In the Dosdourian case, the Florida Supreme Court defined Mary Carter`s typical agreement as “a contract by which a co-defendant secretly agrees with the plaintiff that if such a defendant defends himself in court, his own maximum liability will be proportionately reduced by increasing the liability of other co-defendants.” In fact, any secret agreement between two or more parties that could affect the outcome of the dispute should be disclosed to the other defense lawyer and the court. To eliminate their “sinister influence” and “appearance of adversity,” the court prohibited the use of “any agreement that requires the defendant to remain in the dispute, whether or not there is a specific financial incentive to do so.” In other words, it was a “masquerade” or an “appearance of adversity” and the jury must be informed of this type of agreement. These types of agreements are problematic because, on the one hand, they promote dispute resolution by eliminating a cause of action against the defendant defendant, but on the other hand, they promote litigation by subsidizing them against defendants who are not part of the Mary Carter agreement. A traditional Mary Carter agreement releases the paying defendant from joint and several liability and eliminates a potential contribution claim from the non-incriminating defendant. See Phelps Dodge Corp. v. Krueger Engineering & Mfg. Co., Inc., No. 01-87-00194, 1988 WL 10775, at *1 (Tex. App. 11 February 1988). However, in most states, a traditional Mary Carter agreement is unenforceable and its replacement “does not necessarily reject a defendant” in state law. Barton v.
State, Dep`t of Transp., 308 F.3d 597, 605 (Wash. 2013); see also Reager v. Anderson, 371 S.E.2d 619, 632 (W. Tal 1988) (“Since the defendant decided to remain a party due to the nature of such an agreement, that party authorized a joint judgment against him and the other joint aggrieved party. By choosing to remain in the case, he is subject to the contribution under the Judgment Act. »). However, many States have concluded that the disclosure element of the Mary Carter-type agreement eliminates any prejudice to the non-plaintiff defendant and that, therefore, the arbitrating defendant is not liable for joint and several liability or contribution. Ratterree v. Bartlett, 707 p.2d 1063, 1076 (Kan. 1985). For example, Idaho courts approve agreements in which “the plaintiff releases a co-defendant but reserves the right to bring an action against the remaining defendants. The non-repaying defendant`s contribution right may then be truncated by the plaintiff`s consent to indemnify the attached defendant from any claim for contributions. Schnell v. Crane, 727 P.2d 1187, 1207 (Idaho 1986) (citing Pierringer v.
Horger, 124 N.W.2d 106 (Wisc. 1963)). Trends in these cases are that the effect of a Mary Carter-type agreement essentially depends on the specific agreement in question and its full disclosure. If the disputed agreement is fully disclosed in New York, the courts will enforce its terms, including the waiver of the defendant`s joint and several liability. In Sierra Rutile Ltd.c. Katz, the non-incriminating defendant, argued that the agreement in question should be void contrary to public policy because it is a Mary Carter agreement and that it “distorts the law of liability by disrupting the allocation of liability according to the comparative fault of each party.” 1994 WL 5577888, at *2. The court disagreed with the conclusion that the agreement in question was not a Mary Carter agreement because the agreement had been fully disclosed. Id. at *4. With respect to concerns about the disadvantage of the non-incriminating defendant, the Court added that these concerns are addressed through cross-examination and indictment of the plaintiff`s testimony and the defendant`s settlement regarding possible bias: “If [non-plaintiffs] are concerned that the potential benefit to the defendant`s settlement indicates an agreement between the plaintiff and the defendant defendant, or that the defendants themselves will commit perjury, [non-accusatory defendants] can investigate these matters in court. In Refco Inc.
Securities Litigation, the court analyzed an agreement in which a defendant paid a certain amount to the plaintiff and agreed to make himself available for legal proceedings, including through testimony. No. 07-md-1901; No. 08-cv-7416, 2012 WL 12906289, at *1 (S.D.N.Y. August 10, 2012). The court rejected the argument that this was an inadmissible Mary Carter agreement because “the agreement is public and can be used to charge the paying defendant, or as a basis for judicial redress if he attempts something funny.” Id..