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Cherry Hill Manor Associates v. Faugno

December 6, 2004

CHERRY HILL MANOR ASSOCIATES, PLAINTIFF,
v.
PAUL FAUGNO, ESQ., AND ROGAN & FAUGNO, ESQS., DEFENDANTS-THIRD PARTY PLAINTIFFS-RESPONDENTS, AND HARLEYSVILLE INSURANCE COMPANY OF NEW JERSEY, THIRD PARTY DEFENDANT, AND TIMOTHY TUTTLE, ESQ., ROBERT J. MANCINELLI, ESQ., AND CARVER & MANCINELLI, ESQS., THIRD PARTY DEFENDANTS-APPELLANTS.



On certification to the Superior Court, Appellate Division, whose opinion is reported at 365 N.J. Super. 313 (2004).

SYLLABUS BY THE COURT

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

In these consolidated petitions for certification, the Court considers whether a defendant can seek statutory contribution against third-party defendants when the original plaintiff is legally barred from proceeding directly against any of the third-party defendants.

This appeal originated from a failed business transaction dating back eighteen years. During October 1986, plaintiff, Cherry Hill Manor Associates (CHMA) attempted to purchase a then-mostly unbuilt condominium project from Cherry Hill Manor, Inc. (CHM). As part of its contractual obligations, CHMA (buyer) paid CHM (seller) both a $300,000 deposit and advanced an additional $345,000. In this transaction, CHMA was represented by Timothy Tuttle, Esq. As counsel for CHMA, Tuttle was responsible for ensuring that plaintiff's deposit monies and advances were secured by a purchase money mortgage on the project. For some reason, that purchase money mortgage was neither delivered nor filed of record and, eventually, CHM defaulted on the transaction.

Three years later, CHMA retained Robert J. Mancinelli to recover its deposit and advances from CHM. Although Mancinelli filed suit against CHM, he did not name as a defendant in that suit plaintiff's original lawyer, Tuttle, for his failure to have secured the monies by a purchase money mortgage. CHM filed a voluntary petition in bankruptcy and its debts were subsequently discharged. There being no prospect of recovery, CHMA dismissed its complaint against CHM.

More time passed and CHMA again retained counsel, Paul Faugno, Esq., who filed suit against Tuttle alleging malpractice, based on Tuttle's failure to have secured CHMA's deposit monies and advances with a purchase money mortgage. After some time, and an unsuccessful summary judgment motion based on the entire controversy doctrine, Tuttle filed a third-party complaint against Mancinelli for contribution as a joint tortfeasor. Faugno did not seek to amend the complaint he had filed in CHMA's behalf to allege a direct claim against Mancinelli.

Subsequently, Tuttle renewed his motion for summary judgment, relying on Circle Chevrolet Co. v. Giordano, Halleran & Ciesla. This time, the trial court granted his motion and dismissed the claims against him, which in turn, caused the dismissal of the third-party complaint against Mancinelli. Based on a later Supreme Court holding in Olds v. Donnelly (abrogating its earlier holding in Circle Chevrolet), Faugno referred the matter to Anthony D'Elia, Esq., who, in turn, filed a legal malpractice claim against Mancinelli, which was subsequently dismissed on summary judgment.

Finally, three months after the trial court entered summary judgment in favor of Mancinelli, CHMA, through D'Elia, filed a malpractice action against Faugno, claiming that Faugno had committed malpractice by failing to join Mancinelli as a direct defendant in the action against Tuttle, particularly when Tuttle had filed a third-party complaint in contribution against Mancinelli. Faugno filed an answer, together with a third-party complaint against both Tuttle and Mancinelli seeking contribution and/or indemnification under the Joint Tortfeasors Contribution Law (JTCL). Tuttle and Mancinelli moved for summary judgment, which the trial court granted, holding that they could not be sued for contribution because neither Tuttle nor Mancinelli was Faugno's joint tortfeasor as defined in the JTCL.

Although trial between Faugno and CHMA commenced, the matter was subsequently settled between those parties. Thereafter, Faugno sought to revive his joint tortfeasor contribution claim against Tuttle and Mancinelli by filing a notice of appeal, challenging the propriety of the trial court's dismissal of his claims against Tuttle and Mancinelli. The Appellate Division held that, as a matter of law, Faugno should be permitted to pursue his contribution and indemnity claims under the JTCL against Tuttle and Mancinelli. The panel, therefore, reversed the trial court's grant of summary judgment and remanded the cause for further proceedings.

The Supreme Court granted Tuttle and Mancinelli's petitions for certification.

HELD: Since both of the third-party defendants' alleged acts of malpractice constituted separate torts at different times, covering a six-year period, their separate acts of malpractice cannot constitute "joint liability" under the Joint Tortfeasors Contribution Law; moreover, because both of the third-party defendants' alleged malpractice produced different damages or injuries to plaintiff, the "same injury" requirement of the Law cannot be satisfied for the imposition of contribution liability on a joint tortfeasor, and the trial court properly dismissed the third-party complaints against those tortfeasors.

1. In order to trigger the contribution obligations of the JTCL, the statutory definition of "joint tortfeasor" must be satisfied. The relevant inquiry in this case is whether the alleged malpractice of Tuttle and Mancinelli, which preceded in time Faugno's alleged malpractice, constitute "joint liability" for the "same injury." (pp. 8-9)

2. The true test for joint tortfeasor contribution is joint liability and not joint common or concurrent negligence. In order to answer whether tortfeasors are "joint" under the JTCL, it must be determined whether Tuttle, Mancinelli, and Faugno are subject to common liability to the plaintiff at the time the plaintiff's cause of action accrued. Because each of Tuttle's, Mancinelli's, and Faugno's alleged malpractice constituted separate torts at disparate times with different damages covering a six-year period, their separate acts of malpractice cannot constitute the "joint liability" required for the imposition of contribution liability under the JTCL. Not only has this conclusion been reached in other jurisdictions addressing this issue, but also it is well-grounded in principles of finality and repose, as well as in sound public policy. (pp. 9-13)

3. The contextual uses of the term "injury" contained in the JTCL support the conclusion that the Legislature intended that the term "same injury" in its definition of joint tortfeasor relate to the harm the tort victim suffered and not to the cumulative damages the tort victim sustained as a result of multiple disparate injuries caused by multiple tortfeasors. Viewed in this manner, Faugno cannot satisfy the "same injury" requirement for the imposition of contribution liability on a joint tortfeasor. (pp. 13-16)

4. Under the circumstances of this case, the prior tortfeasors (Tuttle and Mancinelli) are not liable for statutory contribution to the subsequent tortfeasor (Faugno) because the prior and subsequent tortfeasors were not jointly or severally liable to plaintiff for the same cause of action. Furthermore, the subsequent tortfeasor (Faugno) cannot claim statutory contribution from the prior tortfeasors inasmuch as the "injury" inflicted by the prior tortfeasors is not the "same injury" as the one inflicted by the subsequent tortfeasor. (pp. 16-17)

Judgment of the Appellate Division is REVERSED and the judgment of the trial court is REINSTATED.

CHIEF JUSTICE PORITZ and JUSTICES LONG, LaVECCHIA, ZAZZALI, ALBIN, and WALLACE join in JUSTICE RIVERA-SOTO's opinion.

The opinion of the court was delivered by: Justice Rivera-soto

Argued October 28, 2004

These consolidated petitions for certification present the question whether a defendant can seek statutory contribution against third-party defendants when the original plaintiff is legally barred from proceeding directly against any of the third-party defendants. The trial court held that the third party defendants could not be considered joint tortfeasors with the defendant because the third-party defendants were not jointly or severally liable in tort for the same injury to plaintiff as was defendant. The Appellate Division disagreed, reversed the grant of summary judgment in favor of the third party defendants, and remanded the cause for trial. Cherry Hill Manor Assocs. v. Faugno, 365 N.J. Super. 313 (App. Div. 2004).

We hold that, under the circumstances present here, the third-party defendants were not jointly liable for the same injury to plaintiff as was defendant. We, therefore, reverse the judgment of the Appellate Division and reinstate the judgment of the trial court granting summary ...


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