Supreme Court of New Jersey Provides New Method of Apportioning Damages in Successive Tortfeasor Cases
Key Points:
- The Supreme Court of New Jersey overruled case law allowing pro tanto credits for prior settlements in cases involving successive tortfeasors.
- The court created a new procedure by which courts should apportion damages in such cases, which is meant to further fault-based allocation of damages in cases with multiple tortfeasors.
- The new procedure leaves unclear the role of a prior settlement amount with one tortfeasor in the trial of a non-settling successive tortfeasor, and it also makes it more critical for the non-settling tortfeasor to prove damages caused by the prior tort at trial.
In Glassman v. Friedel, et al., 265 A.3d 84 (N.J. 2021), the Supreme Court of New Jersey overruled case law allowing pro tanto credits for prior settlements in cases involving successive tortfeasors. The court created a new procedure for apportioning damages in such cases. The procedure is meant to better reflect New Jersey’s trend towards fault-based allocation of damages.
The decedent in Glassman fell at a restaurant and fractured her ankle. She was hospitalized and underwent surgery. Shortly following discharge, she developed a pulmonary embolism and died.
The plaintiff initially sued the restaurant and related entities (the premises defendants). He later amended his complaint to include a malpractice claim against the treating medical providers (the medical defendants). In discovery, the plaintiff claimed the decedent died of “saddle pulmonary embolism due to immobilization following fractures of left ankle due to fall.”
The premises defendants settled before trial for $1.15 million. Based on the Ciluffo v. Middlesex General Hospital, et al., 370 A.2d 57 (N.J. App. Div. 1977) decision regarding successor liability, the trial court granted the medical defendants a pro tanto credit on a jury verdict should the premises defendants’ settlement amount exceed the total provable damages found by the jury against any specific medical defendant.
On appeal, the Appellate Division reversed the pro tanto credit, holding that Ciluffo did not address the continued viability of a settlement credit following the enactment of the Comparative Negligence Act (CNA). The Supreme Court affirmed and modified the Appellate Division’s reversal.
The Supreme Court detailed the legislative history and intent of the Joint Tortfeasors Contribution Law, the CNA and recent case law, holding they promote fair apportionment of damages by distributing loss in proportion to the parties’ respective faults. The court explained that the CNA abandoned the concept of pro rata allocation of damages in favor of fault-based allocation. The court further explained that the terms of a settlement agreement with a settled defendant bear no consequence on a CNA fault allocation.
The court expressly overturned Ciluffo, holding that pro tanto credits are incompatible with New Jersey’s fault-based allocation model. The court reasoned that this furthered the Legislature’s intent to avoid apportionment based on arbitrary factors, such as the number of defendants in a case.
Recognizing that New Jersey had not previously addressed fault allocation in successive-tortfeasor cases, the Supreme Court set forth a new, two-stage procedure:
Stage One, Part One: The non-settling second-event defendants proffer evidence of damages the plaintiff suffered from the first event.
Stage One, Part Two: The trial court instructs the jury to quantify damages resulting from the first event. To prevent double recovery, damages attributed to the first event should not be included in judgment entered against the second-event defendants. The trial court should not disclose to the jury the settlement amount with the initial tortfeasor.
Stage One, Part Three: The trial court instructs the jury to quantify damages resulting from the second event.
Stage Two: The joint tortfeasor apportionment of damages relative to the second event, wherein the jury allocates a percentage of fault to each responsible party.
The court concluded by acknowledging that this new procedure is more complex than the allocation processes in non-successive tortfeasor cases, but the court maintained that the process is fair and consistent with New Jersey’s current fault-based allocation system.
Notably, the new allocation procedure set forth in Glassman only considers the scenario where the claim arising from the first event has settled and the claim arising from the second event proceeds to trial. It remains to be seen whether a court would use this procedure in the reverse scenario. In the reverse scenario, first-event defendants would certainly have the same interest in presenting evidence of the plaintiff’s subsequent event and damages for allocation purposes.
Remarkably, this procedure seems to render a prior settlement figure irrelevant to a verdict or judgment against the successive tortfeasors. The jury is still prohibited from learning the settlement amount, but now the trial court will not take the figure into consideration either.
Logically, the jury will be tasked with parsing out damages belonging to the first event versus the second. This would seem a prerequisite to calculating second-event damages caused by the defendants sitting in the courtroom. However, asking the jury to quantify the first-event damages caused by the already-settled defendants is puzzling when the jury is instructed to disregard their quantification when calculating second-event damages.
Because the jury’s calculation of first-event damages has no bearing on the final verdict, the effort essentially becomes an academic exercise, yet one that carries significant risk. The process could sidetrack the jury and make deliberations longer than usual, but worse, the process could create areas of discord, or even impasse, all before the jury gets to the critical inquiry of second-event damages.
Deliberating on first-event damages will presumably have a psychological impact on jurors when determining second-event damages. It is difficult to imagine that the jurors, after engaging in mental gymnastics to decide what the plaintiff should have received for the first event, would not then speculate as to what the plaintiff actually received.
Under the new Glassman procedure, it has become more critical for second-event defendants to obtain discovery regarding the first event. It may be necessary to retain additional causation experts. A defendant might seek consolidation of cases or discovery extensions to ensure that first-event discovery has been completed before second-event fact and expert discovery deadlines approach.
The court did not specify how the new procedure translates to jury instructions or the verdict sheet. Unanswered is whether the jury’s calculated first-event damages would have a place on the verdict sheet or would otherwise be disclosed to the litigants.
The Glassman procedure is to take effect immediately. It will be interesting to see how the trial courts implement the decision. In light of the many unanswered questions Glassman raises, it would not be surprising to see the new procedure addressed by the Appellate Division in the near future.
*Rachel is an associate in our Roseland, New Jersey, office. She can be reached at 973.618.4153 or rcbekerman@mdwcg.com.
Defense Digest, Vol. 28, No. 1, April 2022 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2022 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.