New Jersey: Court Crafts Instructions to Allow Employer’s Participation in Tort Action Where Contractual Indemnification Is an Issue

Where the general contractor on a construction project had been sued in tort by the estate of a subcontractor’s employee and, in turn, the general contractor claimed it was entitled to contractual indemnification from the deceased employee’s employer, it was not error for the trial court to allow the employer to participate in the trial since such participation was appropriate to resolve the employer’s fact-dependent contractual duty to indemnify, held a New Jersey appellate court. The judge’s decision did not violate the exclusive remedy provision of the state’s workers’ compensation law. The trial court did, however, commit error when it did not permit the jury to ascertain the employer’s percentage of fault. Quoting Larson’s Workers’ Compensation Law extensively, the court said all care should be taken so that the employee’s own rights were not prejudiced by the interjection of the indemnity factor into the case. Nevertheless, as pointed out in Larson, the problem cannot always be “easily sidestepped.” The court said the preferred solution was by no means obvious. The better practice, said the court, was to try the negligence and contractual indemnification issues simultaneously before the jury. After the evidence had been presented at trial, the court should issue carefully crafted jury instructions, addressing the pivotal factual issues that the jury must decide. The verdict form should likewise be carefully designed so as to have the jurors address only the question of the employer’s potential fault when it was absolutely necessary to do so. The court added that the jury should be given appropriate instructions about the presence of the employer’s counsel in the trial, explaining that he or she is participating solely with respect to certain factual issues that the jury might need to address. The jury should not be given an “ultimate outcome” instruction divulging that the plaintiff cannot recover any damages from the employer, for such an instruction would likely engender confusion and speculation. Finally, the judge must mold the verdict after it is issued, so that the plaintiff’s damages are not reduced by the employer’s percentage share of fault, if any.

Thomas A. Robinson, J.D., the Feature National Columnist for the LexisNexis Workers’ Compensation eNewsletter, is the co-author of Larson’s Workers’ Compensation Law (LexisNexis).

LexisNexis Online Subscribers: Citations below link to Lexis Advance. Bracketed citations link to lexis.com.

See D’Avila v. American Home Assurance Co., 2015 N.J. Super. LEXIS 127 (Aug. 10, 2015) [2015 N.J. Super. LEXIS 127 (Aug. 10, 2015)]

See generally Larson’s Workers’ Compensation Law, § 121.04 [121.04]

Source: Larson’s Workers’ Compensation Law, the nation’s leading authority on workers’ compensation law.

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