APPORTIONMENT OF LIABILITY

1. APPORTIONMENT OF LIABILITY PRACTICAL IMPACT OF DEBENEDETTO ON MULTI-PARTY LITIGATION

2. PRESENTED BY: Getman, Schulthess & Steere, P.A.

3. HISTORY OF APPORTIONMENT • Based on RSA 507:7-e • Purpose is to protect “deep pocket” minimally liable defendants from bearing a disproportionate share of damages awards

4. 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

5. 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”

6. 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

7. TIBERGHEIN CASE • Tiberghein v. B.R. Jones Roofing, 156 N.H. 110 (2007) • RSA 507:7-e apportionment also applies to arbitration awards

8. 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)

9. 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

10. 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

11. PRE-TRIAL SETTLEMENT BY PARTY DEFENDANT A settling party cannot be compelled to litigate fault Everitt v. General Electric

12. 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

13. 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.)

14. BOISVERT v. GINSBERT (cont.) Court (J. Mangones) held: • Defendant not entitled to settlement information – evidence of settlement is barred under RSA 507:7-I • Settlement is irrelevant until jury reaches verdict and apportions damages • Court only required in camera review of settlement terms

15. 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.)

16. WATSON v. ELITE LIFESTYLES (cont.) Court (J. Mohl) held: • Evidence of default judgment would be admitted at trial (to help jury understand role of each entity in the construction) • The amount of damages awarded against defaulted defendants was not admissible (it would “mislead the jury as to their function in assessing damages”)

17. 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

18. 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

19. 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.)

20. RUEL v. NORTH AMERICAN AMUSEMENT (cont.) Court (J. Wageling) ruled: • Defendant could seek apportionment against father as long as it submitted “adequate evidence” at trial • Plaintiff could reference any deficiency in evidence presented

21. RALLIS v. GLADSTONE Court (J. McHugh) held: • 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 • Adequate disclosure may assist plaintiff in determining whether to settle with any defendant prior to trial

22. 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.)

23. COLMAN v. SIPKEMA (cont.) Court (J. McHugh) held: • Defendant could not seek apportionment to the unidentified driver due to insufficient evidence & speculative nature of claim • Defendant would be permitted to introduce the evidence only in order to establish comparative fault on the part of plaintiff

24. 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.)

25. 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

26. PRACTICAL CONSIDERATIONS In deciding whether to pursue apportionment against non-party tortfeasor a defendant must weigh … Cost of litigating v. Likelihood of fault of nonparty success & percentage fault of non-litigant

27. 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)

28. 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

29. 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. .

30. 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…”

31. 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

32. 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

33. 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

34. 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.”

35. 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

36. 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

37. 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

38. 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

39. 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

40. 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

41. 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

42. 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

43. 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

44. 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

45. 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

46. 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)

47. 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

48. 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

49. 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?

50. 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 defendantreceive full offset?