Theobald v. Angelos

• Decision Date: 15 March 1965
• Docket Number: No. A--39,A--39
• Citation: 208 A.2d 129,44 N.J. 228
• Parties: Robert THEOBALD, Plaintiff-Respondent, v. Leon ANGELOS and Cherry Hill Township, Defendants-Appellants.
• Court: New Jersey Supreme Court

Page 228

44 N.J. 228

208 A.2d 129

Robert THEOBALD, Plaintiff-Respondent, v. Leon ANGELOS and Cherry Hill Township, Defendants-Appellants.

No. A--39.

Supreme Court of New Jersey.

Argued Nov. 17, 1964.

Decided March 15, 1965.

Samuel P. Orlando, Camden, for appellants.

Frank E. Vittori, Camden, for respondent (John H. Reiners, Jer., Camden, attorney).

The opinion of the court was delivered by

WEINTRAUB, C.J.

Plaintiff, Theobald, was severely injured in an automobile accident. Before trial he settled with two defendants. We are here concerned with the effect of those settlements upon the liability of the remaining defendant.

This litigation was before us in Theobald v. Angelos, 40 N.J. 295, 191 A.2d 465 (1963). As related in that opinion, the car of defendant Anderson went out of control and came to rest partly in the street and partly upon property of plaintiff. Defendant Angelos, a police officer of defendant Delaware Township, parked his police car behind Anderson's. While plaintiff was standing between these vehicles, defendant Conaty struck the rear of the police car, driving it forward and thereby crushing plaintiff. Just before trial plaintiff settled with Anderson for $1,500 and with Conaty for $88,500. The trial resulted in a judgment for $65,000 against Angelos and the municipality. (The municipality and its servant Angelos are a single tortfeasor for the purposes of the contribution statute, N.J.S. 2A:53A--1, N.J.S.A.; we will refer to them hereafter as 'Angelos' or 'the defendant.')

Both Angelos and plaintiff appealed, Angelos complaining of the trial court's refusal to find the settlements with the codefendants operated to satisfy the judgment, and plaintiff complaining the jury had been misled into returning a verdict for but part of the total damages. We ordered a retrial as to damages only and reserved for later consideration in the light of a new verdict the issues as to the effect of those settlements.

Upon the retrial the jury found total damages of $165,000. The trial court thereupon decided the reserved matters this way:

(1) Angelos contended the fact of settlement with Anderson conclusively established Anderson a co-tortfeasor and hence there should be a three-way division, reducing Angelos' share to $55,000. Plaintiff contended that Anderson was not a tortfeasor because the jury in the first trial found he was not, and hence the total figure of $165,000 should be divided between Conaty and Angelos, the parties the jury found to be at fault. The trial court accepted plaintiff's position and reduced the share of Angelos to $82,500, but then applied upon that amount the sum of $1,500 paid by Anderson to plaintiff, leaving a net liability of $81,000. This so-called 'protanto' credit of $1,500 is not challenged by plaintiff upon this appeal.

(2) Angelos contended alternatively that there should be applied to the total figure ($165,000) the full amount received from Conaty ($88,500) in addition to the sum received from Anderson ($1,500), leaving Angelos liable only for the balance of $75,000. The trial court accepted plaintiff's response that a joint tortfeasor who receives a Pro rata credit because of the discharge of his co-obligor has no interest in whether the plaintiff did well or poorly in settling with the co-obligor.

Angelos appealed from this disposition of those issues and we cretified the appeal before argument in the Appellate Division.

The issues must be considered in the context of our contribution statute as construed in Judson v. Peoples Bank & Trust Co., 17 N.J. 67, 110 A.2d 24 (1954), and Judson v. Peoples Bank & Trust Co., 25 N.J. 17, 134 A.2d 761 (1957). Those cases hold that a settlement with a joint tortfeasor, even though for less than a Pro rata share of the total claim, nontheless (1) reduces the total claim by the Pro rata figure and (2) bars an action for contribution against the settling wrongdoer.

I

The first question is whether for the purposes of the contribution statute Anderson must be deemed a tortfeasor because plaintiff settled with him.

As stated before, the jury at the first trial found that Anderson was not culpably involved. Angelos complains, at least incidentally, that the issue of Anderson's fault was not fairly litigated. We think it was. Angelos had cross-claimed for contribution against both Anderson and Conaty. It is agreed the trial court and counsel were aware of the then recent case of Hoeller v. Coleman, 73 N.J.Super. 502, 180 A.2d 333 (App.Div.1962), certification later denied in 38 N.J. 362, 184 A.2d 868 (1962). There the Appellate Division held that whether a settling party is a tortfeasor is a triable issue of fact, and that if he is not, the only credit which a culpable defendant may have is in the actual sum the settlor paid. We have no doubt that Angelos understood the issue of negligence on the part of Anderson and Conaty was being tried. The jury's finding on the interrogatory submitted to it, that Anderson was not a tortfeasor, was fairly reached and should be accepted.

We proceed then to defendant's proposition that the naked fact of a settlement should establish his right to a Pro rata reduction, however nominal the payment and however innocent of wrong the payor may be. Here, of course, plaintiff had no thought of accepting a mere $1,500 in satisfaction of a third of his heavy losses. We should not surprise him with that result unless we must. Surely there is no room for defendant's claim of estoppel; he had the same full opportunity to press his claim for contribution whether Anderson settled or not. Rather defendant would enjoy a windfall if we found that plaintiff stumbled over a misconception of law. The injustice would be so evident that equity might well relieve plaintiff of the settlement because of his mistake, a result which could not harm Anderson in view of the jury's verdict exculpating him. In any event, we agree with the holding of Hoeller, supra, 73 N.J.Super. 502, 180 A.2d 333, that a Pro rata reduction will not be ordered if the party to the settlement was not in fact a tortfeasor.

The issue is now before us for the first time. In Klotz v. Lee, 36 N.J.Super. 6, 114 A.2d 746 (App.Div.1955), plaintiff agreed to accept $12,500 from one defendant without regard to the jury's verdict and agreed to collect no more than 50% Of the verdict from the codefendant if the verdict ran against both. The jury returned a verdict of $35,000 against the nonsettling defendant alone. The trial court ordered $12,500 to be applied on the amount of the verdict. The Appellate Division affirmed. It is not clear from its opinion that the precise issue before us was pressed. Certification was denied, Klotz v. Breish, 19 N.J. 334, 116 A.2d 829 (1955), and an appeal was dismissed, Klotz v. Lee, 21 N.J. 148, 121 A.2d 369 (1956). In Judson v. Peoples Bank & Trust Co., supra, 25 N.J., at p. 34, 134 A.2d 761 we noted that no one questioned the finding that one of the settling parties (Peoples Bank) was a tortfeasor. We so noted out of an awareness of the issue now before us. In Oliver v. Russo, 29 N.J. 418, 420, 149 A.2d 213 (1959), the appellant sought to present the question but did so for the first time on appeal, asking for a remand to try the issue of the negligence of the settling party. We declined to accept the question in that posture of the case, and cited without comment Davis v. Miller, 385 Pa. 348, 123 A.2d 422 (Sup.Ct.1956), and Swigert v. Welk, 213 Md. 613, 133 A.2d 428 (Ct.App.1957), both of which held under the contribution law of those States that a defendant was entitled to Pro rata credit only if the settling party was in fact a tortfeasor.

In Hoeller v. Coleman, supra, 73 N.J.Super. 502, 180 A.2d 333, the Appellate Division reviewed the prior cases and, as we have already said, held that where the jury found the settling defendant was not a party to the wrong, the culpable defendant could not claim a Pro rata abatement because of that settlement but was entitled to a Pro tanto reduction in the amount the settlor paid. The Appellate Division referred also to Steger v. Egyud, 219 Md. 331, 149 A.2d 762 (Ct.App.1959), where in a case involving New Jersey law the Court of Appeals reached the same conclusions on a review of the decisions in our State. We denied certification in Hoeller, 38 N.J. 362, 184 A.2d 868 (1962). We add that in Hoeller the Appellate Division declined to follow Smootz v. Ienni, 37 N.J.Super. 529, 117 A.2d 675 (Cty.Ct.1955), in which the trial court, upon a motion which plaintiff did not resist, seemingly held that a settlement leads to a Pro rata reduction without regard to the payor's negligence. The trial court in Smootz did not refer to Klotz, supra, 36 N.J.Super. 6, 114 A.2d 746, which had been decided by the Appellate Division a few months before.

Our Joint Tortfeasors Contribution Law, N.J.S. 2A:53A--1 et seq., (enacted in 1952), N.J.S.A. does not direct that credit be given if there is a settlement with one who is not in fact a tortfeasor. Literally at least, the statute calls for an adjustment only if the payor was a party to the wrong. N.J.S. 2A:53A--1, N.J.S.A. defines 'joint tortfeasors' to mean two or more persons jointly or severally 'liable in tort,' and it is a payment by one such person which brings the statute into play. Hence if a settlement is to have the consequences defendant demands, the basis for that result must be found outside the language of the statute itself.

We find no support for defendant's position in our cases prior to the statute. If anything, they tend the other way. We refer to cases dealing with two rules of great antiquity which likely developed because the early common law could not achieve contribution among co-obligors. One rule was that a claimant could have but one satisfaction. The other was that the release of one co-obligor released all without regard to intent or satisfaction in fact.

With respect to the one-satisfaction rule, our ...