NJ Appellate Court Rules that a Settling Defendant Cannot Pursue Contribution from Third-Party Defendant Without a Judgment Entered Against Settling Defendant

Upon settlement between the estate of a plaintiff, who suffered injuries which resulted in amputation, and a defendant physician, the trial court denied a third-party defendant’s motion to dismiss the joinder complaint against them seeking indemnification and contribution. The third-party defendant reasoned the settlement had not been reduced to a judgment and, therefore, no cause of action existed for the defendant/third-party plaintiff. The trial court found that the third-party defendant had notice of the settlement between the plaintiff and defendant and denied the motion to dismiss. The appellate court reversed.

The Superior Court found that without a judgment in favor of the plaintiff, the Joint Tortfeasors Contribution Law expressly precluded the settling defendant from seeking contribution for payments she voluntarily made in the settlement. The court reversed and remanded for entry of an order to dismiss the third-party complaint. The court cited the Supreme Court’s ruling in Young v. Latta, 123 N.J. 584 (1991) which allowed a settling defendant to seek contribution against a non-settling third-party defendant only if the settlement was reduced to a consent judgment.