Covenant not to execute, like a release, defeats joint and several liability
By Kirsten A. Schultz

A covenant not to execute in favor of a settling defendant is equivalent to a release and thereby ends joint and several liability, Division One of the Washington Court of Appeals has held.

In Maguire v. Teuber, No. 51894-9-I (March 2004), Steven Teuber was driving William Hadsall’s car when he rear-ended John Maguire. Maguire sued Teuber and Hadsall. Maguire later settled with Teuber and Hadsall for $100,000, but he did not release them. Instead, he executed a covenant not to execute against the settling defendants’ personal assets. Maguire thereafter amended his complaint to allege negligent road design against the State of Washington.

The State moved to dismiss Maguire’s claims against Teuber and Hadsall. The State sought to avoid being held jointly and severally liable for Teuber and Hadsall’s share of fault.

The superior court denied the State’s motion. The State moved for and obtained discretionary review by the Court of Appeals.

The Court of Appeals noted that the 1986 Tort Reform Act abolished joint and several liability in most circumstances. Generally, joint and several liability still applies among at-fault defendants against whom judgment is rendered, “except those who have been released.” The State argued that the covenant not to execute effectively “released” Teuber and Hadsall because it ended any further liability they might face in the action.