(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
Argued January 18, 1995 -- Decided April 18, 1995
O'HERN, J., writing for a unanimous Court.
In May 1982, Carey Dunn experienced pain and swelling in his scrotal area. He was treated by a
private physician with antibiotics and his condition improved. Later that year, Dunn joined the Health Care
Plan of New Jersey (HCP), a health maintenance organization (HMO). Dr. Martha Brumbaugh became
Dunn's primary care physician at HCP. Pursuant to HCP's official description of benefits, the primary
physician is responsible for coordinating the subscriber's total health program.
In December 1982, Dunn's symptoms reoccurred. Dr. Brumbaugh diagnosed a recurrence of
inflammation of the tissues surrounding the testicle. She referred Dunn to Dr. Donald Praiss of South
Jersey Urologic Associates (SJUA), a group that contracted with HCP to provide services to HCP
subscribers. Dr. Praiss diagnosed a shrunken testicle with persistent collection of fluid and a possible hernia.
Praiss sent Dunn for a scrotal scan. That scan, taken on February 14, 1983, showed a mass but did not
determine its composition. Dr. Praiss ordered no other tests to determine if the mass was cancerous. He
did schedule a return appointment with Dunn.
On February 22, 1983, Dr. Joel Marmar, another SJUA physician, examined Dunn. He told Dunn
to note any change in the size of the mass through self-examination but did not order any further tests or
schedule a return appointment. Neither the scrotal scan nor the reports of the SJUA physicians reached Dr.
Brumbaugh, who had no further contact with Carey Dunn until November 1983. At that time, Dunn saw Dr.
Brumbaugh in respect of other symptoms. Dr. Brumbaugh ordered medication and various tests. In
December 1983, oncological tests revealed testicular cancer that had spread to the liver. Carey Dunn died as
a result of the cancer in April 1985.
Carey Dunn's widow, Linda Dunn (also, Dunn), sued HCP, Dr. Brumbaugh, Dr. Marmar, Dr.
Praiss, and SJUA, asserting claims for medical malpractice in addition to other claims against HCP, including
breach of contract based on Dr. Brumbaugh's failure to review and follow up with the urologists' reports.
Dr. Marmar and SJUA asserted cross-claims for contribution and indemnification against their codefendants.
The case was tried before a jury in June and July of 1990. At the conclusion of Dunn's case, on
HCP's motion, the court dismissed all of the claims against HCP as well as the claims against all of the other
defendants except Dr. Marmar and SJUA (collectively, Dr. Marmar). Because Dr. Marmar had no evidence
to present in respect of HCP's independent negligence, his cross-claims against HCP were effectively
dismissed, even though there was no court order. HCP declined to participate in the trial against Dr.
Marmar. The jury returned a verdict in favor of Dunn in excess of $2.9 million, apportioning ten-percent
fault to Carey Dunn and ninety-percent fault to Dr. Marmar.
Dunn appealed, claiming that HCP had been improperly dismissed as a party, and that HCP was not only liable as Dr. Marmar's principal but also had direct liability for breach of contract. Dr. Marmar did not appeal the dismissal of his cross-claims against HCP. The Appellate Division held that HCP was vicariously liable for Dr. Marmar's actions pursuant to theories of respondeat superior or agency and, therefore, it was thus not necessary to address Dunn's contract theory. The court affirmed the liability judgment but
remanded for retrial on damages only. This Court denied HCP's petition for certification and Dunn's cross-petition. Dr. Marmar did not petition for certification in respect of the dismissal of his cross-claims.
On remand to the trial court, Dr. Marmar sought to litigate his cross-claims against HCP. The trial
court agreed with HCP's argument that the court resolve the issue of the existence of those cross-claims at
the conclusion of the damage trial. Prior to the retrial, Dr. Marmar settled with Dunn and she assigned to
Dr. Marmar any remaining rights that she had. The trial court heard argument on the remaining issues
concerning HCP and ruled that the Appellate Division had implicitly affirmed its dismissal of Dr. Marmar's
cross-claims.
Dr. Marmar appealed from the dismissal of his cross-claims. The Appellate Division remanded the
matter for a determination of whether any viable claims against HCP, if proven, could have been
independent proximate causes of Carey Dunn's injuries and death. If so, damages should be apportioned
between HCP and Dr. Marmar. If any of the cross-claims against HCP led only to vicarious responsibility,
they would be dismissed because of the indemnification agreement between Dr. Marmar and HCP. The
Appellate Division also determined that Dunn had no viable negligence claim directly against HCP, noting
that Dr. Marmar had conceded that he had no evidence that HCP did anything negligent. The court found
that, although Dr. Marmar preserved the cross-claims, they solely encompassed the right to assert
contribution for Dunn's contractual claims or claims based on agency or respondeat superior. The court
further decided that Dr. Marmar's contribution claim may be based on HCP's alleged breach of contract
with Carey Dunn.
The Supreme Court granted HCP's petition for certification.
HELD: There may be contribution between one whose breach of contractual duty is a proximate cause of
personal injury and one whose negligence is a proximate cause of the same injury. However, in the
circumstances of this case, Dr. Marmar failed to adequately preserve his right to assert a cross-claim
for contribution against the Health Care Plan of New Jersey.
1. Under the Comparative Negligence Act, joint tortfeasors share liability on the basis of proportion of
fault as determined by the trier of fact. The Act's application is not limited to negligence actions. It is
appropriate in this case to apportion responsibility based on a breach of contract that is alleged to have
proximately caused personal injury. The alleged failure of HCP is more like a negligent act than an
intentional breach of contract. Thus, Dr. Marmar, a physician-provider who has been found guilty of medical
malpractice, may seek contribution from his health maintenance organization on the basis of its independent
breach of contractual duty to Carey Dunn, a patient-subscriber of HCP. (pp. 12-17)
2. A claim for contribution must be timely asserted. Although there may be strategic reasons for
initially declining to assert a cross-claim for contribution, parties must "stake out positions among themselves"
well before trial. Here, Dr. Marmar did not at the time of the first trail stake out his position concerning
the independent negligence of HCP. Dr. Marmar's cross-claims were not automatically reinstated when
Dunn's claims against HCP were reinstated nor did he seek to preserve them at the time of settlement. It
was not until the case effectively had been disposed of that Dr. Marmar first presented expert evidence
pointing a finger at HCP. At that point, the time to assert such a claim had passed; the interests of justice
require that such factual claims be presented at the early stages of litigation. (pp.19-21)
Judgment of the Appellate Division is REVERSED and the trial court's dismissal of Dr. Marmar's
cross-claims against HCP are REINSTATED.
CHIEF JUSTICE WILENTZ nad JUSTICES HANDLER, POLLOCK, GARIBALDI, STEIN and
COLEMAN join in JUSTICE O'HERN'S opinion.
SUPREME COURT OF NEW JERSEY
A-
58 September Term 1994
LINDA B. DUNN, individually,
and as the Administratrix ad
Prosequendum of the Estate of
Carey Dunn,
Plaintiff,
v.
DONALD E. PRAISS, M.D.,
and MARTHA BRUMBAUGH, M.D.,
Defendants,
and
JOEL E. MARMAR, M.D., and
SOUTH JERSEY UROLOGIC ASSOCIATES,
Defendants-Respondents,
v.
HEALTH CARE PLAN OF
NEW JERSEY,
Defendant-Appellant.
Argued January 18, 1995 -- Decided April 18, 1995
On certification to the Superior Court,
Appellate Division, whose opinion is reported
at
271 N.J. Super. 311 (1994).
Richard A. Grossman argued the cause for
appellant (Grossman & Kruttschnitt,
attorneys; Herbert Kruttschnitt, III, of
counsel; Eli L. Eytan, on the brief).
Stephen M. Greenberg argued the cause for
respondents (Stern & Greenberg, attorneys;
Mr. Greenberg and Jeffrey Speiser, on the
brief).
The opinion of the Court was delivered by
O'HERN, J.
This appeal concerns the concurrent duties of a health
maintenance organization (HMO) and the physicians who contract
with the HMO to deliver medical services.
Traditionally the prohibition on the corporate practice of
medicine stemmed from a perceived need to protect the public from
the commercial exploitation of the practice of medicine. "It has
been said to be against public policy to permit a `middleman' to
intervene for profit in establishing the professional
relationship between members of the medical profession and
members of the public." Michael A. Dowell, The Corporate
Practice of Medicine Doctrine Must Go, HealthSpan, Nov. 1994, at
7, available in WESTLAW, Healthspan Database, *4.
Ever-increasing complexity and costs have brought about vast
changes in the delivery of medical services. Today, most would
not recognize Norman Rockwell's portrait of the family doctor.
The 1973 Health Maintenance Organizations Act, N.J.S.A. 26:2J-1
to -30 (HMO Act), authorized the creation of corporate HMOs. The
HMO Act states that such organizations "shall not be deemed to be
practicing medicine" and exempts such organizations from
licensure relating to the practice of medicine. N.J.S.A. 26:2J-25c. Although it grants immunity to certain HMO employees, the
HMO Act does not confer immunity from medical malpractice
lawsuits on the HMO itself. Robbins v. HIP of New Jersey,
264 N.J. Super. 572 (Law Div. 1993).
[A] potential exists for HMOs to be held
liable for medical malpractice based on one
or more of several tort theories: (1)
vicarious liability on the basis of
respondeat superior or ostensible agency; (2)
corporate negligence based upon negligent
selection and negligent control of the
physician; and (3) corporate negligence based
upon the corporation's independent acts of
negligence, e.g. in the management of
utilization control systems. Contract law
might also be utilized to hold HMOs liable
for malpractice based on breach of contract
or breach of warranty. See Oakley and
Kelley, HMO Liability for Malpractice of
Member Physicians: The Case of IPA Model
HMOs, 23 Tort and Insurance Law Journal 624,
626 (1988).
[Raglin v. HMO Illinois, Inc.,
595 N.E 2d
153, 156 (Ill. App. Ct. 1992).]
This case implicates the first and third of those theories.
A physician-provider who has been found guilty of medical
malpractice seeks contribution from his HMO on the basis of its
independent breach of contractual duty to a patient-subscriber of
the HMO. We hold that such a claim may be asserted but is
procedurally barred in the circumstances of this case.
In May 1982 Carey Dunn, a Philadelphia Navy Yard worker, experienced swelling and pain in his scrotal area. A private physician treated him, and his condition improved with antibiotics. Later that year Dunn joined the Health Care Plan of
New Jersey (HCP). Dr. Martha Brumbaugh became Dunn's primary
physician at HCP. The "official description of benefits" under
the plan said (emphasis added):
This Plan is a group-practice prepayment
plan, sometimes called a Health Maintenance
Organization or HMO. It offers more than
health insurance alone * * * .
Plan members receive health care from a large
number of well qualified, highly trained
physicians. When a new member joins HCP he
or she will select a "primary physician" or
"family doctor" from the HCP Medical Staff.
This doctor becomes the member's personal
physician and assumes responsibility for
coordinating the member's total health
program.
In December 1982 Dunn's symptoms recurred. In January 1983
Dr. Brumbaugh diagnosed a recurrence of epididymitis
(inflammation of the tissues surrounding the testicle). She
referred Dunn to Dr. Donald Praiss of South Jersey Urologic
Associates (SJUA), a group that contracted with HCP to provide
services to HCP subscribers. Dr. Praiss diagnosed an atrophic
(shrunken) testicle with persistent hydrocele (collection of
fluid) and a possible hernia. He sent Dunn for a scrotal scan,
which showed some type of mass, but did not determine its
composition. These are the crucial dates:
2/14/83 * Scrotal scan revealed mass. Dr. Praiss
ordered no further tests to determine if the
mass was cancerous, but scheduled a return
appointment.
2/22/83 * Dr. Joel Marmar (another SJUA physician) examined Dunn and told him to note any change
in the size of the mass through self-examination. Dr. Marmar ordered no further
tests and scheduled no return appointments.
Neither the scrotal scan results nor the SJUA
physicians' evaluations reached Dr.
Brumbaugh, who had no further contact with
Dunn.
11/28/83 * Dunn, complaining of a "full feeling" in his
chest, saw Dr. Brumbaugh, who ordered
medication and various tests.
12/83 * Oncological tests disclosed testicular cancer
that had spread to the liver.
After extensive chemotherapy, Dunn died on April 30, 1985.
Carey Dunn's widow, Linda Dunn, sued HCP, Dr. Brumbaugh, Dr.
Marmar, Dr. Praiss, and SJUA. She asserted claims of medical
malpractice against the individual physicians, and against HCP as
their principal. She also asserted independent claims against
HCP, including breach of contract based on Dr. Brumbaugh's
failure to review and follow up the urologists' reports. Dr.
Marmar and SJUA asserted cross-claims for contribution and
indemnification against their codefendants.
The case was tried to a jury in June and July 1990. At the
end of plaintiff's case, HCP moved to dismiss all claims against
it, both the claims based on respondeat superior and the claims
of independent liability. The trial court dismissed all of the
claims against HCP, as well as the claims against all of the
other defendants, except for Dr. Marmar and his group, SJUA
(collectively, Dr. Marmar).
After the trial court dismissed plaintiff's claims against
HCP, plaintiff's counsel asked the court whether Dr. Marmar's
cross-claims against HCP would be dismissed.
Plaintiff's Counsel: I'm just assuming this dismisses that
cross-claim and all facts alleged by Dr.
Marmar against the HCP as well? I
assume it's all inclusive, they are not
still going forward to prove facts that
it was HCP and not they that didn't fail
to discharge the responsibility?
The Court: I didn't consider the cross-claim.
Dr. Marmar's counsel: I would state for the record, I have no
evidence that HCP would have done
anything deemed negligent. I would not
submit any evidence on that. The only
thing seems to me, if counsel for the
plaintiff is correct, ultimately that
there was some vicarious responsibility,
your Honor's comments today, they would
share in that liability that we
ultimately bear in this case I think
takes care of that.
The Court: All I say, they may be bound if, you
have to look at * * * [Pappas v.
Santiago,
66 N.J. 140 (1974)], they were
invited if they want to continue and the
law says they can continue in the
participation of the trial where you are
continuing along with the theory of
damages because quite conceivably if
there is an award and they have been let
out and there's a tort feasor still
remaining, they may be on the rug for
damages, so they still have a right to
participate in the trial if they want
to.
Dr. Marmar's counsel: I understand.
The trial court did not further address the cross-claims but
instead asked HCP whether, pursuant to Pappas v. Santiago,
66 N.J. 140, 145 (1974) (codefendant who prevails at separate trial
on liability issue is entitled to participate in trial on
damages, since he will be bound by damages fixed if favorable
liability ruling is reversed), it wished to continue to
participate in the trial on the issue of damages even though it
was no longer a party. HCP declined. Dr. Marmar concedes that
the cross-claims were effectively dismissed at that time, though
the court entered no such order.
The case proceeded to trial against Dr. Marmar. The jury
returned a verdict in favor of plaintiff in the sum of
$2,904,240.54, apportioning ten percent fault to the decedent and
ninety percent to Dr. Marmar.
Plaintiff appealed, claiming that HCP had been improperly
dismissed as a party, and that HCP was not only liable as Dr.
Marmar's principal but also had direct liability for breach of
contract. Dr. Marmar cross-appealed (1) the trial court's denial
of certain expert testimony on the liability issues and (2)
various damage issues, most notably the issue in Tenore v. Nu Car
Carriers, Inc.,
67 N.J. 466, 482 (1975) (holding that
introduction of evidence prepared by expert witnesses purporting
to show an injured plaintiff's aggregate damages is improper).
Dr. Marmar did not appeal the dismissal of his cross-claims
against HCP.
The Appellate Division held that HCP was vicariously liable
for Dr. Marmar's actions on a theory of respondeat superior or
agency, and that it was therefore not necessary to analyze
plaintiff's contract theory. It affirmed the liability judgment
but remanded for retrial on damages only because of trial errors:
Plaintiff has requested that we overturn
the trial judge's determination to dismiss
plaintiff's claims against the HMO.
Plaintiff has couched her argument in terms
of a contractual duty based upon the [HMO's]
promotional literature. We need not analyze
the contractual theory advanced by plaintiff,
since it is apparent to us that Health Care
Plan of New Jersey is responsible for Dr.
Marmar's actions on theories of respondeat
superior or agency.
* * * We therefore hold that under these
circumstances both Dr. Marmar (and South
Jersey Urologic Associates) and the HMO are
responsible to plaintiff for such damages as
may be assessed by reason of Dr. Marmar's
actions.
The liability judgment is affirmed; the
Health Care Plan of New Jersey is deemed
responsible on a principal-agent basis for
the acts of Dr. Marmar; the damage judgment
for decedent's pain, suffering, and related
losses is remanded to the Law Division for
consideration whether there should be a
comprehensive damage trial; the wrongful
death and loss of consortium damage judgments
are reversed and the matter is remanded to
the Law Division for retrial on these latter
issues.
[
256 N.J. Super. 180, 193,
195, 202 (App. Div. 1992).]
HCP petitioned for certification concerning the imposition
of vicarious liability. Plaintiff cross-petitioned for
certification, seeking review of the portion of the judgment
vacating the award for damages and review of the Appellate
Division's "[a]ffirmance of the dismissal of the breach of
contract claim against HCP and Dr. Brumbaugh." Dr. Marmar
opposed plaintiff's cross-petition. He did not petition for
certification on the dismissal of his cross-claim. This Court
denied both petitions.
130 N.J. 20 (1992).
On remand to the Law Division, Dr. Marmar sought to include
a trial of "the pending crossclaims between Dr. Marmar and HCP"
in that proceeding. HCP insisted that there were no pending
cross-claims and urged the court to resolve the asserted cross-claims after the damages trial because the cross-claims involved
a "question of law." The trial court agreed with HCP and
directed a trial on damages, after which it would consider any
cross-claims. HCP elected not to participate in the damages
trial.
Prior to retrial, Dr. Marmar settled with plaintiff for
$2,904,160.54, $80.00 less than the original jury verdict.
Plaintiff assigned to Dr. Marmar any remaining rights that she
had. The trial court then ordered argument to determine whether
any issues concerning HCP remained. Dr. Marmar claimed that he
had a valid cross-claim against HCP. Dr. Marmar's counsel made
the following offer of proof: "[W]e say there is fault and we
will prove that because we have witnesses who will show what they
[HCP] didn't do and they should have done and that they were
absolutely actively negligent." He argued that liability as
between Dr. Marmar and HCP had never been tried on the merits
because under Rule 4:37-2 the cross-claims had been automatically
dismissed when plaintiff's claims were dismissed. Because the
dismissal of HCP on vicarious-liability grounds had been
reversed, the cross-claims must be reinstated.
HCP countered that Dr. Marmar's cross-claims were dismissed
not because the court rule triggered such dismissal, but because
Dr. Marmar had acknowledged having no proof of HCP's independent
liability. Moreover, HCP argued, the Appellate Division had not
reversed the finding of no liability under breach of contract or
negligence (it had simply resolved the respondeat superior issue)
and therefore those findings stood. The trial court ruled that
the Appellate Division had implicitly affirmed its dismissal of
the cross-claims.
Dr. Marmar appealed from the dismissal of his cross-claims.
The Appellate Division remanded to determine whether any viable
claims against HCP, if proven, could have been independent
proximate causes of plaintiff's injuries and death. If so,
damages should be apportioned between HCP and Dr. Marmar. If any
of the cross-claims against HCP led only to vicarious
responsibility, they would be dismissed (because Dr. Marmar and
SJUA had agreed to indemnify HCP for any losses occasioned by the
SJUA physicians' negligence). The court said that "[i]t would be
inequitable to reinstate plaintiff's claims against the HMO
(which in turn provide a basis for an indemnification claim
against Dr. Marmar) without permitting the doctor and the
urologic group to show that there is a valid basis to claim
contribution against HCP."
271 N.J. Super. 311, 320 (1994).
The Appellate Division determined that plaintiff had no
viable negligence claim directly against HCP and noted that Dr.
Marmar had conceded that he had "no evidence that HCP would have
done anything deemed negligent." Therefore, the court said, Dr.
Marmar preserved his cross-claims against HCP, but those cross-claims "solely encompassed the right to assert contribution for
plaintiff's contractual claim or claims based on agency or
respondeat superior." 271 N.J. Super. at 322.
The Appellate Division further decided that Dr. Marmar's
contribution claim may be based on HCP's alleged breach of
contract with Carey Dunn:
We can * * * see no reason not to apportion
responsibility based upon any civil wrong,
including a breach of contract, that
proximately causes a personal injury. A
person who is injured as a result of the
breach of a defendant's contractual duty
should have no less legal recourse than a
person injured as a result of the breach of a
general duty of reasonable care.
[271 N.J. Super. at 324.]
This Court granted HCP's petition for certification.
137 N.J. 308 (1994).
There are two issues in this case: (1) Can there be contribution between a party whose breach of contract is the proximate cause of personal injury and another party whose negligence is a proximate cause of the same injury? and (2) If so, did Dr. Marmar adequately preserve the right to assert such a cross-claim?
The common-law doctrine that forbade contribution between joint tortfeasors was based on the same theory as that of contributory negligence, that "[a]ny fault kept a claimant from recovering under the system," Ostrowski v. Azzara, 111 N.J. 429, 436 (1988), whether that claimant was a plaintiff seeking compensation from a defendant or one joint tortfeasor looking for contribution from another. At common law, the plaintiff was free to choose which of multiple tortfeasors to sue and from which among them to seek satisfaction of any judgment. A defendant in a tort action had no right to implead other suspected tortfeasors or to seek from fellow tortfeasors contribution for payments made in excess of his or her proportion of fault. Young v. Latta, 123 N.J. 584, 588-89 (1991). To ameliorate the harshness of that theory, which "did violence to basic equitable notions that those whose fault caused the injury should, in good conscience, bear their just shares of the burden," Kennedy v. Camp, 14 N.J. 390,
400 (1954) (Jacobs, J., concurring), the Legislature in 1952
enacted the Joint Tortfeasors Contribution Law, N.J.S.A. 2A:53A-l
to -5 (JTCL). The JTCL provides that if any one of the joint
tortfeasors pays a judgment to an injured person, that tortfeasor
is entitled to recover contribution from the other joint
tortfeasors "for the excess so paid over his pro rata share."
N.J.S.A. 2A:53A-3.
The Comparative Negligence Act, N.J.S.A. 2A:15-5.1 to
-5.3, enacted in 1973, modified the JTCL's pro-rata apportionment
of liability among joint tortfeasors. (The Comparative
Negligence Act was amended by L. 1987, c. 325 and L. 1987, c.
404. The amendments substantially modified rules of joint-and-several liability with respect to the extent of contribution in
certain circumstances not present here.) Joint tortfeasors no
longer share liability on a pro-rata basis but instead on the
basis of proportion of fault as determined by the trier of fact.
The effect of the Comparative Negligence Act on contribution is
to measure the remedy by percentage of responsibility rather than
by the number of culpable parties.
In Blazovic v. Andrich,
124 N.J. 90, 98 (1991), we explained
that it is "well-settled that the [Comparative Negligence] Act's
application is not limited to negligence actions." For example,
in Suter v. San Angelo Foundry & Machine Co.,
81 N.J. 150, 161
(1979), the Court reasoned that such a limitation would frustrate
the legislative intent to mitigate the unfairness associated with
the total bar to recovery posed by common-law contributory
negligence. Consequently, the Court determined that the
Comparative Negligence Act "was intended to cover fault in a
broader sense rather than in the technical narrow negligence
concept." Id. at 162 n.2. The Court held that "the Comparative
Negligence Act is applicable to strict liability actions in those
circumscribed areas in which plaintiff's conduct may be found to
constitute contributory negligence." Id. at 164.
In Adler's Quality Bakery, Inc. v. Gaseteria, Inc.,
32 N.J. 55, 77 (1960), the Court held that under the JTCL, a negligent
defendant could seek contribution from a strictly liable
codefendant who was the operator of an airplane that without
fault fell from the sky. Later, in Blazovic, supra, 124 N.J. at
107, we held that "responsibility for a plaintiff's claimed
injury is to be apportioned according to each party's relative
degree of fault, including the fault attributable to an
intentional tortfeasor." Finally, in Childs v. New Jersey
Manufacturers Insurance Co.,
108 N.J. 506 (1987), and Riccio v.
Prudential Property & Casualty Insurance Co.,
108 N.J. 493
(1987), we explained how the usual principles of comparative
negligence under the JTCL were to be modified when part of the
recovery was based on contract under the uninsured motorist
endorsements of an automobile liability insurance policy.
A common thread that runs through most of those decisions is
a concept of fault, whether based on the failure to insure that a
product fulfills its warranty (Suter, supra,
81 N.J. 150), an
absolute liability for ultra-hazardous activity imposed by
statute (Adler's Quality Bakery, supra,
32 N.J. 55), or the
intentional infliction of injury on another (Blazovic, supra,
124 N.J. 90).
In the context of this case in which the breach of
contractual duty appears to parallel closely the fault-based duty
of care imposed on a health-care provider, it is appropriate to
allow for contribution. In another case the issue might be less
clear. For example, assume that an HMO contract had authorized
five days of hospital care for an appendectomy, but the HMO
refused to cover more than three days. The relationship between
that breach of contract and a concurrent act of malpractice might
be more difficult to assess. In this case the alleged failure of
the HMO is more like a negligent act than an intentional breach
of a contract.
We therefore agree with the Appellate Division that it is
appropriate in this case to apportion responsibility based on a
breach of contract that is alleged to have proximately caused
personal injury. Our jurisprudence has taken a pragmatic
approach when giving effect to the conceptual differences between
a breach of contract and a breach of a duty of reasonable care.
See Pickett v. Lloyd's,
131 N.J. 457, 470 (1993) ("Compensation
should not be dependent on what label we place on an action but
rather on the nature of the injury inflicted on the plaintiff and
the remedies requested."). The nature of the wrongdoer's conduct
is not particularly relevant. See Cartel Capital Corp. v. Fireco
of New Jersey,
81 N.J. 548, 566-68 (1980) (explaining how there
may be contribution between parties liable on entirely different
bases). For example, a manufacturer liable under warranty may
seek contribution from a dealer who negligently repairs an
automobile. Howell v. Bennett Buick, Inc.,
382 N.Y.S.2d 338, 340
(App. Div.), appeal denied,
387 N.Y.S.2d 1030 (Ct. App. 1976),
cited with approval in Cartel Capital Corp., supra, 81 N.J. at
568. A bank absolutely liable under a statute may seek
contribution from a negligent attorney. Tormo v. Yormark,
398 F.
Supp. 1159, 1188-81 (D.N.J. 1975) (applying New Jersey law). A
negligent supermarket may seek contribution from a manufacturer
of a defective shopping cart strictly liable for a customer's
injuries. Safeway Stores, Inc. v. Nest-Kart,
579 P.2d 441, 445-46 (Cal. 1978), cited with approval in Cartel Capital Corp.,
supra, 81 N.J. at 568. The underlying principle is "that
liability should be imposed in proportion to fault." Blazovic,
supra, 124 N.J. at 112.
The refusal to allow contribution among wrongdoers was a
common-law doctrine based on a premise that has been altered by
decades of changing legislative policy. Our common law evolves
consonant with changes in statutory policy. Renz v. Penn Central
Corp.,
87 N.J. 437, 456 (1981). Hence, we agree with the
Appellate Division that in circumstances such as these "[a]
breach of a contractual duty which is a proximate cause of a
personal injury can easily be balanced against the negligence of
another party so that their percentage responsibilities can be
assessed and contribution directed as comparative fault." 271
N.J. Super. at 324.
Although there may be contribution between one whose breach of contractual duty is a proximate cause of personal injury and one whose negligence is a proximate cause of the same injury, a claim for contribution must be timely asserted. In Young, supra, 123 N.J. 584, we explained how the comparative fault of an absent defendant should be treated when that party has been dismissed from the proceeding by a stipulation of settlement. We held that the existence of a cross-claim was not essential to assert a claim for a credit for the amounts due to the claimant from the dismissed defendant. We recognized that there are many strategic reasons for initially declining to prosecute a claim for contribution. Physicians, for example, "may choose to defend charges of malpractice by denying that there was any negligence at all because finger-pointing among the defendants would accrue only to the benefit of the plaintiff." Id. at 596.
We emphasized, however, that a party does not have full rein to assert the claim for contribution or setoff without first providing affected parties fair and timely notice. "A litigation
strategy that features surprise to the adversary is no longer
tolerated." Id. at 597. We were there speaking of prejudice to
the plaintiffs. We see no reason why a similar standard should
not apply to claims for contribution between defendants. Parties
must "stake out positions among themselves" well before trial.
Id. at 597. In this case, Dr. Marmar did not at the time of the
first trial stake out his position as to the causative fault of
HCP. When the trial judge dismissed plaintiff's claims against
HCP, Dr. Marmar's counsel told the court that he intended to
present no evidence that HCP was independently negligent.
Dr. Marmar insists that pursuant to Rule 4:37-2 his cross-claims were automatically reinstated when the plaintiff's case against the dismissed defendant was reinstated. However, in this case the normal procedure under Rule 4:37-2(c) (that would adjudicate contribution claims only after "the close of all the evidence") was not followed. The automatic reinstatement does not follow in these circumstances. Nor does E & K Agency, Inc. v. Van Dyke, 60 N.J. 160 (1972), mandate reinstatement of the claim. In that case a non-appealing defendant benefited by an appeal by a codefendant but only because the successful appeal "eliminate[d] all basis for recovery against [the] nonappealing party." Id. at 163. In this case plaintiff's successful appeal did not have the same effect. The basis for relief was not
congruent in each instance; plaintiff's restored claim against
HCP rested on a theory of respondeat superior or agency; Dr.
Marmar's cross-claim against HCP rested on a breach of
contractual duty, a theory that he had not previously asserted.
When plaintiff appealed the dismissal of her claim against
HCP, Dr. Marmar did not cross-appeal the dismissal of his cross-claims for contribution. When Dr. Marmar, after the remand,
settled the claim through his insurance company for substantially
the full amount of the first verdict, he did seek to preserve the
cross-claim for contribution against HCP. However, it was not
until after the case had in effect been tried (because, after
all, a settlement disposes of a case as does a trial) that Dr.
Marmar first presented an expert report asserting HCP's
independent breach of duty for failure to monitor the SJUA
physicians' treatment of Carey Dunn. Had that "finger-pointing"
occurred at the proper stage, it might have aided plaintiff's
cause, in that a professional health-care provider agreed with
her.
HCP's rather cavalier attitude in agreeing to be bound by
any judgment on the remand exposed it to great peril. We
acknowledge that the original trial counsel for Dr. Marmar did
not articulate or abjure a claim for contribution on the
contractual theory now stated (and assigned to it by plaintiff).
However, the underlying factual basis for either claim is largely
the same insofar as HCP is concerned: Did it have a duty to
coordinate the care among its physicians? Recall how Dr.
Marmar's counsel phrased its offer of proof on the remand: "[W]e
have witnesses who will show what they [HCP] didn't do and they
should have done and that they were absolutely actively
negligent." All the relevant facts were known at the time of the
first trial. Had HCP then settled with plaintiff, would not Dr.
Marmar have had the duty to set forth the factual basis for the
contribution claim at such a trial?
We reinstate the judgment of the trial court not because, as it thought, the Appellate Division had foreclosed its consideration of a cross-claim for contribution, but because we believe that the time to assert that claim had passed. At the time of the first trial Dr. Marmar did not stake out his position setting forth any independent claim of contributory breach of duty. In his first appeal, Dr. Marmar did not cross-appeal from the dismissal of his claim for contribution. Not until after the case had been settled, and thereby disposed of, did Dr. Marmar present the report of his expert, Dr. C. David Spencer, stating that "the coordination of care with and by the primary care physician which was emphasized in [HCP's] * * * literature did not occur in regard to the critical steps in Mr. Dunn's case." Given the trial court's view of the Appellate Division's mandate, an earlier report would probably not have changed its view.
Still, we are satisfied that the interests of justice require
that such factual claims be presented at the early stages of
litigation.
We reverse the judgment of the Appellate Division and
reinstate the trial court's dismissal of Dr. Marmar's cross-claims against HCP.
Chief Justice Wilentz and Justices Handler, Pollock, Garibaldi, Stein and Coleman join in this opinion.
NO. A-58 SEPTEMBER TERM 1994
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court
LINDA B. DUNN, individually,
and as the Administratrix ad
Prosequendum of the Estate of
Carey Dunn,
Plaintiff,
v.
DONALD E. PRAISS, M.D.,
and MARTHA BRUMBAUGH, M.D.,
Defendants,
and
JOEL E. MARMAR, M.D., and
SOUTH JERSEY UROLOGIC ASSOCIATES,
Defendants-Respondents,
v.
HEALTH CARE PLAN OF NEW JERSEY,
Defendant-Appellant.
DECIDED April 18, 1995
Chief Justice Wilentz PRESIDING
OPINION BY Justice O'Hern
CONCURRING OPINION BY
DISSENTING OPINION BY