Apportioning Fault to Settling Defendants Under Nilsson v. Bierman: Constitutional Considerations
I. Introduction:
In Nilsson v. Biermani, the New Hampshire Supreme Court ruled that the jury can apportion fault to a tortfeasor who had settled with the plaintiff and was not present at trial. The Nilsson decision represented a sharp departure from the traditional practice in this state and it raises significant constitutional issues that will be addressed below.
II. The Nilsson Case:
Leif Nilsson was a passenger in a car driven by Eric Robert Knight. Knight failed to stop at a stop sign and collided with a car driven by Joseph Bierman. Nilsson was injured and he sued both Knight and Bierman. Shortly before trial, Nilsson settled his claims against Knight for $25,000 and proceeded to trial against Bierman.
Despite the fact that Knight was no longer involved in the case, the jury was given special verdict questions which allowed it to apportion fault to both Bierman and Knight. The jury found Knight to have been 99% at fault and Bierman to have been 1% at fault and it awarded damages of $170,000. The plaintiff asked the trial court to amend the verdict to hold Bierman liable for the entire award less the $25,000 settlement proceeds and the court denied his motion.
On appeal, the Supreme Court affirmed. The court examined R.S.A. 507:7-e which states that damages are to be awarded “to each claimant and against each defendant in accordance with the proportionate fault of each of the parties . . .” and rejected the plaintiff’s contention that a settling defendant was not a “party”to whom fault could be apportioned. Instead, the court concluded that the word “party” includes settling defendants.ii
The court went on to state that its ruling was supported by decisions in other jurisdictions. Specifically, the court noted that “[m]ost jurisdictions permit juries to allocate fault among settling and nonsettling tortfeasors.”iii In addition, the court observed that “[m]any jurisdictions even permit a jury to consider nonparties when apportioning fault.”iv However, the court declined to reach the issue “whether a tortfeasor, such as one who is immune from liability or otherwise not before the court, constitutes a ‘party’ under section 7-e.”v
The court also declined to address the plaintiff’s arguments that apportioning fault to a settling party violated his constitutional rights.vi According to the court, the plaintiff should have made those arguments before the trial court instructed the jury and that they were not preserved for appeal despite the fact that they were made in the plaintiff’s post trial motion.vii
Next, the court rejected the plaintiff’s argument that the case was governed by R.S.A. 507:7-h and R.S.A. 507:7-i. Those sections provide that, when one defendant settles with the plaintiff before trial, the nonsettling defendants are entitled to a credit for the amount the settling defendant paid. Accordingly, the plaintiff argued that, once Knight settled, Bierman, as the sole remaining defendant, became liable for the entire verdict less the $25,000 paid by Knight. The court disagreed, holding that section 7-h and section 7-i “apply only to defendants who are both jointly and severally liable, not to defendants who are only severally liable.”viii
The practical effects of the Nilsson case are as follows:
The jury will be allowed to apportion fault to a named defendant who settles prior to trial;
If a nonsettling defendant is found to be 50% or more at fault, that defendant is jointly and severally liable for the entire damage award less a credit for the amount paid by the settling defendant; and
If a nonsettling defendant is found to be less than 50% at fault, that defendant is liable for its proportionate share of the total damage award without any credit for the amount paid by the settling defendant.
III. Criticism of the Nilsson Decision:
The central holding in Nilsson is that the word “parties” in R.S.A. 507:7-e includes defendants who have settled. This conclusion appears to conflict with the common understanding that a settling defendant who has received a release is no longer a party to the lawsuit. In fact, our Supreme Court, like many other courts, has recognized as much.ix
It is difficult to believe, therefore, that the Legislature intended the word “parties” to include settling defendants when settling defendants were not “parties” at common law. Arguably, the rules of statutory construction prohibit such an interpretation in the absence of a clear expression of intent by the Legislature.x On the other hand, if the Legislature had intended to include settling defendants, it could have said so explicitly as other states have done.xi
The Nilsson court’s extremely broad interpretation of the word “parties” seems to run afoul of several other rules of statutory construction. Although it may have seemed unfair at first blush to require Bierman to pay $145,000 in damages after his car was struck by a driver who ran a red light, the court should have put aside the question of fairness because “[t]he courts have no function of redrafting legislation in order to make it conformable to an intention not fairly expressed in it.”xii Instead, as the court has made clear, when construing a statute
the question before us is not what the legislature ought to have done when it enacted this statute but what it did, as expressed in the words of the statute itself. Nor is it for this Court to add terms to the statute that the legislature did not see fit to include. It is not our function to speculate upon any supposed intention not appropriately expressed in the Act itself. Relief from its inappropriateness must be sought through further legislative action.xiii
Since a defendant who has settled with the plaintiff and received a release is no longer a “party” to the lawsuit, R.S.A. 507:7-e should not have been construed as allowing the jury to apportion fault to the settling defendant. If that came as a surprise to the Legislature, it would have an opportunity to amend the statute to more accurately conform to its intent. In the absence of “further legislative action,” however, the words set forth in section 7-e should have been given their plain meaning and the jury in the Nilsson case should not have been allowed to apportion fault to Eric Robert Knight.
IV. Apportioning Fault to a Settling Defendant is Unconstitutional:
In Nilsson, the court did not consider the plaintiff’s constitutional arguments because they were not preserved below. If the court had reached the constitutional issues, however, it appears that its interpretation of R.S.A. 507:7-e would not pass muster.
It is well-settled in New Hampshire that the right to recover for one’s injuries is an important substantive right recognized by the state constitution.xiv Accordingly, a statute that interferes with the right to recover must be reasonable, not arbitrary, and it must differentiate in a manner having a fair and substantial relation to the object of the legislation.xv Unlike other states, in New Hampshire “restrictions on the right to recover are subject to a more rigorous level of scrutiny than that employed under the rational basis test.”xvi
In Montana, the state supreme court twice struck down statutes allowing the apportionment of fault to nonparties finding that they did not satisfy the rational basis test. In Newville v. Statexvii, a foster child sued several defendants for injuries she suffered at the hands of his foster father. Specifically, the plaintiff sued the foster father, his wife, their counselor, and the state department of family services.xviii Prior to trial, the plaintiff settled with the foster father and the counselor. The case went to trial against the department of family services and the foster father’s wife.xix
In accordance with a state statute, the trial judge allowed the jury to apportion fault to the two remaining defendants and the counselor who had settled. The foster father was not included because the statute did not allow apportionment of liability for intentional misconduct.xx The jury returned a verdict apportioning 35% of the fault to the foster father’s wife, 35% to the counselor who had settled prior to trial, and 30% to the department of family services.xxi
The plaintiff appealed, challenging the constitutionality of the statute allowing fault to be apportioned to a settling defendant. Specifically, the plaintiff argued that the statute “arbitrarily prejudices plaintiffs by requiring them to exonerate nonparties.”xxii Furthermore, she claimed that
there is no reasonable basis to require any plaintiff to prepare a defense at the last minute for nonparties whom defendants seek to blame for the injury, but who have not been joined as defendants; and that there is no reasonable basis for requiring plaintiffs to examine jury instructions, marshal evidence, make objections, argue the case, and examine witnesses from the standpoint of unrepresented parties, particularly when they do not know until the latter part of the trial that defendants will seek to place blame on unrepresented persons.xxiii
Applying the rational basis test, the Montana Supreme Court concluded that the statute violated substantive due process. In particular, the court held that the statute “unreasonably mandates an allocation of percentages of negligence to nonparties without any kind of procedural safeguard.”xxiv The court felt that this may cause plaintiffs to be deprived of a fair adjudication of the merits of their claims.xxv In addition, the court explained that the statute “imposes a burden upon plaintiffs to anticipate defendants’ attempts to apportion blame up to the time of submission of the verdict form to the jury.”xxvi Not only was the statute unfair to plaintiffs, according to the court, it “can also unreasonably affect defendants and nonparties.”xxvii
The court went on to observe that, “[a]lthough [the counselor] settled prior to trial and was no longer a party, she nonetheless was included on the verdict form as a settling party . . . No attorney represented [her] interests at trial and as a result, it is possible that the application of percentage of negligence was higher than would have been appropriate had the facts as to her case been presented by her own counsel.”xxviii
The Montana court took note of the fact that other jurisdictions permitted the apportionment of liability to settling parties. “However, these jurisdictions have procedural aspects which provide for notice to plaintiffs, specific burdens of proof, and other procedures for safeguarding the rights of all involved—parties and nonparties alike.”xxix The court scolded the legislature for failing to consider such safeguards when it enacted the statutexxx and concluded that “the Montana Legislature has acted arbitrarily and unreasonably . . .”xxxi Accordingly, the court held that “the allocation of percentages of liability to nonparties violates substantive due process as to the plaintiffs.”xxxii
In response to the court’s ruling in Newville, the Montana legislature amended the apportionment statute to include several procedural safeguards. The state supreme court examined those amendments in Plumb v. Fourth Judicial District Courtxxxiii and concluded that the statute was still unconstitutional.
In Plumb, the plaintiff was injured when she slipped and fell at a mall. She sued the mall’s owner claiming that it negligently maintained its premises. The mall responded by asserting that the plaintiff’s injuries were caused or exacerbated by the negligent medical treatment she received from her physician after the fall.xxxiv The trial court allowed the mall to assert this affirmative defense based on newly enacted amendments to the statute the Montana Supreme Court had struck down as unconstitutional in Newville. In Plumb, the state supreme court exercised its supervisory power to consider the constitutional issues prior to trial.
The amendments at issue in Plumb included: (1) the requirement that the burden of proving a nonparty’s liability is on the defendant; (2) a requirement that the nonparty defense be affirmatively pled; and (3) a requirement that a nonparty be notified that he or she is being blamed for the plaintiff’s injuries.xxxv According to the court, however, “conspicuous by its absence from the 1995 amendments was any opportunity for an unnamed third person to appear and defend himself or herself.”xxxvi The court explained that, by virtue of that omission, the legislature had “ignored the central point of the Newville decision where we stated: No attorney represented Goodwin’s interests at trial and as a result, it is possible that the application of percentage of negligence was higher than would have been appropriate had the facts as to her case been presented by her own counsel.”xxxvii Accordingly, the court held that
while the State has a legitimate interest in enacting a scheme of liability which apportions liability for damages based upon the degree of a party’s fault for another person’s injuries, the nonparty defense provided for by the 1995 amendments . . . is not rationally related to that legitimate governmental objective, but is more likely to accomplish the opposite result.xxxviii
The court cited three reasons for its conclusion that the amended statute still did not satisfy the rational basis test:
1. The 1995 amendments . . . permit the Mall to assign liability for the Plumbs’ damages to Dr. Timothy Adams without affording Dr. Adams an opportunity to defend himself. As a result, Dr. Adams’ professional reputation and economic interests are jeopardized without an opportunity to personally appear on his own behalf, cross-examine those witnesses who might criticize the care he provided, or offer evidence in support of his course of treatment. The percentage of liability assigned to Dr. Adams following this kind of process would not be a reliable or accurate apportionment of liability and cannot, therefore, be rationally related to the objectives for which . . . the 1995 amendments were enacted.
2
. The Plumbs’ right to recover that amount of damages from the defendant for which the defendant is proportionally responsible, and all of their damages in the event that the defendant is fifty-one percent or more responsible, is jeopardized by the potential this procedure affords for disproportionate assignment of liability to an unnamed, unrepresented, and nonparticipating third person. The Plumbs are entitled . . . to recover all of their damages from the Mall in the event the Mall is found to be fifty-one percent or more at fault, and the proportionate amount of damages for which the Mall is at fault in the event the jury finds it to be less than fifty-one percent responsible. The greater the degree of fault that is assigned to unnamed nonparties, the greater the reduction in the Plumbs’ recovery. Yet, without the opportunity to appear and defend themselves, nonparties are likely to be assigned a disproportionate share of liability, and the Plumbs’ recovery is likely to be reduced beyond the degree to which a third party would be found at fault if he, she, or it actually had an opportunity to defend
themselves.
3
. As noted in Newville, “there is no reasonable basis for requiring plaintiffs to examine jury instructions, marshal evidence, make objections, argue the case, and examine witnesses from the standpoint of the unrepresented parties,” and requiring the plaintiff’s attorney to serve in such a dual capacity is actually antithetical to his or her primary obligation, which is to represent the plaintiff by proving the plaintiff’s case.xxxix
The Montana experience is highly instructive here. In fact, the law in New Hampshire following the Nilsson decision is virtually identical to the law found unconstitutional by the Newville court since there are currently no procedural safeguards in place to protect plaintiffs. The Plumb case recognizes, however, that, regardless of the safeguards, there is a fundamental problem with apportioning fault to a nonparty or a settling defendant: A tortfeasor who is not present at trial will never be properly defended and, as a result, it is highly likely that the jury will apportion a disproportionate share of the fault to him.
It is important to keep in mind that the Montana court struck down the nonparty apportionment statutes based on the rational basis test. When these issues are properly presented in New Hampshire, the court will be applying middle-tier scrutiny, “a more rigorous level of scrutiny than that employed under the rational basis test.”xl Accordingly, it seems clear that R.S.A. 507:7-e, as construed in Nilsson, will not meet the heightened requirements imposed by the New Hampshire constitution and will be invalidated as well.
V. Conclusion:
“A just verdict is a result of a fair trial, the right to which is a substantive right grounded in our constitution . . .”xli However, a just verdict “will more likely be reached if both sides of the issue are fully presented and . . . this is more likely to occur if the sides are presented by partisan advocates.”xlii It is plainly unfair, therefore, to allow a jury to apportion fault to a tortfeasor who is not able to defend himself at trial. It follows that the procedure adopted by the court in Nilsson v. Bierman should not withstand a proper constitutional challenge.
END NOTES
No. 2003-028, decided December 29, 2003.
See id., slip op at 3 (quotations omitted).
Id.
Id.
Id.
See id., slip op. at 4.
See id.
Id., slip op. at 5.
See Bedford School District v. Caron Construction Company, Inc., 116 N.H. 800, 803 (1976).
See State v. Hermsdorf, 135 N.H. 360, 363 (1992) (“In enacting legislation, the legislature is presumed to be aware of the common law: we will not construe a statute as abrogating the common law unless the statute clearly expresses such an intention.”).
See e.g. Iowa Code Annotated §668.2; Michigan Compiled Laws Annotated §600.6304(1)(b).
Trustees of the Phillips-Exeter Academy v. Exeter, 92 N.H. 473, 478 (1943).
Prive v. M.W. Goodell Construction Company, 119 N.H. 914, 917 (1979) (citations omitted).
See Carson v. Maurer, 120 N.H. 925, 931-32 (1980).
See id., 140 N.H. at 212.
Lorette v. Peter-Sam Investment Properties, 140 N.H. 208, 211-12 (1995).
883 P.2d 793 (Mont. 1994).
See id., 883 P.2d at 798.
See id.
See id.
See id.
See id., 883 P.2d at 802.
Id.
Id.
See id.
Id.
Id.
Id., 883 P.2d at 803.
Id.
See id.
Id.
Id.
927 P.2d 1011 (1996).
See id., 927 P.2d at 1013.
Id., 927 P.2d at 1019.
Id.
Id. (quoting Newville, 883 P.2d at 803).
Id.
Id., 927 P.2d at 1020.
Lorette, 140 N.H. at 211-12.
Opinion of the Justices, 141 N.H. 562, 574 (1997).
Scontsas v. Citizens Insurance Company of New Jersey, 109 N.H. 386, 388 (1969).
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