Stephen James Utts, M.D., Petitioner

Dennie Short, individually, and as executor of The Estate of Clifton Short, deceased, Norma L. Short, Patricia Ann Cain, and Sam Short, Respondents

Justice Gonzales delivered the opinion of the Court as to Parts I and IIB, and a concurring opinion as to Parts IIA, IIC, and III, all of which Chief Justice Phillips and Justice Abbott joined. Justice Enoch, Justice Baker, Justice Hankinson, and Justice O'Neill joined Parts I and IIB of the Court's opinion and its judgment.

The primary issue in this case is whether section 33.012 of the Texas Civil Practices and Remedies Code requires a court to credit a former plaintiff and a defendant's settlement, who are not parties at trial, against a judgment for the remaining plaintiffs. The trial court denied the defendant, Doctor Stephen Utts, a credit for a settlement by one beneficiary, Dorothy Short Walker, who was not a party at trial. The court of appeals affirmed. 987 S.W.2d 626, 627. I would hold that Utts is not entitled to a credit for Walker's settlement because Walker was not a party whose settlement must be credited under section 33.012. Accordingly, I concur with the Court's decision to affirm the judgment of the court of appeals and remand this case to the trial court to render judgment.

I After a post-verdict hearing, the trial court rendered judgment awarding the jury's damages less a settlement credit of $50. ⁽¹⁾ The trial court concluded that (1) the statutory definition of "claimant" requires a claimant to be a party seeking recovery, and Walker was not a party at the time of trial, (2) even if the Walker settlement could be credited against the jury verdict, Utts waived his right to the credit by not introducing evidence of the settlement before verdict, and (3) even absent waiver, Utts' evidence was mostly inadmissible hearsay and unauthenticated.

Utts appealed the trial court's judgment, and the court of appeals affirmed, holding that Utts had no statutory right to the $200,000 settlement credit. 987 S.W.2d at 631. The court of appeals determined that the record contained sufficient evidence to establish the amount of the Walker settlement. But the court concluded that Civil Practices and Remedies Code section 33.012(b) requires a court to reduce a claimant's recovery only by the claimant's own settlements, not by other claimants' settlements. Id. at 630. The court also found nothing in section 33.012(b)(1) to suggest that wrongful death beneficiaries are collectively one claimant where a settlement by one beneficiary against a single liable party must be credited against the recovery of other beneficiaries against all other liable parties. The court of appeals held that because Walker was not awarded any damages, Utts was not entitled to a credit for Walker's settlement with HCA. Id. at 631.

II

Utts petitions this Court for review on three grounds. First, he argues that he is entitled to a credit for Walker's settlement based on our construction of Texas Civil Practices and Remedies Code section 33.012(b) in Drilex Sys., Inc. v. Flores, 1 S.W.3d 112 (Tex. 1999). Second, Utts seeks a credit for Walker's settlement because, Utts contends, the settlement transaction was a sham intended to circumvent the proper operation of the statute. And third, Utts argues that in calculating the offset, a dollar-for-dollar credit for a lump-sum settlement with multiple plaintiffs, should be subtracted from the total amount of damages awarded by the jury, rather than allocated based on each plaintiff's percentage of the total jury award. I address each of these issues in turn.

A

The first question is whether Utts is entitled to a credit for Walker's settlement under section 33.012(b) of the Texas Civil Practices and Remedies Code. That section provides:

If the claimant has settled with one or more persons, the court shall further reduce the amount of damages to be recovered by the claimant with respect to a cause of action by a credit equal to one of the following . . . .

Tex. Civ. Prac. & Rem. Code § 33.012(b). The statute defines a "claimant" as: [A] party seeking recovery of damages pursuant to the provisions of Section 33.001, including a plaintiff, counterclaimant, cross-claimant, or third-party plaintiff seeking recovery of damages. In an action in which a party seeks recovery of damages for injury to another person, damage to the property of another person, death of another person, or other harm to another person, "claimant" includes both that other person and the party seeking recovery of damages . . . .

Tex. Civ. Prac. & Rem. Code § 33.011(1).

In Drilex, we applied this statute to a suit in which an injured oil worker, Jorge Flores, and his family sought recovery for damages to Flores. There, the plaintiffs had settled with one defendant and were awarded damages against another defendant. See Drilex, 1 S.W.3d at 120-22. The children in that case settled individually with the defendant and the parents jointly accepted a lump sum to settle their claims. The issue there was whether the family members were individual claimants or whether they all were collectively one claimant for the purpose of crediting their settlements. See id. at 121. We noted that the governing definition of claimant provided that "'In an action in which a party seeks recovery of damages for injury to another person . . . 'claimant' includes both that other person and the party seeking recovery of damages. . . .'" Id. at 122 (emphasis omitted) (quoting Tex. Civ. Prac. Rem. Code § 33.011(1)). Based on the statutory definition, and on the potential unfairness to defendants from collective settlements designed to avoid full settlement credits, we concluded that the entire family was one claimant. See id.

I agree with the respondents that our holding in Drilex is not applicable to require a credit to remaining defendants for a settlement by a former plaintiff and defendant who are no longer parties to the suit when the case is submitted to the jury. Applying the statute to such persons or entities would be inconsistent with the plain language of the definition of claimant. With few exceptions, we interpret a statutory provision according to the plain and common meaning of the provision's words and terms. Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 865 (Tex. 1999).

Section 33.011's definition of claimant refers to the party seeking recovery of damages for injury to another. A plaintiff who settles with all defendants or otherwise drops out of a lawsuit is no longer a party and is no longer seeking damages. Additionally, the plain language of Chapter 33 anticipates that a claimant recovers damages. See id. § 33.012(b) ("the court shall further reduce the amount of damages to be recovered by the claimant . . ."); § 33.013(c) ("each liable defendant is . . . jointly and severally liable for the damages recoverable by the claimant . . . ."). But plaintiffs who withdraw from a cause of action and do not submit a claim to the jury cannot recover damages, and therefore cannot be part of a claimant that recovers damages. Furthermore, the statute indicates that a court should determine the identity of the claimant at submission rather than some later point because the definition of "liable defendant" in section 33.011 suggests that, in the context of determining settlement credits, when a jury returns a verdict a claimant is no longer seeking damages but has been awarded damages. See id. § 33.011 ("'Liable Defendant' means a defendant against whom a judgment can be entered for at least a portion of the damages awarded to the claimant.").

Therefore, I conclude that a former plaintiff who settles and is no longer party to the suit when the case is submitted to the jury is not a claimant or a component of a complainant for the purposes of crediting settlements under section 33.012. Accordingly, I agree with the respondents that the trial court's decision is consistent with, and distinguishable from, our decision in Drilex. Because we can decide the case on grounds argued by the respondents without overruling Drilex, we should do so. The opinion in Drilex was decided in August 1999. Stare decisis exhorts us to "adhere to our precedents for reasons of efficiency, fairness, and legitimacy." Weiner v. Wasson, 900 S.W.2d 316, 320 (Tex. 1995). We would undercut these values if we were to overrule an opinion barely a year old, when no party has asked us to do so, and when we can and should decide the case on narrower grounds.

Thus, while section 33.012(a) requires a court to credit a claimant's settlement against the amount of damages awarded to a claimant, Walker, who nonsuited all defendants and did not submit a claim to the jury, was awarded no damages. Therefore, there are no damages to be reduced by her settlement. Accordingly, Utts is not entitled under section 33.012 to a credit for Walker's settlement to offset the damages of the other claimants who were awarded damages, but he is entitled to a credit reducing their damages by the amount of their own settlements.

B

Utts also contends that he is entitled to a full credit for Walker's settlement because the transaction was a sham designed solely to avoid the statutory settlement credit. Utts concedes that he did not put on evidence demonstrating the nature of the transaction, and he did not request a fact finding that this arrangement was a sham. Utts requested the trial court to reopen the evidence to allow him to demonstrate that the settlement structure was a sham, which the trial court refused to do. Utts, however, does not challenge that ruling in his petition to this Court. Rather, he argues, it was not his burden to prove the sham nature of the transaction, but even if it is his burden, the evidence in the record sufficiency demonstrates the spuriousness of the transaction.

A defendant seeking a settlement credit has the burden of proving its right to such a credit. See Mobil Oil Corp. v. Ellender, 968 S.W.2d 917, 927 (Tex. 1998). Since I conclude that Utts is not directly entitled to a settlement credit for Walker's settlement under section 33.012(b), it is his burden to establish that he is indirectly entitled to the credit on the grounds that the transaction is a sham. Thus, I turn to the evidence adduced regarding the nature of this settlement.

The evidence in the record demonstrates that HCA entered into a settlement agreement with Walker for $200,000. HCA paid $50,000 of the $200,000 settlement directly to Walker and paid the remaining $150,000 to the trust account of the firm representing Walker and the other family members. On the same day, Walker directed her attorney to distribute $10,000 "gifts on my behalf from any monies belonging to me" to the other family members in the suit. She did not give any money to Clifton Short's estate. Soon after, the other family members settled with HCA for $10 each. Utts presented no direct evidence suggesting Walker's payment were not good faith gifts.

A distribution of money as in this case could, of course, be an impermissible sham transaction intended to avoid a legitimate settlement credit. I conclude, however, that the evidence here does not establish as a matter of law that Walker's arrangement for payments to her family members was a sham transaction. At most it raises a fact issue, and therefore Utts' legal sufficiency challenge fails.

C

Having determined that Utts is not entitled to a credit for Walker's settlement, but that he is entitled to a credit for the settlements of family members who submitted claims to the jury, the last issue we must consider is the method of calculating the credit. The trial court reduced each family member's damages by $10 for their settlements with HCA, and the court of appeals affirmed this allocation of the settlement credit. In Drilex, however, we held that the total of all settlements should be credited against the total recovery before allocation based on each individual's percentage of the total recovery. Drilex, 1 S.W.3d at 122. Here, because I have determined that Walker's settlement is not part of the credit, either method renders the same result. Error, if any, can have no effect on the judgment and is harmless.

III

I would hold that if a plaintiff settles and is no longer a party to the suit when the case is submitted to the jury, any settlement by that plaintiff does not qualify as a credit under section 33.012. Here, because Walker was awarded no damages, there is nothing against which to offset. But Utts is entitled to a credit for each individual family member's settlement to reduce each of their individual damage awards. Therefore, I agree that we should affirm the judgment of the court of appeals.

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Alberto R. Gonzales

Justice

1. This cause of action accrued and was filed prior to September 1, 1995. At that time, section 33.013 stated that a defendant was jointly and severally liable for the entire judgment if his percentage of responsibility was greater than twenty percent. Therefore, Utts is jointly and severally liable for the entire judgment. Act of June 3, 1987, 70th Leg., 1st C.S., ch. 2, § 2.09, 1987 Tex. Gen. Laws 37, 42 (Tex. Civ. Prac. & Rem. Code § 33.013(b)(1)).