As the doctrine of comparative negligence emerged throughout the last few decades, the concept of apportionment of liability quickly became commonplace in tort law litigation. See Harvey S. Perlman and Gary T. Schwartz, “Third Annual Judges and Lawyers Symposium: The Restatement (Third) of Torts and the Future of Tort Law: Overview by the ALI Reporters: General Principles,” 10 Kan. J.L. & Pub. Pol'y 8 (2000); See generally, Restat 3d of Torts: Apportionment of Liability, §26 (3rd 2000). While the doctrine of joint and several liability ensured that plaintiffs could fully recover against any one defendant for their injuries, it also left defendants at risk of taking more of the liability for an incident than they deserved. Relatively recently, courts have turned to apportionment of liability as a potential solution to this problem.

As a result of the tort reform initiative, some states have limited joint and several liability by designating the proportionality of an individual's fault. See Nancy C. Marcus, “Phantom Parties and Other Practical Problems with the Attempted Abolition of Joint and Several Liability,” 60 Ark. L. Rev. 437, 440 (2007). However, courts have been more hesitant to adopt this practice when the defendant is unidentified and not a party to the lawsuit. Id. at 442-443. In New Jersey, when the question of liability is in dispute for negligence and strict liability cases, the Comparative Negligence Act mandates the trier of fact make the following findings: (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 party's injuries; and (2) the extent, in the form of a percentage of each party's negligence or fault with the total of all percentages being 100 percent. N.J.S.A. §2A:15-5.2.

Initially, New Jersey State case law did not allow the apportionment of liability to individuals who were not a party to the lawsuit. See Bencivenga v. J.J.A.M.M., 258 N.J. Super. 399 (App.Div. July 14, 1992). In Bencivenga, the Superior Court of New Jersey Appellate Division held that the plain and ordinary meaning of the State Comparative Negligence Act precluded the inclusion of a fictitiously named tortfeasor for the purpose of apportioning their liability. Id. at 406-407.

Nevertheless, since this 1992 case, state jurisprudence has reversed course through recent cases such as Town of Kearny v. Brandt, 214 N.J. 76 (N.J. June 20, 2013).  In that case, the plaintiff town sued defendant architect and other parties also affiliated with structural defects in the construction of a municipal building. The other defendants were ultimately dismissed from the action due to the lapse of a statute of repose. Nonetheless, the State Supreme Court held that the factfinder is allowed to evaluate the liability of all those potentially responsible, even those who have been dismissed from the lawsuit due to the lapse of the statute of repose. The court went on to state that assessing the negligence of a fictitious party “promotes fair allocation of responsibility and avoids creating an incentive for a plaintiff to strategically target only one of a range of culpable defendants.” Id. at 104.

Pursuant to §2A:15-5.3 of the New Jersey Comparative Negligence Act, the Town of Kearny court also noted that the extent to which a plaintiff can recover from a defendant depends on the percentage of liability that is apportioned to said defendant. Id. at 97. Under the act, if the factfinder apportions more than 60 percent of the fault to a defendant, the plaintiff may recover the full amount of the awarded damages from said defendant alone. On the contrary, if the factfinder apportions less than 60 percent of fault to a defendant, the plaintiff may recover only the percentage of the damages assessed to said defendant. Nonetheless, in the former situation, if a party is liable for more than the percentage share of the damage award that is assessed by the factfinder, the Joint Tortfeasors Contribution Law mandates that said party may have contribution rights against other parties. Id. at 102.

In Krzykalski v. Tindall, 448 N.J. Super. 1 (App. Div. Dec. 5, 2016), the Superior Court of New Jersey Appellate Division echoed the decision in Town of Kearny. In Krzykalski, the plaintiff sued defendant Tindall and John Doe alleging negligence in the operation of their vehicles that caused an accident in which plaintiff was injured. At trial, a verdict was rendered in favor of the defendants. Plaintiff argued on appeal, among other things, that the judge erred in allowing the jury to apportion liability between defendant Tindall and the fictitious John Doe. The appellate court disagreed with the plaintiff and held that the consideration of an alleged tortfeasor's negligence and degree of responsibility is not governed by whether that tortfeasor is a party but turns on whether the other tortfeasor will be affected by the verdict. Since this holding, plaintiff has petitioned the New Jersey Supreme Court for certification of the appellate court judgment. The case was argued on Jan. 30, 2018, and we look forward to the high court's adjudication of this evolving issue of liability apportionment in New Jersey state jurisprudence this year.

Nevertheless, until a final ruling is handed down in Krzykalski, the most recent case law on the topic at hand remains the New Jersey Supreme Court's decision in July 2017, when the court buttressed its holding in Town of Kearny with its decision in Jones v. Morey's Pier, 2017 N.J. LEXIS 812, 30-32 (N.J. July 27, 2017).

There, the court reasserted that New Jersey courts have permitted the apportionment of liability to nonparties when such person or entity could be considered a joint tortfeasor pursuant to N.J.S.A. 2A:53A-2. Id; see also, N.J.S.A. §2A:53A-1,2 (declaring a right of contribution exists between joint tortfeasors, which the statute defines as two or more persons jointly or severally liable in tort for the same injury to person or property, whether or not judgment has been recovered against all or some of them. A master and servant or principal and agent shall be considered a single tortfeasor). In such situations, the New Jersey Supreme Court and the Appellate Division have “permitted a factfinder to allocate fault to an individual or entity, notwithstanding the fact that at the time of trial that individual or entity is not liable to pay damages to the plaintiff, and the allocation may reduce the amount of damages awarded to the plaintiff.” See Jones at 30.

The New Jersey Supreme Court has consistently supported apportionment among joint tortfeasors. The court has supported the apportionment regardless of whether actual payment would be made to the plaintiff. Furthermore, the Appellate Division has previously acknowledged that fictitious parties affect other tortfeasors in apportionment. Accordingly, liability apportionment against a party in which recovery cannot be had is no different than liability apportionment against an unidentified or fictitious non-party to the case. See, generally, Jones at 30-32. As the high court noted in Jones, “allocation of a percentage of fault to a joint tortfeasor that is not a defendant at trial may afford to a remaining defendant the practical benefit of the contribution claim to which it is entitled under the Comparative Negligence Act, N.J.S.A. 2A:15-5.3(e), and the Joint Tortfeasors Contribution Law, N.J.S.A. 2A:53A-2.” Id at 34. Therefore, whether or not said non-defendant is known or unidentified should not alter a court's determination with respect to liability apportionment.

While New Jersey case law is moving in favor of liability apportionment for phantom parties, this legal trend still has its share of critics. See Marcus, supra at 472-476. Detractors of phantom liability apportionment, regardless of the state it is implemented in, argue that the phenomenon will leave both plaintiffs and defendants worse off than states that do not apportion liability in this manner. Id. at 473-474. Specifically, these opponents allege that without the opportunity to appear and defend themselves, phantom parties are likely to be apportioned a disproportionate share of the liability. Meanwhile, plaintiffs will also be injured as their “recovery is likely to be reduced beyond the degree to which a third party would be found at fault if he, she, or it actually had an opportunity to defend themselves.” Id. at 474.

As the Restatement 3rd of Torts on Apportionment of Liability recognizes, there is still relatively little case law on the topic of liability apportionment throughout federal and state jurisprudence throughout the country. Nonetheless, New Jersey state jurisprudence has followed the Restatement in terms of accepting the doctrine of liability apportionment for both known and unknown parties and encourages further development of the matter. See Town of Kearny at 83.

Howard S. Shafer is a partner in the insurance and corporate liability defense firm of Shafer Glazer, a Your House Counsel® Member Firm. Brian J. McAteer, a summer associate at the firm, assisted with the preparation of the article.