Erny v. Estate of Merola

• Decision Date: 30 January 2002
• Citation: 792 A.2d 1208,171 N.J. 86
• Parties: Christine ERNY, Plaintiff-Appellant, v. The ESTATE OF Antoinette T. MEROLA, Milton Merola, Matthew Erny, Andrea D. Gambino, State of New Jersey, Anka Construction, Inc., John Does No. 1-5 (fictitious names being the persons or corporations intended), XYZ Corp. No. 1-5 (fictitious names being the partnerships and/or corporations intended), Defendants, and Roy Russo, Defendant-Respondent.
• Court: New Jersey Supreme Court

792 A.2d 1208

171 N.J. 86

Christine ERNY, Plaintiff-Appellant, v. The ESTATE OF Antoinette T. MEROLA, Milton Merola, Matthew Erny, Andrea D. Gambino, State of New Jersey, Anka Construction, Inc., John Does No. 1-5 (fictitious names being the persons or corporations intended), XYZ Corp. No. 1-5 (fictitious names being the partnerships and/or corporations intended), Defendants, and Roy Russo, Defendant-Respondent.

Supreme Court of New Jersey.

Argued September 24, 2001.

Decided January 30, 2002.

Anita R. Hotchkiss, Morristown, argued the cause for appellant (Porzio, Bromberg & Newman, attorneys; Ms. Hotchkiss and Linda Pissott Reig, on the briefs).

Edwin R. Matthews, Short Hills, argued the cause for respondent (Mr. Matthews, attorney; Mr. Matthews and Robert J. Pansulla, on the briefs). The opinion of the Court was delivered by LaVECCHIA, J.

The choice-of-law question presented in this appeal requires the Court to decide whether New Jersey or New York law should apply to determine the joint and several liability of the defendants. The underlying occurrence was an automobile accident in New Jersey that involved a New Jersey plaintiff and two New York defendants. After a trial the New York defendant drivers were found sixty and forty percent at fault respectively. New Jersey's law shields all defendants less than sixty percent at fault from joint liability for damages in excess of their apportioned responsibility. New York's law specifically subjects defendants in auto negligence actions to joint and several liability irrespective of their allocated percentage of fault, consistent with that state's policy of providing recovery to plaintiffs in such cases. To resolve the choice-of-law question, we must evaluate the respective interests of the two involved states to determine the state that has the most significant interest in governing the joint and several liability issue. Having done so, we conclude that New York law has primacy in these circumstances.

I.

On May 17, 1992, plaintiff Christine Erny, a New Jersey resident, was injured in a multi-car accident on Route 287 in Franklin Township, New Jersey. Her husband, Matthew Erny, was driving the pick-up truck in which she was a passenger. The chain of events that caused the accident began when Roy Russo, a New York resident, while driving in a southerly direction on Route 287, crossed into the travel lane of Antoinette Merola, also a New York resident, causing Merola to lose control of her car and cross over the median into oncoming northbound traffic. Merola's car collided head-on with the Erny's pick-up truck and another vehicle. Merola was killed and several others were injured. As a result of the crash, Ms. Erny lost her spleen and left kidney and suffered other serious injuries.

Merola's car was registered and insured in New York; it was owned by her husband, Milton Merola. Russo was a student at Lehigh University in Pennsylvania at the time of the accident. He traveled from his home in New York through New Jersey to go to and from school. Russo's car was owned by his mother, Terry Russo, and the car was registered and insured in New York. Merola's car was covered under an automobile insurance policy having liability limits of $100,000 per occurrence; Russo's car was covered under an automobile policy with a liability limit of $1.5 million per occurrence.

Plaintiff instituted this negligence action in December 1992 against the Estate of Antoinette Merola, Milton Merola (the Merola defendants), Russo, Matthew Erny and a fictitious named defendant. Additional claims were filed by three other New Jersey residents and a foreign resident injured in the accident. Those additional claims were settled before the damages trial. In May 1993, the Merola defendants instituted a negligence/wrongful death action in the Supreme Court of New York against Russo and his mother (the Russo defendants). The Russo defendants moved to dismiss the New York action because of the pending action in New Jersey. Notwithstanding opposition by the Merola defendants, the motion was granted on comity grounds and the New York action was dismissed without prejudice. The Merola defendants then amended their cross-claim in the New Jersey action to assert claims for damages against the Russo defendants.

The trial court bifurcated the issues of liability and damages. The court also denied Milton Merola's motion for summary judgment allowing plaintiff's claims to proceed against him as owner of the car driven by decedent Antoinette Merola. Following a jury trial on liability, a verdict was returned in favor of plaintiffs, assigning Russo forty percent fault and the Merola defendants sixty percent fault. The jury's allocation of fault also applied to the Merola defendants' cross-claim against Russo. New Jersey law was applied during the trial. After the trial on liability, the Merola defendants moved for application of New York comparative negligence law, which would allow the Merola defendants to recover forty percent of their damages from Russo. N.Y. C.P.L.R. § 1411 (McKinney 2001). That motion was denied, the trial court determining that choice of law considerations favored application of New Jersey comparative negligence law, N.J.S.A. 2A:15-5.1.

Two years later, the damages trial concluded with an award to plaintiff of $650,000. The trial court allocated the damages according to the jury's finding of liability and entered a judgment against Russo for forty percent, amounting to $260,000, and against the Merola defendants for sixty percent, amounting to $390,000. Plaintiff filed a post-judgment motion seeking several remedies, including the application of New York law on the issue of joint and several liability. The trial court denied the motion, concluding that because New Jersey law governed the comparative negligence issue, it also controlled the defendants' respective liability for damages. The court reasoned that the two concepts were "so intertwined" that "it would not be good policy to have one of those concepts decided under one state's law and the other under another state's law." The effect of the ruling limited plaintiff's right to recover damages. N.J.S.A. 2A:15-5.3 provided that a plaintiff could not recover one hundred percent of noneconomic damages from a joint tortfeasor who was less than sixty percent at fault. Conversely, if New York joint and several liability law applied plaintiff could recover all of her damages from either defendant irrespective of his or her percentage of fault, and therefore could collect from Russo because he had a sufficient amount of liability coverage to satisfy Erny's judgment. N.Y. C.P.L.R. §§ 1601, 1602(6) (McKinney 2001).

On appeal, the Appellate Division determined that the trial court properly applied both New Jersey comparative negligence and joint and several liability law. Erny v. Russo, 333 N.J.Super. 88, 99, 104, 754 A.2d 606 (2000). The Appellate Division held that under the controlling choice-of-law analysis, it was appropriate to apply New Jersey comparative negligence law. The court then determined that despite the general rule that "conflict of laws determinations are to be made on an issue by issue basis," New Jersey law should apply on the joint and several liability issue, observing that "in a case where New Jersey's comparative negligence law has already been applied ... our law of joint and several liability, which is essentially a damages provision, will be applied." Id. at 102, 754 A.2d 606 (citing Marinelli v. K-Mart Corp. 318 N.J.Super. 554, 568-69, 724 A.2d 806 (App.Div.1999), aff'd o.b. 162 N.J. 516, 745 A.2d 508 (2000)

).

We granted plaintiff's petition for certification, 167 N.J. 630, 772 A.2d 932 (2001), limited only to review of the choice-of-law determination concerning joint and several hability.

II.

The issue before the Court is whether to apply New York's joint and several liability statutes, N.Y. C.P.L.R. §§ 1601 and 1602(6), or the New Jersey analog, N.J.S.A. 2A:15-5.3. Because New Jersey is the forum for this litigation, our choice-of-law rules apply. Fu v. Fu, 160 N.J. 108, 117-18, 733 A.2d 1133 (1999). Our rules employ a flexible "governmental-interest" analysis to determine which state has the greatest interest in governing the specific issue that arises in the underlying litigation. Ibid.; Gantes v. Kason Corp., 145 N.J. 478, 484, 679 A.2d 106 (1996); Veazey v. Doremus, 103 N.J. 244, 247, 510 A.2d 1187 (1986). Ordinarily, choice-of-law determinations are made on an issue-by-issue basis, with each issue receiving separate analysis. Gantes, supra,145 N.J. at 484,679 A.2d 106; Veazey, supra, 103 N.J. at 248,510 A.2d 1187 (1996); White v. Smith, 398 F.Supp. 130, 134 (D.N.J.1975) ("In order to determine which state has the greatest interest in the application of its own law, each issue must be analyzed separately."); Grossman v. Club Med Sales, Inc., 273 N.J.Super. 42, 51, 640 A.2d 1194 (App.Div.1994) (observing that "[i]t is thus conceivable that the law of one jurisdiction may apply to one issue in a matter and the law of a second jurisdiction to another."). See also Clawans v. United States, 75 F.Supp.2d 368, 374-75 (D.N.J. 1999)

(applying New Jersey law to issue of damages and Maryland law to issue of fault apportionment). The precise question here is whether a discrete choice-of-law determination on joint and several liability is appropriate once New Jersey law has been held to apply to the issue of comparative negligence.

A.

The Restatement (Second) of Conflict of Laws proposes an issue-by-issue approach to choice-of-law determinations in tort and recommends that each issue be decided by "the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties ...." Restatement (Second) of Conflict of Laws § 145(1) (1971). Section 145 provides the method by which a court ought to determine which state has the most significant...