The New Jersey Supreme Court, in an opinion written last week by Justice Anne M. Patterson, reduced the risk of improper windfall recoveries.
When multiple defendants are potentially responsible for harm, and one or more of them settle before trial, it can sometimes be difficult for the remaining defendants to demonstrate to the jury that it should allocate some of the fault to the settling defendants who are no longer present for trial. This can sometimes result in an injustice, with the Plaintiff receiving settlement money before trial, and then receiving judgment for full damages against the remaining defendants at trial.
About the Case
In Rowe v. Bell & Gossett Company, the Supreme Court recognized this unfairness and took an important step to level the playing field. The Court ruled that a remaining defendant was permitted to introduce at trial certain evidence of the settling defendants’ fault obtained during discovery, even where the settling defendants did not appear at trial.
Normally, the use of discovery evidence might be considered inadmissible hearsay or require a showing that the declarant is unavailable to appear at trial. “Hearsay is not admissible except as provided by these rules or by other law.” N.J.R.E. 802.
However, the Court determined that the statements in the settling defendants’ interrogatory answers and corporate representative deposition transcripts were against those settling defendants’ interests, and so were admissible under the “statement against interest” exception to the hearsay exclusion. N.J.R.E. 803(c)(25) (“Statements not dependent on declarant’s availability. –Whether or not the declarant is available as a witness: *** Statement against interest. — A statement which was at the time of its making so far contrary to the declarant’s pecuniary, proprietary, or social interest, or so far tended to subject declarant to civil or criminal liability, or to render invalid declarant’s claim against another, that a reasonable person in declarant’s position would not have made the statement unless the person believed it to be true. Such a statement is admissible against an accused in a criminal action only if the accused was the declarant”).
The Court made it clear that “N.J.R.E. 803(c)(25) does not require a showing that the declarant is unavailable in order for that declarant’s statement against interest to be admissible.” Moreover, the Court noted that use of statements against interest “is not contingent on a showing of extrinsic circumstances bearing on the general reliability or trustworthiness of the declarant’s statement.”
This clarification by the New Jersey Supreme Court will help level the playing field at trial and prevent potential windfalls. It will also help defendants with small percentages of fault to receive a fair allocation at trial.