On appeal from the Superior Court of New Jersey, Law Division, Cape May County.
Approved for Publication April 29, 1997.
Before Judges Shebell, Baime and P.g. Levy. The opinion of the court was delivered by Shebell, P.j.a.d.
The opinion of the court was delivered by: Shebell
The opinion of the court was delivered by
This is an appeal from the September 15, 1996 order of the Law Division granting defendant's motion for summary judgment based on the determination that plaintiff's action is barred by the entire controversy doctrine. Plaintiff's motion for reconsideration was also denied.
The sole issue on appeal is whether plaintiff's indemnification claim is barred by the entire controversy doctrine in light of plaintiff's failure to file a cross-claim for indemnification against defendant during the previous law suit when they were co-defendants. We have carefully considered plaintiff's legal arguments and find them to be clearly without merit. R. 2:11-3(e)(1)(E).
Plaintiff, Carl V. Buck, II, and defendant, James A. MacDonald, each owned shares of a corporation that developed a sixty-unit condominium project in Cape May. On June 2, 1995, plaintiff instituted a claim for indemnification on behalf of the corporation against MacDonald who had been the project's architect, alleging faults with the design and construction of the structures. In August 1990, Buck, MacDonald, and the corporation had been named co-defendants in a suit by the condominium owners, who sought redress for the design and construction deficiencies. In April 1993, a settlement agreement was reached with the owners under which the corporation, Buck, and MacDonald agreed to pay for the remedial measures necessary to correct the deficiencies found in the project. Because of this prior suit, the trial Judge granted summary judgment against plaintiff in this action, finding that the entire controversy doctrine precluded plaintiff's claim for indemnification.
Pursuant to the entire controversy doctrine, all parties with a material interest in the litigation and all claims arising from the same overall transaction must be joined in a single action. DiTrolio v. Antiles, 142 N.J. 253, 267-68, 662 A.2d 494 (1995); Circle Chevrolet v. Giordano, Halleran & Ciesla, 142 N.J. 280, 289, 662 A.2d 509 (1995); Mystic Isle Development Corp. v. Perskie & Nehmad, 142 N.J. 310, 322-23, 662 A.2d 523 (1995); Mortgagelinq Corp. v. Commonwealth Land Title, 142 N.J. 336, 342-43, 662 A.2d 536 (1995); Cogdell v. Hospital Ctr., 116 N.J. 7, 26, 560 A.2d 1169 (1989). "In sum, the entire controversy doctrine compels litigants at the risk of preclusion to assert all claims in a single controversy." Prevratil v. Mohr, 145 N.J. 180, 190, 678 A.2d 243 (1996).
The test for whether claims are "related" such that they must be brought in a single action under New Jersey['s] entire controversy doctrine was expressed in O'Shea v. Amoco Oil Co., 886 F. 2d 584 (3d. Cir. 1989), as follows: if parties or persons will, after final judgment is entered, be likely to have to engage in additional litigation to conclusively dispose of their respective bundles of rights and liabilities that derive from a single transaction or related series of transactions, the omitted components of the dispute or controversy must be regarded as constituting an element of one mandatory unit of litigation. Id. at 590-91.
[DiTrolio, (supra) , 142 N.J. at 268.]
We find the holding in Harley Davidson v. Advance Die., 292 N.J. Super. 62, 68, 678 A.2d 293 (App. Div.), certif. granted, 146 N.J. 568 (1996) to be less than compelling here. In that case, the parts manufacturer was not a party to the initial suit and the claim against it purportedly did not accrue until after a settlement had been reached between the motorcycle company and the injured plaintiff. We, therefore, found that a stringent application of the entire controversy doctrine in the context of that case might result in undesirable consequences. Id. at 68-69.
More to the point here is Bendar v. Rosen, 247 N.J. Super. 219, 237, 588 A.2d 1264 (App. Div. 1991), wherein we stated that the entire controversy doctrine and judicial economy militated in favor of requiring the assertion of a cross-claim for contribution in an underlying tort action, even though "technically a right of contribution does not arise until a tortfeasor has paid more than his pro rata share." The comment to R. 4:7-5 (Cross-Claim Against Co-Party; Claim for Contribution or Claim for Indemnity) supports our Conclusion that the entire controversy doctrine requires an indemnification cross-claim to be made here.
The import of the amendment is to require defendants to assert any cross-claims for contribution and indemnity which they may have against any other party in the action itself despite the fact that the cause of action for contribution and indemnity does not ...