Plaintiff, Theobald, was severely injured in an automobile accident. Before trial he settled with two defendants. We are here concerned with the effect of those settlements upon the liability of the remaining defendant.
This litigation was before us in Theobald v. Angelos, 40 N.J. 295 (1963). As related in that opinion, the car of defendant Anderson went out of control and came to rest partly in the street and partly upon property of plaintiff. Defendant Angelos, a police officer of defendant Delaware Township, parked his police car behind Anderson's. While plaintiff was standing between these vehicles, defendant Conaty struck the rear of the police car, driving it forward and thereby crushing plaintiff. Just before trial plaintiff settled with Anderson for $1,500 and with Conaty for $88,500. The trial resulted in a judgment for $65,000 against Angelos and the municipality. (The municipality and its servant Angelos are a single tortfeasor for the purposes of the contribution statute, N.J.S. 2A:53A-1; we will refer to them hereafter as "Angelos" or "the defendant.")
Both Angelos and plaintiff appealed, Angelos complaining of the trial court's refusal to find the settlements with the co-defendants operated to satisfy the judgment, and plaintiff complaining the jury had been misled into returning a verdict for but part of the total damages. We ordered a retrial as to damages only and reserved for later consideration in the light of a new verdict the issues as to the effect of those settlements.
Upon the retrial the jury found total damages of $165,000. The trial court thereupon decided the reserved matters this way:
(1) Angelos contended the fact of settlement with Anderson conclusively established Anderson a co-tortfeasor and hence there should be a three-way division, reducing Angelos' share to $55,000. Plaintiff contended that Anderson was not a tortfeasor because the jury in the first trial found he was not, and hence the total figure of $165,000 should be divided between Conaty and Angelos, the parties the jury found to be
(2) Angelos contended alternatively that there should be applied to the total figure ($165,000) the full amount received from Conaty ($88,500) in addition to the sum received from Anderson ($1,500), leaving Angelos liable only for the balance of $75,000. The trial court accepted plaintiff's response that a joint tortfeasor who receives a pro rata credit because of the discharge of his co-obligor has no interest in whether the plaintiff did well or poorly in settling with the co-obligor.
Angelos appealed from this disposition of those issues and we certified the appeal before argument in the Appellate Division.
The issues must be considered in the context of our contribution statute as construed in Judson v. Peoples Bank & Trust Co., 17 N.J. 67 (1954), and Judson v. Peoples Bank & Trust Co., 25 N.J. 17 (1957). Those cases hold that a settlement with a joint tortfeasor, even though for less than a pro rata share of the total claim, nonetheless (1) reduces the total claim by the pro rata figure and (2) bars an action for contribution against the settling wrongdoer.
The first question is whether for the purposes of the contribution statute Anderson must be deemed a tortfeasor because plaintiff settled with him.
As stated before, the jury at the first trial found that Anderson was not culpably involved. Angelos complains, at least incidentally, that the issue of Anderson's fault was not fairly litigated. We think it was. Angelos had cross-claimed for contribution against both Anderson and Conaty. It is
We proceed then to defendant's proposition that the naked fact of a settlement should establish his right to a pro rata reduction, however nominal the payment and however innocent of wrong the payor may be. Here, of course, plaintiff had no thought of accepting a mere $1,500 in satisfaction of a third of his heavy losses. We should not surprise him with that result unless we must. Surely there is no room for defendant's claim of estoppel; he had the same full opportunity to press his claim for contribution whether Anderson settled or not. Rather defendant would enjoy a windfall if we found that plaintiff stumbled over a misconception of law. The injustice would be so evident that equity might well relieve plaintiff of the settlement because of his mistake, a result which could not harm Anderson in view of the jury's verdict exculpating him. In any event, we agree with the holding of Hoeller, supra, 73 N.J.Super. 502, that a pro rata reduction will not be ordered if the party to the settlement was not in fact a tortfeasor.
The issue is now before us for the first time. In Klotz v. Lee, 36 N.J.Super. 6 (App. Div. 1955), plaintiff agreed to accept $12,500 from one defendant without regard to the jury's verdict and agreed to collect no more than 50% of the verdict from the codefendant if the verdict ran against both. The jury returned a verdict of $35,000 against the nonsettling defendant alone. The trial court ordered $12,500 to be applied on the amount of the verdict. The Appellate Division
In Hoeller v. Coleman, supra, 73 N.J.Super. 502, the Appellate Division reviewed the prior cases and, as we have already said, held that where the jury found the settling defendant was not a party to the wrong, the culpable defendant could not claim a pro rata abatement because of that settlement but was entitled to a pro tanto reduction in the amount the settlor paid. The Appellate Division referred also to Steger v. Egyud, 219 Md. 331, 149 A.2d 762 (Ct. App. 1959), where in a case involving New Jersey law the Court of Appeals reached the same conclusions on a review of the decisions in our State. We denied certification in Hoeller, 38 N.J. 362 (1962). We add that in Hoeller the Appellate Division declined to follow Smootz v. Ienni, 37 N.J.Super. 529 (Cty. Ct. 1955), in which the trial court, upon a motion which plaintiff did not resist, seemingly held that a settlement leads to a pro rata reduction without regard to the payor's negligence. The trial court in Smootz did not refer to Klotz, supra, 36 N.J.Super. 6, which had been decided by the Appellate Division a few months before.
We find no support for defendant's position in our cases prior to the statute. If anything, they tend the other way. We refer to cases dealing with two rules of great antiquity which likely developed because the early common law could not achieve contribution among co-obligors. One rule was that a claimant could have but one satisfaction. The other was that the release of one co-obligor released all without regard to intent or satisfaction in fact.
With respect to the one-satisfaction rule, our case law is here equivocal. In Brandstein v. Ironbound Transportation Co., 112 N.J.L. 585 (E. & A. 1934), it was held that the consideration received for a "covenant not to sue" had to be applied to the liability of other tortfeasors. The discussion throughout was upon the assumption that the payor was a culpable party. At the very end appeared the following paragraph (at p. 593):
"That payments by persons not interested in the cause of action, as wrongdoers, are not to be applied in diminution of damages does not lessen the force of the rule here applied. Such payments are not made by reason of any liability to answer for the wrongful act, but grow out of a relationship not connected with the wrongful act complained of. Such payments are by reason of gratuity or contract."
The court may there have had in mind payments received under contractual arrangements such as a policy of accident insurance. But the quoted paragraph could mean that a payment received from one charged by the claimant with wrongdoing
On the other hand cases in our State decided since Brandstein and mentioned above would require a pro tanto application even though the payor was not a party to the wrong, and we think correctly so. Still defendant can claim no support therein because that view of the pro tanto rule is neutral in this controversy. As to moneys thus received from one charged with wrongdoing, a plaintiff has the sum in hand and there is no evident hardship in reducing his verdict against others by that amount. Indeed, it would rarely be worth the while of the litigants or of the judicial system to try out the question whether the payor was a party to the wrong when only a dollar-for-dollar application is at stake. Cf. Gelsmine v. Vignale, 11 N.J.Super. 481 (App. Div. 1951). So here plaintiff does not bother to pursue the question whether that credit was correctely ordered. Viewed in terms of fairness and utility, that rule is sound.
Cases dealing with the other rule mentioned above, that the release of one tortfeasor released all without regard to intent
Thus the history of the subject points against defendant's position. So also does the nature of the right to contribution. Contribution is of equitable origin and stems from the maxim that equality is equity. 2 Pomeroy, Equity Jurisprudence (5th ed. 1941), § 406, pp. 145-146; Prosser, Torts, § 47, p. 278 (3d ed. 1964); 2 Williston, Contracts, § 345, pp. 763 and 767 (Jaeger 3d ed. 1959). The equitable right to contribution is a right as among joint tortfeasors not to be burdened with more than a pro rata share of the dollar liability jointly incurred. Judson v. Peoples Bank & Trust Co., supra, 17 N.J., at p. 92. A defendant receives all the benefit the doctrine intends when he pays no more than his pro rata share. Our statute seeks to relieve tortfeasors of injustice as among themselves; it would be foreign to its purpose to penalize a plaintiff for a misstep which in truth deprived a tortfeasor of nothing. Cf. Judson v. Peoples Bank & Trust Co., supra, 25 N.J., at p. 38.
Nor can support be found for defendant's position in terms of utility. There is a strong policy in favor of settlements. A contribution law should provide the maximum room for settlements with a minimum of unfairness. Under the
For whatever it may be worth, we note that defendant's position would not prevail under either the Uniform Contribution among Tortfeasors Act of 1939 or the revision of 1955, 9 U.L.A. 233, 1964 pocket part, p. 116. In addition to the circumstance that both statutes, as in the case of our own, speak in terms of settlements with persons "liable in tort" (§ 1), the 1939 act leaves the settling tortfeasor liable to the co-tortfeasor unless the settlement expressly provides for at least a pro rata reduction and the 1955 act leaves the settling tortfeasor liable for contribution only if the settlement was not in good faith. Under those plans a plaintiff is never chargeable with more than he received unless he agreed to a greater credit. Rather the defendant against whom the judgment runs must sue for contribution, and of course he cannot recover unless he proves contributory fault.
The second question is whether defendant should pay $81,000 as ordered below, or $75,000 for which he contends. It will be recalled that the trial court refused to apply to the jury verdict of $165,000 the whole of the sum of $88,500 paid by Conaty. The trial court's thesis was that the contribution statute controls, and that a defendant who pays his pro rata share is not aggrieved because a co-tortfeasor paid more.
The one-satisfaction rule is equitable in nature and was designed to prevent unjust enrichment. Prosser, Torts, § 45, p. 267 (3d ed. 1964). As we said earlier, it probably came into being at a time when courts of law could not achieve contribution among co-obligors. While the rule remains useful as an instrument for a just result, Daily v. Somberg, 28 N.J. 372 (1958), the question is whether it should be invoked in a situation in which our contribution statute applies.
Defendant's just liability under our contribution statute, based on the equitable doctrine that equality is equity, is for a pro rata share. He, however, seeks to avoid part of his liability because a co-tortfeasor paid more than he had to under the law. If defendant can invoke the one-satisfaction rule, he will enrich himself to the extent of another's overpayment. Hence, as plaintiff correctly puts it, the question is whether it is the plaintiff or the defendant who should be "unjustly" enriched if there in fact is any "unjust" enrichment in this scene.
We think plaintiff has the better of the argument in terms of both fairness and utility.
As to fairness, it is difficult to know whether a tort claimant has received more than full satisfaction. There is no precise
But if there is enrichment, it is not at defendant's expense. Defendant does not seek to make Conaty whole but rather to profit from the injustice that Conaty supposedly experienced. If the voluntary agreement between plaintiff and Conaty were thought so to offend public policy as to require redress, the remedy would run to Conaty rather than to a stranger to the bargain. See McKenna v. Austin, 77 U.S. App. D.C. 228, 134 F.2d 659, 665, 148 A.L.R. 1253 (D.C. Cir. 1943). We note that after it was held in Daugherty v. Hershberger, 386 Pa. 367, 126 A.2d 730 (Sup. Ct. 1956), that a judgment debtor was entitled to a pro tanto credit in excess of a pro rata share, the settling tortfeasor succeeded in recovering the difference from the judgment debtor. Mong v. Hershberger, 200 Pa.Super. 68, 186 A.2d 427 (Super. Ct. 1962). We do not cite this case to hold that our statute authorizes an action for contribution by a tortfeasor who pays under an agreement of settlement rather than a judgment. See Pennsylvania Greyhound Lines, Inc. v. Rosenthal, 14 N.J. 372, 383 (1954). Rather our purpose is to stress that the situs of the equity is not in the nonsettling defendant. He equitably is entitled to relief only if he pays more than his pro rata share of the judgment against him. Sattelberger v. Telep, 14 N.J. 353, 367 (1954).
The same answer emerges when the issue is considered in terms of utility. Under the thesis of our contribution law, a
For these reasons we think that considerations of utility redound against a pro tanto credit in excess of a pro rata share. Again, if there were an offsetting gain in terms of fairness, it might be another matter, but as already pointed out, a co-tortfeasor who pays less than his pro rata share because another tortfeasor paid more would be enriched at the expense of another.
To sum up, (1) if a claimant settles with one of several joint tortfeasors, there will be a pro rata reduction in the verdict against the remaining tortfeasors, whether the sum received is less or more than a pro rata share, and (2) if the claimant settles with one who is charged with the wrong but who in fact is not a party to it, the sum received (not exceeding a pro rata share) shall be applied in reduction of the verdict against the culpable parties.
The judgment is affirmed.
I agree with the Court's disposition except insofar as it results in the award to the plaintiff of a sum in excess of the full amount of damages fixed by the jury. If, as may well be, the excess should not remain with the defendants-appellants, then it would seem more just and equitable to have it go now to the persons who took the course, highly favored in the law, of settling prior to trial. See Mong v. Hershberger, 200 Pa.Super. 68, 186 A.2d 427 (Super. Ct. 1962). It must be borne in mind that, in the fixing of his damages, the plaintiff here received the greatest measure of protection available under our judicial system. Thus we set aside the first jury's verdict of $65,000 and sent the matter back for a new trial limited to the issue of damages alone. We directed that the trial judge clearly inform the jurors that their verdict should represent "full and fair compensation for all the plaintiff's damages arising out of the accident." 40 N.J., at p. 308. There is no reason to doubt that the second jury's verdict sympathetically fulfilled this direction. I see no justice in having the plaintiff receive more from those involved in the accident than the $165,000 fixed by the second jury and find no occasion for departing here from the generally accepted principle that one satisfaction in full is enough. See Breen v. Peck, 28 N.J. 351, 362-363 (1958); cf. Daily v. Somberg, 28 N.J. 372, 386 (1958); Moss v. Cherdak, 114 N.J.L. 332, 334 (E. & A. 1935); Brandstein v. Ironbound Transportation Co., 112 N.J.L. 585, 593 (E. & A. 1934); Spurr v. North Hudson County R.R. Co., 56 N.J.L. 346, 347 (Sup. Ct. 1894); Steger v. Egyud, 219 Md. 331, 149 A.2d 762, 768 (1959).
I vote to modify.
PROCTOR, J. (concurring in part).
I agree with that part of Justice Jacobs' concurring opinion which states that there is no reason to doubt that the second jury's determination of the amount of damages fairly reflects the actual damages of the plaintiff arising out of the accident. I also agree with Justice Jacobs that there is no just reason to depart from the
I vote to modify.
FRANCIS, J. (dissenting in part).
I cannot agree with the result reached in Part I of the majority opinion. When a plaintiff claims to have been injured as the result of the negligence of three persons and he settles with two of them, under the law as I see it, he reduces his claim against the third person pro rata, that is, by two-thirds. If he obtains a judgment thereafter against the third person, his recovery is limited to one-third of it from that person. The remaining two-thirds are conclusively regarded as having been satisfied by the settling tortfeasors and the plaintiff is charged with having accepted the settlements whether the amount received was large or small, knowing that they would bring about the pro rata discharge of his claim. Practical administration of the Joint Tortfeasors Contribution Law, N.J.S. 2A:53A-1 et seq., requires that result and this Court adopted it in Judson v. Peoples Bank & Trust Co., 17 N.J. 67 (1954) (hereafter "Judson One").
In Judson One the Court gave thoughtful consideration to what the result ought to be under the act when one of several tortfeasors settles with the injured party for an amount which is less than his pro rata share of the total damage. It pointed out that equality between the tortfeasors could be accomplished in two ways: (1) by requiring the injured person to
The Court regarded the second alternative as undesirable because if "the injured party is required to credit only the amount received in settlement, * * * he may be tempted to make collusive settlements * * *." 17 N.J., at p. 92. For example, one of two alleged joint tortfeasors clearly may appear to have been solely or in large measure responsible for an accident, but he may be of doubtful financial worth, or a relative or friend of the injured party. The other alleged wrongdoer may be insured or sound financially. In such situation the injured party may accept a small sum in settlement of his claim against the one in return for his assistance in an improper concert of action to lay the blame on the other alleged tortfeasor.
Justice Brennan, who authored the opinion, declared for the Court that the first alternative is clearly preferable because collusive settlements are "wholly ineffective when a credit of the settler's pro rata share is the required result of any settlement, * * *." 17 N.J., at p. 93. That result, he said, would not impair the public policy favoring compromise. Moreover, when such a credit is required the injured party cannot complain of unfairness, since the reduction of the ultimate judgment after trial would be a direct result of his own act in accepting in compromise less than the settler's pro rata share of the total recoverable damages. "Thus, if the settlement is not collusive, he makes it upon the basis of his own appraisal of the risks of recovery and will hardly be deterred from it because it may later eventuate that he accepted less than the settler's pro rata share." 17 N.J., at p. 93.
The Court went on to illustrate specifically the purport of its decision. There were five alleged tortfeasors in the case. Two of them had settled with the plaintiff for a total of $2,500. It said that if a verdict were obtained against the three non-settling defendants for $315,000, the claimed damages, the pro rata shares of the five defendants would be $63,000 each. A credit of $126,000 would then be entered, that amount representing the sum of the pro rata shares of the two defendants who had settled. 17 N.J., at pp. 72, 94.
In a comprehensive two-part article entitled "Contribution and Indemnity Between Tortfeasors," appearing in 21 Cornell L.Q. 552 (1936) and 22 Cornell L.Q. 469 (1937) and written when there was considerable agitation for some form of joint tortfeasors contribution law, Professor Francis H. Bohlen anticipated the rule of Judson One. He said:
"If the injured man settles for a sum which, upon suit against the unreleased tortfeasor, is seen to be less than the proportion of the loss which the released tortfeasor should bear, the injured man who has consented to the settlement should bear the loss of this disparity. He should recover no more from the unreleased defendant than such proportion as the latter would have had to pay had the other delinquent been brought into the action as codefendant. Thus, if A, the original plaintiff, settles with B, one of the persons liable for his injury, for the sum of one thousand dollars, and in a subsequent action against the other defendant his damages are assessed at ten thousand dollars, A's recovery should be limited to five thousand dollars. A and not C should bear the loss entailed by the inadequate settlement which he has made with B." 21 Cornell L.Q., at pp. 567, 568.
In considering the advisability of adopting the rule of the majority in this case, it should be noted that quite obviously Professor Bohlen favored the thesis that a settling defendant ought to be considered a tortfeasor and that the injured party should give pro rata, not pro tanto, credit to the judgment tortfeasors in determining their liability for contribution.
"Plaintiffs ask us to reconsider the first Judson opinion and urge that the remaining defendants receive a credit only in the amount of the settlement. As noted in that opinion, our Legislature did not adopt the Uniform Contribution Among Tortfeasors Act, but rather borrowed from it and left gnawing problems for judicial solution. Plaintiffs say that in concluding that the liability of the remaining defendants be reduced by the full pro rata shares of the tortfeasors relieved by settlement we read into our statute a result `akin' to provisions of the uniform law which the Legislature refused to accept. We cannot agree. The plain import of sections 4 and 5 of the uniform law, which do not appear in our statute, is that where a tortfeasor settles for less than his full share the other tortfeasors shall receive a credit for the sum paid in settlement and may pursue their right of contribution against the settling wrongdoer unless the settlement papers contain an agreement for a full pro rata credit upon the liability of the remaining wrongdoers. Hence, the conclusions reached on the first Judson appeal rested upon an approach distinctly different from that of the omitted sections of the uniform law." 25 N.J., at pp. 34-35.
The opinion goes on to concede that neither approach (Judson One or the uniform law) is satisfactory. It points out that in 1955 the National Conference of Commissioners proposed as a substitute measure that a settlement shall discharge the settling tortfeasor from liability for contribution if the settlement is made "in good faith," the non-settling tortfeasor to receive credit for the amount actually paid in settlement. This suggestion, said the Court,
"* * * seems to be a superior solution, but its origin must be legislative; we cannot possibly read it into our own statute without exercising a power that is not ours. In these circumstances we feel constrained to abide by the interpretation made on the first appeal, conceding that the consequences are unhappy but recognizing that the only possible alternative before us, to wit, the thesis of the uniform law of 1939, would hardly be an improvement." 25 N.J., at p. 36.
And again referring to the purpose of the New Jersey act, the Court said: "It was not designed to prevent a full recovery
I do not find in either Judson opinion the slightest intimation that a person who settles a tort claim made against him by an injured party is not to be considered a tortfeasor under the contribution act unless he is formally adjudged such after a trial. Every reasonable inference is to the contrary.
In spite of Judson One and the legislative history discussed in both Judson cases, the majority now concludes that a person charged with liability as a tortfeasor who settles with an injured party making the charge is not a tortfeasor for purposes of the contribution statute unless he is adjudicated as such after a trial. A rule of that nature uproots sound and long-held legal principles. A person who sues another asserting that his negligence caused injury or damage, and who obtains a settlement, should be estopped by public policy from taking a contrary position thereafter in order to pursue another self-serving purpose. A clear exposition of this doctrine appears in Tompkins v. Clay-Street Hill R. Co., 66 Cal. 163, 4 P. 1165, 1168 (Sup. Ct. 1884).
"The compromise of an asserted claim does not necessarily involve an admission on the part of him against whom the claim is asserted that the claim is well founded. But one who, having commenced an action against another, has received money in consideration that the action shall be dismissed * * * ought not to be permitted to deny that he received the money in satisfaction of a valid demand. The defendant paying the money may subsequently say: `I did not and do not admit that I ought to have paid anything; I was willing to buy my peace.' But the other party ought not to be allowed to deny that he had any right to the money, the payment of which he had induced under pain of the prosecution of an action already commenced. He should not be permitted to say, with any beneficial result to himself, `I pursued the defendant falso clamore, and I took his money by way of settlement of a pending action in which I never could have recovered.'"
The Supreme Court of Indiana in Cleveland, C., C. & St. L. Ry. Co. v. Hilligoss, 171 Ind. 417, 86 N.E. 485 (1908), took the same position. It said one who has suffered a wrong will
This age-old doctrine should not be regarded as changed by the Joint Tortfeasors Contribution Law unless the legislative intention to do so appears either expressly or by unavoidable implication from the language used. I find no such language. In fact, the contrary is evident. Section 1 says that the term "tortfeasors" means "two or more persons jointly or severally liable in tort for the same injury to person or property, whether or not judgment has been recovered against all or some of them." N.J.S. 2A:53A-1. (Emphasis added) Manifestly the italicized clause reveals a legislative awareness that tort claims are settled without trial by one or more of several persons claimed to be jointly liable to an injured person. Moreover, the language reasonably supports the conclusion that the intention was to treat as joint tortfeasors for purposes of administration of the act, those who settle claims against them without suit. In effect the italicized clause connotes an aim to perpetuate the old law that an injured person who receives consideration in compromise of his charge of negligence against an alleged wrongdoer has conclusively established the settler's liability in the sense that he will not be permitted to deny that liability.
The variety of contribution statutes in other jurisdictions makes it impossible to find very much help beyond our borders. But Levi v. Montgomery, 120 N.W.2d 383 (N.D. Sup.
In Levi, supra, the plaintiff was injured allegedly as the result of the negligence of two tortfeasors. He sued them both charging joint negligence. Prior to trial one defendant settled. Trial of the action against the other resulted in a judgment against him. The judgment debtor sought a credit on the judgment for the amount of the settlement. The trial court refused to allow the reduction on the ground that the payment by the settler was a voluntary payment and that he was not liable in tort. (It does not appear from the opinion how or on what basis the trial judge reached that decision.) The Supreme Court's comment was: "The Court thus found that the implement company was not, in fact a tort-feasor and, since such defendant was not liable to the plaintiff in tort, the provisions of Section 32-38-04 [the contribution law] did not apply." 120 N.W.2d, at p. 388. The Supreme Court, after alluding to the fact that the plaintiff's complaint charged the defendants with concurrent fault, said:
"Thus the question at issue between the parties is determined by the pleadings. Even though the plaintiff now contends that he, in fact, had no cause of action in tort against one of the defendants, the court will consider the issues as framed by the pleadings. Where the plaintiff charges several defendants with tort, and one of the defendants buys its way out of the suit and is given a release and covenant not to sue, the court will not go into the question of liability of such defendant. The test in such cases is: Was the defendant sued as a tortfeasor? * * * The question of actual liability in tort of any of the defendants so discharged by release and covenant not to sue is wholly immaterial." 120 N.W.2d, at pp. 388, 389. (Emphasis added)
On rehearing the court confirmed its original opinion, and in speaking of the settlement, said:
In reaching a decision in the present case, the majority regarded the similar result in Hoeller v. Coleman, 73 N.J.Super. 502 (App. Div. 1962), as persuasive. The decision in that case was contrary to Judson One. More than that, to justify its departure from Judson One, the Appellate Division turned a gossamer thread appearing in this Court's opinion in Oliver v. Russo, 29 N.J. 418 (1959), into a supporting pillar. Now the majority apparently uses the pillar as the main structure. The per curiam opinion in Oliver v. Russo, supra, refused to consider the issue now before us because it was presented for the first time at the oral argument and had not been raised at the trial level "where it might have been dealt with procedurally as well as substantively." 29 N.J., at p. 421. The Appellate Division in Hoeller v. Coleman, supra, took the quoted statement and the cited cases which followed it as an indication that we would accept the substantive argument. Now, the majority relies on Hoeller to support its thesis that a contrary result would be unjust in this case. Such a process is reminiscent of the comment of Dr. Henry Van Dyke in "The Man Behind the Book" (Charles Scribner & Sons, 1929):
"This leaves the globe poised on the elephant, and the elephant standing on the tortoise, and the tortoise supported by the shadow of the elephant." (at p. 9)
In my judgment the authorities noted above, particularly Judson One, as well as Kelleher v. Lozzi, 7 N.J. 17, 23, 24 (1951); Gelsmine v. Vignale, 11 N.J.Super. 481, 485 (App. Div. 1951); Aljian v. Ben Schlossberg, Inc., 8 N.J.Super. 461, 465 (Law Div. 1950); Smootz v. Ienni, 37 N.J.Super. 529 (Cty. Ct. 1955); New Amsterdam Casualty Co. v. O'Brien, 330 S.W.2d 859, 863 (Mo. Sup. Ct. 1960); and McClure v. Lence, 349 Ill.App. 341, 110 N.E.2d 695, 697 (App. Ct. 1953), demonstrate that the plaintiff, having
Accordingly, I would hold that by settling with Anderson, plaintiff discharged his claim against the remaining defendants pro rata, that is, by one-third of the $165,000 verdict. By settling with Conaty he likewise discharged his claim pro rata, i.e., by one-third of the verdict.
There can be no better illustration of the adage that hard cases make bad law than this one. Let us consider what the majority opinion will do to the trial of cases. Simply stated it will make the trial of multiple tortfeasor tort cases at least in part a sham and the court room a stage for thespian members of the bar whenever plaintiff has settled with one or more of the defendants.
By force of the majority opinion, when a plaintiff sues two defendants (for example) charging them with joint negligence in his complaint and one settles and obtains a covenant not to sue, in spite of the settlement, and no matter what the consideration received, plaintiff may take the inconsistent position that the settler was not negligent, and that in fact he had no justifiable claim against him. Then he may proceed to trial and undertake to prove the settler was free from fault and the remaining defendant solely responsible for his injuries or damage. If on such a trial the jury finds the settler not guilty of negligence and so not a tortfeasor, and returns a verdict against the other defendant for the full damage, the plaintiff then will collect from the latter not only his pro rata share of the judgment, but also the difference between the amount received in settlement and the second pro rata share. Thus, by his about-face the amount paid to plaintiff in settlement is transformed from a pro rata to a pro tanto deduction
Furthermore, suppose the judgment resulting from this unusual type of trial shows that a settler who is adjudged a tortfeasor paid more than his pro rata share of the judgment. (Such a result is conceivable. It happened in this case. True, the settler may be indifferent at the trial on the issue of liability because, whatever the verdict, the settlement discharges him from any additional liability. But, if he participates in the trial, as presumably he may under the majority opinion, would he not devote his energies in large measure to an attack upon the nature of plaintiff's injuries and monetary losses?) Should he recover the overpayment, as Justice Jacobs' concurring opinion suggests? Or, should the plaintiff retain the overpayment unless, as the majority suggests, the settler can show plaintiff is unjustly enriched? Or, should plaintiff retain the overpayment and apply the full settlement in reduction of the final judgment because, as Justice Proctor suggests, the parties bargained at arm's length about the value of plaintiff's claim against the settler and their considered valuation should not be disturbed? The fact that the members of the Court are in disagreement as to the proper answers to these questions further convinces me of the unsoundness of Part I of the majority opinion.
A favored objective of the law is to encourage settlements. It is inconceivable that the majority holding will serve that
The majority opinion does not discuss the point specifically but the context clearly indicates the fact that a settlement has been made with one defendant may be proved at the trial. Presumably, also, the sum received by the plaintiff will not be introduced. Thus the jury will be in the dark as to the amount of the codefendant's payment, but they will be aware that plaintiff charged him with negligence either before the suit was instituted in order to obtain the settlement, or in the complaint (the allegations of which the defendant on trial will probably use to advantage), and that the charge produced
Moreover, it seems to me that in applying the new approach in tort cases in the future, the plaintiff's action should determine the course to be followed in litigation begun subsequent to a partial settlement. If after a compromise he sues the other alleged tortfeasor without joining the settler, the plaintiff ought to be conclusively presumed to have recognized the settler as a tortfeasor, and as having discharged a pro rata share of any judgment recovered at the trial. In such cases a defendant should not be burdened with the obligation to bring the settler in on a third-party claim.
Consideration of the procedure to be followed hereafter when a plaintiff settles with one of two alleged tortfeasors is important. (Of course, the greater the number of alleged tortfeasors the more aggravated the problems become. I have been discussing the situation in terms of two tortfeasors for illustration purposes.) Take first the case where the injured plaintiff settles with one of two tortfeasors before litigation. When a suit is instituted subsequently against the other alleged wrongdoer, must the settler be joined as a defendant? As indicated above, even under the majority opinion joinder should not be imperative; failure of the plaintiff to do so should result in automatic pro rata discharge of plaintiff's claim. But assuming that in most cases the rule adopted by the majority will produce a complaint charging both settler and non-settling tortfeasor with negligence, what happens
If plaintiff does not join the settler in the suit, and that failure does not constitute acceptance of his status as a tortfeasor, then the non-settling defendant undoubtedly will bring in the settler by third-party contribution proceedings. In this instance also, the settler would move for summary judgment based on his covenant not to sue. The motion would be denied on the basis of the majority opinion here, presumably with an order permitting the case to be tried solely to have the jury determine if the settler was a tortfeasor. I suppose in view of plaintiff's interest in saving the difference between a pro tanto and pro rata discharge of the settler, plaintiff would have to be made a defendant in the third-party proceedings, and that the defendant in the main suit would have the burden of proving the settler was a tortfeasor.
Another possible mechanism suggests itself. On the majority thesis when plaintiff sues the remaining alleged tortfeasor, may he join a separate count seeking a declaratory judgment as to whether the settler was a tortfeasor?
No matter what efforts are made to simplify the rule now promulgated, administration of the rule is bound to hinder rather than promote settlements. Assuming the new rule will provide incentive for the first settlement between plaintiff and one alleged tortfeasor, a suggestion which I think is questionable, compromise with the remaining tortfeasor will be more
Finally, if it be true that because of the majority opinion settlements will be less attractive, another unfortunate result is bound to follow. Our trial lists are already overcrowded. A high percentage of the cases are tort actions. A further increase is as inevitable as it will be unfortunate.
All of the foregoing considerations convince me that Judson One represents a sound and practicable interpretation of the New Jersey tortfeasors contribution statute. I do not maintain that it presents a perfect solution of the problem. It has been on the books, however, since 1954. Judson Two criticized but did not depart from the earlier holding. Instead the Court treated the matter as one for further study by the Legislature. In spite of the open invitation the statute has remained unchanged. An inference is that the lawmakers are satisfied with the view of the statute taken by the Court in Judson One.
I agree with the result reached in Part II of the majority opinion. That conclusion follows as a matter of course from the views I have expressed under Part I as to the proper construction of the statute.
The majority opinion takes the view that plaintiff may retain the excess of a settlement over the settler's pro rata share of the ultimate judgment upon the trial, except perhaps where unjust enrichment is shown. (Where the excess is to go if such enrichment appears was not decided.) Aside from my disagreement on the basic problem discussed in Part I, I believe the test suggested for deciding whether plaintiff has been unjustly enriched imports into the law a startling new concept. It suggests that the cost of the litigation, presumably including attorneys' fees, may be taken into account. Although an argument can be made for inclusion of such fees in tort litigation, under our long-established rule a jury verdict is limited to compensating the plaintiff for his injuries and monetary losses such as medical, hospital bills, loss of wages and the like. Counsel fees have never been includable. I can see no more justification for allowing them to be considered on this kind of a claim of unjust enrichment than for using them as a basis for sustaining a jury verdict against a claim of excessiveness.
Under all the circumstances, Anderson, Conaty and Angelos should be regarded as joint tortfeasors. Anderson and Conaty each having discharged one-third of the $165,000 verdict by
For affirmance — Chief Justice WEINTRAUB and Justices HALL, SCHETTINO and HANEMAN — 4.
For modification — Justices JACOBS, FRANCIS and PROCTOR — 3.