Marguerite T. Simon, J.s.c.
Plaintiff in this matter seeks to enforce a settlement admittedly tailored as an attempt to meet the requirements of Griggs v. Bertram, 88 N.J. 347 (1982).
The underlying litigation resulted from the tragic death of eighteen-year-old William N. Battista, III, on January 12, 1982. His mother, Katherine Battista, brought an action against the Borough of Leonia and three police officers, Carmey Cross, Todd Cieslak and Paul Olson, alleging failure to provide emergency medical assistance and seeking both compensatory and punitive damages. Plaintiff in that lawsuit alleged that, rather than providing necessary emergency medical assistance for William Battista, the Leonia police officers prepared to arrest him on an outstanding municipal court warrant. William Battista had failed to appear in response to a charge of drinking beer in public. When the police officers later responded to a second call for help, it was too late to revive the young man. Any reference to the facts and sequence of that lawsuit is made solely from the testimony and exhibits from that case which were introduced in the present matter as this court has been unable to locate the complete court file in that action, Battista v. Borough of Leonia, Docket No. L-66790-81.
A Law Enforcement Officers Liability Policy (P15EV) from Western World Insurance Company, Inc., (Western World) covered individual members of the Leonia Police Department with limits of $500,000 (per person, per incident and per year) and expressly excluded coverage for exemplary or punitive damages. A second policy (P25EV) from Aetna Casualty & Surety Company (Aetna) insured the municipality in the same amount, excluding individual police officers and also excluding punitive damages.
The law firm of Lieb, Berlin and Kaplan was retained through Western World and filed an answer on behalf of the Borough and each of the individual police officers as to all
counts (compensatory and punitive) of the complaint. Additional answers were filed on behalf of the Borough by Durkin and Boggia, municipal attorneys, who responded to all counts, and Harwood Lloyd, through Aetna, who responded to compensatory counts only. By motion preceding trial, the Borough successfully obtained the dismissal of punitive counts as to the municipality. The incident took place at the Crawbuck residence and Mr. and Mrs. Crawbuck as well as their son, John, were eventually named additional defendants and represented by separate counsel.
A thirteen day jury trial commenced June 13, 1984 before the Honorable Edward J. Van Tassel. Donald L. Berlin of Lieb, Berlin and Kaplan acted as trial counsel for the three police officers and Frank Lloyd tried the matter for the Borough of Leonia. In its verdict, the jury assessed compensatory damages at $60,000 and found Officer Olson fifty percent negligent, the Borough of Leonia thirty-three percent negligent and Officer Cieslak seventeen percent negligent. Officer Cross was found to be not negligent. The jury answered "yes" to jury interrogatory question Number 19 which provided, "If you find Paul Olson guilty of negligence, were his acts of negligence intentional, willful, wanton and/or malicious?" Punitive damages were set at one million dollars against Officer Olson only.
Several post-verdict motions and applications were made including a motion by Mr. Berlin on behalf of defendants Borough of Leonia, Todd Cieslak and Paul Olson for a judgment notwithstanding the verdict or, in the alternative, a new trial. By letter dated July 27, 1984 (P30EV), Judge Van Tassel alluded to the then recent Opinion Number 534 of the Advisory Committee on Professional Ethics and stated that Mr. Berlin, by his multiple representation, was placed in a conflicting position and that independent counsel should be retained immediately. It was a short time before this letter, approximately mid-July 1984, that defendant, Paul Olson, had retained John Altieri as his independent attorney. Both Mr. Berlin and Mr. Altieri entered their appearances on August 1, 1984 when
Judge Van Tassel delivered his decision on the motions referred to above.
At that time, Judge Van Tassel reiterated his prior determination that it was appropriate to present the issue of punitive damages to the jury. With regard to the amount of punitive damages, he commented that no testimony had been adduced as to the defendant Olson's assets and stated: "Now, the verdict, of course, of a million dollars under those circumstances, I will give it to you straight out. It is outrageously high. It cannot stand." Judge Van Tassel then remitted that amount to $75,000, an amount not accepted by the parties. Accordingly, the matter was set down for a new trial as to the amount of punitive damages only.
During the period preceding the new trial on damages, John Altieri became aware of the existence of a Policeman's Benevolent Association (P.B.A.) Agreement between the Borough of Leonia and its police officers (P16EV) containing the following language:
This provision does not apply to any action, ". . . occasioned by the employee's willful detour from the prescribed duties and regulations of the department."
A deposition, before the new trial and in accordance with a court order, disclosed the assets and liabilities of Lieutenant Olson, as recorded on a document (P18EV). On the date set for the new trial on punitive damages, September 3, 1985, attorneys John Altieri and Lawrence Weintraub placed the terms of a settlement on the record before the Honorable Arthur Minuskin. Testimony was taken from Mrs. Battista and Lieutenant Olson as to the voluntariness of the settlement only, and no testimony was taken as to the merits of the matter. The terms
of the agreement were incorporated into a written document (P2EV) executed by both Battista and Olson. The plaintiff and defendant settled the amount of punitive damages at one million dollars, the amount of the jury award. The detailed document consists of ten numbered paragraphs and provides, in part, that Battista will join in a future lawsuit to seek indemnification for that amount. It states:
(3) Olson hereby agrees to give to Battista an irrevocable offer of assignment to any and all claims he may have under any and all policies of insurance and/or indemnification, such an assignment to be effective at the exclusive option of Battista. In return Battista agrees to limit her recovery of the $1,000,000 from the insurance companies and other defendants; and not to seek recovery from Olson personally.
Olson agrees to start suit within 45 days against Western World, the Borough of Leonia, Aetna, and Lieb, Berlin and Kaplan, naming Battista as a party defendant. It further provides:
(8) With respect to the lawsuit about to be filed, Olson and Battista both agree that in light of Olson's own claims for injuries and damages due to the tortious conduct of the defendants, breach of fiduciary relationship and conflicts of interest, as well as breaches of various contracts for insurance and indemnification and in view of his desire to assert those claims in his own right, that Olson will also seek claims for indemnification for Battista on her behalf in his name in that same suit as well. In the event, however, at any time Battista feels that she wants to be substituted in place of Olson on the claims for indemnification, then the parties hereby agree that she has the right to exercise that option and Olson will agree to substitute her in his place and stead. Olson, nevertheless, retains the right to pursue his own claims in that event.
The present action was begun on December 13, 1985, with the filing of a complaint by Paul Olson seeking enforcement of the indemnification provisions of the settlement agreement, recovery against Western World and Aetna for emotional distress, and recovery against Leonia for counsel fees and indemnification under the P.B.A. Agreement. A case management conference before the Honorable Peter Ciolino, Assignment Judge, resulted in the entry of an order dated May 14, 1987, substituting Leopold A. Monaco as counsel for Battista, ...