On certification to the Superior Court, Appellate Division, whose opinion is reported at 268 N.J. Super. 235 (1993).
The opinion of the Court was delivered by Clifford. Chief Justice Wilentz and Justices Handler, Pollock, O'Hern, Garibaldi, and Stein join in this opinion.
The opinion of the Court was delivered by
Plaintiffs' appeal challenges the Appellate Division's interpretation of the collateral-source statute, N.J.S.A. 2A:15-97. The court below held that the statute allows a court to reduce a plaintiff's verdict in a personal-injury case by the amount paid by a settling defendant that a jury later determines is not liable in any degree. 268 N.J. Super. 235 (1993). We granted certification, 137 N.J. 165 (1994), and now reverse.
On January 13, 1988, plaintiff Joszef Kiss was the owner and operator of an automobile that was involved in a chain-reaction collision on Route 18, East Brunswick. The Kiss vehicle was struck in the rear by a vehicle operated by defendant Ziv Jacob, behind which were automobiles of defendants Warnebold and Marold, also involved in the collision as were several vehicles ahead of the Kiss automobile. Kiss and his wife, plaintiff Edith Kiss, whose claim was for her per quod losses only, sued Jacob, Warnebold, Marold, and the drivers of three vehicles ahead of the Kiss automobile. Motions before trial resulted in summary judgments
in favor of Marold and the drivers ahead of Kiss, leaving only Jacob and Warnebold as defendants.
Immediately prior to trial plaintiffs settled with Warnebold for $100,000, the limits of that defendant's personal-injury-liability coverage. The trial court bifurcated the trial. At the liability phase the jury determined that Warnebold, the settling defendant, had been negligent but that her negligence had not proximately caused plaintiff Joszef Kiss's injuries. The jury found Jacob 100% at fault for the accident. At the damages trial the jury returned a verdict in Joszef Kiss's favor for $37,500 for lost earnings and $5,000 for his injuries. It awarded plaintiff Edith Kiss $2500 on her per quod claim. The total award therefore was $45,000.
On Jacob's application following trial, the court reduced Joszef Kiss's lost-earnings award to $11,500 by deducting from the $37,500 returned by the jury the sum of $26,000, representing the amount that Kiss's own automobile insurer had paid in personal-injury-protection (PIP) benefits for lost income. The court further ruled that because Warnebold, who had been found zero percent liable, was not a joint tortfeasor for purposes of the collateral-source statute, the $100,000 that plaintiffs had received in settlement with Warnebold should off-set Joszef Kiss's personal-injury award of $5000 and Edith Kiss's per quod recovery of $2500. The result was a reduction of Edith's verdict to zero and of Joszef's award to $11,500.
On appeal, plaintiffs challenged the trial court's application of the collateral-source statute, and defendant cross-appealed, contending that the statute required that plaintiffs' entire award be extinguished. The Appellate Division held that N.J.S.A. 2A:15-97 applied to settlements received from settling parties that a jury determines are not liable. 268 N.J. Super. at 250. The court below thus determined that Jacob, who by jury determination was 100% responsible for plaintiffs' injuries and damages, ...