Cartel Capital Corp. v. Fireco of New Jersey

• Decision Date: 04 August 1978
• Citation: 161 N.J.Super. 301,391 A.2d 928
• Parties: CARTEL CAPITAL CORP., and Evan Funding Corp., Plaintiffs, v. FIRECO OF NEW JERSEY, Defendant-Appellant, and Ansul, Inc., Defendant-Respondent. and COUNTRY BURGER OF RAMSEY, INC., Plaintiff-Respondent and Cross-Appellant, v. FIRECO OF NEW JERSEY, Defendant-Appellant and Cross-Respondent.
• Court: New Jersey Superior Court — Appellate Division

Page 301

161 N.J.Super. 301

391 A.2d 928

CARTEL CAPITAL CORP., and Evan Funding Corp., Plaintiffs, v. FIRECO OF NEW JERSEY, Defendant-Appellant, and Ansul, Inc., Defendant-Respondent.

and

COUNTRY BURGER OF RAMSEY, INC., Plaintiff-Respondent and Cross-Appellant, v. FIRECO OF NEW JERSEY, Defendant-Appellant and Cross-Respondent.

Superior Court of New Jersey, Appellate Division.

Argued June 6, 1978.

Decided Aug. 4, 1978.

Leonard J. Tafro, South Orange, argued the cause for appellant and cross-respondent Fireco of New Jersey (Adams, Adubato, Tafro & Connelly, South Orange, attorneys; John D. Potenza, South Orange, on the brief).

Raymond J. Fleming, West Orange, argued the cause for respondent and cross-appellant Country Burger of Ramsey, Inc. (Feurstein, Sachs & Maitlin, West Orange, attorneys).

Kent A. Losche, Hackensack, appeared for respondent Ansul, Inc. (Harwood, Lloyd, Ryan, Coyle & Wulster, Hackensack, attorneys).

Before Judges LORA, SEIDMAN and MILMED.

The opinion of the court was delivered by

SEIDMAN, J. A. D.

This appeal arises out of a lawsuit instituted by Country Burger of Ramsey, Inc. (hereinafter referred to as plaintiff), to recover for property damage sustained in a fire that occurred on November 30, 1973 in a fast food restaurant which it owned and operated. The claim was asserted against Ansul, Inc., and Fireco of New Jersey (Fireco), respectively the manufacturer and the retailer of a fire extinguishing system installed in the restaurant by the latter. Plaintiff alleged that the equipment malfunctioned when a fire broke out at a grill, as a result of which the fire spread, causing extensive damage. ¹ The action against Ansul was for strict liability in tort, based upon an alleged design defect in the actuating mechanism of the fire extinguishing system. Fireco was charged not only with strict liability in tort, but also with negligence in servicing, inspecting and maintaining the system.

On the date scheduled for trial counsel for Ansul informed the court of its agreement to pay plaintiff $50,000 in full settlement of the claim against it. At the same time it abandoned its crossclaim against Fireco for contribution and indemnification and also successfully moved, over Fireco's objection, for a dismissal of the latter's like crossclaim. The trial then proceeded on plaintiff's causes of action against Fireco for negligence and strict liability in tort. Ansul remained in the case as a party defendant, although its counsel did not participate in and was not present during the trial. ² The issue of Ansul's liability for the defect was submitted to the jury for the apportionment of fault under the comparative negligence statute, N.J.S.A. 2A:15-5.1 Et seq.

In response to special interrogatories propounded by the trial judge at the conclusion of the trial in conjunction with his charge, the jury found both Fireco and plaintiff guilty of negligence that was "a proximate cause of the incident," and also found that "the fire extinguisher equipment (was) defectively designed by the defendant Ansul," which defect was "a proximate cause of plaintiff's damages." The jury allocated fault among the parties, pursuant to the trial judge's direction to take "the combined fault of the defendants and plaintiff as a total of 100%," as follows: 29% Was allocated to Ansul; 30%, to Fireco; and 41%, to plaintiff. Plaintiff's damages were found to be in the amount of $113,400.

The trial judge thereafter molded the verdict. In an oral opinion, he stated that Ansul's percentage of fault (29%) must be added to Fireco's 30% (representing only the negligence cause of action against it). ³ The latter's total percentage of fault was thus increased to 59%. He then ruled that as plaintiff's negligence was now not greater than the total allocation of fault to Fireco, it was not barred from recovery under the comparative negligence statute. But he found further that since plaintiff could not have double payment on its product liability claim, it was entitled to receive from Fireco only 30% Of the total damages determined by the jury, or $34,020, plus interest and costs. The entry of an accordant judgment was ordered. The judgment also incorporated the dismissal of the claims of Cartel Capital Corp. and Evan Funding Corp., and, for the stated reason that "there is no legal basis for indemnification by Fireco of New Jersey against Ansul, Inc., under either the theory of common law indemnity or products liability," the dismissal of Fireco's crossclaims against Ansul.

Fireco complains on appeal only of the utilization of "the negligence attributed to the settling defendant for anything save only deduction from the verdict," and, "assuming Arguendo that Ansul's settlement did not eliminate its attributed percentage of negligence from the case," of the trial judge's combining "the negligence of Fireco with that of Ansul when measuring against the comparative negligence of Country Burger." ⁴ Plaintiff's response is that the court below correctly added "the percentages of responsibility in determining the plaintiff's amount of recovery." It argues that "(i)n any comparative negligence case the percentage of fault of all of the defendants should be combined." On its cross-appeal, plaintiff contends that the trial judge erred "in reducing the judgment by more than the plaintiff's percentage of fault."

For reasons that follow, we reverse the judgment except as it relates to the dismissal of the claims of Cartel Capital Corporation and Evan Funding Corporation. The matter must be remanded for a new trial on issues that will be developed in more detail hereinafter.

There is no dispute that the fire extinguishing system manufactured by Ansul was designed to put out fires in restaurant grills like those in plaintiff's place of business. The component parts were tanks or receptacles containing a chemical powder that was the extinguishing agent, a cylinder of carbon dioxide gas, and an actuating mechanism. When the latter was triggered, the gas would be released through piping into the tank or tanks, exerting a downward force upon the powder, which would be expelled through nozzles onto the area of the fire. The actuating mechanism could be set so as to operate either automatically through a fusable link that heat would melt, or manually by pulling a handle. In either case, a spring would be released which would strike a lever in the carbon dioxide container, causing the gas to flow into the tank of powder.

Although the proofs were in conflict, the thrust of plaintiff's case was essentially as follows: Fireco installed the Ansul system in the premises in question in 1967. At that time there were two nozzles over each grill and additional ones over deep fat fryers. The system was checked by Fireco every six months. In 1969, after the system was actuated apparently by accident, Fireco installed new cables and fusable links. The actuating mechanism handle was replaced by Fireco in 1972 after a fire in the kitchen. More nozzles were added earlier in 1973 when an additional grill was installed.

On November 30, 1973, at about 9:30 p. m., a stack of paper plates somehow fell onto an unattended hot grill and caught fire. An accumulation of grease under and around the grill also ignited. One of the employees tried unsuccessfully to put out the blaze with flour. The handle of the fire extinguishing system was pulled, but nothing came out of the nozzles. Portable fire extinguishers apparently did not work. The fire spread rapidly, causing considerable damage to the premises.

An examination of the equipment by plaintiff's expert after the fire indicated to him that the actuating mechanism had failed because of the manner in which the handle had been replaced by Fireco's employee allegedly in 1972. Contrary to instructions in Ansul's maintenance manual, a screw was inserted through the wrong side of a shaft. As a result, the handle, when rotated, made contact with the housing and was prevented from turning sufficiently to cause the spring to strike the lever and release the gas. The error also interfered with the automatic operation of the system.

In the expert's opinion, the handle shaft should have been so designed by the manufacturer as to prevent the insertion of the screw from either side. Specifically, the shaft should have been drilled only part way through, thus accepting the screw from one side only and eliminating the possibility of an "unknowing technician" erroneously inserting the screw at the opposite side of the shaft. The malfunction of the system, according to the expert, resulted from a combination of a design defect and "a repair or maintenance defect."

As indicated previously, plaintiff's complaint included a cause of action against both Ansul and Fireco for strict liability in tort. The jury evidently was satisfied from the proofs before it not only that Fireco and plaintiff had been guilty of negligence which was a proximate cause "of the incident," but also that the equipment had been defectively designed by Ansul and that the defect was a proximate cause of plaintiff's damages. Following the trial judge's instructions, the jury determined the issues by responding to interrogatories and allocating the percentages of fault as set forth hereinabove.

We do not comprehend the trial judge's rationale in molding the verdict as he did. His apparent concept of Ansul's role was that the issue of Ansul's fault had to be submitted to the jury, despite the settlement, in order to implement the comparative negligence statute. This would be so in the ordinary negligence case because a percentage share of negligence must now be substituted for a pro rata share in matters of contribution among joint tortfeasors. Rogers v. Spady, 147 N.J.Super. 274, 277, 371 A.2d 285 (App.Div.1977) . Consequently, where a claimant in such case settles with a codefendant, "that percentage of negligence found attributable to the settling...