Steger v. Egyud

Hammond, J., delivered the opinion of the Court. In 1955 the appellee Egyud suffered serious injury to his head and arm when the automobile in which he was riding, driven by his son-in-law Trainor, collided at night with a parked tractor-trailer owned by Steger, the individual appellant, and leased to Victor Eynn Lines, the corporate appellant. Soon after the accident, Trainor’s insurance company paid Egyud $6,500.00, in return for his covenant not to sue Trainor. In 1956 Egyud sued Steger and Victor Lynn Lines in Baltimore.

Egyud and Trainor lived in New Jersey and the accident and the settlement took place in that State. Before trial the plaintiff gave notice that he intended to rely on New Jersey law, and under Code, 1957, Art. 35, Secs. 47-53, the Uniform Judicial Notice of Foreign Law Act, the statutory and case law of New Jersey were required to be noticed judicially. The case was tried on issues—(a) Did appellants’ negligence contribute to the accident and damage; (b) Did Train- or’s negligence contribute to the accident and damage; and (c) The amount of damage. The jury found appellants negligent, Trainor not negligent, and assessed the damages at $40,000.00.

Appellants make these main contentions: (1) that the trial court erred in refusing to let the jury know of Trainor’s settlement with Egyud and the covenant not to sue; (2) that under New Jersey law appellants are entitled to an automatic pro rata reduction of one-half the jury’s verdict because of ³³⁴ the settlement by Trainor, a joint tortfeasor; (3) that because of the automatic pro rata reduction, or because the evidence showed as a matter of law that Trainor had been negligent, it was error to submit his negligence to the jury; (4) that in the alternative, appellants are entitled to a pro ‘ tanto reduction in the verdict of $6,500.00, the amount Egyud received in settlement; and (5) that the court erred in its charge on the burden of proof. The evidence was that Egyud was riding on the right front seat of Trainor’s car on U. S. Route 130, a dual highway with two lanes in each direction. The scene of the accident was about two-thirds of the way up on an ascending grade where there was a third lane. Appellants’ tractor, pulling a flatbed type trailer, suffered a broken fuel pump and was parked in the third lane.

The driver put out three ten-inch high reflectors that shone when light hit them, one at the left hand corner of the trailer under the body, another in the center of the lane fifty feet back of the trailer, and another fifty feet beyond that, close to the curb. He telephoned to Baltimore for a fuel pump and then went to sleep in the cab, without making any effort to have the truck towed off the highway. The court charged the jury, seemingly by agreement of the parties, certainly with no exception being taken by either side, that Sec. 39:3-62 of the Annotated Code of New Jersey required a motor vehicle that is stopped on a highway or a shoulder, when lights are necessary, to be equipped with “one or more lamps which shall exhibit * * * a red light visible from a distance of five hundred feet to the rear.” He similarly charged the jury that Sec. 39:3-64 of the same code required commercial vehicles weighing over five thousand pounds to carry at least three portable flares, electric lanterns or other devices “capable of continuously producing a warning light visible from a distance of at least five hundred feet for a period of at least twelve hours” and to put one ahead, one behind and one on the traffic side of any such vehicle disabled on the highway during a time when lights are required. (See, however, Raws of New Jersey, 1947, Ch. 82, amending Sec. 39:3-64 of the Annotated Code ³³⁵ of New Jersey and said section as it appears in the 1958 supplement to the Annotated Code.) Trainor started up the grade, remaining in the right-hand lane which became the middle lane after the road widened.

A tractor-trailer passed him on the left and moved to its right as it went upgrade and slowed so that there were only about five feet between it and Trainor’s car. Trainor took his foot off the gas to slow his progress and eased to his right. As he did so, Egyud called “look out”, and Trainor saw a dark object in the road with no lights on it about ten feet away and cut to his left, but hit or scraped the body of the trailer. The trailer, says Trainor, was eight feet wide, the lanes nine feet wide, and the trailer was not parked straight to the curb, the front part being over the tar strip separating the lanes, with the left rear corner two inches inside the strip.

Egyud said he saw a low little red light four or five feet away when he called out, and that there was traffic passing on the left as Trainor slowed down and then struck the trailer. Before he slowed down, he was going forty-five miles an hour in a fifty-mile zone. The weather was clear and the road dry. The New Jersey state trooper, who arrived after the accident, found one undamaged reflector, the one under the left rear corner of the trailer.

The other two had been run over and flattened, by whom does not appear. There were no lights or flares on or near the trailer as the court charged the jury the New Jersey law required. The appellants offered statements Trainor had given to their investigator and to the state trooper. The investigator said Trainor told her traffic was heavy; he could not pass the tractor-trailer that had passed him (not the one he struck); a car to his left scared him and he pulled to his right and hit the parked trailer.

The trooper says Trainor told him that he did not see the reflectors of the disabled trailer and “suddenly veered to the right shoulder” and struck it. Appellants do not seriously urge that the evidence did not require submission of their negligence to the jury, and clearly it did. On his and other testimony from the stand, we do not find that Trainor could be said to be negligent as a matter ³³⁶ of law. The weight and effect of his prior statements were for the jury.

Appellants earnestly press their claim that they were seriously prejudiced by the court’s failure to let the jury know of the settlement with Egyud and the covenant not to sue. Trainor was not a party defendant because Egyud had agreed not to sue him, and appellants could not obtain service on him. Appellants argue that since the jury did not view Trainor as a defendant, they probably concluded that he could not have been liable; for if he had been, one or the other of the parties would have brought him into the case. This, they suggest, prevented a true appraisal by the jury of their claim that Trainor’s negligence was the sole proximate cause of the accident and of his credibility on the stand, weighed against his earlier statements.

We find this fine spun argument no more than speculation. If the jury had been told of the settlement and the covenant, they well may have concluded from the fact of the settlement that Trainor had been negligent (although his insurance company made the settlement). On the other hand, if the jury had taken the words of the covenant at face value, they could well have found, as they did, that he had not been liable, for the covenant says that Trainor “denies liability and denies that the aforesaid injuries, damages and losses were occasioned or in anywise contributed to or caused by any negligence, liability or fault on his part”, and also that neither the covenant nor the payment of the agreed settlement “shall in anywise be construed as an admission of liability” on the part of Trainor. The cases are not uniform on the subject.

They agree generally that the amount paid should be deducted from the judgment against the other tortfeasor. Some hold that the jury should make the deduction, others that the court should make it. See the cases in the annotation in 104 A. L. R. 931, and Cf. Brandstein v. Ironbound Transp.

Co. (Ct. of Errors & Appeals of N. J.), 172 A. 580 , with Klotz v. Lee (Super. Ct. N. J.), 114 A. 2d 746, 749 , 1 appeal dismissed, ³³⁷ 121 A. 2d 369 . In the setting in which the problem is here presented, we find the thinking of the Illinois courts persuasive. In Be Lude v. Rimek (App. Ct. Ill.), 115 N. E. 2d 561, 565 , the Court said: “It is well understood by lawyers and judges experienced in such matters that in a case where evidence is offered of the payment of a substantial sum for a covenant not to sue, the jury considers it evidence that the covenantee is the party responsible for the injury, and that defendant or defendants should be exculpated.” The Court held: “To permit the introduction of the covenant and its attendant facts in every case would seriously jeopardize a plaintiff’s opportunity for a fair trial.

Further, it would tend to discourage settlement of this type of litigation when two or more defendants are involved.” See also Schumacher v. Rosenthal, 226 F. 2d 946, 948 (C. A. 7th Cir.); and Jacob-sen v. Woerner (Kan.), 89 P. 2d 24 . Appellants showed no prejudice in this contention. Our decision that Trainor was not negligent as a matter of law leaves as the central and pivotal question the effect of the covenant not to sue on the amount of the judgment and on contribution, in the light of the finding of the jury that Trainor was not negligent in fact. The litigants agree that New Jersey law applies and controls all matters of substance, including the extent of liability and the right to, and measure of, contribution.

Restatement, Conflict of Laws, Sec. 412. Prior to 1952, there was no right of contribution in New Jersey among conscious or intentional wrongdoers or tortfeasors in pari delicto. In 1952 New Jersey passed a short version of the Uniform Contribution Among Tortfeasors Act. It adopts the definition in the Uniform Act that the term joint tortfeasors means 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, and provides that the right to contribution exists among joint tortfeasors.

There is nothing in the Act about releases or covenants not to ³³⁸ sue, sections 4 and 5 of the Uniform Act having been omitted in the New Jersey Act. In 1954 the Supreme Court of New Jersey decided the case of Judson v. Peoples Bank & Trust Co. of Westfield (N. J.), 110 A. 2d 24, 36-37, holding that conscious, willful or intentional joint tortfeasors were within the ambit of the Act and reversed the judgment below. In sending the case back to the lower court, the Supreme Court took occasion to give its opinion as to the effect of settlement by a joint tortfeasor. The Court said that the equality aimed at by the Act could be realized in either of two ways: first, by the crediting upon the verdict against the others the settler’s pro rata share, or by permitting the injured party to have judgment