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Who Is Mary Carter?

Article Excerpt
The term "Mary Carter" agreement is derived from the case of Booth v. Mary Carter Paint Co., 202 So.2d 8 (Fla. Dist. Ct. App. 1967). In Booth, the plaintiff brought an action against Mary Carter Paint Company (hereinafter "Mary Carter"), Wallace Tompkins, Crofford Hancock, B.C. Willoughby and Harry Lee Sutton for the negligent operation of their motor vehicles which resulted in the death of his wife. Prior to trial, plaintiff entered into a secret agreement with defendants Willoughby and Sutton which limited their maximum liability, regardless of the jury's verdict, to $12,500. Willoughby and Sutton agreed to participate in the trial as "active defendants," and in the event of a verdict against all defendants, plaintiff would seek to collect any judgment from only Mary Carter. Pursuant to the agreement, plaintiff agreed to enforce any judgment against Mary Carter, with no additional contribution from the settling defendants. The terms of the agreement were upheld by the Florida appellate court.

Not all jurisdictions permit the use of Mary Carter agreements. In Pennsylvania, Mary Carter agreements allow a defendant to settle with plaintiff and maintain an interest in plaintiff's recovery from the other defendants so that the settling defendant may recover some or all of its settlement payment to plaintiff. Although no two Mary Carter agreements are alike, they typically include the following elements:

the settling defendant guarantees plaintiff a minimum payment;

plaintiff agrees not to enforce any subsequent judgment against the settling defendant;

the settling defendant remains in the lawsuit, and its payment to plaintiff is reduced if money is recovered by settlement or judgment from the other defendants; and

the agreement is confidential...