Cartel Capital Corporation v. Fireco of New Jersey

Brief Fact Summary.

The Superior Court (New Jersey) upheld a jury verdict that found Defendants, including manufacturer, negligent and entered a judgment in favor of Plaintiff restaurant in a products liability action. Defendant distributor challenged the decision.

Synopsis of Rule of Law.

The effect on the Plaintiff of a joint tortfeasor’s settlement will depend upon the percentage of fault found against him. When one Defendant settles, the remaining co-defendant or co-defendants are chargeable with the total verdict less that attributable to the settling Defendant’s percentage share.

Facts.

Plaintiff restaurant purchased a fire extinguishing system from Defendant distributor that was produced by Defendant manufacturer. A fire developed at Plaintiff’s restaurant. The fire extinguishing system failed to operate automatically or manually. Plaintiff filed suit against Defendants alleging strict liability and/or negligence. A jury found the servicer of the system negligent, and the product itself defective, allocating fault to all three parties. One co-defendant, however, had settled with the Plaintiff, requiring the Court to address the question of remaining damages, for contribution, to be assessed against the nonsettling Defendants.

Issue.

What is the effect of a joint tortfeasor’s settlement on co-defendants’ apportionment of liability?

Held.

The Court remanded, ordering judgment for the restaurant against the distributor. The court held that Defendants’ fault, including Defendant manufacturer, of 59 percent amounted to total fault, thus Defendants’ were liable for the entire judgment and that, as a matter of law, there was no contributory negligence.

Discussion.

This case involves contribution among joint tortfeasors. Joint tortfeasors are two or more individuals who either (1) act in concert to commit a tort, (2) act independently but cause a single indivisible tortious injury, or (3) share responsibility for a tort because of vicarious liability.
The Court engages in a lengthy analysis of the issue surrounding the apportionment of fault among joint tortfeasors in negligence actions. Such apportionment becomes more complicated when parties settle; where there are multiple parties the precise division of compensation can become tricky. As the court stated, “A plaintiff may be entitled to and obtain several judgments against different persons for the same obligation or liability so long as there is only one satisfaction or recovery.” Even so, the court noted, “An unsatisfied judgment against one or more joint and several tortfeasors does not constitute a bar to actions against the remaining tortfeasors.”
Settlement, as noted, can complicate the process, however, as the court explained, “Even when liability of one defendant is wholly vicarious, settlement with the primarily liable defendant may not necessarily release the other. For example, when an employer is liable for an employee’s negligence, both the employer and employee are jointly and severally liable to the injured party until full satisfaction is received.”
The latter consideration raises the issue of release of obligation, legal effect of which, the court noted, “should be determined by the intent of the parties to the release, with due consideration being given to whether the compensation paid was fully adequate.” And further, the court stated, “A release of one tortfeasor will not release others who may also be liable to plaintiff for his harm unless the release is so intended or the plaintiff receives as a result thereof either full satisfaction or satisfaction intended as such.” Settlement, as occurred here, may raise further issues with regard to contribution. The court explained, “In some situations the person vicariously responsible may be held liable even though an action cannot be maintained against the active wrongdoer. This is the case when the active wrongdoer has been given a release by the injured person that preserves the latter’s rights against the person vicariously liable.” Settlement, the court observed, can then offe
r different scenarios for compensation: “When a jury verdict sustains several alternative theories of recovery advanced by a plaintiff, the trial court must (unless plaintiff chooses otherwise) render judgment on the theory which affords the greatest recovery.” Hence, the court further explained, “Under the joint tortfeasors law, a settlement with a joint tortfeasor, even though for less than a pro rata share of the total claim, reduces the plaintiff’s total claim against the nonsettling codefendant or codefendants by the pro rata share and thus bars contribution from the settling tortfeasor.” The court then concluded, “The effect on the plaintiff of a joint tortfeasor’s settlement will depend upon the percentage of fault found against him. When one defendant settles, the remaining codefendant or codefendants are chargeable with the total verdict less that attributable to the settling defendant’s percentage share.” Thus, the nonsettling party, the distributor Fireco, maintained liabil
ity for contribution.