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There has been a lack of consistency in malpractice cases where the plaintiff has settled with one or more defendants, and then goes to trial against other defendants. However, a recently published New Jersey Law Division case has brought a measure of consistency to this issue.
The Issue
In the past, after a New Jersey plaintiff had settled with one or more malpractice defendants, the remaining defendants often sought a pro tanto or “dollar for dollar” credit in the amount of the settlement, relying upon Ciluffo v. Middlesex General Hospital, 146 N.J. Super. 476 (App. Div. 1977). The plaintiff often responded that since there would be no evidence at trial that the settling defendants were negligent, the remaining defendants were not entitled to any credit for the amount of the settlements.
The Case
The issue was recently clarified by Judge Joseph Rea in the law division case of Graham v. Twedell, 432 N.J. Super. 592 (Law Div. 2013). In Graham, the plaintiff alleged that the defendant negligently ordered the administration of Lopressor, causing the plaintiff to suffer a cardiac arrest. The court succinctly described the tragedy that befell the plaintiff: “Because of the oxygen deprivation to her brain, plaintiff has been in a vegetative state ever since January 2, 2008. For the last five plus years, she has been living at home under the most excellent care of her husband, Willie Graham. Her condition has not and will not improve.”
Prior to trial, the plaintiff settled with four of the five defendants for a total of $2,725,000. The remaining defendant moved in limine for an order declaring that he was entitled to a credit of $2,725,000 if he lost at trial, relying upon Ciluffo , as well as Clark v. University Hospital-UMDNJ, 390 N.J. Super. 108 (App. Div. 2006), and Mitchell v. Procini, 331 N.J. Super. 445 (App. Div. 2000). The plaintiff responded that the settlement would have “no effect on any verdict against the defendant,” relying upon the seminal case of Rogers v. Spady, 147 N.J. Super. 274 (App. Div. 1977), and Johnson v. American Homestead Mortgage Co., 306 N.J. Super. 429 (App. Div. 1997).
In denying the defendant's motion, Judge Rea first stated the question as follows: “The issue presented in this medical negligence case is whether the sole defendant at trial ' would be entitled to a credit against any verdict returned against him in an amount equivalent to the aggregate for which the other named defendants settled prior to the commencement of trial.”
Judge Rea then observed that, “[I]n order for the defendant to be entitled to a credit, the jury's verdict must provide sufficient information to discern the liability of the settling defendant.” The court explained that “In both Ciluffo and Clark, the jury considered and rendered a verdict as to the missing co-defendant that settled prior to trial. The same was not so in Johnson and is not so in this case.” (Citations omitted.) Judge Rea also distinguished Mitchell, where the jury did not determine the full amount of damages: “Without a jury determination of full damages, it is impossible to determine to what extent, if any, the settlement with the Cherry Hill [NJ] defendants took into consideration plaintiff's contributory fault. We, therefore, conclude that plaintiff is entitled to have a jury determine the issue of full compensation, as well as that amount attributed to defendant's alleged malpractice.” Mitchell, 331 N.J. Super. at 457-458.
Judge Rea then quoted the contrasting facts of Johnson:
[U]nless the settling defendant's percentage of liability is adjudicated at trial, there is simply no right in the adjudicated tortfeasors to a reduction of their own separately-allocated responsibility for the verdict. We are aware that the percentage of fault of a settling defendant is subject to allocation at trial, but only if the settling defendant's liability is a trial issue either as the result of a cross-claim or because it is tried on notice to plaintiff. See Young v. Latta, supra; R. 4:7-5(c), as amended effective, September 1, 1992. Here, the cross-claim was expressly withdrawn, [the settling defendant's] liability was not a trial issue and, therefore, no allocation of negligence was made against it. In these circumstances, each of the non-settling defendants was liable for his full allocated percentage of plaintiff's damages without receiving credit for the settlement. Johnson, 306 N.J. Super. at 436-37.
This holding is consistent with New Jersey's Comparative Negligence Act, N.J.S.A. 2A:15-5.1 et seq., which requires that each tortfeasor pay damages based upon its adjudicated percentage of fault. As Judge Rea explained:
In sum, as first articulated in Rogers v. Spady, 147 N. J. Super. 274, 277 (App. Div. 1977), the effect of the Comparative Negligence Law was to replace the former pro rata liability of joint tortfeasors under the Joint Tortfeasors Contribution Law, former N.J.S.A. 2A:53A-1, with the obligation that each tortfeasor pay damages in accordance with its own adjudicated percentage of fault. A necessary corollary of this scheme is to deny to comparative-negligence joint tortfeasors a reduction of their liability based on a plaintiff's pretrial settlement with a defendant who is never found to be liable at all. Thus, under the comparative-negligence scheme a plaintiff is entitled to retain the proceeds of the pretrial settlement as well as the full jury verdict as allocated among all other defendants. In this respect, as Rogers pointed out, the comparative-negligence scheme differs from the former Joint Tortfeasors Contribution Law, as construed by Theobald v. Angelos, 44 N.J. 228 (1965), under which the non-settling defendants were entitled to a pro tanto credit for the proceeds of the settlement made by plaintiff with the settling defendant whose liability was never adjudicated.
The reliance upon Young is of particular significance in the medical malpractice cases. Judge Rea also recalled that in Young, the New Jersey Supreme Court ratified the Rogers court's decision that the nonsettling defendants receive a “credit” from the total damage award in an amount equal to the settling tortfeasor's percentage share of fault. The Supreme Court also held in Young that a nonsettling defendant must give the plaintiff “fair and timely notice” of the intention to seek a credit.
The Young court instructed that “Our system of discovery is designed to make available information that is reasonably calculated to lead to relevant evidence concerning the respective positions of the parties. ' A litigation strategy that features surprise to the adversary is no longer tolerated.” Additionally, the Young court warned that a defendant who does not produce a qualified expert opinion on a timely basis, or fails to allege that a co-defendant's fault cased the injury, will be precluded from asserting the settling defendant's fault at trial. The Young court concluded: “Although early and diligent pursuit of a nonsettling tortfeasor's claim for credit seems to have obvious advantages, there may be tactical reasons, not readily apparent to us, why the non-settler would delay asserting that claim. We emphasize that in this context trial courts should not countenance delay ' that is, the court should not permit the nonsettler to wait until the last minute before alerting the court and the plaintiff's lawyer that the settler's conduct will be at issue.”
The Take-Away
The Young doctrine is applicable and important in cases where the plaintiff settles with one defendant and withdraws the expert as to that defendant. The nonsettling defendant, having relied on the plaintiff's expert who is no longer available, may be left without competent evidence to establish not only that the settling defendant deviated from the standard of care but, critically, also that the settling defendant's negligence was a proximate cause of the ultimate injury. In such cases the remaining defendant is not entitled to any credit for the payment of the settling defendant.
This creates the possibility that either the plaintiff, the settling defendant or the nonsettling defendant may receive a windfall at another's expense. In Kiss v. Jacob, the court explained: “The result of the Comparative Negligence Law is that if plaintiff makes a particularly good bargain in settlement and the ultimate percentage of negligence found attributable to the settling defendant would have resulted in a judgment for less than the amount of settlement, plaintiff will benefit by the excess amount. For example, in Young … the plaintiff settled with one defendant for $20,000. At trial, the jury awarded $150,000 to the plaintiff but attributed 80% of the fault to the settling defendant. Thus, plaintiff received only $30,000 from the nonsettling defendant and only $50,000 in total, despite the fact that the jury had determined plaintiff's true damages were $150,000.”
Richard Galex is a Partner and Matthew Schiappa is a Senior Associate at Lomurro Davison Eastman & Munoz, Freehold, NJ. This article also appeared in the New Jersey Law Journal, a ALM sister publication of this newsletter.
There has been a lack of consistency in malpractice cases where the plaintiff has settled with one or more defendants, and then goes to trial against other defendants. However, a recently published New Jersey Law Division case has brought a measure of consistency to this issue.
The Issue
In the past, after a New Jersey plaintiff had settled with one or more malpractice defendants, the remaining defendants often sought a pro tanto or “dollar for dollar” credit in the amount of the settlement, relying upon
The Case
The issue was recently clarified by Judge Joseph Rea in the law division case of
Prior to trial, the plaintiff settled with four of the five defendants for a total of $2,725,000. The remaining defendant moved in limine for an order declaring that he was entitled to a credit of $2,725,000 if he lost at trial, relying upon Ciluffo , as well as
In denying the defendant's motion, Judge Rea first stated the question as follows: “The issue presented in this medical negligence case is whether the sole defendant at trial ' would be entitled to a credit against any verdict returned against him in an amount equivalent to the aggregate for which the other named defendants settled prior to the commencement of trial.”
Judge Rea then observed that, “[I]n order for the defendant to be entitled to a credit, the jury's verdict must provide sufficient information to discern the liability of the settling defendant.” The court explained that “In both Ciluffo and Clark, the jury considered and rendered a verdict as to the missing co-defendant that settled prior to trial. The same was not so in Johnson and is not so in this case.” (Citations omitted.) Judge Rea also distinguished Mitchell, where the jury did not determine the full amount of damages: “Without a jury determination of full damages, it is impossible to determine to what extent, if any, the settlement with the Cherry Hill [NJ] defendants took into consideration plaintiff's contributory fault. We, therefore, conclude that plaintiff is entitled to have a jury determine the issue of full compensation, as well as that amount attributed to defendant's alleged malpractice.” Mitchell, 331 N.J. Super. at 457-458.
Judge Rea then quoted the contrasting facts of Johnson:
[U]nless the settling defendant's percentage of liability is adjudicated at trial, there is simply no right in the adjudicated tortfeasors to a reduction of their own separately-allocated responsibility for the verdict. We are aware that the percentage of fault of a settling defendant is subject to allocation at trial, but only if the settling defendant's liability is a trial issue either as the result of a cross-claim or because it is tried on notice to plaintiff. See Young v. Latta, supra; R. 4:7-5(c), as amended effective, September 1, 1992. Here, the cross-claim was expressly withdrawn, [the settling defendant's] liability was not a trial issue and, therefore, no allocation of negligence was made against it. In these circumstances, each of the non-settling defendants was liable for his full allocated percentage of plaintiff's damages without receiving credit for the settlement. Johnson, 306 N.J. Super. at 436-37.
This holding is consistent with New Jersey's Comparative Negligence Act,
In sum, as first articulated in
The reliance upon Young is of particular significance in the medical malpractice cases. Judge Rea also recalled that in Young, the New Jersey Supreme Court ratified the Rogers court's decision that the nonsettling defendants receive a “credit” from the total damage award in an amount equal to the settling tortfeasor's percentage share of fault. The Supreme Court also held in Young that a nonsettling defendant must give the plaintiff “fair and timely notice” of the intention to seek a credit.
The Young court instructed that “Our system of discovery is designed to make available information that is reasonably calculated to lead to relevant evidence concerning the respective positions of the parties. ' A litigation strategy that features surprise to the adversary is no longer tolerated.” Additionally, the Young court warned that a defendant who does not produce a qualified expert opinion on a timely basis, or fails to allege that a co-defendant's fault cased the injury, will be precluded from asserting the settling defendant's fault at trial. The Young court concluded: “Although early and diligent pursuit of a nonsettling tortfeasor's claim for credit seems to have obvious advantages, there may be tactical reasons, not readily apparent to us, why the non-settler would delay asserting that claim. We emphasize that in this context trial courts should not countenance delay ' that is, the court should not permit the nonsettler to wait until the last minute before alerting the court and the plaintiff's lawyer that the settler's conduct will be at issue.”
The Take-Away
The Young doctrine is applicable and important in cases where the plaintiff settles with one defendant and withdraws the expert as to that defendant. The nonsettling defendant, having relied on the plaintiff's expert who is no longer available, may be left without competent evidence to establish not only that the settling defendant deviated from the standard of care but, critically, also that the settling defendant's negligence was a proximate cause of the ultimate injury. In such cases the remaining defendant is not entitled to any credit for the payment of the settling defendant.
This creates the possibility that either the plaintiff, the settling defendant or the nonsettling defendant may receive a windfall at another's expense. In Kiss v. Jacob, the court explained: “The result of the Comparative Negligence Law is that if plaintiff makes a particularly good bargain in settlement and the ultimate percentage of negligence found attributable to the settling defendant would have resulted in a judgment for less than the amount of settlement, plaintiff will benefit by the excess amount. For example, in Young … the plaintiff settled with one defendant for $20,000. At trial, the jury awarded $150,000 to the plaintiff but attributed 80% of the fault to the settling defendant. Thus, plaintiff received only $30,000 from the nonsettling defendant and only $50,000 in total, despite the fact that the jury had determined plaintiff's true damages were $150,000.”
Richard Galex is a Partner and Matthew Schiappa is a Senior Associate at
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