How The Abolishment Of Joint and Several Liability Can Impact Upon Litigation Strategy
Pennsylvania has joined the growing number of jurisdictions that have eliminated or modified joint and several liability. 42 Pa.C.S. § 7102 Under the old joint and several rules, any defendant found negligent could be compelled to pay the entire verdict. Now, only a defendant found to be at least 60% at fault pays the entire verdict. Its impact on litigation will be heavily determined by the Court’s interpretation of 42 Pa.C.S. § 7102 (a.2) which provides:
For purposes of apportioning liability only, the question of liability of any defendant or other person who has entered into a release with the plaintiff with respect to the action and who is not a party shall be transmitted to the trier of fact upon appropriate requests and proofs by any party. A person whose liability may be determined pursuant to this section does not include an employer to the extent that the employer is granted immunity from liability or suit pursuant to the act of June 2, 1915 (P.L. 736, No. 338), known as the Workers’ Compensation Act. An attribution of responsibility to any person or entity as provided in this subsection shall not be admissible or relied upon in any other action or proceeding for any purpose.
The first question to be resolved is which clause the phrase “and who is not a party” modify. If the phase refers only to entities that have already entered into a release, then this portion of the statute is of limited value. However, if the phrase modifies both categories of individuals in the earlier part of the sentence, (“the question of liability of any defendant…who is not a party shall be transmitted to the trier of fact upon appropriate requests and proofs by any party”) it will have a significant impact on litigation.
Support for the proposition that liability can be assessed against unnamed defendants that have not entered into a settlement agreement can be found in the second half of the paragraph. First, the legislature specifically excluded employers from the classification of parties that can share in a liability determination. There would be no need to do this unless the legislature contemplated an assessment of liability against a party immune from tort liability. Second, the legislature barred any collateral effects of a liability finding on unnamed parties. If these parties had already entered into a release of liability, they would have no concerns with the final adjudicated apportionment. This clause protects only those defendants who could still be a party to a separate action for contribution. Both of these provisions support the potential for the jury to be permitted to apportion liability against an unnamed Defendant.
However, until such time as the Courts adopt such a reading, the prudent course of action for all Defendants will be to use the joinder rules to make sure that all Defendants are part of the case. This tactic should also be employed unless counsel is certain that the liability of his client will be less than 60% of the total negligence of all parties.
There will be, though, situations when the additional parties cannot be joined. For example, a government entity may be entitled to immunity or a potential co-defendant may be in bankruptcy or outside the jurisdiction of the Court. There may also be business or strategic reasons not to join a party. For example, the Plaintiff files suit against a property owner as a result of a fall on ice. Other potential defendants include the property manager and snow removal contractor. Contractual agreements could make all three parties insured under the same policy. In this scenario, having the additional parties as “unnamed defendants on the verdict sheet” could significantly reduce the amount of the Plaintiff’s verdict.
If confronted with the need to assert a claim against an unnamed defendant, counsel must determine the meaning of the phrase “upon appropriate requests. ” The Rules of Civil Procedure do not address the potential of asserting a claim to reduce the award due to the actions of an unnamed defendant. The most appropriate time to raise such a defense would be to assert the liability of the unnamed defendant in the New Matter. The failure to identify an unnamed tortfeasor could be deemed a waiver of the right to claim an offset. Should the identity of the new defendant not be revealed until discovery, a Motion to Amend New Matter should be immediately filed.
When deciding the best course of action, the Statute of Limitations must be taken into consideration. If Plaintiff’s counsel waited until the eve of the expiration of the statute of limitations to file suit, then the defendant had no choice but to join additional parties after the expiration of the statute of limitations. Since the Plaintiff has no direct claim against these parties, their obligation to contribute requires a finding of at least 60% liability on the original defendant. Thus, capping their potential exposure at 40% of the value of Plaintiff’s claims. For this reason, Plaintiff’s counsel are being advised to file suit at least three months prior to the expiration of the Statute of Limitations.
If the Defendant has the opportunity to identify a new defendant but allows the statute of limitations to expire prior to identifying other potential tortfeasors, the Courts may find that the Defendant has waived the right to claim a set off. This could be a simple matter of requesting an extension prior to filing the answer to the complaint. In situations where the Plaintiff has filed suit several months prior to the expiration of the statute of limitations, defense counsel must quickly begin an investigation to identify other potential parties. Since the ramifications to a Plaintiff for an untimely discovered defendant are much higher than existed for a defendant who was joined late under the old rules, one would anticipate the Courts to make it very difficult for a party to identify a potential defendant beyond the time required to file their Answer.