On 16 April 1973 at approximately 3:30 in the afternoon, natural gas which had escaped from a leak and accumulated in the basement of a building (premises liability) and exploded. The explosion and resulting fire killed someone, seriously injured three people, destroyed a building and caused extensive damage to other buildings of the apartment complex and to personal property of several of the tenants.
Four out of a total of 21 lawsuits commenced, are the subject of this appeal: wrongful death action; two personal injury actions; and the property damage.
In the property damage action, a New York Injury Lawyer said the complaint alleged, inter alia, claims based on negligence and strict products liability against the concerns responsible for the manufacture, assembly and installation of the “gas train”, i. e., the various pipes, connections and devices located in the gas equipment room of the building through which the high pressure gas coming from the outside must pass for delivery at a properly reduced low pressure to be used by the tenants in the several garden apartment structures. Of the five defendants in the property damage action, four were manufacturers of components of the gas train – manufacturer of the filters for the removal of dirt and dust from the incoming gas; the manufacturer of the regulator which reduced the high pressure gas to the proper low pressure for use by the tenants; manufacturer of the valve to relieve the excess pressure and the meter to measure the amount of gas used; and, the fabricator and supplier of the gaskets used in the filters. The fifth defendant, purchased the various components and assembled and installed the gas train.
The wrongful death and personal injury complaints named the same five defendants and in addition the owners of the apartment complex. By court order on 19 June 1975 the cases were joined for trial. After the completion of lengthy discovery procedures and numerous pretrial conferences, the court, with agreement of all counsel, directed that the liability phase of the bifurcated trial should commence on March 4, 1978.
The case was settled for the aggregate sum of $791,533.00 by stipulations on March 4 and March 6.
Although they were in accord as to the reasonableness of the amounts of the settlements, an NY Personal Injury Lawyer said the defendants could not agree among themselves as to their proportionate shares of responsibility for payment. Recognizing the possibility that a trial could result in a plaintiffs’ verdict that was substantially higher than the settlements, they decided to obviate that risk by collectively making a binding settlement with the plaintiffs with the added proviso that the question of the apportionment of responsibility be held in abeyance for determination by the jury in the property damage action which might come to trial. Two of the defendants, had agreed to fund the settlement in advance of the apportionment determination by putting up the “front” money.
At this point, all parties and the court considered the wrongful death action and personal injury actions to be finally settled with the plaintiffs and terminated as independent, subsisting lawsuits; and the contemplated trial of the property damage action, which the parties had agreed would serve as the vehicle for effectuating their stipulation as to the proportionate responsibility for payment, was to be a normal adversarial trial in which the property damage plaintiffs would seek and might possibly obtain recovery against any one or all of the defendants and in which the plaintiffs expected no cooperation from their adversaries.
On 8 March 1978 the course of the proceedings changed radically where the attorney for the property damage plaintiffs unexpectedly announced that his clients had settled with all the defendants except one for the sum of $450,000.00. The settlement which was pursuant to the General Obligations Law, included a reservation of rights by plaintiffs against the nonsettling defendant. The four settling defendants and plaintiffs then agreed: “that this trial continues with all defendants named, including the ones we’ve arrived at this agreement with, so that eventually a jury may arrive at an apportionment of liability such as it might be.” They further agreed: “that the attorneys for those parties will continue to participate in the trial of that action which remains for the purpose of having apportionment decided and that all of the other bodily injury cases and the wrongful death action have been previously settled with plaintiffs also continue as companion actions.”
The nonsettling defendant has asked the court – to limit the participation in the property damage action to the remaining nonsettling defendant and to prohibit the attorneys for the settling defendants from taking part in the trial; and to be relieved from the stipulation made in its agreement to settle the wrongful death and personal injury cases that its share of the settlement be determined by the apportionment made by the jury in the trial of the property damage action.
After resolving other procedural questions and over the objection of the nonsettling defendant, the property damage case proceeded to trial. A Nassau County Personal Injury Lawyer said the court had ruled that the jury verdict would determine the remaining liability questions in the property damage action and that the same trial would also serve as the instrument for apportioning the obligations of the six parties to the settlements.
The trial resulted in the assessment of liability against one defendant (the nonsettling defendant). The jury, returning a verdict in the form of answers to special questions, stated in substance that the sole cause of the accident was the nonsettling defendant’s filter, its negligence and its marketing of a defective filter (a defective product to which a product liability arises) were the proximate causes of the accident and that the property damage plaintiffs and the property damage defendants were all free from negligence or from responsibility under any other theory.
The damage phase of the trial was not contested. The jury brought in a verdict of and the court, it will be recalled, had directed that the property damage verdict would also serve as the basis of the apportionment determination for the payment of the wrongful death and personal injury settlements. For this reason the court granted separate judgments over against the nonsettling defendant in these actions as “cross claims” for the amounts advanced plus interest; and, additional allowance plus in costs and disbursements.
The jurors must inevitably have assumed that the plaintiffs and all the “defendants” were adversaries. They would necessarily have expected plaintiffs to put in their strongest case against all the defendants and have concluded, when plaintiffs put in a case only against the nonsettling defendant, that there was no evidence to be offered against the others. But the nonsettling defendant could not explain the reason. It could not reveal that plaintiffs had settled with four defendants under General Obligations Law and that as a result, plaintiffs and the settling defendants were not only not adversaries (as they appeared) but were actually allies in pursuing the same end: a verdict against the nonsettling defendant. The case (by the ground rules established) had to be presented as something it was not a case where plaintiffs had extant claims against all five defendants. The very format for the trial as framed by the court pitted the nonsettling defendant alone against the combined forces of the plaintiffs and the nonsettling defendant’s four co-defendants. At the same time, it prevented the nonsettling defendant from making its strongest argument: that the plaintiffs and the four settling defendants were not in fact adversaries, as they seemed to be, but were united in their interests. Thus, the jury could not scrutinize the evidence in the light of the true self-interests and interrelationships of the parties.
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