Title: Christine Erny v. Estate of Antoinette T. Merola, et als.

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

(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). LaVECCHIA, J., writing for a unanimous Court. In this appeal, the Court must decide whether New Jersey or New York law should apply to determine the joint and several liability of two New York residents, who were named defendants in a suit by a New Jersey plaintiff for damages resulting from an automobile accident that occurred in New Jersey. On May 17, 1992, Christine Erny, a New Jersey resident, was injured in a multi-car accident on Route 287 in Franklin Township, New Jersey. At the time of the accident, she was a passenger in a truck driven by her husband. The accident occurred 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 her to lose control of her car and to 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, including Christine Erny, who lost her spleen, her left kidney, and suffered several other serious injuries. Merola's car was registered and insured in New York. The policy covering the Merola vehicle carried liability limits of $100,000 per occurrence. Russo was a student at Lehigh University, who traveled from his home in New York through New Jersey to go to and from school. The vehicle he was driving was owned by his mother, and was insured and registered in New York. The Russo vehicle carried liability limits of $1.5 million per occurrence. In December 1992, Erny filed suit in New Jersey against the Estate of Antoinette Merola, Roy Russo, and others. Additional claims filed by others ultimately were settled. In May 1993, the Merola defendants filed a negligence/wrongful death suit in New York against Russo and his mother (the Russo defendants). The Russo defendants then moved to dismiss the New York action because of the pending action in New Jersey. That motion, despite opposition by the Merola defendants, 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. Following a jury trial on liability, a verdict was returned in favor of Erny, assigning Russo forty percent fault and the Merola defendants sixty percent fault. The jury's allocation of fault also applied to the Merola's cross-claim against Russo. New Jersey law was applied during the course of 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. The trial court denied that motion, determining that choice of law considerations favored application of the New Jersey comparative negligence law. Two years later, Erny's damages trial concluded with an award to her in the amount of $650,000. The trial court allocated the damages according to the jury's liability findings 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. Erny then filed a post-judgment motion seeking several remedies, including the application of New York's law on the issue of joint and several liability, which would have allowed Erny to collect the entire judgment against either or both defendants. 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 make good policy to have only one of the concepts decided under one state's law. The effect of the ruling limited Erny's right to recover the full amount of her damages, since New Jersey law precluded her from recovering one hundred percent of her noneconomic damages from a joint tortfeasor who was less than sixty percent at fault. In a reported decision, the Appellate Division determined that the trial court properly applied both New Jersey comparative negligence and joint and several liability law. The panel further determined that despite the general rule requiring conflict of law determinations 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. The Supreme Court granted Erny's petition for certification, limited only to review of the choice-of-law determination concerning joint and several liability. HELD: New York's joint and several liability law applies to plaintiff's recovery in this automobile negligence action filed in New Jersey against defendants who operated vehicles registered and insured in the State of New York. 1. Since New Jersey is the forum for this litigation, New Jersey's choice-of-law rules apply. Those 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. Ordinarily, choice-of-law determinations are made on an issue-by-issue basis, with each issue receiving separate analysis. (pp. 7-10) 2. The law of contributory negligence generally addresses the effect of plaintiff's fault, if any, on his or her entitlement to recover damages at all, while joint and several liability, which allows a plaintiff under certain circumstances to recover the entire amount of damages from any one of several defendants, has been regarded generally as a damages provision. (pp. 11-13) 3. The significant differences among states in applying principles of tort law belies the suggestion that any specific combination of the two legal issues are intrinsically tied to one another. New Jersey's scheme of joint and several liability can operate independently of its comparative negligence law, and vice versa. Thus, in a choice-of-law determination involving parties from other states, application of New Jersey law on joint and several liability does not follow automatically from the determination that its comparative negligence law applies. (pp. 13-15) 4. New Jersey's joint and several liability law reflects that state's chosen policies, which must be tested in a choice-of-law analysis by comparison to the other interested state's policy preferences. (p. 15) 5. New York's policy allows plaintiff an expansive opportunity for full recovery of damages and would allow plaintiff to collect one hundred percent of her damages from Russo, while New Jersey's joint and several liability policy limits a defendant's liability for noneconomic damages to his or her portion of negligence or responsibility where that portion is less than sixty percent. Thus, under the governmental-interest test, there is an actual conflict between the laws of the states involved. (pp. 16-17) 6. Under the Restatement, the most important factor in applying the governmental-interest test in tort cases is the competing interests of the states. If a state policy or interest will be neither fostered by applying that state's law, nor frustrated by the failure to apply it, it is highly unlikely that that state has any interest whatsoever in blanketing that particular issue with its law. (pp. 17-19) 7. In personal injury cases, the place of the injury is important, and when both the conduct and the injury occur in the same place, that jurisdiction's law generally will apply except in those rare instances where another jurisdiction has a demonstrably dominant interest and no policy of the situs state is frustrated by application of the sister state's policy. (pp. 19-20) 8. To determine which state has the most significant relationship to the occurrence and to the parties concerning the issue of recovery of damages, one must identify the governmental policies underlying each state's statute and then determine how those policies are affected by the contacts. In this case, New York's long-standing policy of providing recovery to plaintiffs injured in accidents caused by its residents driving automobiles registered and insured in New York expresses a weightier interest in both compensation and deterrence than does the New Jersey statute, which limits the liability of joint tortfeasors involved in automobile accidents. (pp. 21-25) 9. Application of New York's joint and several liability law in this matter involving only New York defendants whose cars are registered and insured in New York furthers its governmental interest. (pp. 26-27) 10. New Jersey's policy interests in reducing liability insurance rates are not furthered by applying its law in this case where neither defendant drove a vehicle registered or insured in New Jersey. Furthermore, application of New Jersey joint and several liability law would frustrate New York's strong policy of compensation in automobile accident cases and its interest in deterrence of negligence. Thus, the Restatement's presumption in favor of the law of the situs of the conduct and injury is overcome, and New York's joint and several liability law applies to plaintiff's recovery in this matter. (pp. 27-29) Judgment of the Appellate Division is REVERSED and the matter is REMANDED for further proceedings consistent with the Court's opinion. CHIEF JUSTICE PORITZ and JUSTICES STEIN, COLEMAN, LONG, VERNIERO, and ZAZZALI join in JUSTICE LaVECCHIA's opinion. 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 (fictitious names being the persons or corporations intended), XYZ CORP. NO. 1-5 (fictitious names being the partnerships and/or corporations intended), Defendants, and ROY RUSSO, Defendant-Respondent. _________________________________ Argued September 24, 2001 -- Decided January 30,2002 On certification to the Superior Court, Appellate Division, whose opinion is reported at 333 N.J. Super. 88 (2000). Anita R. Hotchkiss argued the cause for appellant (Porzio, Bromberg & Newman, attorneys; Ms. Hotchkiss and Linda Pissott Reig, on the briefs). 2. The place where the conduct causing the injury occurred is New Jersey; 3. The domicile and residence of the parties is a) Plaintiff Erny - New Jersey; b) Defendants Merola - New York; c) Defendant Russo - New York; and 4. The place where the accident occurred is New Jersey. In addition, at the time of the accident both Merola and Russo were driving cars registered and insured in New York. Those contacts are relevant to the extent that they implicate the policies underlying the conflicting statutory provisions. Fu, supra, 160 N.J. at 125 (citing White, supra, 398 F. Supp. at 134). We next apply the five factors to determine which state has the most significant relationship to the occurrence and the parties concerning the issue of recovery of damages. Fu, supra, 160 N.J. at 119. That is accomplished by identifying the governmental policies underlying each state's statute and then determining how those policies are affected by the contacts. Ibid. The most important factor is the competing interests of the states, followed in importance by the interests underlying tort law, and the interests of interstate comity. Id. at 122-25. When New York enacted section 1601, it abrogated the common law of joint and several liability that allowed a joint tortfeasor to be held responsible for the total damages awarded to a plaintiff. The change addressed the inequity that occurred when defendants who were only slightly at fault were forced to pay a disproportionate share of damages awards. Morales v. County of Nassau, 724 N.E.2d 756, 757-58 (N.Y. 1999). However, the New York legislature also enacted exceptions to the law that served to perpetuate common law joint and several liability in certain instances, reflecting 'careful deliberations over the appropriate situations for a modified joint and several liability rule . . . .' Id. at 759 (quoting Governor's Approval Mem., Bill Jacket, L. 1986, c. 682, reprinted in 1986 N.Y. Legis. Ann. at 289). Those exceptions include liability resulting from use of a motor vehicle. N.Y. C.P.L.R. 1602(6). Therefore, in balancing the interests that led to the abrogation of the joint and several liability rule, the New York legislature determined that a joint tortfeasor in a car accident, as in this case, should not receive the protection of section 1601. Rather, the purpose underlying the common law joint and several liability law continues to govern: [T]he sense that compensation of the relatively innocent victim serves a more important purpose than striking a nuanced balance between and among the relatively guilty. Siler v. 146 Montague Assocs., 652 N.Y.S.2d 315, 320 (N.Y. App. Div.) appeal dismissed, 686 N.E.2d 497 (N.Y. 1997) (quotation omitted). New York placed more value on protection of the innocent victim in an automobile accident than reducing the cost of automobile liability insurance by application of the new law to automobile negligence actions. That policy concern for the victims of automobile accidents is expressed elsewhere in New York law as well. Moreover, New York's concern is not limited to the protection and interest of its citizens. New York automobile insurance laws require coverage for claims arising out of the ownership, use or operation of a vehicle 'within the state of New York, or elsewhere in the United States in North America or the Dominion of Canada. Johnson v. Hertz Corp., 315 F. Supp. 302, 304 (S.D.N.Y. 1970) (quoting N.Y. Veh. & Traf. Law 311(4)(a) (McKinney 1970). That statutory language led the federal district court to conclude that New York's automobile insurance laws express a policy aimed at protecting innocent victims of New York vehicle registrants, whether injured or harmed in New York State or elsewhere. Johnson, supra, 315 F. Supp. at 304. New York thus has a long-standing and multi-faceted policy of providing for recovery to plaintiffs injured in accidents caused by its residents driving automobiles registered and insured in New York. On the other hand, the New Jersey joint and several liability statute, N.J.S.A. 2A:15-5.3, was enacted to provide fairness to joint tortfeasors by requiring each to contribute to the award in proportion to their own actual degree of negligence. Lee's Hawaiian Islanders, supra, 195 N.J. Super. at 505. Amendments to New Jersey's statute indicate, however, that the Legislature limited the liability of joint tortfeasors to address concerns about both the rising cost of insurance and increasing litigation. In 1987, the Legislature amended section 2A:15-5.3 to impose full responsibility for all damages only on joint tortfeasors whose percentage of fault was sixty percent or more. That law also imposed on any joint tortfeasor found to be more than twenty percent responsible, but less then sixty percent responsible, the potential for full responsibility for economic damages in addition to that tortfeasor's allocated share of noneconomic damages. That version of the law was in place at the time of plaintiff's accident. In 1995, the Legislature again amended N.J.S.A. 2A:15- 5.3, limiting responsibility for the full amount of damages to only those tortfeasors who are found to be sixty percent or more responsible. The sponsor commented at that time that the pre-1995 formula contributed to the rising cost of litigation and liability insurance. Sponsor Statement to Senate Bill No. 1494 (October 3, 1994). The Sponsor's Statement elaborated on that point: This Bill is intended to reduce the cost of general liability insurance for everyone by eliminating the so called deep pocket sought by many defense (sic) attorneys when they file lawsuits with multiple defendants. Under present law, any person who is determined to be more than 20% at fault in any action may end up paying damages beyond his actual share of liability as determined by his degree of fault; this means that an insurance company must base its liability premiums upon a worse-case scenario (i.e. that the defendant would be called upon to contribute the entire judgment if other defendants do not have sufficient resources). Although that Statement accompanied the 1995 amendment and thus occurred after plaintiff's accident, it reflects the Legislature's general concern about the connection between joint and several liability and the cost of liability insurance. Unlike the New York Legislature, the New Jersey Legislature did not exempt automobile negligence actions from the reach of the modifications to the joint and several liability statute. Thus, the policy underlying New Jersey's joint and several liability law promotes redress to plaintiffs but declines to make a joint tortfeasor fully responsible for damages beyond his or her allocated share unless that tortfeasor is more than sixty percent at fault. New Jersey's policy thus reflects a balancing of interests that factors in its concern about increased liability insurance costs. In addition to identifying the respective governmental interests, we also must consider how the statutes in issue promote the goals that generally underlie tort law - compensation and deterrence. Fu, supra, 160 N.J. at 123. New York's statute, which specifically excepts automobile accident defendants from the protections of its modified joint and several liability scheme, expresses a weightier interest in both compensation and deterrence than does the New Jersey statute, which limits the liability of joint tortfeasors involved in automobile accidents. By providing that a negligent defendant can be held responsible for one hundred percent of a victim's injuries irrespective of degree of fault, the New York statute encourages its drivers to insure more adequately their vehicles and, inferentially, to drive with care. The statute benefits victims. Its application makes it much more likely that a plaintiff will recover fully, despite encountering an underinsured tortfeasor. New Jersey's statute, in contrast, has a more nuanced approach. It permits a plaintiff to seek full recovery from a substantially negligent joint tortfeasor, but it also evinces a policy of protecting certain defendants and thus containing insurance costs. The governmental-interest analysis also requires the Court to consider how strongly the contacts involved relate to each state's policy of deterrence and compensation, as well as the interests of interstate comity, that is, whether application of one law will further or frustrate the policies of the other state. Fu, supra, 160 N.J. at 122, 125. This Court stated in Fu that New York has demonstrated an unwavering policy that 'innocent plaintiffs should have a financially responsible source from which to recover . . . [and] that automobile ownership per se carries a heavy burden of responsibility.' 160 N.J. at 136-37 (quoting White, supra, 398 F. Supp. at 137). That policy influenced the legislature to enact a comprehensive scheme under its Vehicle and Insurance Law requir[ing] owners to purchase insurance sufficient to meet the demands of this responsibility, irregardless of where that demand is made. White, supra, 398 F. Supp. at 137 (citing N.Y. Veh. & Traf. Law 311(4)(a) (McKinney 1970). Thus, fairly viewed, New York's policy clearly favors compensation to plaintiffs in automobile negligence actions brought against New York defendants wherever in the United States the accident occurs, i.e., both domiciliary and non-domiciliary plaintiffs. Application of New York's joint and several liability law in this matter involving only New York defendants whose cars are registered and insured in New York furthers that governmental interest. New Jersey's joint and several liability law, in contrast, balances its desire to allow plaintiff redress against a concern about New Jersey liability insurance rates, including car insurance rates. That concern is evidenced in the evolution of the joint and several liability statute. Successive amendments progressively restricted a plaintiff's ability to recover the full amount of damages from a single joint tortfeasor. The Sponsor's Statement to the 1995 amendment reflects the State's monitoring of escalating insurance and litigation costs and its attempt to moderate those costs. New Jersey's policy interests are not furthered by applying its law in this case where neither defendant drove a vehicle registered or insured in New Jersey. Accordingly, limiting the joint and several liability of these defendants through application of our joint and several liability law would not further New Jersey's interest in reducing liability insurance rates. We also note that application of New York's joint and several law, which would impose full responsibility on a defendant who is less than sixty percent liable and is registered and insured in New York, does not frustrate New Jersey's policies. However, application of New Jersey's law would frustrate New York's strong policy of compensation in automobile accident cases and its interest in deterrence of negligence. Because the policy underlying New Jersey's law is not thwarted by application of New York joint and several liability law to this case, and because the compensation and deterrence policies underlying New York's law are advanced, the Restatement's presumption in favor of the law of the situs of the conduct and injury is overcome. Accordingly, we hold that New York's joint and several liability law applies to plaintiff's recovery of damages in this matter. 3. Defendant has argued that application of New York law on the facts in this case would be inconsistent with the Court's prior determinations in Fu v. Fu, supra, 160 N.J. at 108 and Marinelli v. K-Mart Corp, supra, 318 N.J. Super. at 554. That argument tends to diminish the individualized assessment that controls in the governmental-interests test that we apply to each choice-of-law determination. Each choice-of-law case presents its own unique combination of facts -- the parties' residences, the place and type of occurrence and the specific set of governmental interests -- that influence the resolution of the choice-of-law issue presented. Defendant's attempt to compare Fu and Marinelli to this matter is unavailing. Fu concerned the issue of vicarious liability in the context of an automobile accident in New York that involved only New Jersey residents. Fu, supra, 160 N.J. at 125. Thus, New York's policy that holds its registered and insured resident drivers liable for automobile negligence damages to both domiciliary and non- domiciliary plaintiffs was not implicated. Id. at 139. In comparison, the defendants here are all New York residents with cars registered and insured pursuant to New York requirements. New York's governmental interest is strong and would be frustrated if its law is not applied. In Marinelli, a case that did involve joint and several liability, only one defendant was from the Commonwealth of Pennsylvania. He was determined to be only ten percent responsible for an accidental shooting in New Jersey of a New Jersey plaintiff by other defendants who also were residents of New Jersey. Marinelli, supra, 318 N.J. Super. at 558. Pennsylvania had no strong policy interest in asserting its joint and several liability law in the matter, unlike the significant interests that underlie New York's law in this case. The Appellate Division in Marinelli performed a thorough governmental-interest analysis and properly concluded in that set of circumstances that New Jersey law should be applied. Id. at 566-67. Accordingly, we perceive no inconsistency between our conclusion in this matter that New York joint and several liability law should apply and the holdings in either Fu or Marinelli. NO. A-71 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. DECIDED January 30, 2002 Chief Justice Poritz