44-2003

44-2003. Joint and several liability;
proportionate liability; determination of responsibility;
uncollectible share; settlement discharge; limitation on actions;
definitions

A. Subject to the provisions of this section, an action brought under section
44-2001, 44-2002 or 44-2032 may be brought against any person, including any dealer,
salesman or agent, who made, participated in or induced the unlawful sale or purchase,
and such persons shall be jointly and severally liable to the person who is entitled to
maintain such action. No person shall be deemed to have participated in any sale or
purchase solely by reason of having acted in the ordinary course of that person's
professional capacity in connection with that sale or purchase.

B. Any covered person against whom a final judgment is entered in a private action
is jointly and severally liable for damages only if the trier of fact determines that the
covered person recklessly or knowingly committed a violation of this chapter.

C. A covered person against whom a final judgment is entered in a private action is
liable solely for the portion of the judgment that corresponds to the percentage of
responsibility of the covered person as prescribed in subsection D of this section. In
any case in which a contractual relationship permits, a covered person who prevails in
any private action may recover the attorney fees and costs of that covered person for the
private action.

D. The court in a private action shall instruct the jury to answer special
interrogatories, or if there is no jury, make findings, for each covered person and any
other person the parties claim to have caused or contributed to the loss incurred by the
plaintiff, including any person who has entered into a settlement with the plaintiff or
plaintiffs, concerning each of the following:

1. Whether the person committed a violation of this chapter.

2. The percentage of responsibility of the person, measured as a percentage of the
total fault of all persons who caused or contributed to the loss incurred by the
plaintiff.

3. Whether the person knowingly committed a violation of this chapter.

E. The responses to the interrogatories or findings under subsection D of this
section shall specify the total amount of damages that the plaintiff is entitled to
recover and the percentage of responsibility of each covered person found to have caused
or contributed to the loss incurred by the plaintiff or plaintiffs. In determining the
percentage of responsibility under this section, the trier of fact shall consider both
the nature and extent of:

1. The conduct of each covered person found to have caused or contributed to the
loss incurred by the plaintiff or plaintiffs.

2. The causal relationship between the conduct of each covered person and the
damages incurred by the plaintiff or plaintiffs.

F. Notwithstanding subsection C of this section, on a motion made within six months
after a final judgment is entered in any private action, if the court determines that all
or part of the share of the judgment of the covered person is not collectible against
that covered person and is also not collectible against a covered person described in
subsection B of this section, each covered person described in subsection C of this
section is liable for the uncollectible share as follows:

1. Each covered person is jointly and severally liable for the uncollectible share
if the plaintiff establishes that the plaintiff is an individual whose recoverable
damages under the final judgment are greater than ten per cent of the net worth of the
plaintiff, and the plaintiff's net worth is less than two hundred thousand dollars,
excluding the value of the plaintiff's owned primary residence.

2. With respect to any plaintiff not described in paragraph 1 of this subsection,
each covered person is liable for the uncollectible share in proportion to the percentage
of responsibility of that covered person, except that the total liability of a covered
person under this subsection may not exceed fifty per cent of the proportionate share of
that covered person, as determined under subsection E of this section.

G. For purposes of subsection F of this section, net worth is determined as of the
date immediately preceding the date of the purchase or sale by the plaintiff of the
security that is the subject of the action and is equal to the fair market value of
assets, minus liabilities, including the net value of the plaintiff's investments in real
and personal property and personal residences.

H. The total payments required pursuant to subsection F of this section shall not
exceed the amount of the uncollectible share. A covered person against whom judgment is
not collectible is subject to contribution and to any continuing liability to the
plaintiff on the judgment.

I. To the extent that a covered person is required to make an additional payment
pursuant to subsection F of this section, the covered person may recover contribution
from any of the following or any combination of the following:

1. The covered person originally liable to make the payment.

2. Any covered person liable jointly and severally pursuant to subsection B of this
section.

3. Any covered person who is held proportionately liable pursuant to this section,
who is liable to make the same payment and who has paid less than the person's
proportionate share of that payment.

4. Any other person who is responsible for the conduct giving rise to the payment
and who would have been liable to make the same payment.

J. The standard for allocation of damages under subsections B, C and D of this
section and the procedure for reallocation of uncollectible shares under subsection F of
this section shall not be disclosed to members of the jury.

K. If a covered person settles any private action at any time before a final
verdict or judgment, the court shall enter an order discharging the covered person from
all claims for contribution brought by other persons. On entry of the settlement by the
court, the court shall enter a bar order constituting the final discharge of all
obligations to the plaintiff of the settling covered person arising out of the
action. The order bars all future claims for contribution arising out of the action by:

1. Any person against the settling covered person.

2. The settling covered person against any person, other than a person whose
liability has been extinguished by the settlement of the settling covered person.

L. If a covered person enters into a settlement with the plaintiff before a final
verdict or judgment, the verdict or judgment shall be reduced by the greater of either:

1. The amount that corresponds to the percentage of responsibility of that covered
person.

2. The amount paid to the plaintiff by that covered person.

M. Except as provided in subsection K of this section, a covered person who becomes
jointly and severally liable for damages in any private action may recover contribution
from any other person who, if joined in the original action, would have been liable for
the same damages. A claim for contribution shall be determined based on the percentage
of responsibility of the claimant and of each person against whom a claim for
contribution is made.

N. In any private action determining liability, an action for contribution shall be
brought within six months after the entry of a final, nonappealable judgment in the
action, except that an action for contribution brought by a covered person who was
required to make an additional payment pursuant to subsection F of this section may be
brought within six months after the date on which the payment was made.

O. For purposes of this section, reckless conduct by a covered person does not
constitute a knowing violation of this chapter by the covered person.

P. For the purposes of this section:

1. "Covered person" means a defendant in any private action arising under sections
44-1991 and 44-1992 or a defendant who is an outside director in a private action arising
under section 44-1997.

2. "Knowingly committed a violation of this chapter" means either:

(a) In an action that is based on an untrue statement of material fact or omission
of a material fact necessary to make the statement not misleading, the covered person
makes an untrue statement of a material fact with actual knowledge that the
representation is false or omits the statement of a fact necessary in order to make the
statement made not misleading, with actual knowledge that, as a result of the omission,
one of the material representations of the covered person is false and other persons are
likely to reasonably rely on that misrepresentation or omission.

(b) In an action that is based on any conduct that is not described in subdivision
(a), the covered person engages in conduct with actual knowledge of the facts and
circumstances that make the conduct of that covered person a violation of this chapter.