tortfeasor, Pee Dee Fleet was responsible for a “pro rata” share of the $20 million settlement of the underlying claims. The trial court agreed with Ferguson that pursuant to the contribution statutes, “pro rata” means equal shares without regard for any percentage-based allocation or principles of comparative fault. “Pro rata” contribution is instead determined by a simple head count of the tortfeasors that caused the same harm. Here, there were two tortfeasors, Ferguson and Pee Dee Fleet, and therefore Ferguson was entitled to a 50 percent contribution from Pee Dee Fleet, or $10 million.

In addition to the rarely tested legal issues surrounding the contribution statutes, this case implicated insurance bad faith and South Carolina’s Tyger River Doctrine. Pee Dee Fleet had liability coverage of $6 million through Auto-Owners, which had refused to pay anything toward the settlement with the pedestrians’ estates. After Ferguson brought the contribution claim, Auto-Owners still refused to pay anything, and it rejected Ferguson’s offer of judgment within policy limits. This left Pee Dee Fleet exposed to a judgment in excess of its coverage, which ultimately came to fruition. The Court entered judgment against Pee Dee Fleet for $10 million on Ferguson’s contribution claim along with interest on Ferguson’s Offer of Judgment in the amount of $1,043,287.67, for a total judgment of $11.04 million.

After judgment was entered, Ferguson gave Pee Dee Fleet a very brief opportunity to settle the case for less than the judgment (and the post-judgment interest that was beginning to rapidly accrue). Pee Dee Fleet accepted and paid $10 million to settle the contribution case.