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Erny v. Estate of Merola

January 30, 2002

CHRISTINE ERNY, PLAINTIFF-APPELLANT
v.
THE ESTATE OF ANTOINETTE T. MEROLA, MILTON MEROLA, MATTHEW ERNY, ANDREA D. GAMBINO, STATE OF NEW JERSEY, ANKA CONSTRUCTION, INC., JOHN DOES NO. 1-5, ETC., ET AL., DEFENDANTS, AND ROY RUSSO, DEFENDANT-RESPONDENT



The opinion of the court was delivered by: LaVECCHIA, J.

Argued September 24, 2001

On certification to the Superior Court, Appellate Division, whose opinion is reported at 333 N.J. Super. 88 (2000).

The choice-of-law question presented in this appeal requires the Court to decide whether New Jersey or New York law should apply to determine the joint and several liability of the defendants. The underlying occurrence was an automobile accident in New Jersey that involved a New Jersey plaintiff and two New York defendants. After a trial the New York defendant drivers were found sixty and forty percent at fault respectively. New Jersey's law shields all defendants less than sixty percent at fault from joint liability for damages in excess of their apportioned responsibility. New York's law specifically subjects defendants in auto negligence actions to joint and several liability irrespective of their allocated percentage of fault, consistent with that state's policy of providing recovery to plaintiffs in such cases. To resolve the choice-of-law question, we must evaluate the respective interests of the two involved states to determine the state that has the most significant interest in governing the joint and several liability issue. Having done so, we conclude that New York law has primacy in these circumstances.

I.

On May 17, 1992, plaintiff Christine Erny, a New Jersey resident, was injured in a multi-car accident on Route 287 in Franklin Township, New Jersey. Her husband, Matthew Erny, was driving the pick-up truck in which she was a passenger. The chain of events that caused the accident began when Roy Russo, a New York resident, while driving in a southerly direction on Route 287, crossed into the travel lane of Antoinette Merola, also a New York resident, causing Merola to lose control of her car and cross over the median into oncoming northbound traffic. Merola's car collided head-on with the Erny's pick-up truck and another vehicle. Merola was killed and several others were injured. As a result of the crash, Ms. Erny lost her spleen and left kidney and suffered other serious injuries.

Merola's car was registered and insured in New York; it was owned by her husband, Milton Merola. Russo was a student at Lehigh University in Pennsylvania at the time of the accident. He traveled from his home in New York through New Jersey to go to and from school. Russo's car was owned by his mother, Terry Russo, and the car was registered and insured in New York. Merola's car was covered under an automobile insurance policy having liability limits of $100,000 per occurrence; Russo's car was covered under an automobile policy with a liability limit of $1.5 million per occurrence.

Plaintiff instituted this negligence action in December 1992 against the Estate of Antoinette Merola, Milton Merola (the Merola defendants), Russo, Matthew Erny and a fictitious named defendant. Additional claims were filed by three other New Jersey residents and a foreign resident injured in the accident. Those additional claims were settled before the damages trial. In May 1993, the Merola defendants instituted a negligence/wrongful death action in the Supreme Court of New York against Russo and his mother (the Russo defendants). The Russo defendants moved to dismiss the New York action because of the pending action in New Jersey. Notwithstanding opposition by the Merola defendants, the motion was granted on comity grounds and the New York action was dismissed without prejudice. The Merola defendants then amended their cross-claim in the New Jersey action to assert claims for damages against the Russo defendants. The trial court bifurcated the issues of liability and damages. The court also denied Milton Merola's motion for summary judgment allowing plaintiff's claims to proceed against him as owner of the car driven by decedent Antoinette Merola. Following a jury trial on liability, a verdict was returned in favor of plaintiffs, assigning Russo forty percent fault and the Merola defendants sixty percent fault. The jury's allocation of fault also applied to the Merola defendants' cross-claim against Russo. New Jersey law was applied during the trial. After the trial on liability, the Merola defendants moved for application of New York comparative negligence law, which would allow the Merola defendants to recover forty percent of their damages from Russo. N.Y. C.P.L.R. § 1411 (McKinney 2001). That motion was denied, the trial court determining that choice of law considerations favored application of New Jersey comparative negligence law, N.J.S.A. 2A:15-5.1.

Two years later, the damages trial concluded with an award to plaintiff of $650,000. The trial court allocated the damages according to the jury's finding of liability and entered a judgment against Russo for forty percent, amounting to $260,000, and against the Merola defendants for sixty percent, amounting to $390,000. Plaintiff filed a post-judgment motion seeking several remedies, including the application of New York law on the issue of joint and several liability. The trial court denied the motion, concluding that because New Jersey law governed the comparative negligence issue, it also controlled the defendants' respective liability for damages. The court reasoned that the two concepts were "so intertwined" that "it would not be good policy to have one of those concepts decided under one state's law and the other under another state's law." The effect of the ruling limited plaintiff's right to recover damages. N.J.S.A. 2A:15-5.3 provided that a plaintiff could not recover one hundred percent of non-economic damages from a joint tortfeasor who was less than sixty percent at fault. Conversely, if New York joint and several liability law applied plaintiff could recover all of her damages from either defendant irrespective of his or her percentage of fault, and therefore could collect from Russo because he had a sufficient amount of liability coverage to satisfy Erny's judgment. N.Y. C.P.L.R. §§ 1601, 1602(6) (McKinney 2001).

On appeal, the Appellate Division determined that the trial court properly applied both New Jersey comparative negligence and joint and several liability law. Erny v. Russo, 333 N.J. Super. 88, 99, 104 (2000). The Appellate Division held that under the controlling choice-of-law analysis, it was appropriate to apply New Jersey comparative negligence law. The court then determined that despite the general rule that "conflict of laws determinations are to be made on an issue by issue basis," New Jersey law should apply on the joint and several liability issue, observing that "in a case where New Jersey's comparative negligence law has already been applied . . . our law of joint and several liability, which is essentially a damages provision, will be applied." Id. at 102 (citing Marinelli v. K-mart Corp. 318 N.J. Super. 554, 568-69 (App. Div. 1999), aff'd o.b. 162 N.J. 516 (2000)).

We granted plaintiff's petition for certification, 167 N.J. 630 (2001), limited only to review of the choice-of-law determination concerning joint and several liability.

II.

The issue before the Court is whether to apply New York's joint and several liability statutes, N.Y. C.P.L.R. §§ 1601 and 1602(6), or the New Jersey analog, N.J.S.A. 2A:15-5.3. Because New Jersey is the forum for this litigation, our choice-of-law rules apply. Fu v. Fu, 160 N.J. 108, 117-18 (1999). Our rules employ a flexible "governmental-interest" analysis to determine which state has the greatest interest in governing the specific issue that arises in the underlying litigation. Ibid.; Gantes v. Kason Corp., 145 N.J. 478, 484 (1996); Veazey v. Doremus, 103 N.J. 244, 247 (1986). Ordinarily, choice-of-law determinations are made on an issue-by-issue basis, with each issue receiving separate analysis. Gantes, supra, 145 N.J. at 484; Veazey, supra, 103 N.J. at 248 (1996); White v. Smith, 398 F. Supp. 130, 134 (D.N.J. 1975) ("In order to determine which state has the greatest interest in the application of its own law, each issue must be analyzed separately."); Grossman v. Club Med Sales, Inc., 273 N.J. Super. 42, 51 (App. Div. 1994) (observing that "[i]t is thus conceivable that the law of one jurisdiction may apply to one issue in a matter and the law of a second jurisdiction to another."). See also Clawans v. United States, 75 F. Supp.2d 368, 374-75 (D.N.J. 1999) (applying New Jersey law to issue of damages and Maryland law to issue of fault apportionment). The precise question here is whether a discrete choice-of-law determination on joint and several liability is appropriate once New Jersey law has been held to apply to the issue of comparative negligence.

A.

The Restatement (Second) of Conflict of Laws proposes an issue-by-issue approach to choice-of-law determinations in tort and recommends that each issue be decided by "the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties. . . ." Restatement (Second) of Conflict of Laws § 145(1) (1971). Section 145 provides the method by which a court ought to determine which state has the most significant relationship to the issue under consideration. Comment a. to section 145 states that the method outlined sets forth "a principle applicable to all torts and to all issues in tort . . . ." Id. § 145 cmt. a. Moreover, the commentary states that: "Each issue is to receive separate consideration if it is one which would be resolved differently under the local law rule of two or more of the potentially interested states." Id. § 145 cmt. d. Section 146 reaffirms the issue-by-issue approach in the context of personal injury litigation to ensure that the policy of the state with the greater interest is applied. It provides:

In an action for a personal injury, the local law of the state where the injury occurred determines the rights and liabilities of the parties, unless, with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6 to the occurrence and the parties, in which event the local law of the other state will be applied. [Restatement, supra, § 146].

Damage issues specifically are characterized as appropriate for an issue-specific determination with respect to which state has the dominant policy interest. The law selected upon application of the rule of section 145 should determine the measure of damages. Id. § 171. Comments a. and b. to section 171 explain:

a. The law selected by application of the rule of § 145 determines what items of loss can be included in the damages and what limitations, if any, are imposed upon the amount of recovery.

b. The determination of the state of the applicable law should be made in the light of the choice-of-law principles stated in § 6. In general, this should be the state which has the dominant interest in the determination of the particular issue. The state of conduct and injury will not, by reason of these contacts alone, be the state that is primarily concerned with the measure of damages in a tort action. The local law of this state will, however, be applied unless some other state has a greater interest in this issue.

The Restatement also cites the rule of section 145 as being appropriate for issue-specific choice-of-law determinations for contributory and comparative fault (section 164); joint torts (section 172); and contribution and indemnity among tortfeasors (section 173); although the law of the site of the conduct and injury is presumptively the preferred choice of law for contributory fault and joint torts. Thus, the general approach of the Restatement counsels issue-specific choice-of-law determinations in tort because the state where the conduct and injury occurred may not be, by reason of those contacts alone, the state with the primary interest. The analysis turns on the respective tort policy interests of the two states, whether their interests conflict, and which state's policies should prevail. The governmental-interest test of the Restatement focuses and guides our analysis in such determinations. Fu, supra, 160 N.J. at 118.

B.

The question posed here is whether, having held that New Jersey's comparative negligence law applies, the courts below properly determined that New Jersey joint and several liability law also must apply. Application of the governmental-interest test requires analysis of the purposes underlying each law. See Restatement, supra, § 6 cmt. e ("Every rule of law, whether embodied in a statute or in a common law rule, was designed to achieve one or more purposes."); id. § 145 cmt. c (stating that "the interest of a state in having its tort rule applied . . . will depend on the purpose sought to be achieved by that rule . . . ."). Hence, an examination of the purpose underlying our comparative negligence law does not eliminate the need to examine the underlying purpose of our joint and several liability law.

The law of contributory negligence generally addresses the effect of plaintiff's fault, if any, on plaintiff's entitlement to recover damages at all. The doctrine of comparative negligence considers those circumstances under which the plaintiff's contributory fault does not bar recovery, but does serve to reduce the damages he or she would otherwise be entitled to receive. Both concepts apportion fault in accordance with plaintiff's and defendant's negligence and affect plaintiff's entitlement to damages. See W. Page Keeton, et. al., Prosser and Keeton on the Law of Torts, ยง 65 at 451-53; (5th ed. 1984) (observing that it is unfortunate that "contributory negligence is called negligence at all. ?Contributory Fault' would be a more descriptive term. Negligence as it is commonly ...


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