November 3, 2008
SEVASTI PODIAS, ADMINISTRATRIX AD PROSEQUENDUM AND GENERAL ADMINISTRATRIX OF THE ESTATE OF ANTONIOS N. PODIAS, DECEASED, AND SEVASTI PODIAS, INDIVIDUALLY, PLAINTIFFS-APPELLANTS,
MICHAEL J. MAIRS, JOHN M. MAIRS, PATRICIA URIBE, LUZ R. CROUSILLAT-URIBE, THOMAS CHOMKO, DANIEL CHOMKO, ANNE CHOMKO, KYLE CHARLES NEWELL, ANDREW K. SWANSON, JR., AND JOHN DOES I THROUGH X, DEFENDANTS-RESPONDENTS.
On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-000138-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 8, 2008
Before Judges Parrillo, Lihotz and Messano.
We granted leave to appeal to review interlocutory rulings of the Law Division (1) precluding plaintiff from recovering wrongful death damages from defendants Kyle Newell and Andrew Swanson (defendants) because she had received full satisfaction from settling and non-settling defendants; and (2) capping plaintiff's economic damages at $800,000. For the following reasons, we reverse the former and affirm the latter.
The facts are recited at length in our previous opinion, Podias v. Mairs, 394 N.J. Super. 338 (App. Div.), certif. denied, 192 N.J. 482 (2007), and need not be repeated at length here. Briefly stated, plaintiff's decedent, Antonios Podias, was struck by a car driven by Michael Mairs, in which Newell and Swanson were passengers. All three left Podias in the middle of the Parkway where he was subsequently struck and killed by a car driven by Patricia Uribe. Plaintiff Sevasti Podias, individually and on behalf of her late husband's estate, brought survival and wrongful death claims against Mairs, Newell, Swanson and Uribe, as well as Thomas, Daniel and Anne Chomko (the Chomko defendants) at whose home Mairs and the two defendants had been drinking alcohol earlier in the evening of the accident. Mairs and the Chomko defendants settled prior to trial in the respective amounts of $l,075,000 and $300,000. Newell and Swanson were granted summary judgment based on the motion judge's finding no legal duty on defendants' part to volunteer emergency assistance. Trial proceeded against the lone remaining defendant, Uribe, after which the jury returned a wrongful death verdict in the amount of $800,000, allocating Uribe 10% fault ($80,000) and Mairs 90% fault.*fn1
In the interim, we granted leave to appeal the grant of summary judgment in favor of Newell and Swanson, and found that, under the circumstances, under the derivative theory of concert liability, a jury could reasonably find that defendants substantially assisted Mairs in his breach of a direct legal duty to decedent. Podias, supra, 394 N.J. Super. at 354-55. Consequently, we reversed and remanded the matter for trial of plaintiff's wrongful death and survival claims against Newell and Swanson. Defendants then moved in limine to limit plaintiff's wrongful death claim to the $800,000 in economic damages awarded at the earlier trial. The trial judge not only agreed to cap plaintiff's wrongful death damages at $800,000 by barring proof on the issue of economic loss, but, in addition, held that because plaintiff had already recovered more than that amount from the settling defendants and Uribe, she was precluded from pursuing a wrongful death claim against Newell and Swanson, effectively limiting plaintiff's recovery exclusively to her survival claim. Plaintiff then moved for leave to appeal from the interlocutory order of March 11, 2008, encompassing both rulings.
As to the former, the trial judge voiced concern that by allowing plaintiff to recover from defendants, she might receive a windfall as a result of settlements with Mairs and the Chomko defendants, as well as the judgment against Uribe. All parties agree, however, that the judge erred, as a matter of law, in barring plaintiff's wrongful death claim against Newell and Swanson, essentially conceding that a jury is duty-bound to consider the percentage share of fault, if any, of these defendants and that plaintiff is entitled to recover wrongful death damages in accordance with any adjudicated allocation.
The law construing the respective obligations of tortfeasors is well-settled. Johnson v. Am. Homestead Mortg. Corp., 306 N.J. Super. 429, 436 (App. Div. 1997). New Jersey "favors the apportionment of fault among responsible parties." Boryszewski v. Burke, 380 N.J. Super. 361, 374 (App. Div. 2005) (citing Scafidi v. Seiler, 119 N.J. 93, 109-14 (1990) and Reichert v. Vegholm, 366 N.J. Super. 209, 213 (App. Div. 2004)). Indeed, the Comparative Negligence Act (Act), N.J.S.A. 2A:15-5.1 to-5.8, mandates the apportionment of fault where "the question of liability is in dispute." N.J.S.A. 2A:15-5.2(a). The Act provides:
a. In all negligence actions and strict liability actions in which the question of liability is in dispute,... the trier of fact shall make the following as findings of fact:
(1) The amount of damages which would be recoverable by the injured party regardless of any consideration of negligence or fault, that is, the full value of the injured party's damages.
(2) The extent, in the form of a percentage, of each party's negligence or fault. The percentage of negligence or fault of each party shall be based on 100% and the total of all percentages of negligence or fault of all the parties to a suit shall be 100%.
Thus, the law, enacted in 1973, replaces the "pro rata liability of joint tortfeasors under the Joint Tortfeasors Contribution Law, former N.J.S.A. 2A:53A-1, with the obligation of each tortfeasor to pay damages in accordance with its own adjudicated percentage of fault." Johnson, supra, 306 N.J. Super. at 436 (citing Rogers v. Spady, 147 N.J. Super. 274, 277 (App. Div. 1977)). In fact, even where the apportionment proofs are too imprecise for a jury to make an allocation, the law nevertheless favors apportionment among tortfeasors, Boryszewski, supra, 380 N.J. Super. at 375-76, and allows the judge "to apportion damages equally among the various causative events." Campione v. Soden, 150 N.J. 163, 184 (1997).
On this score, "[i]t is appropriate for juries to apportion fault between defendants who settled before trial and those who did not." Boryszewski, supra, 380 N.J. Super. at 375. Although, on the one hand, settling defendants are not liable to pay more than the settlement amount, Young v. Latta, 123 N.J. 584, 591-96 (1991), on the other hand, plaintiffs may recover the full amount of the adjudicated percentages of fault against the non-settling defendants and retain proceeds from the settling tortfeasors. Johnson, supra, 306 N.J. Super. at 436. In other words, comparative-negligence joint tortfeasors do not reduce "their liability based on a plaintiff's pretrial settlement with a defendant who is never found to be liable at all." Ibid. Simply put, "under the comparative-negligence scheme, a plaintiff is entitled to retain the proceeds of the pretrial settlement as well as the full jury verdict as allocated among all other defendants." Ibid. "[This] rule applies to every multiple defendant case in which a comparative negligence allocation among them is required to be made." Id. at 437 (citing Blazovic v. Andrich, 124 N.J. 90, 107 (1991)).
Here, the motion judge's stated concern over a possible windfall to plaintiff was ill-founded. New Jersey has a "strong policy in favor of settlements." Theobald v. Angelos, 44 N.J. 228, 237 (1965). Although settlement before trial does not always benefit a plaintiff, the prospect of a loss is offset by the potential for receiving an amount in excess of the actual damage suffered. As to the latter, we observed in Rogers v. Spady, supra:
The result of the Comparative Negligence Law is that if plaintiff makes a particularly good bargain in settlement and the ultimate percentage of negligence found attributable to the settling defendant would have resulted in a judgment for less than the amount of settlement, plaintiff will benefit by the excess amount. This necessarily means that if the settling defendant is found 0% negligent..., plaintiff will receive the settlement plus the full verdict.... [T]he potential for enrichment of plaintiff beyond the loss suffered has been increased. However, this is offset by the potential for a greater loss to plaintiff if he makes a low settlement. While ideally a claimant should not receive more than one satisfaction for a wrong, when the situation arises in which additional enrichment must necessarily flow to someone, the more just result is to have the person wronged receive the benefit and not a wrongdoer. [147 N.J. Super. at 278 (citing Theobald, supra, 44 N.J. at 239-41 (1965)) (emphasis added).]
As such, non-settling defendants are not entitled to a pro tanto credit for the proceeds of the settlement made by a plaintiff with the settling defendant whose liability was never adjudicated. Johnson, supra, 306 N.J. Super. at 436-47. This rationale "has been consistently reaffirmed and adhered to."
Id. at 437 (citations omitted).
In sum, on her wrongful death claim, plaintiff is entitled to seek and obtain judgment against defendants Newell and Swanson despite the economic loss verdict having been satisfied from settling defendants Mairs and Chomko, and non-settling defendant Uribe. Accordingly, we reverse that portion of the March 11, 2008 order dismissing plaintiff's wrongful death claim against these two defendants.
We deal now with the economic damage issue under the Wrongful Death Act. N.J.S.A. 2A:31-1 to-6. Plaintiff argues that, as a matter of equity, she should be allowed to relitigate her economic loss claim at the trial against Newell and Swanson, given the increased loss due to the two-year trial delay occasioned by the court's mistaken grant of summary judgment in 2006. The judge below rejected plaintiff's identical argument on the ground of collateral estoppel. We agree as to the doctrine's preclusive effect and, accordingly, affirm this portion of the trial court's ruling.
Collateral estoppel is an equitable doctrine intended to conserve judicial resources and facilitate the speedy resolution of claims by prohibiting redundant litigation where the matter was previously resolved by an appropriate fact finder. Panniel v. Diaz, 376 N.J. Super. 597, 608 (Law Div. 2004). A claim will be estopped when:
(1) the issue to be precluded is identical to the issue decided in the prior proceeding;
(2) the issue was actually litigated in the prior proceeding;
(3) the court in the prior proceeding issued a final judgment on the merits;
(4) the determination of the issue was essential to the prior judgment; and
(5) the party against whom the doctrine is asserted was a party to or in privity with a party to the earlier proceeding.
[In re Estate of Dawson, 136 N.J. 1, 20-21 (1994) (citations and parentheticals omitted).]
The exceptions to collateral estoppel include:
 where the party to be precluded could not, as a matter of law, obtain review of the first decision[;]....
 where the issue is one of law and the
(1) claims in the two actions are unrelated or (2) there had been an intervening change in the legal context or a potential inequity exists[;]....
 where a new determination is warranted by differences in the quality or extensiveness of the procedures in the two tribunals or by the differences in their jurisdiction[;]....
 where there are consequential differences between the proceedings in burden of going forward or of persuasion[; and]....
 where public interest militates against preclusive effect, or where it was not sufficiently foreseeable in the first proceeding that the issue to be precluded would arise in the second, or where an adversary's conduct or other special circumstances deprived the party to be precluded of the opportunity or incentive to obtain a full and fair adjudication in the first action.
[Zoneraich v. Overlook Hospital, 212 N.J.
Super. 83, 94-95 (App. Div.), certif. denied, 107 N.J. 32 (1986).]
Here, all of the elements of collateral estoppel regarding the economic loss claim are met, and no exceptions apply. First, there is an identity of issues, namely the issue to be precluded, i.e., plaintiff's economic damages, is "identical to the issue in the prior proceeding." Given the overlap, the trial court is bound to the prior proceeding's judgment. See First Union Nat. Bank v. Penn Salem, Inc., 190 N.J. 342, 356 (2007) (holding in a contract case that "the trial court in the second action should be bound by the judgment entered in the first action to the extent the same categories of damages are claimed in the second action as in the first"). Second, the issue of economic loss under the wrongful death claim was "actually litigated" in the prior action. Plaintiff fully and fairly litigated her damage claim under the Wrongful Death Act in the first trial. Her economic expert, Dr. Tinari, presented evidence of past, present and future economic loss; a jury considered all relevant evidence and returned a verdict awarding plaintiff $800,000 in damages. Third, the prior trial resulted in a "final judgment on the merits," and, fourth, the determination of the issue of damages was "essential" to that final judgment. Finally, the party against whom the doctrine is now asserted--plaintiff--is "identical" to the party in the earlier proceeding. Accordingly, all the elements of collateral estoppel are met.
Furthermore, none of the exceptions to the doctrine apply. First, the party to be precluded--plaintiff--may, "as a matter of law, obtain review of the first decision" by way of appeal. Second, the issue litigated was not one of law but rather of fact; furthermore, potential inequities in a damages calculation were accounted for, as will be discussed infra. As to the third and fourth factors, the tribunals involved in the dual litigation are identical, as are the burdens of proof. Lastly, no public interest considerations warrant relitigation of the economic damages claim; in fact, notions of judicial economy and conservation of judicial resources compel just the opposite conclusion.
Most significantly, plaintiff was afforded the opportunity in the first action to obtain a full and fair adjudication of her economic loss claim. Her economic expert testified at length as to plaintiff's past, present and future economic loss. As to the latter, as evidenced in Dr. Tinari's in depth thirty-three page report, the expert utilized a generally-accepted method of determining the then-present value of plaintiff's future losses. He did this by making an allowance for the interest that the total economic loss sum would earn for such period of time through a process called discounting or reducing the total future financial losses during the period of expectation by applying a fixed interest figure-here, six percent.
Dr. Tinari also presented evidence to the jury regarding past lost income, as enhanced by a growth factor, and the value of counseling, advice, companionship and work around the house.
Dr. Tinari added an annual growth rate of 3.9% to the decedent's average income from the years prior to decedent's death, and used that rate from the date of death until the date he rendered his report on December 24, 2003. Thereafter, he projected future loss of earning capacity from January 2004 to the date of decedent's expected retirement in 2024. He utilized a 4% growth rate for the future income, but then discounted at the rate of 6%, explaining that, "using historical municipal bond returns and current financial market trends, we select 6% as the appropriate discount rate."
At the close of evidence, the trial judge instructed the jury on how to properly calculate economic loss:
You must limit your consideration to whatever financial loss was suffered by the survivors as measured by what they would have received from the decedent with a reasonable degree of probability had the decedent survived... The financial loss does include, however, not only actual monies which would have been contributed to or earned for the benefit of the survivors, but it also includes the reasonable value of benefits which would have been received in the nature of services, assistance and care, as well as training, guidance and counsel that the decedent's survivors would have received from the decedent.... [Jurors may consider] life expectancy... [and] work life expectancy[;]... the figures in evidence[;]... assumptions based upon probable length of life which has been computed from statistical data[;] net earnings of decedent after taxes as of the time of his death;... decedent's own personal expenses;... benefit given by decedent to a survivor or survivors in the form of service or assistance rendered by the decedent and in guidance and in training which may have been offered by the decedent to the survivors;... decedent's personality, his character, his habits and the customs and the relationship that existed between the decedent and the survivors.
On the basis of the evidence adduced and in accordance with the court's instructions, the jury returned a verdict awarding plaintiff $800,000 in economic loss.
When confronted with defendants' motion to bar relitigation of the quantum of economic damages, the trial judge observed:
I've had the opportunity to read Dr. Tinari's report. I also went to my trial notes, and it's my recollection and it is confirmed by Dr. Tinari's report that at the time that he testified, he gave a projection of past lost income, past lost services and counsel, and things of that nature. A second part of his testimony which was future loss, future economic losses consisting of income, counseling, advice and counseling, and things of that nature. And what he did was he brought his past lost [sic] up to the date of trial, but he kept with the future.....
So if [Tinari] testified to the future losses, the jury made that calculation and made a complete determination as to what the total value was.
We have no quarrel with the trial court's reasoning on this issue. We do not view the alleged increased economic loss resulting from the change in its present value--due to additional years of past loss and fewer years of discounting--occasioned by the two-year trial delay, to be a consequential--much less substantial--intervening change giving rise to a potential inequity. Indeed, an award of damages may not always have the exactitude which plaintiff seems to demand. In this regard, a jury is instructed to consider reasonable compensation for a plaintiff's injuries and losses--past, present and future. See N.J. Model Jury Charge 8.11C. Suffice it to say, the appropriateness of compensation should not be made to depend on when a particular matter is heard. In any event, any increased economic loss not recovered by virtue of trial delay may be offset by a pre-judgment interest award. See R. 4:42-11.
Accordingly, we hold that the judgment in the first action is conclusive as to the amount of economic damages on plaintiff's wrongful death claim and that issue may not be relitigated in the second action.
Affirmed in part; reversed in part and remanded for further proceedings consistent with this opinion.