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Rowe v. Bell & Gossett Co.

Supreme Court of New Jersey

September 11, 2019

Donna Rowe, individually and as Executrix and Executrix ad Prosequendum of the Estate of Ronald Rowe, Plaintiff-Respondent,
v.
Bell & Gossett Company, a subsidiary of ITT Industries; Borg Warner Morse TEC, f/k/a Borg Warner; Bryant Manufacturing, n/k/a Carrier Corp.; Burnham LLC, individually and as successor to Burnham Corporation, individually and as successor-in-interest to Federal Boiler and Radiator Co.; Crane Co., individually and as successor to Jenkins Valves, Inc., a/k/a Jenkins Bros.; Crane Pumps & Systems, Inc.; Dana Companies, LLC, f/k/a Dana Corporation, individually and as successor-in-interest to Victor and Spicer; ECR International, Inc., as successor-in-interest to Dunkirk Radiator Corporation; General Electric Company; General Plumbing Supply, Inc., as successor-in-interest to Ridgewood Corp.; HB Smith Co., Inc.; Honeywell International, Inc., f/k/a Allied Signal, Inc., as successor-in-interest to The Bendix Corporation; J.H. France Refractories Company; Johnson Controls, Inc., individually and as successor-in-interest to York International Corp.; Lennox Furnace Co., a/k/a Lennox Industries; Nutley Heating & Cooling Supply Company; Peerless Industries, Inc. f/d/b/a Peerless Heater Co.; Ridgewood Corp.; Sid Harvey Industries, Inc.; Trane US, Inc., as successor to American Standard Inc.; Union Carbide Corp.; Weil-McLain Company, Inc.; Compudyne Corporation, individually and as successor to York-Shipley; New Jersey Plumbing Group, LLC, d/b/a Blackman Plumbing Supply Company, Inc., as successor-in-interest to Orange County Plumbing Supply Company and Ridgewood Corporation; Orange County Plumbing Group, LLC, as successor-in-interest to Orange County Plumbing Supply Co. and Ridgewood Corporation; York International, Inc., Defendants, and Hilco, Inc., as successor-in-interest to Universal Engineering Co., Inc., Defendant-Appellant.

          Argued March 25, 2019

          On certification to the Superior Court, Appellate Division.

          Patricia M. Henrich argued the cause for appellant (Reilly, McDevitt & Henrich, attorneys; Patricia M. Henrich and Brandy L. Harris, on the briefs).

          Amber R. Long argued the cause for respondent (Levy Konigsberg, attorneys; Amber R. Long, on the briefs).

          Marc S. Gaffrey argued the cause for amicus curiae New Jersey Defense Association (Hoagland, Longo, Moran, Dunst & Doukas, attorneys; Marc S. Gaffrey, on the brief).

          Michael G. Donahue argued the cause for amicus curiae New Jersey Association for Justice (Stark & Stark, attorneys; Michael G. Donahue, on the brief).

          McCarter & English, and Gibbons, et al., attorneys for amici curiae Honeywell International, Inc., et al. (John C. Garde and Wilfred P. Coronato, of counsel and on the brief, Kim M. Catullo and Ethan D. Stein, of counsel, and Steven H. Del Mauro, on the brief).

          McGivney, Kluger & Cook, et al., attorneys for amici curiae Ace Plumbing & Electrical, et al. (Thomas B. McNulty, William D. Sanders, and Trish L. Wilson, of counsel and on the brief).

          PATTERSON, J., writing for the Court.

         The Court considers whether the trial court properly admitted into evidence statements made by defendants who reached a settlement with plaintiffs prior to trial and whether the court properly allowed the jury to allocate fault to those settling defendants.

         Plaintiffs Ronald Rowe and Donna Rowe filed an asbestos product liability action alleging that Ronald Rowe contracted mesothelioma as a result of exposure to asbestos-containing products sold by defendants. The parties conducted discovery. Each defendant served certified answers to interrogatories, and plaintiffs' counsel deposed defendants' current and former employees, who testified as corporate representatives.

         One defendant named in plaintiffs' complaint was "Universal," which asserted against all other defendants crossclaims for contribution and for common-law indemnification. ("Universal" is used in the opinion and here to denote both Hilco, Inc., and Universal Engineering Co., Inc., without prejudice to the parties' arguments as to successor liability.) Plaintiffs settled their claims with eight defendants. When the trial commenced, Universal was the only defendant remaining.

         Universal moved to admit excerpts from the settling defendants' answers to interrogatories and the deposition testimony of their corporate representatives. Evidently relying on N.J.R.E. 803(b)(1), and noting Universal's crossclaims, the trial court admitted the interrogatory answers as statements by a party to the case. Although the court cited N.J.R.E. 804(b)(1) with respect to only one settling defendant, it deemed the corporate representatives of six out-of-state settling defendants to be unavailable to testify at trial and admitted their deposition testimony. However, the trial court excluded the deposition testimony of the corporate representatives of two defendants, as well as portions of certain answers to interrogatories and deposition testimony proffered by Universal.

         In support of Universal's position that the jury should allocate fault to the settling defendants, its counsel read to the jury the admitted excerpts from the settling defendants' interrogatory answers and the deposition testimony of the corporate representatives. The trial court concluded that Universal had submitted sufficient factual proofs to warrant allocation of fault to the settling defendants and denied plaintiffs' motion to bar such an allocation. The jury returned a verdict in plaintiffs' favor but allocated only twenty percent of the fault to Universal, sharing the remainder of the fault among the eight settling defendants.

         Plaintiffs moved for judgment notwithstanding the verdict or for a new trial, arguing in part that Universal had failed to present prima facie evidence sufficient to warrant an allocation of fault to the settling defendants. The trial court denied plaintiffs' motion and entered a molded judgment in plaintiffs' favor.

         The Appellate Division reversed and remanded for a new trial on the apportionment of fault. It held that the disputed evidence was inadmissible under N.J.R.E. 803(b)(1) because Universal did not offer that evidence against the settling defendants and under N.J.R.E. 804(b)(1) because the declarants were not "unavailable." The Appellate Division further held that the disputed evidence did not constitute statements against interest for purposes of N.J.R.E. 803(c)(25). It declined to reverse the trial court's denial of plaintiffs' post-verdict motion, however.

         The Court granted Universal's petition for certification. 235 N.J. 467 (2018).

         HELD: The excerpts from the settling defendants' interrogatory answers and corporate representative depositions were admissible as statements against interest under N.J.R.E. 803(c)(25). Those statements, in combination with other evidence presented at trial, gave rise to a prima facie showing that the settling defendants bore some fault in this matter. The trial court properly submitted to the jury the question of whether a percentage of fault should be apportioned to the settling defendants.

         1. The Comparative Negligence Act and the Joint Tortfeasors Contribution Law comprise the statutory framework for the allocation of fault when multiple parties are alleged to have contributed to the plaintiff's harm. They operate in tandem to promote the distribution of loss in proportion to the respective faults of the parties causing that loss. The Court has long construed that statutory scheme to authorize an allocation of fault to a settling defendant in appropriate settings. In Young v. Latta, the Court held that a non-settling defendant may seek the allocation of fault to a settling defendant even if the non-settling defendant has filed no crossclaim against the settling defendant. 123 N.J. 584, 596 (1991). The Young Court stressed that the non-settling defendant must give the plaintiff "fair and timely notice" of its intent to assert the fault of a settling defendant. Id. at 597; see also R. 4:7-5(c) (codifying the rule of Young). And the defendant seeking apportionment of fault to a settling defendant has the burden to prove by a preponderance of the evidence the elements of the claim against the settling defendant. In order for the trial court to instruct the jury to consider allocating a percentage of liability to the settling defendant, the non-settling defendant must present to the trial court prima facie evidence supporting any claims asserted against that defendant. (pp. 23-29)

         2. Universal relied on the depositions and the answers to interrogatories it presented at trial to argue in favor of allocation, and it had the burden to show that the testimony was admissible under one or more Rules of Evidence. Each of the statements disputed in this appeal constitutes hearsay as defined in N.J.R.E. 801(c). Hearsay is generally inadmissible "except as provided by [the rules of evidence] or by other law." N.J.R.E. 802. In both civil and criminal cases, N.J.R.E. 803(c)(25) prescribes an exception to the hearsay rule for certain statements that, when made, were against the declarant's interest. Admission of a statement under N.J.R.E. 803(c)(25) is not contingent on a showing of extrinsic circumstances bearing on the general reliability or trustworthiness of the declarant's statement. Moreover, N.J.R.E. 803(c)(25) does not require a showing that the declarant is unavailable in order for that declarant's statement against interest to be admissible. Whether a statement is in fact against the defendant's interest must be determined from the circumstances of each case. As does the threat of penal consequences in a criminal setting, the prospect that the declarant may be subject to civil liability by virtue of the statement may satisfy N.J.R.E. 803(c)(25). The declarant, however, need not be a party to the action in which the statement is admitted. (pp. 29-33)

         3. Here, for purposes of N.J.R.E. 803(c)(25), the declarant in each instance was the settling defendant itself, not an officer or employee of that corporation. When the statements at issue were made, they were adverse in three significant respects to the settling defendants' litigation positions in this matter and/or other asbestos cases. Notably, some statements provided information relevant to allegations of successor liability; some supported plaintiffs' allegations that the defendants or their predecessors in interest manufactured and/or sold products containing asbestos; and some included statements against interest on the issue of warnings. The answers to interrogatories and deposition testimony at issue satisfied the standard of N.J.R.E. 803(c)(25) and were admissible pursuant to that rule. The Court does not reach admissibility under N.J.R.E. 804(b)(1), N.J.R.E. 803(b)(1), or Rule 4:16-1(b). (pp. 33-39)

         4. Plaintiff did not file a cross-petition challenging the denial of her motion for a judgment notwithstanding the verdict or a new trial, so the issue of Universal's prima facie showing as to the fault of the settling defendants is not before the Court. The trial court properly allowed Universal to present its proofs in support of apportionment of fault to the settling defendants. It was the jury's province to accept or reject those proofs, and the Court leaves its verdict undisturbed. (pp. 39-41)

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

          CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, FERNANDEZ-VINA, SOLOMON, and TIMPONE join in JUSTICE PATTERSON'S opinion.

          OPINION

          PATTERSON JUSTICE

         Pursuant to the Comparative Negligence Act, N.J.S.A. 2A:15-5.1 to -5.8, and the Joint Tortfeasors Contribution Law, N.J.S.A. 2A:53A-1 to -5, a defendant may seek the allocation of a percentage of fault to a codefendant with whom the plaintiff has settled. Krzykalski v. Tindall, 232 N.J. 525, 534-37 (2018); Young v. Latta, 123 N.J. 584, 593-96 (1991). If the factfinder assigns a percentage of fault to a settling defendant, the trial court molds the judgment so that the allocation operates as a credit against the plaintiff's recovery of damages. See N.J.S.A. 2A:15-5.2(d); Young, 123 N.J. at 595; Cartel Capital Corp. v. Fireco of N.J., 81 N.J. 548, 569 (1980).

         This appeal arises from the trial court's judgment in an asbestos product liability action. Plaintiffs Ronald Rowe and Donna Rowe alleged that Ronald Rowe contracted mesothelioma as a result of exposure to asbestos-containing products sold by defendants. Eight defendants settled with plaintiffs prior to trial.

         At trial, the sole remaining defendant offered into evidence excerpts from the settling defendants' interrogatory answers and deposition testimony given by those defendants' corporate representatives. In the answers to interrogatories and corporate representative depositions, the settling defendants made statements contrary to their interests in this case and other asbestos product liability matters that were pending against them at the time the statements were made.

         In support of its argument that the interrogatory answers and deposition testimony should be admitted at trial, the non-settling defendant relied on three exceptions to the rule against hearsay: N.J.R.E. 804(b)(1) (testimony in prior proceedings); N.J.R.E. 803(b)(1) (statement by a party-opponent); and N.J.R.E. 803(c)(25) (statement against interest). Plaintiffs objected to the admission of the evidence and opposed any allocation of fault to the settling defendants.

         The trial court excluded portions of the disputed discovery material, but admitted into evidence excerpts from the interrogatory answers of all eight settling defendants and portions of the deposition testimony of six of those defendants' corporate representatives. The court permitted the jury to consider allocating a percentage of fault to the eight settling defendants.

         The jury returned a verdict in plaintiffs' favor, but found that the non-settling defendant met its burden to prove that the settling defendants bore some measure of fault. The jury allocated a percentage of fault to each of those defendants, thus reducing plaintiffs' recovery of damages against the non-settling defendant.

         Plaintiffs appealed the trial court's judgment. The Appellate Division reversed that judgment, holding that the trial court had improperly admitted the settling defendants' interrogatory answers and deposition testimony. It remanded the case to the trial court for a new trial with respect to the allocation of fault.

         We hold that the disputed excerpts from the settling defendants' interrogatory answers and corporate representative depositions were admissible as statements against interest under N.J.R.E. 803(c)(25). At the time that the settling defendants made those statements, each statement was "so far contrary" to those defendants' "pecuniary, proprietary, or social interest[s]," and "so far tended to subject" the defendants "to civil . . . liability," that "a reasonable person in [defendants'] position would not have made the statement unless the person believed it to be true." See ibid. Those statements, in combination with other evidence presented at trial, gave rise to a prima facie showing that the settling defendants bore some fault in this matter. The trial court properly submitted to the jury the question of whether a percentage of fault should be apportioned to the settling defendants.

         Accordingly, we reverse the Appellate Division's judgment and reinstate the judgment entered by the trial court in accordance with the jury's allocation of fault.

         I.

         A.

         We derive our summary of the facts from plaintiffs' complaint, the deposition testimony of plaintiff Ronald Rowe, and other documents in the trial record.

         Plaintiff Ronald Rowe, born in 1931, was diagnosed with mesothelioma in March 2014. He and his wife, plaintiff Donna Rowe, alleged that his mesothelioma resulted from exposure to asbestos for more than three decades. Plaintiffs contended that Ronald Rowe worked with asbestos-containing brakes, clutches, and gaskets while repairing his personal vehicles from 1949 until the late 1970s and while employed as a mechanic in a car dealership from 1952 to 1954. Rowe testified that in his automotive repair work, he used clutches, brakes, and other equipment manufactured by several of the defendants named in plaintiffs' action.

         Plaintiffs further asserted that Ronald Rowe was exposed to asbestos while working as a boiler serviceman for various businesses, and for his own business, from 1954 through his retirement in 1985. Rowe testified that his job duties during those time periods included mixing asbestos-containing dry furnace cement while installing and servicing boilers, as well as removing hardened asbestos-containing cement while repairing and removing heating equipment. He stated that he also disassembled pipes, conducted regular maintenance on boilers, and installed new commercial and residential heating equipment. Rowe stated that in performing those tasks, he was exposed to asbestos-containing boilers, furnaces, burners, pumps, valves, insulation, and gaskets, as well as dust from asbestos-containing cement.

         B.

         Plaintiffs filed an asbestos product liability action against twenty-seven defendants, pleading claims for strict liability based on the alleged breach of the duty to warn, negligence, and the breach of express and implied warranties. Plaintiff Donna Rowe also asserted a per quod claim. Plaintiffs sought compensatory and punitive damages, attorneys' fees, costs, and other relief.

         Plaintiffs alleged that some defendants were manufacturers and/or sellers of asbestos-containing products to which Ronald Rowe was exposed, and that other defendants were successors in interest to entities that had been manufacturers or sellers of such products.

         One defendant named in plaintiffs' complaint was Hilco, Inc. Plaintiffs alleged that Hilco is the successor in interest to an entity no longer in existence, Universal Engineering Co., Inc., a seller of asbestos-containing dry cement. Hilco disputed plaintiffs' allegation that it was a successor in interest to Universal Engineering Co., Inc., and ...


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