Defendant Barred from Suing Public Entity Due to Failure to File Timely Tort Claims Act Notice

On July 27, 2017, the New Jersey Supreme Court decided important issues concerning the ability of a defendant to sue a public entity in a third party claim.  In the case of Twanda Jones v. Morey’s Pier, 2017 N.J. LEXIS 812 (July 27, 2017), the Supreme Court decided that a defendant is barred from asserting contribution and common law indemnification claims against a public entity under the Tort Claims Act if a timely notice of tort claim was not filed.  The Supreme Court also decided how fault may be allocated against a public entity regardless and the effect of any such allocation of fault on plaintiff’s recovery of damages.

This decision is a very important one for both public and private entities. For public entities, it will give them a basis to obtain a dismissal of a third party claim if no timely Tort Claims Act (“TCA”) notice was filed. For private entities, who may have a valid contribution claim against a public entity, they must consider filing a TCA notice against such public entity – even before a lawsuit is filed – or be faced with having that claim dismissed once suit is filed.

The Jones case dealt with the tragic death of 11 year old Abiah Jones after she fell from a ride in an amusement park during a trip organized by her charter school, Pleasant Tech Academy Education Association (“Association”), which is treated as a public entity for the purposes of the Tort Claims Act. Her parents filed a wrongful death action against Morey’s Pier and other Morey defendants, alleging that their daughter’s death resulted from the negligent operation of the park.  However, the plaintiffs did not serve a TCA Notice of Claim on the Association within ninety (90) days of her death (as required by the TCA).

The plaintiffs filed this wrongful death and survival action in New Jersey almost two years following her death.  The Morey defendants thereafter filed a Third Party Complaint against the Association and sought contribution and common law indemnification alleging that its negligence was a proximate cause of the  minor’s death.  The Association moved for summary judgment, invoking the TCA’s 90 day notice of claim provision.

The trial court denied the Association’s motion, finding that the TCA does not require the service of a notice of a claim as a prerequisite to a contribution or common law indemnification claim against a public entity joint tortfeasor.  The Association filed a Motion for Leave to Appeal to the Appellate Division, which was denied.  However, the Supreme Court subsequently granted the Association’s Motion for Leave to Appeal.

The plaintiffs did not name the Association as a defendant.  Neither plaintiffs, nor the Morey defendants served Notice of a Tort Claim on the Association within the ninety (90) day time period prescribed by the notice of claim provision of the Tort Claims Act.  The Morey defendants, regardless, filed a Third Party Complaint against the Association.  They claimed that the Association negligently organized, supervised, and chaperoned the field trip to the amusement park and that its negligence proximately caused the minor’s death.

In denying the Association’s Summary Judgment Motion, the trial court interpreted the notice provision to limit only a plaintiff’s right to assert a claim against a public entity.  It concluded that the pertinent provision does not require the service of a notice of a claim as a prerequisite to a defendant’s contribution or common law indemnification claims against the joint tortfeasor that is a public entity.

In previously published decisions of both the Appellate Division and the Law Division, the courts had interpreted the notice provision as inapplicable to defendants who file third party actions for contribution or common law indemnification against the public entity, despite defendant’s failure to comply with the notice requirement. The rationale was that the contribution claim was a right which does not ripen into a cause of action until the defendant has paid more than his pro rata portion of the judgment obtained against him by the plaintiff.  However, there were contrary prior Law Division published decisions, which barred claims for contribution and indemnification, if the claimant (or the defendant) failed to serve a tort claims act notice within the ninety (90) day period as set forth in the statute.

The Supreme Court decided in favor of the prior Law Division decisions, concurring in their logic that the Legislature did not distinguish between a plaintiff’s claim and a defendant’s cross-claim or third party claim against a public entity.  It did not exempt from the tort claims notice requirement a defendant’s claim for contribution and indemnification.  In short, the Court found that the statute’s meaning was clear in that it governs contribution and indemnification claims brought by defendants, as well as direct claims asserted by plaintiffs.  To hold otherwise, the Court felt that it would be undermining the Legislature’s intent “to permit public entities to properly investigate claims, correct the conditions or practices that give rise to the claim, prepare a defense, and assess the need for reserves.”

Thus, the Supreme Court held that when a defendant (or claimant) does not serve a timely notice of tort claim on a public entity, as required under N.J.S.A. 59:8-8, and is not granted leave to file a late notice of claim under N.J.S.A. 59:8-9, the TCA bars that defendant’s cross-claim or third party claim for contribution and common law indemnification against a public entity.

Next, the Supreme Court had to decide what would be the consequences as to the defendant if it could not pursue the public entity in a third party claim for contribution and indemnification.  It noted that the defendant may not even be aware of a potential contribution claim within the ninety (90) day time period.

Ordinarily, a defendant compelled to pay more than the percentage of damages corresponding to the jury’s allocation of fault would have a remedy under the Comparative Negligence Act for a claim for contribution against other joint tortfeasors.  The Supreme Court cited two cases which have held in several settings that even if the claims against the defendant are dismissed by virtue of the operation of a statute, apportionment of fault to that defendant is required by law.  Permitting the allocation of a percentage of fault to a joint tortfeasor that is not a defendant at trial “may afford to a remaining defendant the practical benefit of the contribution claim to which it is entitled under the Comparative Negligence Act and the joint tortfeasor’s contribution law.”   Thus, the Supreme Court ruled that the Morey defendants may nevertheless seek an allocation at fault as an equitable result under the circumstances.

Next, the court considered the Morey defendants’ argument that “if plaintiffs prevail at trial and the trial court molds the judgment. . ., the court should limit the Morey defendants’ liability for damages to any percentage of fault that the jury apportions to them, whether or not that percentage meets the sixty percent (60%) threshold.” Here, if a jury were to allocate sixty percent (60%) or more of the fault, but less than one hundred percent (100%) to the Morey defendants, and the Morey defendants were required to pay one hundred percent (100%) of the damages, they would be denied the benefit of their contribution claim.  Thus, the Court ruled that if the Morey defendants present evidence that the Association was negligent and that its negligence was a proximate cause of the minor’s death, the jury should be instructed to determine whether the Morey defendants have met their burden of proof on these issues.  If so, the jury would allocate negligence between the Morey defendants and the Association.  If the jury allocates a percentage of fault to the Association, the Court held that the trial court should mold the judgment to reduce the Morey defendants’ liability to plaintiffs in accordance with the percentage of fault allocated to the Association.

The Supreme Court reminded all litigants that if they intended to pursue a claim against a public entity or employee subject to the Tort Claims Act, they must act expeditiously to preserve that claim by serving notice within ninety (90) days of the accrual of the claim or filing an application within one year of that date for leave to serve a late notice of claim on a showing of “extraordinary circumstances.”  A plaintiff that is aware of a potential cause of action against a public entity and litigates the case in a manner that deprives the defendant of an opportunity to serve a Tort Claims Act Notice on that entity, risks a reduction in any damage award by virtue of an allocation of fault under the Comparative Negligence and Joint Tortfeasors Contribution Law.  However, a defendant that is aware of its potential cross-claim against a public entity that may be a joint tortfeasor, but fails to serve a Tort Claims Act notice on that entity, may lose the benefit of an allocation of fault to the public entity in accordance with those statutes.

Up until now, the trial courts were generally following the case law that would not bar such a third party claim. With this Supreme Court decision, public entity defendants will be able to obtain a dismissal as to any such claims if a timely notice of tort claim was not filed – by either the plaintiff or the defendant.

Thus, to protect its contribution rights, once a potential defendant (or insurance company or TPA or whomever is charged with investigating a claim) learns of a tort claim against it, it should promptly consider whether there is potentially a third party who could be culpable for that accident or incident. If that third party is a public entity, it should file a TCA notice against them and/or inquire whether the claimant has filed a TCA notice against that public entity to preserve its contribution claim. If no TCA claim was filed within the required 90 day time period, then the potential defendant should consider whether it should seek leave of court to file a late notice of Tort Claim – which can be filed up to one year of the accrual of the action (typically the date of the incident).

Certainly, in many cases, the defendant does not even learn of the potential claim until after a year after the accident (at which point it would be too late to even seek leave to file a TCA claim). In those situations, if the plaintiff has not filed a TCA notice against the potentially culpable pubic entity, this case does protect the defendant by permitting an allocation of liability as to that public entity regardless of the defendant’s inability to file a third party cross-claim for contribution or indemnification against that public entity.

Tags: Tort Claims Act, Tort Claims Act Notice