P and B settle, B paying P $ 5,000. P sues A and recovers a verdict of $ 12,000. The problem then arises as to how to adjust the equities between A and B so that neither will have to pay more than his pro rata share of P's damages.
The solution adopted by the Uniform Contribution Among Joint Tort-feasors Act is to reduce the amount of the verdict against the one tort-feasor by the amount plaintiff received from the other tort-feasor in settlement, and then let the judgment tort-feasor who pays more than his pro rata share have his action against the settler for contribution.
Following this solution, our hypothetical case would be resolved as follows: P recovers a judgment against A for $ 7,000 (the $ 12,000 verdict, less the $ 5,000 P received from B in the settlement). A then sues B and recovers $ 1,000 by way of contribution. A and B end up paying $ 6,000 each, and plaintiff has received $ 5,000 plus $ 7,000, or $ 12,000.
The New Jersey legislature did not adopt the sections of the Uniform Act which provide for this solution. The solution adopted by the New Jersey courts is designed to give finality to a settlement by a tort-feasor with the plaintiff by protecting the settler from future suits for contribution. At the same time, the plaintiff is not tempted to enter into collusive settlements, as he might be under the first solution. All this is accomplished under New Jersey law by reducing the amount of the verdict against one tort-feasor by the settler's pro rata share of the damages. Our hypothetical case would be resolved in New Jersey as follows: P recovers a judgment against A for $ 6,000 ($ 12,000 verdict, less B's pro rata share of the damages, or $ 6,000). A may not sue B for contribution because A has not paid any more than has pro rata share of plaintiff's damages. B has been spared the expense of defending a lawsuit and the possibility of having to pay more money to discharge a liability which he ostensibly settled before the suit. The plaintiff may not be heard to complain, since he voluntarily accepted from B an amount which turned out to be less than B's pro rata share of the damages.
Applying the second solution as explained by Justice Brennan, Judge Foley in the Smootz case granted the third-party defendant's motion for summary judgment and directed the clerk to enter a judgment against the original defendant (if a judgment were recovered against him by the original plaintiff) in the amount of 50 per cent of the verdict.
In conclusion, we agree with the third-party defendant Hellie here that New Jersey law as set forth in the Smootz case requires us to grant his motion for summary judgment. We also observe, however, that the whole rationale of the Smootz case in entering summary judgment for the third-party defendant depends upon the concurrent protection afforded the defendant retained in the suit. That protection assures the defendant that he will have to pay no more than his pro rata share of the plaintiff's damages, even though his cotort-feasor is adjudged safe from any further liability by the granting of his motion. That protection is accomplished by ordering the clerk to enter a judgment against the defendant for one-half the amount of any verdict and judgment subsequently obtained against him by the original plaintiff.
We see no difficulty in adopting our Federal procedure so as to accomplish the result required by New Jersey law.
Therefore, this 20th day of November, 1959, it is ordered that third-party defendant Hellie's motion for summary judgment is granted, and that the clerk is directed to enter a judgment against the defendant Dougherty, if one is recovered against him by the plaintiffs, in the amount of 50 per cent of the verdict.