## Facts

- Larry Edward Spencer suffered serious injuries when his car on State Route 17 collided head-on with a truck driven by James Gardner.
- The collision occurred after George Bracket, driving a vehicle owned by House of Lamps, made an unsafe lane change that caused Gardner to swerve across the center line into Spencer’s oncoming lane.
- Spencer brought a personal injury action against Gardner, Bracket, and House of Lamps.
- Before trial, Gardner settled with Spencer for $350,000 (the full amount of Gardner’s insurance coverage).
- The case proceeded to verdict against Bracket and House of Lamps, and the jury awarded Spencer $2.5 million in damages.
- Bracket and House of Lamps satisfied the balance of the judgment by paying Spencer $2.15 million.
- Bracket and House of Lamps then sued the State of California for comparative equitable indemnity, alleging a dangerous condition of public property based on the state’s failure to install a median barrier separating opposing traffic on the highway segment where the crash occurred.
- In the indemnity action, a jury found the state’s failure was a cause of Spencer’s injuries and allocated fault at 85% to Bracket/House of Lamps, 10% to the State, and 5% to Gardner.
- The trial court entered judgment for Bracket/House of Lamps against the State for $226,315.66, calculated as: ($2,500,000 − $350,000) × (10/95).
- The State appealed, challenging only the damages calculation method (not the fault allocation).

## Issues

1. In a comparative equitable indemnity action, when one concurrent tortfeasor has settled with the injured plaintiff, must the settlement amount be credited against the plaintiff’s total damages before apportioning the remaining loss among the nonsettling tortfeasors based on their relative fault?
2. Did the trial court err by subtracting Gardner’s $350,000 settlement from the $2.5 million verdict before computing the State’s indemnity share using the parties’ comparative fault percentages as between the nonsettling defendants (10/95)?

## Decision

- The Court of Appeal affirmed the judgment.
- The court held that the trial court properly credited the full amount of Gardner’s settlement against the total damages before allocating the unpaid remainder between Bracket/House of Lamps and the State according to their relative shares of nonsettling fault (10% of 95%).
- Applying that method, the State’s indemnity obligation was correctly computed as ($2,500,000 − $350,000) × (10/95) = $226,315.66.

## Legal Principles

- Comparative equitable indemnity allows a tortfeasor who has paid more than its fair share of the plaintiff’s loss to obtain partial reimbursement from another concurrent tortfeasor in proportion to comparative fault.
- A plaintiff’s settlement with one tortfeasor is credited against the plaintiff’s total damages to prevent a double recovery for the same harm.
- When allocating indemnity among nonsettling tortfeasors after a third party’s settlement, the court may first subtract the settlement amount from total damages and then apportion the remaining unpaid damages among the nonsettling parties according to their relative comparative fault (i.e., each party’s percentage divided by the combined percentage of the nonsettling parties).
- This setoff-first approach aligns fault-based allocation with the reality that part of the plaintiff’s total loss has already been satisfied by the settling tortfeasor.

## Conclusion

Bracket v. State of California holds that in a comparative equitable indemnity action, the settling tortfeasor’s payment is deducted from the plaintiff’s total damages before the remaining unpaid damages are allocated among the nonsettling tortfeasors according to their relative shares of comparative fault, and the State’s share was properly calculated using that method.


Bracket v. State of California, 180 Cal. App. 3d 1171, 226 Cal. Rptr. 1 (1986)