On appeal from Superior Court, Law Division, Mercer County.
Bischoff, Petrella and Brody. The opinion of the court was delivered by Petrella, J.A.D.
The issue on this appeal is whether a cross-claim for contribution may be pursued by one settling defendant who has obtained a consent judgment, against the remaining settling defendant. The trial judge answered that question in the affirmative. We reverse and remand for the entry of an order dismissing all cross-claims.
The claim for contribution arose between two defendants in litigation which stemmed from an intersection accident in Hopewell, New Jersey in which Mary Tefft was a passenger in a car driven by her son, Kim Tefft. Their car collided with a car driven by defendant Mildred Wismer. Mary Tefft suffered a fractured dislocation of the right hip resulting in permanent disability.
Plaintiffs instituted suit claiming that both drivers were negligent. Elden C. Tefft asserted a per quod claim. Defendants cross-claimed against each other for contribution. After the jury found defendant Wismer 95% negligent and defendant Tefft 5% negligent in a trial of liability only, defendants each negotiated settlements with plaintiffs. Wismer was insured by a liability policy with a limit of $100,000. Defendant Tefft was insured for an unknown amount. Wismer's insurer paid her entire policy limits of $100,000 in exchange for a general release. Plaintiffs then settled the case for an additional $60,000 from defendant Kim Tefft, notwithstanding the jury having found him only 5% negligent. In an effort to preserve his cross-claim for contribution against settling defendant Wismer,*fn1 defendant
Tefft insisted on a consent judgment being entered against him in the amount of $60,000.
The consent judgment between only plaintiffs Tefft and defendant Tefft was entered over Wismer's objections. Defendant Tefft then successfully moved for summary judgment against Wismer on his contribution cross-claim. The trial judge entered a $52,000 judgment against Wismer because he considered Tefft liable for only 5% of the $160,000 settlement amount, notwithstanding his settlement with plaintiffs for $60,000. The parties concede that the damage claims had a potential in excess of $160,000. That may be stating the obvious if the parties paid that much in settlement. Of course, a jury verdict on damages could have been for a lower or higher amount, or even by coincidence the same amount.
The anomaly of the result of the judge's decision below is clear. Defendant Wismer having bought peace with plaintiff for her entire $100,000 policy, would be required to pay an additional $52,000 to a settling co-defendant without having any opportunity to negotiate how much defendant Tefft paid. Any such additional payment here would presumably have to be made by defendant Wismer personally in the absence of bad faith by her insurance carrier. See Rova Farms Resort v. Investors Ins. Co., 65 N.J. 474 (1974) and Kaudern v. Allstate, 277 F. Supp. 83 (D.N.J.1967).
Contribution between joint tortfeasors under comparative negligence is governed by the interplay between the Joint Tortfeasors Contribution Act,*fn2 N.J.S.A. 2A:53A-1, et seq., and the Comparative Negligence Act, N.J.S.A. 2A:15-5.1, et seq. See generally Cartel Capital Corp. v. Fireco of New Jersey, 81 N.J. 548, 569-570 (1980); Ezzi v. De Laurentis, 172 N.J. Super. 592, 598 (Law Div.1980); Polyard v. Terry, 148 N.J. Super. 202, 207 (Law Div.1977), rev'd on other grounds 160 N.J. Super. 497 (App.Div.1978), aff'd 79 N.J. 547 (1979). The right to contribution is stated in N.J.S.A. 2A:53A-3 as:
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.
Under the Comparative Negligence Act, N.J.S.A. 2A:15-5.1:
Contributory negligence shall not bar recovery in an action by any person or his legal representative to recover damages for negligence resulting in death or injury to person or property, if such negligence was not greater than the negligence of the person against whom recovery is sought, or was not greater than the combined negligence of the persons against whom recovery is sought. Any damages sustained shall be diminished by the percentage sustained of negligence attributable to the person recovering.
The right to pro rata contribution was affected as to nonsettling defendants with the adoption of the Comparative ...