apportionment of liability practical impact of debenedetto on multi-party litigation

APPORTIONMENT OF LIABILITY

PRACTICAL IMPACT OF DEBENEDETTO ON MULTI-PARTY LITIGATION

PRESENTED BY:

Getman, Schulthess & Steere, P.A.

HISTORY OF APPORTIONMENT

Based on RSA 507:7-ePurpose is to protect “deep pocket”

minimally liable defendants from bearing a disproportionate share of damages awards

RSA 507:7-e

Jury awards damages against each defendant according to proportionate fault of each of the “parties”

Each “party” is jointly & severally liable if 50% or more at fault

Each “party” is severally liable for only its proportionate share if less than 50% at fault

NILSSON CASE

Nilsson v. Bierman, 150 N.H. 393 (2003) For purposes of apportionment under RSA

507:7-e the word “party” refers to all persons or entities who take part in an accident or transaction

“Party” includes settling “parties”

DeBENEDETTO CASE

DeBenedetto v. CLD Consulting Engineers, Inc., 153 N.H. 793 (2006)

“Party” for purposes of apportionment under RSA 507:7-e includes all parties contributing to an occurrence

Includes persons/entities immune from liability

Includes persons/entities not otherwise before the court

TIBERGHEIN CASE

Tiberghein v. B.R. Jones Roofing, 156 N.H. 110 (2007)

RSA 507:7-e apportionment also applies to arbitration awards

BURDEN OF PROOF

Burden of establishing fault on the part of a non-litigant tortfeasor lies with the litigant defendants in the case

Everitt v. General Electric, 156 N.H. 202 (2007)

ADEQUATE EVIDENCE

Allegations against non-litigant tortfeasors must be supported with “adequate evidence”

DeBenedetto v. CLD Consulting Engineers Conduct discovery to obtain facts supporting

non-litigant tortfeasor’s fault Defendant seeking apportionment is in

position analogous to that of plaintiff

EXPERT TESTIMONY

Expert opinion testimony is required to establish non-litigant tortfeasor’s fault in:

1) professional liability cases

Goudreault v. Kleeman,158 N.H. 236 (2009)

2) any case which would ordinarily

require expert testimony

PRE-TRIAL SETTLEMENT BY PARTY DEFENDANT

A settling party cannot be compelled to

litigate fault

Everitt v. General Electric

SUPERIOR COURT ORDERS

Since Nilsson & DeBenedetto, trial courts have attempted to predict how the Supreme Court would apply non-party apportionment in a variety of circumstances

BOISVERT v. GINSBERG

Plaintiff brought negligence action for injuries resulting from spinal surgery

Principal doctor/tortfeasor settled before trial Remaining defendants sought disclosure of

terms of settlement in order to assess exposure & analyze contribution issues

(cont.)

BOISVERT v. GINSBERT (cont.)

Court (J. Mangones) held:1. Defendant not entitled to settlement

information – evidence of settlement is barred under RSA 507:7-I

2. Settlement is irrelevant until jury reaches verdict and apportions damages

3. Court only required in camera review of settlement terms

WATSON v. ELITE LIFESTYLES

Plaintiffs sued defendants claiming poor construction of addition to their home

Two of the defendants defaulted Court would not apportion liability to

defaulted defendants until after trial of case against remaining defendants

(cont.)

WATSON v. ELITE LIFESTYLES (cont.)

Court (J. Mohl) held:1. Evidence of default judgment would be

admitted at trial (to help jury understand role of each entity in the construction)

2. The amount of damages awarded against defaulted defendants was not admissible(it would “mislead the jury as to their function in assessing damages”)

PETRUCELLI v. STEPHEN D’ABROSCA, et al

Dispute between former business partners concerning formation, operation, sale and winding up of car dealership

Plaintiff sued former owner, the business entity, and its law firm

Plaintiff settled with the law firm before trial Defendant sought apportionment of liability to

law firm and two other non-parties

PETRUCELLI v. D’ABROCSA, et al (cont.)

Court denied apportionment due to inadequate evidence and lack of expert evidence as to law firm

Jury awarded over $2M – 80% of fault was apportioned to the former partner

RUEL v. NORTH AMERICAN AMUSEMENT

Minor child injured in “moon bounce” carnival ride

One defendant sought apportionment against child’s father

Plaintiff sought to exclude evidence against father due to defendant’s failure to adequately answer interrogatories pertaining to father (cont.)

RUEL v. NORTH AMERICAN AMUSEMENT (cont.)

Court (J. Wageling) ruled:

1. Defendant could seek apportionment against father as long as it submitted “adequate evidence” at trial

2. Plaintiff could reference any deficiency in evidence presented

RALLIS v. GLADSTONE

Court (J. McHugh) held:

1. If a non-settling defendant plans to argue for apportioning fault to a settling party, it should be required to specify its reasons in its DeBenedetto disclosure

2. Adequate disclosure may assist plaintiff in determining whether to settle with any defendant prior to trial

COLMAN v. SIPKEMA

Plaintiff and defendant involved in car accident

Defendant sought to apportion liability against third, unknown driver

Details pertaining to the unidentified car came from plaintiff and were “sketchy”

(cont.)

COLMAN v. SIPKEMA (cont.)

Court (J. McHugh) held:

1. Defendant could not seek apportionment to the unidentified driver due to insufficient evidence & speculative nature of claim

2. Defendant would be permitted to introduce the evidence only in order to establish comparative fault on the part of plaintiff

RAY v. GEICO

Plaintiff’s vehicle hit by uninsured driver Plaintiff brings UM claim Evidence showed that unidentified third

driver may have contributed to accident UM insurer sought apportionment as to “hit &

run” driver – stands in the shoes of the uninsured motorist and entitled to assert same defenses (cont.)

RAY v. GEICO

Plaintiff objected claiming: 1) purpose of UM statute is to fully compensate parties injured by uninsured drivers; 2) apportionment doesn’t apply in UM case; 3) UM insurer must compensate for harm caused by ALL liable uninsured drivers

Court Held: Insurer may seek apportionment of liability to unidentified driver if it can support the claim with adequate evidence

PRACTICAL CONSIDERATIONS

In deciding whether to pursue apportionment against non-party tortfeasor a defendant must weigh …

Cost of litigating v. Likelihood offault of nonparty success &

percentage fault of non-

litigant

ADEQUACY OF DISCLOSURE

Intent to apportion liability against non-litigant must be disclosed in advance

Strictly adhere to language of disclosure requirement in structuring conference order

Identify all “parties” as potential DeBenedetto defendants (including non-party tortfeasors, immune tortfeasors, settling defendants, co-defendants and “phantom” defendants)

TIMING OF DISCLOSURE

Include broad disclosure language in Brief Statement

File Notice of Intent to apportion to specific tortfeasors within deadline provided for in Structuring Conference Order

FORM OF DISCLOSUREBRIEF STATEMENT

Sample disclosure language for Brief Statement:

The defendant reserves the right to request that the jury or Court find fault against any and all potential joint tortfeasors regardless of whether they have been sued by the plaintiffs or any other party, whether they have settled their claims prior to trial, or whether they are protected from suit by any immunity or other legal bar to bringing such an action.

.

FORM OF DISCLOSURENOTICE OF INTENT

Structuring Conference Order Form currently requires:

“If defendant claims that unnamed parties are at fault (see DeBenedetto), defendant shall disclose the identity of every such party and the basis of the allegation of fault no later than…”

NOTICE OF INTENTTO APPORTION LIABILITY

Must specifically identify all persons or entities to which apportionment may be sought

Should set forth the factual and legal basis for apportionment of liability to each such person or entity

EXPANSION OF DISCLOSURE REQUIREMENT?

Plaintiff attorneys are lobbying to modify structuring conference language

May require identification of co-defendants as DeBenedetto parties for purposes of apportionment

Failure to disclose co-defendants who later settle could preclude apportionment

May require disclosure of witnesses, including experts, to support apportionment as to that party

PROPOSED LEGISLATION

HB 1255 (introduced in 2010 session) Would have amended RSA 507:7-e to

prohibit apportionment claims against any person/entity immune from liability unless that person/entity is made a party to the action under Superior Court Rule 27

Bill deemed “inexpedient to legislate” by Judiciary Committee

SEVIGNY v. QUESADA

Parties amended Structuring Conference Order Form to state:

“Pursuant to DeBenedetto v. CLD case, defendants shall disclose by 7.15.08 the identity of every person or party alleged to be at fault and the basis therefore.”

SEVIGNY (cont.)

None of the defendants disclosed intent to apportion liability prior to deadline

Plaintiff settled with one defendant Plaintiff withdrew medical experts they

planned to support claims against the settling defendant

Remaining defendant sought to videotape testimony of plaintiff’s withdrawn experts

SEVIGNY (cont.)

Trial Court ruled: Structuring Conference Order required

disclosure of all persons alleged to be at fault, even if they were parties to the litigation

Defendant could not compel testimony from plaintiff’s withdrawn experts

Defendant was barred from seeking to apportion liability to any other person at trial

DISCLOSURE OF EVIDENCE SUPPORTING APPORTIONMENT

Plaintiffs have successfully amended Structuring Conference Order Forms to require disclosure, by a fixed date, of:

The identity of every person or party alleged to be at fault

The specific bases for the allegation of fault The witnesses defendant intends to call to

establish fault, including experts

PRACTICAL CONSIDERATIONS

Requires defendant to prepare case against co-defendant as well as its own defense

Deters cooperation among co-defendants Results in additional expense by requiring

discovery and experts as to co-defendant Defendant cannot rely on plaintiff’s evidence

and witnesses against co-defendant Requires strict adherence to disclosure date

CASE STUDIES

Few cases have reached Supreme Court, so attorneys and trial courts in unchartered waters

Advantages of utilizing apportionment must be assessed on a case by case basis

CASE #1

Customer injured in slip & fall on commercial property Suit filed against property owner & plumbing contractor Property owner likely ≥ 50% at fault & contractor likely <

50% at fault Property owner settles & potential verdict likely higher

than amount paid in settlement DeBenedetto instruction beneficial: 1) if contractor < 50% at fault it pays only its

proportionate share;2) if found ≥ 50% at fault, liable for 100% but gets

offset for amount paid by settling property owner

CASE #1 - ILLUSTRATION

Property owner settles for $40k prior to trial Case goes to trial against plumbing

contractor and contractor seeks apportionment to property owner

Jury reaches verdict of $100k 1) contractor found 30% at fault – pays $30k

2) contractor found 50% at fault – pays $60k

CASE #2

Employee of subcontractor (SC) injured in construction accident

Defendant general contractor (GC) minimally at fault SC primarily at fault, but immune due to WC bar SC contractually obligated to defend & indemnify GC GC brings third party action v. SC SC assumes defense of GC & seeks apportionment of fault

to SC GC withdraws third party action

CASE #3

Plaintiff injured due to alleged product defect & sues multiple defendants

Primary manufacturer seeks apportionment as to remaining defendants and non-party component manufacturers

Primary manufacturer found ≥ 50% at fault

CASE #3 - ILLUSTRATION

Jury awards verdict of $100k 70% apportioned to primary manufacturer 20% apportioned to co-defendants 10% apportioned to non-party component

manufacturers Primary manufacturer pays 80% but can

seek contribution from non-parties

CASE #4

Plaintiff injured while a passenger in vehicle operated by spouse (Operator #1) and struck by a second vehicle (Operator #2)

Operator #2 is clearly ≥ 50% at fault Operator #1 settles claim for less than his

proportionate share Operator #2 is jointly & severally liable, so liable

for 100% of verdict with offset for amount of settlement with Operator #1

DeBenedetto apportionment neutral

CASE #4 - ILLUSTRATION

Operator #1 settles for $20k Trial proceeds against Operator #2 who

seeks apportionment to Operator #1 Jury awards verdict of $100k Operator #2 found to be 70% at fault,

Operator #1 30% at fault Operator #2 pays $80k ($100k less offset of

$20k)

CASE #5

Construction accident with both GC and immune employer/subcontractor at fault

If GC is ≥ 50% liable, DeBenedetto apportionment neutral since GC has joint & several liability

If GC < 50% liable, apportionment beneficial since it pays only its proportionate share

CASE #5 - ILLUSTRATION

Jury awards verdict of $100k If GC is 60% liable and SC 40%, GC still

pays $100 due to joint & several liability If GC is 40% liable and SC is 60% liable, GC

pays only $40k – apportionment beneficial to GC and plaintiff bears the loss

CASE #6

Plaintiff injured in automobile accident when struck by Vehicle #1

Operator of Vehicle #1 claims that he swerved to avoid unidentified operator of Vehicle #2 who failed to yield right-of-way

Can Operator of Vehicle #1 seek apportionment of liability to “phantom” driver?

CASE #7

Plaintiff injured due to negligence of two defendants and extent to which each is liable is not clear

One defendant settles for substantial amount Trial proceeds against remaining defendant and

jury apportions liability to settling defendant for less than amount it paid

Remaining defendant is found ≥ 50% at fault Does remaining defendant receive full offset?

CASE #7 - ILLUSTRATION

Operator #1 settles for $80k prior to trial Trial proceeds against Operator #2 Operator #2 is found 70% at fault, Operator

#1 is assigned 30% Jury awards verdict of $100k Operator #2 pays…?

CASE #8

Plaintiff settles with Defendant #1 Trial proceeds against Defendant #2 Defendant #2 found < 50% at fault after

seeking apportionment to Defendant #1 Amount of liability apportioned to Defendant

#1 is less than amount it paid Who gets “windfall”?

CASE #8 - ILLUSTRATION

Defendant #1 settles for $80k prior to trial Trial proceeds against Defendant #2 Jury awards verdict of $100k Apportionment of liability is 30% to

Defendant #2 and 70% to Defendant #1 Defendant #2 pays…?

Unsettled Questions…

Applicability of DeBenedetto apportionment in underinsured motorist cases

Applicability of DeBenedetto in breach of contract cases

The End