The Diocese of St. Cloud Decade-Long Drama: The Conclusion

On April 9, 2005, when Alice Staab fell out of the wheelchair being pushed by her husband, Richard Staab, at Holy Cross Parish School, little did she know that her case would take four trips to the higher courts in Minnesota and last for almost 10 years.

Procedural History and Appeals

This case revolves around Minnesota Statute Section 604.02 and its 2003 amendment. The 2003 amendment is reflected in subdivision 1, which states,

Subdivision 1. Joint Liability. When two persons are severally liable, contributions to awards shall be in a proportion to the percentage of fault attributable to each, except that the following persons are jointly and severally liable for the whole award:

(1) a person whose fault is greater than fifty percent;

(2) two or more persons who act in a common scheme or plan that results in injury;

(3) a person who commits an intentional tort; or

(4) a person whose liability arises under [various statutes].

Subdivision 2, which remained unchanged in 2003, states the following,

Subd. 2 Reallocation of uncollectible amounts generally.

Upon motion made not later than one year after judgment is entered, the court shall determine whether all or part of the parties equitable share of the obligation uncollectible from that party and shall reallocate any uncollectible amount among the other parties, including the claimant at fault, according to their respective percentages of fault. A party whose liability is reallocated is nonetheless subject to contribution and to any continuing liability to the claimant on the judgment.

After her injury, Alice Staab sued the Diocese of St. Cloud, the owner of Holy Cross Parish School, claiming that the Diocese was negligent in her fall because she was wheeled over a 5 inch drop-off after proceeding through a doorway. The Diocese did not assert any claims against Richard Staab who was pushing Alice’s wheelchair at the time of the fall. At trial a jury found that both Richard and the Diocese were each 50% responsible for the accident and for Alice’s damages of $224,200.70.

After the award came down the District Court held that the Diocese had to pay the total amount because since Richard Staab was not a party to the action, subdivision 1 of Section 604.02 did not apply. The case made its way up to the Minnesota Court of Appeals (Staab I) which held that the term “persons” in 604.02, subdivision 1 “must be defined broadly to include not just a party to a lawsuit, but any tortfeasor whose fault has been submitted to the jury.” In other words, the Diocese was only obligated to payGTY_supreme_court_cases_jef_131003_16x9_992 its portion of the award that was allocated to it.

The Minnesota Supreme Court granted review and affirmed the Minnesota Court of Appeals but reached a slightly different reasoning for the same conclusion (Staab II). The Minnesota Supreme Court focused on the meaning of “when” in subdivision 1 holding that liability attaches at the time of the tortious act. Therefore, the absence of a tortfeasor in a lawsuit does not negate them from apportionment under subdivision 1. After the case was remanded to be disposed of in accordance with the Court’s ruling, Alice Staab made a motion under subdivision 2 for Richard’s 50 percent to be allocated to the Diocese since his share of the fault was unable to be collected. The trial court granted the motion. The Diocese appealed.

Thus, the case went back to the Court of Appeals due to the granting of Alice’s motion under subdivision 2. In Staab III, the Court of Appeals rejected all of the Diocese arguments against reallocation under subdivision 2 and affirmed the trial court. The Diocese argued that reallocation under subdivision 2 is only applicable where there is joint and several liability, that the term party in subdivision 2 should be defined as to include only litigants—showing contrast to subdivision 1’s use of “person”—and, finally, the Diocese argued that there must be a judgment against the tortfeasor for the tortfeasor’s fault be reallocated.

The Diocese appealed and the Minnesota Supreme Court granted review. Oral argument was heard on November 4, 2013. The Diocese argued that if plaintiffs were allowed to reallocate fault under subdivision 2 and collect an entire award from any party it would completely eviscerate the legislator’s 2003 amendments to subdivision 1. In other words, liability would focus on whether a party is solvent and able to pay the judgment instead of focusing on a party’s percentage of fault. Staab insisted that reallocation under subdivision 2 is appropriate because nothing in subdivision 2 limits its application to parties who are jointly and severally liable under subdivision 1.

Final Supreme Court Ruling: Staab IV

Majority Opinion

On September 10, 2014 the Minnesota Supreme Court settled the issue and held “that a party who is severally liable under Minn. Stat. § 604.02, subd. 1, cannot be required to contribute more than that parties equitable share of the total damages award to the reallocation-of- damages provision in Minn. Stat. § 604.02, subd. 2” and reversed and remanded to the District Court for entry of judgment consistent with that ruling. Staab v. Diocese of St. Cloud, — N.W.2d — (Minn. 2014)(Staab IV).

To begin its analysis, the Minnesota Supreme Court had to determine whether Minn. Stat. § 604.02 is ambiguous when applied to severally liable parties. The court concluded that there are two reasonable interpretations of subdivision 2. One reasonable interpretation would be that any “party” is subject to reallocation because the term “party” includes all parties to the tort as defined in Staab I. The second reasonable interpretation of subdivision 2 is that “damages cannot be reallocated to parties who are only severally liable under subdivision 1.” Supreme Court concluded that because subdivision 2 is subject to more than one reasonable interpretation it should be treated as ambiguous on whether it applies to severally liable parties.

Determining that subdivision 2 is ambiguous, the courts spent a great deal of time turning to the canons of statutory construction to ascertain the statutes meeting. Ultimately, the court held that “interpreting subdivision 2 to permit reallocation of an uncollectible share to a severally liable defendant would violate the principle that a statue must be construed in a manner that gives effect to each of its provisions” because subdivision 1 states that contributions to awards are in proportion to the percentage of fault. More simply, a reallocation under subdivision 2 would in effect be a “fifth” exception under subdivision 1 which articulates when joint and several liability still applies. The legislative history supports this interpretation because the amendment in 2003 was intended to limit the application of joint and several liability. The court quoted legislatures during the 2003 amendment debate who urged colleagues to vote in favor of the bill because it would create fairness by requiring people to pay for the harm they cause, but not for harm caused by others.

Bottom line, the court stated, “…the conflicts between subdivision 1 and subdivision 2 arise because the application of subdivision 2 to severally liable parties completely eviscerate the legislator’s amendment to subdivision 1.”

The Dissent

The dissent took issue with the fact that a “blameless plaintiff” will only be awarded half of the damages that she suffered and argued that this result violates the plain words of the law. The dissent argues that subdivision 2 is clear and unambiguous and required the District Court to reallocate Richard Staab’s uncollectible amounts to the Diocese. The dissent further takes issue with the majority’s reasoning that the 2003 amendment to subdivision 1 silently amended subdivision 2. In essence, the dissents opines that the “concept that a plaintiff who has suffered an indivisible injury cannot ever recover the insolvent tortfeasor share, in preference to a solvent tortfeasor, is an abrogation of the common law. If the legislator intended such abrogation, it had to say so clearly. It did not.”

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