Dodd v. Copeland

Citation99 N.J.Super. 481,240 A.2d 444
Decision Date07 March 1968
Docket NumberNo. A--236,A--236
PartiesWilliam DODD, Edward Dodd and Marion Elizabeth Dodd, Plaintiffs-Respondents, v. George R. COPELAND, George D. Copeland, and Samuel J. Cox, Defendants, Samuel J. Cox and Unsatisfied Claim and Judgment Fund, Appellants.
CourtNew Jersey Superior Court – Appellate Division

Bruce D. Herrigel, Clinton, for appellants (Herrigel & Herrigel, Clinton, attorneys).

John J. Trombadore, Manville, for respondents (Trombadore & Trombadore, Manville, attorneys).

Before Judges SULLIVAN, FOLEY and LEONARD.

The opinion of the court was delivered by

SULLIVAN, S.J.A.D.

The Unsatisfied Claim and Judgment Fund (Fund) appeals from an order of the trial court directing the Fund to pay to plaintiffs the sum of $6211.87, being one-half of the amount of a judgment recovered by plaintiffs in a motor vehicle accident case. The issue involved is to what extent, if any, is the Fund liable to pay plaintiffs' judgment.

The facts are not in dispute. Plaintiff William Dodd was a passenger in an automobile owned and operated by George D. Copeland when it collided with a vehicle owned and operated by Samuel J. Cox. Dodd was injured as a result of the accident and filed suit against both Copeland and Cox. Since he was a minor at the time of the accident (he is now of age), his parents joined in a count for medical expenses.

Copeland had $10,000 insurance coverage and an answer was filed on his behalf by his carrier. Cox was uninsured. The Fund, having received due notice, filed an appearance on his behalf. Both defendants filed crossclaims for contribution under the Joint Tortfeasors Contribution Law.

When the case came to trial Copeland's insurance carrier settled with plaintiffs for $5,000 and received a covenant not to sue. The Fund refused to settle and the case continued against Cox, but resulted in a mistrial. In the meantime, the crossclaims for contribution were dismissed. At the retrial of the case against Cox the jury was asked to decide Cox's liability, the extent of plaintiffs' damages and whether Copeland was a joint tortfeasor. The jury found Cox liable and returned a verdict in favor of Dodd and against Cox for $12,000. Dodd's parents were awarded $423.75. The jury also found that Copeland was a joint tortfeasor. Judgment was entered for $12,423.75. Plaintiffs issued execution on their judgment and examined Cox in discovery proceedings, but were unable to collect their judgment.

Plaintiffs then made application for payment of their judgment from the Fund. They conceded that, having settled with one of two joint tortfeasors, the remaining defendant Cox is only liable to pay one-half of the $12,423.75 judgment, or $6211.87. They asked that the Fund be ordered to pay said amount. As heretofore noted, the trial court granted plaintiffs' application.

Initially, the Fund argues that it is not required to pay any part of the plaintiffs' judgment against Cox because of their settlement with Copeland who was found to be a joint tortfeasor. The Fund's argument is that under the Unsatisfied Claim and Judgment Fund Law, the Fund becomes liable to pay a judgment only after the holder of the judgment has fully pursued and exhausted all remedies available to him for recovering damages against all persons against whom he has a cause of action in respect of his damages, by commencing an action against such persons and prosecuting the same to judgment; that, in any event, the Fund may not be called upon to pay in excess of $10,000 on account of injury to or death of one person in any one accident, and plaintiffs' damages were assessed by the jury at $12,423.75; that the same jury also found that Copeland was a joint tortfeasor. Since Copeland had insurance coverage of $10,000, the Fund argues that plaintiffs could have collected at least $10,000 from him had no settlement been made, in which case the Fund could not have been called upon to make any payment whatever.

It is the Fund's argument that plaintiffs, by settling with Copeland, deprived the Fund of the benefits it would have received had plaintiffs exhausted all remedies available, and it cannot now be required to pay damages that plaintiffs could have recovered against Copeland.

We do not agree with this contention since its practical effect would be to bar any settlement in a case in which the Fund appears for one of the defendants unless the Fund participates in the settlement. The general policy of the law is to encourage the good faith settlement of claims and thereby avoid or terminate litigation. We do not consider that the provisions of the Unsatisfied Claim and Judgment Fund Law are at odds with this general policy. Settlement with other persons can and often does reduce the amount which the Fund is called upon to pay.

The Fund Law does state that before an order for payment of a judgment is made, a plaintiff must have fully pursued and exhausted all remedies available to him for recovering damages against all persons against whom he has a cause of action in respect of his damages, by commencing an action against such persons and prosecuting the same in good faith to judgment. N.J.S.A. 39:6--71(b).

However, the sense of any statute is to be collected from its object and the nature of the subject matter. Particular phrases must be read in the light of the contextual setting. The import of such language is controlled accordingly. The literal sense of terminology cannot prevail over the reason and spirit of the expression as a whole. Giles v. Gassert, 23 N.J. 22, 33--34, 127 A.2d 161 (1956).

It seems clear that the requirement that a plaintiff fully pursue and exhaust all remedies available against all other persons includes good faith settlement with such persons, since the same statutory section also provides that any amount which a plaintiff has received by way of settlement of the cause of action from any person other than the judgment debtor, shall be deducted from the amount due upon the judgment for payment of which claim is made. N.J.S.A. 39:6--71.

In Gray v. Tice, 52 N.J.Super. 309, 145 A.2d 353 (Law Div.1958), it was specifically held that plaintiff's settlement with one of the defendants in a motor vehicle case did not bar recourse against the Fund as to the judgment obtained against the remaining defendant. So, too, in Gilbert v. Unsatisfied Claim and Judgment Fund Board, 85 N.J.Super. 143, 204 A.2d 204 (App.Div.1964), certification denied 44 N.J. 403, 209 A.2d 140 (1965), where plaintiffs had taken all reasonable steps to serve the driver of defendant owner's automobile with process but he could not be found, we held that the act did not make it mandatory that a judgment be entered against the driver to qualify plaintiffs for payment by the Fund of their judgment against the uninsured owner.

No contention is made that the settlement in question with Copeland was not made in good faith. Under the circumstances we conclude that such settlement did not debar plaintiffs from looking to the Fund for payment of their judgment against Cox.

The question presented is how much of the $12,423.75 judgment should the Fund be obligated to pay. Plaintiffs conceded that under the Joint Tortfeasors Contribution Law their settlement with Copeland, who was subsequently found to be a joint tortfeasor, required that a Pro rata credit be given against the amount of the judgment. Theobald v. Angelos, 44 N.J. 228, 208 A.2d 129 (1965). They sought, and the trial court entered, an order directing the Fund to pay one-half of the judgment, or $6,211.87.

The Fund argues that this method of computation was improper. It arrives at a net figure of $1,211.87 by taking the prorated amount of judgment under the Joint Tortfeasors Contribution Law and deducting therefrom the $5,000 received in settlement from Copeland. It is the Fund's contention that N.J.S.A. 39:6--71 requires this added deduction.

In our opinion, neither the method used by the trial court nor the method contended for by the Fund is correct. The Fund Law stipulates that the maximum amount of a judgment for which the Fund can be held liable for injuries to any one person is $10,000, but that such maximum amount shall be reduced by any amount received in settlement with other persons for the same injuries. N.J.S.A. 39:6--73(c)(3).

Plaintiffs' damages were fixed at $12,334.75 by the jury. The maximum liability of the Fund under the statute for injuries to any one person is $10,000. The sum of $5,000 has been received in settlement from Copeland, so that the amount which the Fund should pay is $5,000.

We reject the Fund's contention that the amount of settlement must be deducted from the pro-rated judgment. This would result in a double credit amounting to $11,211.87 ($6,211.87 plus $5,000), whereas plaintiffs have only received in settlement the sum of $5,000.

The Joint Tortfeasors Contribution Law and the Unsatisfied Claim and Judgment Fund Law must be read with reference to each other. The provision in the Fund Law requiring a deduction of the amount of any money received by way of settlement was not intended to be in addition to pro-rating plaintiffs' judgment by virtue of the same settlement, since the Pro tanto credit required by the Fund Law serves the same basic purpose as the Pro rata credit available under the Joint Tortfeasors Contribution Law where there has been a settlement with a joint tortfeasor. Of course, we recognize that under certain circumstances (as, for example, had plaintiffs settled with Copeland for $1,000 instead of $5,000) it would be to the Fund's advantage to use the Pro rata credit provided for under the Joint Tortfeasors Contribution Law rather than the Pro tanto credit under the Fund Law. The Fund may claim one credit or the other, but not both. Otherwise an inequitable situation would result.

The Fund has called our attention to the opinion in Gray v. Tice, supra, which, among other...

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  • People v. Adams, Docket No. 3940
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    • Court of Appeal of Michigan — District of US
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    ...The literal sense of terminology cannot prevail over the reason and spirit of the expression as a whole.' Dodd v. Copeland (1968), 99 N.J.Super. 481, 486, 240 A.2d 444, 446. 'All laws should receive a sensible construction. General terms should be so limited in their application as not to l......
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