Ramos v. Browning Ferris Industries of South Jersey, Inc.

• Decision Date: 08 July 1986
• Citation: 103 N.J. 177,510 A.2d 1152
• Parties: Jose RAMOS and Carmen Ramos, Plaintiffs-Respondents, v. BROWNING FERRIS INDUSTRIES OF SOUTH JERSEY, INC., Defendant and Third-Party Plaintiff-Respondent and Cross-Appellant, and Laminating Corporation of America, Third-Party Defendant-Appellant and Cross- Respondent.
• Court: New Jersey Supreme Court

Page 177

103 N.J. 177

510 A.2d 1152

Jose RAMOS and Carmen Ramos, Plaintiffs-Respondents, v. BROWNING FERRIS INDUSTRIES OF SOUTH JERSEY, INC., Defendant and Third-Party Plaintiff-Respondent and Cross-Appellant and Laminating Corporation of America, Third-Party Defendant-Appellant and Cross- Respondent.

Supreme Court of New Jersey.

Argued Nov. 18, 1985.

Decided July 8, 1986.

Robert F. Colquhoun, for third-party defendant-appellant and cross-respondent (Colquhoun & Colquhoun, attorneys).

Thaddeus J. Hubert, III, for defendant and third-party plaintiff-respondent and cross-appellant (Hoagland, Longo, Oropollo & Moran, attorneys).

Seymour Margulies, for plaintiffs-respondents (Margulies, Margulies & Wind, attorneys; Jack Jay Wind, on brief).

The opinion of the Court was delivered by

POLLOCK, J.

On this appeal, we are asked to overturn the rule that an employer's liability for injuries sustained by an employee is restricted to the schedule of payments in the New Jersey Workers' Compensation Act, N.J.S.A. 34:15-1 to -127. The question is raised by a third-party tortfeasor that seeks contribution, common-law indemnification, or express indemnification from the employer with respect to a judgment obtained by the employee against the tortfeasor.

While moving a drum of solid waste on the premises of his employer, Laminating Corporation of America (LCA), plaintiff Jose Ramos was injured when he tripped over a rut made by a solid waste hauler, Browning-Ferris Industries of South Jersey, Inc. (BFI). After recovering a workers' compensation award against LCA, Ramos sued BFI, which filed a third-party complaint against LCA.

On cross-motions by LCA and BFI, the Law Division granted summary judgment for LCA dismissing BFI's indemnification claim. Thereafter, the jury found BFI 75 percent and Ramos 25 percent negligent, and returned a verdict for $410,000 in favor of Ramos, which the court molded to $307,500.

The Appellate Division affirmed the judgment for Ramos, but reversed the summary judgment for LCA, and ordered LCA to indemnify BFI from liability for Ramos's injuries. 194 N.J.Super. 96, 476 A.2d 304 (1984).

We granted both LCA's petition for certification and BFI's cross-petition, 101 N.J. 211, 501 A.2d 894 & 895 (1985), which asserted that if BFI was not entitled to express indemnification, it was entitled to implied indemnification or contribution from LCA. We find that LCA did not agree to indemnify BFI for BFI's own negligence, and that BFI's claims against LCA for contribution and implied indemnification are barred by the Workers' Compensation Act, N.J.S.A. 34:15-8. Consequently, we reverse the judgment of the Appellate Division.

-I-

LCA and BFI executed a standard BFI "service agreement," pursuant to which BFI agreed to furnish LCA with certain equipment identified as a solid waste compactor, a large steel container for the deposit of solid waste.

The agreement between BFI and LCA provided, in relevant part Customer [LCA] acknowledges that it has care, custody and management of equipment owned by the Company [BFI] and accepts responsibility for the equipment and its contents except when it is being physically handled by employees of the Company. Therefore, Customer expressly agrees to defend, indemnify and hold harmless the Company from and against any and all claims for loss of or damage to property, or injury to or death of person or persons resulting from or arising in any manner out of Customer's use, operation or possession of the equipment furnished under this Agreement.

Customer acknowledges that Company shall not be liable for any damage to pavement or driving surface resulting from its trucks servicing an agreed upon area.

LCA's employees would place solid waste in the container and BFI's trucks would remove, empty, and return the container to LCA's premises. In the course of these activities, BFI gouged holes or ruts in the ground around the containers.

On January 11, 1979, Ramos was wheeling a cart with a 400-pound drum through LCA's yard to a compactor. The cart caught in a snow-covered hole, and the drum rolled onto his leg, thereby causing serious personal injuries.

Ramos sued BFI, which filed a third-party complaint against LCA. The Law Division found that the indemnity clause did not obligate LCA to indemnify BFI from BFI's own negligence and that BFI was not entitled to implied indemnification or contribution. The Appellate Division disagreed with the Law Division's interpretation of the indemnification clause, finding that LCA agreed to indemnify BFI in all instances except "when the [container] is being physically handled by the employees of [BFI]." Additionally, the court stated that the Workers' Compensation Act did not bar enforcement of such an express indemnification agreement against the employer. 194 N.J.Super. at 101-02, 476 A.2d 304. The court ruled further that BFI owed plaintiff a duty with respect to placing the containers on LCA's premises and that

[t]he jury could have found that BFI acted unreasonably in not insisting on a safer location for the container or in failing to reduce the risk of dangerous ruts by spreading and compacting or advising LCA to spread and compact 'quarry blend bluestone' over the soil near the container. Plaintiff's expert testified that bluestone is used for that purpose. [ Id. at 104 476 A.2d 304.]

Finally, the Appellate Division rejected BFI's contention that the Law Division had erred in not submitting to the jury the issue of LCA's comparative negligence even though LCA is immune from liability to the plaintiff because of the bar of the Workers' Compensation Act. The court found that because the employer is immune, "it cannot be a party to a negligence action." Id. at 107, 476 A.2d 304.

-II-

With respect to work-related injuries, the rights and duties of an employee and employer, as well as those of the employer and a third-party tortfeasor, are governed by the Workers' Compensation Act, N.J.S.A. 34:15-1 to -127. That Act is built upon the principle that it provides the exclusive remedy against the employer for a work-related injury sustained by an employee. N.J.S.A. 34:15-8; Estelle v. Board of Educ. of Red Bank, 14 N.J. 256, 102 A.2d 44 (1954). Fundamental to the Act is the premise that by accepting the benefits provided by its schedule of payments, the employee agrees to foresake a tort action against the employer. Morris v. Hermann Forwarding Co., 18 N.J. 195, 197-98, 113 A.2d 513 (1955).

At common law, each joint tortfeasor was jointly and severally liable for all the damage caused by their wrongful acts. W. Keeton, D. Dobbs, R. Keeton, D. Owen, Prosser & Keeton on Torts § 52 at 345, 347-48 (5th ed. 1984) (Prosser & Keeton); F. Harper and F. James, Law of Torts § 10.1 at 692 (1956). Therefore, under common-law principles, even if LCA had contributed to the causation of plaintiff's accident, BFI would remain jointly and severally liable to plaintiff for the entire judgment.

To relieve the inequity of imposing the entire burden on one of several joint tortfeasors, the Legislature enacted the Joint Tortfeasors Contribution Law, N.J.S.A. 2A:53A-1 to -5. Although that law does not diminish the liability of a joint tortfeasor to the plaintiff, it provides a means for one joint tortfeasor to obtain contribution from another. Specifically, the law provides:

Where injury or damage is suffered by any person as a result of the wrongful act, neglect or default of joint tortfeasors, and the person so suffering injury or damage recovers a money judgment or judgments for such injury or damage against one or more of the joint tortfeasors, either in one action or in separate actions, and any one of the joint tortfeasors pays such judgment in whole or in part, he shall be entitled to recover contribution from the other joint tortfeasor or joint tortfeasors for the excess so paid over his pro rata share; but no person shall be entitled to recover contribution under this act from any person entitled to be indemnified by him in respect to the liability for which the contribution is sought. [N.J.S.A. 2A:53A-3.]

The term "joint tortfeasors" is defined to mean "two or more persons jointly or severally liable in tort for the same injury." N.J.S.A. 2A:53A-1.

At the time the Legislature enacted the Joint Tortfeasors Contribution Law, as at present, the Workers' Compensation Act provided that the agreement, express or implied, between employer and employee to accept the Workers' Compensation Act "shall be a surrender by the parties thereto of their rights to any other method, form or amount of compensation or determination thereof than as provided in this article * * *." N.J.S.A. 34:15-8. Thus, the Workers' Compensation Act removes the employer from the operation of the Joint Tortfeasors Contribution Law. Because the employer cannot be a joint tortfeasor, it is not subject to the provisions of the Joint Tortfeasors Contribution Law, and a third-party tortfeasor may not obtain contribution from an employer, no matter what may be the comparative negligence of the third party and the employer. Schweizer v. Elox Div. of Colt Indus., 70 N.J. 280, 288, 359 A.2d 857 (1976); Farren v. New Jersey Turnpike Auth., 31 N.J.Super. 356, 360-61, 106 A.2d 752 (App. Div.1954); Arcell v. Ashland Chem. Co., Inc., 152 N.J.Super. 471, 483-85, 378 A.2d 53 (Law Div.1977); Ruvolo v. United States Steel Corp., 139 N.J.Super. 578, 583, 354 A.2d 685 (Law Div.1976); Yearicks v. City of Wildwood, 23 N.J.Super. 379, 382-83, 92 A.2d 873 (Law Div.1952); Bertone v. Turco Prods., Inc., 252 F.2d 726, 730 (3d Cir.1958); Cameron v. G & H Steel Service, Inc., 494 F.Supp. 171, 174-75 (E.D.N.Y.1980).

The New Jersey Rule is consistent with that of the great majority of jurisdictions, which hold that the exclusive-remedy provision of the Workers' Compensation Act precludes a claim for contribution against an employer whose concurring negligence contributed to the injury of an...