On appeal from the Superior Court, Law Division, Middlesex County.
Michels, Pressler and Bilder. The opinion of the court was delivered by Pressler, J.A.D. Bilder, J.s.c. (temporarily assigned), dissenting.
The primary question raised by this appeal is whether a plaintiff is barred from commencing a personal injury action against an alleged tortfeasor after having obtained partial recovery for the injury from the tortfeasor's employer in a prior action against the employer alone based exclusively on the employer's vicarious liability for the employee's causative act of negligence.
The question arises out of a largely undisputed factual background. Plaintiff Ann McFadden, while a patient at the Medical Center at Princeton (hospital), fell on a piece of soap left on the bathroom floor, sustaining serious injuries, including a herniated disc whose treatment required two subsequent hospitalizations and, ultimately, a laminectomy. The medical expenses incurred for treatment of the injuries as stated in plaintiff's answers to interrogatories were close to $5,000. She sued the hospital on a respondeat superior theory for the negligence of its employees in maintaining the bathroom in an unsafe condition. In a bifurcated trial she obtained a liability verdict against the hospital, the sole defendant in that suit. The claim was, however, settled before the damages trial for a total compensatory sum of $9,500. The release of the hospital executed by plaintiffs in connection with the settlement is silent as to whether the hospital's employees were also being released, but the letter of transmittal of the settlement documents by plaintiff's attorney did state that "This settlement is predicated on the defendant's hospital statute limitation of
$10,000.00 liability." The statutory reference was obviously to N.J.S.A. 2A:53A-8, which so limits the negligence liability of hospitals to their patients. Since, however, the limitation does not extend to the hospital's employees, who are accordingly obligated to respond in full for the damages resulting from the acts of negligence, N.J.S.A. 2A:53A-7, and since plaintiffs believed that the amount of their compensatory damages exceeded the hospital's limitation, they then commenced this action against these defendants, who were the floor nurses at the time the injury was sustained and were alleged to be those employees of the hospital actually responsible for the unsafe condition which resulted in the accident. Because of the identity of this cause of action and that prosecuted in the prior suit against the hospital, defendants, relying on the so-called entire controversy doctrine, moved for summary judgment dismissing the complaint. It is from the denial of that motion that defendants, on leave granted, appeal. We affirm.
At the outset we note that this court, in Moss v. Jones , 93 N.J. Super. 179, 185 (App. Div. 1966), has heretofore held that when a plaintiff has a cause of action against two possible defendants, namely the negligent actor and the person vicariously liable for the negligent conduct, he need not join both in a single action but has the option of suing them separately in successive actions. The rationale permitting successive litigation is that although the act of negligence complained of is the same in each action, there are nevertheless two distinct and separate persons responsible to the plaintiff, the actual tortfeasor himself and the person vicariously liable for the tort. Thus a plaintiff has two separate causes of action which he may prosecute separately, there being "nothing mandatory as to joinder, when liability is several or joint and several." Moss v. Jones, supra. This holding accords with the Restatement view. See Restatement, Judgments , § 94 at 467 (1942); Restatement, Judgments 2d (Tentative Draft No. 3, 1976), § 94 and Comment (a) at 72-75. The fact, however, that the
same alleged wrongdoing is the basis of two separate actions is not entirely without preclusive consequences. Thus, it is well settled that if the first suit, whether against the actual tortfeasor or the person vicariously liable, fails because of an adjudication that the injury was not caused by the actual tortfeasor's negligence, plaintiff, having had his day in court with respect to the underlying merits of the claim, will be precluded from relitigating the identical factual issue in the second suit by reason of res adjudicata /collateral estoppel considerations. See Restatement, Judgments , §§ 96 to 99 at 472-495 (1942); Restatement, Judgments 2d (Tentative Draft No. 4, 1977), § 99, Introductory Note and at 50-66; Restatement, Judgments 2d (Tentative Draft No. 3, 1976), § 99 and Introductory Note and at 89-102. And see cases collected in Annotation, "Res Judicata -- Same Accident -- New Party." 23 A.L.R. 2d 710, 726-735 (1952), and Later Case Service. And see Ettin v. Ava Truck Leasing, Inc. , 53 N.J. 463, 478-479 (1969). It is also clear that a plaintiff is entitled to only one satisfaction for the same loss. See generally, Theobald v. Angelos , 44 N.J. 228, 235, 239 (1965); Theobald v. Kenney's Suburban House, Inc. , 48 N.J. 203, 206-209, 212 (1966). Hence, if he has obtained a judgment in the first litigation, satisfaction thereof will bar his prosecution of a second action based on the same harm. If, however, plaintiff has been successful in the first action and the judgment in his favor obtained therein remains unsatisfied, he is free to proceed against the other party whose responsibility to him for the harm presents a fact issue not foreclosed by reason of a prior adverse adjudication. Thus, as was held in Moss v. Jones, supra ,
The general rule in this jurisdiction is that a release of one tortfeasor will not release others who may also be liable to plaintiff for his harm unless the release is so intended or the plaintiff receives as a result thereof either full satisfaction or satisfaction intended as such. Breen v. Peck , 28 N.J. 351 (1958). While that departure from the common law was formulated in the context of multiple acts of negligence committed by concurrent tortfeasors, each of whom was himself actually rather than merely vicariously liable, we see no reason why the rule should not apply as well to the single act of negligence for which both the actual wrongdoer and [159 NJSuper Page 367] his master or principal are each independently liable. The rationale of the rule is equally apposite whether the liability is actual or vicarious -- namely, that plaintiff is entitled to pursue all those who are independently liable to him for his harm until one full satisfaction is obtained. Where the cotortfeasors are each liable to plaintiff because of their respective distinct acts of negligence, obviously plaintiff is not precluded from suing one by reason of a prior adjudication adverse to him with respect to the other. But that difference in preclusionary consequences has, in our view, no bearing at all on the question of the effect of a release given to one co-obligor. We are aware of earlier decisions by our trial courts holding that the release of either the actual tortfeasor or the person vicariously liable serves to relieve the other as well where, as here, the document of release does not expressly reserve the right to proceed against the other. See Aljian v. Ben Schlossberg, Inc. , 8 N.J. Super. 461 (Law Div. 1950); United States Fidelity and Guar. Co. v. Goetze , 108 N.J. Eq. 210 (Ch. 1931). These cases were, however, decided prior to Breen v. Peck, supra , and we fail to discern therein any persuasive reason for not applying the intent/full satisfaction test of Breen to this special category of joint obligor release. But see Mayfair Fabrics v. Henley , 101 N.J. Super. 363, 375 (Law Div. 1968). We are also aware of the divergent views taken by other jurisdictions as to the question of whether the release of the master or servant releases the other. See Annotation "Tort of Servant -- Release -- Effect," 92 A.L.R. 2d 533 (1963), and Later Case Service. We concur, however, with the view expressed by such cases as Biles v. Harris , 521 P. 2d 884 (Okl. Ct. App. 1974), holding that the consequences of the release of a master or servant vis-a-vis the other are not different than those of a release of one actual joint tortfeasor vis-a-vis another and hence that the negligent employees are not released by a release of the employer where no such intent to release is manifest. We further note that this is the view proposed
by § 95 of Tentative Draft No. 3 of the Restatement, Judgments 2d, supra , which rejects the rule of § 95 of the original Restatement to the effect that the release of one co-obligor releases all. And see the Tentative Draft, supra , Comment (b) on § 99 at 94, also observing that the release of either master or servant does not ipso facto release the other.
Applying the intent/full satisfaction test of Breen v. Peck, supra , we are persuaded by this record that the instant defendant employees were not here intended to be released and that the settlement amount was not intended to and did not, in fact, constitute full compensation for the claim. That the $9,500 sum was predicated on the hospital's limitation of liability rather than on the fair value of the damages claim is a virtually self-evident proposition. Not only was that basis of the settlement made clear in the transmittal letter referred to but it is also obvious to us that the hospital's liability having already been adjudicated, the verdict value of the claim, considering the nature of the documented injury and its sequelae and the extent of the medical expenses, was patently substantially in excess of the hospital's liability. We feel confident in assuming that the settlement figure of $9,500 was reached in these circumstances not because plaintiffs may ...