Haw. Rev. Stat. § 663-15.5

Current through Act 1 of the 2024 Legislative Session

Section 663-15.5 - Release; joint tortfeasors; co-obligors; good faith settlement

(a) A release, dismissal with or without prejudice, or a covenant not to sue or not to enforce a judgment that is given in good faith under subsection (b) to one or more joint tortfeasors, or to one or more co-obligors who are mutually subject to contribution rights, shall:

(1) Not discharge any other joint tortfeasor or co-obligor not released from liability unless its terms so provide;

(2) Reduce the claims against the other joint tortfeasor or co-obligor not released in the amount stipulated by the release, dismissal, or covenant, or in the amount of the consideration paid for it, whichever is greater; and

(3) Discharge the party to whom it is given from all liability for any contribution to any other joint tortfeasor or co-obligor.

This subsection shall not apply to co-obligors who have expressly agreed in writing to an apportionment of liability for losses or claims among themselves.

(b) For purposes of subsection (a), any party shall petition the court for a hearing on the issue of good faith of a settlement entered into by the plaintiff or other claimant and one or more alleged tortfeasors or co-obligors, serving notice to all other known joint tortfeasors or co-obligors. Upon a showing of good cause, the court may shorten the time for giving the required notice to permit the determination of the issue before the commencement of the trial of the action, or before the verdict or judgment if settlement is made after the trial has commenced.

The petition shall indicate the settling parties and, except for a settlement that includes a confidentiality agreement regarding the case or the terms of the settlement, the basis, terms, and settlement amount.

The notice, petition, and proposed order shall be served as provided by rules of court or by certified mail, return receipt requested. Proof of service shall be filed with the court. Within twenty-five days of the mailing of the notice, petition, and proposed order, a nonsettling alleged joint tortfeasor or co-obligor may file an objection to contest the good faith of the settlement. If none of the nonsettling alleged joint tortfeasors or co-obligors files an objection within the twenty-five days, the court may approve the settlement without a hearing. An objection by a nonsettling alleged joint tortfeasor or co-obligor shall be served upon all parties. A nonsettling alleged joint tortfeasor or co-obligor asserting a lack of good faith shall have the burden of proof on that issue.

Where a confidentiality agreement has been entered into regarding the claim or settlement terms, the court shall hear the matter in a manner consistent with preventing public disclosure of the agreement while providing other joint tortfeasors and co-obligors sufficient information to object to a proposed settlement.

(c) The court may determine the issue of good faith for purposes of subsection (a) on the basis of affidavits or declarations served with the petition under subsection (b) and any affidavits or declarations filed in response. In the alternative, the court, in its discretion, may receive other evidence at a hearing.

(d) A determination by the court that a settlement was made in good faith shall:

(1) Bar any other joint tortfeasor or co-obligor from any further claims against the settling tortfeasor or co-obligor, except those based on a written indemnity agreement; and

(2) Result in a dismissal of all cross-claims filed against the settling joint tortfeasor or co-obligor, except those based on a written indemnity agreement.

(e) A party aggrieved by a court determination on the issue of good faith may appeal the determination. The appeal shall be filed within twenty days after service of written notice of the determination, or within any additional time not exceeding twenty days as the court may allow.

(f) The running of any statute of limitations or other time limitations shall be tolled during the period of consideration by the court on the issue of good faith.

(g) The procedures, rights, and obligations of this section shall apply to a release, dismissal, or covenant given before, as well as after, a lawsuit has been filed and does not require the existence of a lawsuit.

(h) This section shall not apply to a release, dismissal with or without prejudice, or a covenant not to sue or not to enforce judgment given to a co-obligor on an alleged contract debt where the contract was made prior to January 1, 2002.

HRS § 663-15.5

Amended by L 2017, c 12,§ 73, eff. 4/26/2017.

L 2001, c 300, §1; am L 2003, c 146, §1 .

Law Journals and Reviews

Keeping the (Good) Faith: Hawai`i's Good Faith Settlement After HRS Section 15.5 and Troyer v. Adams. 26 UH L. Rev. 275.

Magistrate judge properly determined that defendant did not meet its burden of disproving good faith regarding settlement between plaintiff and other defendants. 293 F. Supp. 2d 1144. Discussed, where the court held that the proportionate share rule of federal admiralty law governed the settlement between plaintiff and the settling defendant. 526 F. Supp. 2d 1135. This section adequately protects a non-settling joint tortfeasor's right to procedural due process; subsections (b) and (c) afford a non-settling joint tortfeasor notice and an opportunity to be heard regarding the determination whether a settlement has been given in good faith and, consequently, bars cross-claims for contribution against the settling joint tortfeasor. 102 H. 399, 77 P.3d 83. Whether a settlement was given in "good faith" for purposes of this section is a matter left to the discretion of the trial court in light of all the relevant circumstances extant at the time of settlement.102 Haw. 399,77 P.3d 83. Legislature intended only parties, not merely non-settling alleged joint tortfeasors, to have the right to appeal a court determination on the issue of good faith; where, for purposes of appeal, appellant was required to intervene as a party, pursuant to HRCP rule 24 and failed to do so, and was thus not made a party to the case, appellant lacked standing to appeal. 112 H. 176, 145 P.3d 719. A settlement, wherein a party seeks to accomplish indirectly that which it is expressly barred by applicable law from accomplishing directly, is not in good faith. 113 H. 406,153 P.3d 1091.