The Superior Court of New Jersey, Appellate Division, recently clarified the applicability of New Jersey’s Joint Tortfeasors Contribution Act, N.J.S.A. 2A:53A-3, to claims for contribution from parties that have been dismissed pursuant to the Statute of Repose. In Cherilus v. Federal Express, 435 N.J. Super. 172 (App. Div. 2014), the court determined that a defendant in a product liability and negligence action could not pursue a contribution action against the third-party defendant, who had been dismissed pursuant to New Jersey’s Statute of Repose.
The plaintiff in Cherilus was injured on a cargo lift at a Federal Express facility where he worked, and subsequently filed suit against Linc Facilities Services (LFS), which was responsible for maintaining the lift. LFS then filed a third-party complaint against Columbus McKinnon Corporation, the manufacturer of the lift. The trial court granted summary judgment to Columbus on the grounds that LFS’ third-party claims were barred by New Jersey’s 10-year Statute of Repose. LFS then settled with the plaintiff and appealed the dismissal of Columbus so that it could pursue a claim for contribution for a portion of the settlement that it paid to the plaintiff.
The Appellate Division determined that LFS had no right to contribution from Columbus because New Jersey’s Joint Tortfeasors Contribution Act does not apply “where the payment is made in fulfillment of a voluntary compromise or settlement of a claim for damages attributed to a joint tortfeasor.” The Cherilus court emphasized that the Joint Tortfeasors Contribution Act requires a money judgment against one or more joint tortfeasors, and one of the joint tortfeasors must pay a disproportionate share of that judgment. The Cherilus court rejected LFS’ argument that the trial court’s summary judgment order in favor of Columbus satisfied the “money judgment” requirement of the contribution statute.
The Cherilus court reasoned that “a defendant is not required to pay another tortfeasor’s share of the damages” because it can “proceed to trial on the plaintiffs’ personal injury claims and receive a credit under the Comparative Negligence Act, N.J.S.A. 2A:15-5.2, for any proportion of responsibility for the injuries that the jury attributes to another tortfeasor, even if the other tortfeasor was earlier dismissed from the case pursuant to the statute of repose.” Thus, a defendant who settles with the plaintiff does not need to “cover the liability of a co-defendant who has been dismissed from the case.” Nevertheless, if a defendant settles and pays more than its fair share, “it can preserve its claim for contribution from a potentially liable joint tortfeasor through appropriate judicial proceedings and a judgment order.” However, LFS did not obtain a consent judgment or any other form of judicial intervention to preserve a cause of action against Columbus. Accordingly, the Cherilus court concluded that LFS had no right to contribution from Columbus.
The Cherilus decision is significant because it expands upon the New Jersey Supreme Court’s recent decision in Town of Kearny v. Brandt, 214 N.J. 76 (2013), where the court held that defendants may receive a credit under the Comparative Negligence Act for the portion of fault that is allocated to a joint tortfeasor who is dismissed pursuant to the Statute of Repose. The Cherilus decision takes the holding in Brandt one step further and applies it in the context of a claim for contribution against a joint tortfeasor who was dismissed pursuant to the Statute of Repose. More specifically, the court in Cherilus reasoned that because joint tortfeasors receive a credit under the Comparative Negligence Act for the percentage of fault attributable to a joint tortfeasor who was dismissed pursuant to the Statute of Repose, there is no reason for the remaining joint tortfeasor(s) to seek contribution from the dismissed joint tortfeasor. To the extent that settling joint tortfeasors’ wish to retain claims for contribution against other joint tortfeasors who have been dismissed from the case, they must ensure that a consent judgment is entered, or otherwise seek judicial intervention to explicitly preserve a right to contribution.