Crispin v. Volkswagenwerk, A.G. , 96 N.J. 336 ( 1984 )

HANDLER, J.,

concurring.

The Court in its opinion recognizes that this case should be controlled by the principles of the entire controversy doctrine. I concur in this conclusion. I write separately, however, to emphasize the reasons that underlie this result and warrant, in appropriate circumstances such as those presented in this case, the extension of the entire controversy doctrine to compel joinder of parties as well as claims.

The entire controversy doctrine is a principle of judicial administration relating to the procedural disposition of a controversy that has. reached the courts and must be resolved by judicial action. The entire controversy doctrine, properly understood, encompasses all judicially cognizable facets of a dispute. The doctrine therefore reasonably requires the joinder, in a single action leading to a comprehensive disposition, of all claims and persons implicated in the entire controversy when failure to effect such joinder will result in duplicate litigation of common issues that could have been resolved in the earlier action.

The concept of the entire controversy doctrine was clearly articulated by Justice Brennan in Ajamian v. Schlanger, 14 N.J. 483, cert. denied, 348 U.S. 835, 75 S.Ct. 58, 99 L.Ed. 659 (1954). Justice Brennan expounded, as have others since, that the basic aim of the reforms introduced by the Judicial Article of the 1947 State Constitution and the implementing court rules was to provide

for the just and expeditious determination in a single action of the ultimate merits of an entire controversy between litigants. It is a fundamental objective of this procedural reform to avoid the delays and wasteful expense of the multiplicity of litigation which results from the splitting of a controversy. [Id. at 485.]

“[C]onsistent with the demands of a responsive civil justice system,” the doctrine as generally applied requires “that a party who has elected to hold back from the first proceeding a related component of the controversy be barred from thereafter raising it in a subsequent proceeding.” William Blanchard Co. v. Beach Concrete Co., Inc., 150 N.J.Super. 277, 292 (App.Div.), certif. denied, 75 N.J. 528 (1977). Its usual effect is to “require a party to join all its claims against its adversary when those claims [are] related to and part of the same controversy.” Aetna Ins. Co. v. Gilchrist Bros., Inc., 85 N.J. 550, 557 (1981).

New Jersey has long held a strong commitment to the doctrine and its goals of judicial economy and fairness to the parties. For example, in Tevis v. Tevis, 79 N.J. 422, 434 (1979), this Court held that a wife’s claim of assault committed by her husband should, under the entire controversy doctrine, have been presented in connection with the divorce action “as part of the overall dispute between the parties, in order to lay at rest all their legal differences in one proceeding and avoid the prolongation and fractionalization of litigation.” In Falcone v. Middlesex Cty. Medical Soc’y, 47 N.J. 92, 94 (1966), upon dismissing a second suit between the same parties for damages, this Court stated that “elemental considerations of fairness to the other party and the urgent need for eliminating the delay and wastage incident to the fragmentation of litigation dictate that all of the aspects of the plaintiff’s controversy with the defendant be included within his legal proceeding.” We noted that “the piecemeal litigation of fragments of a single controversy is too evident an evil to remain unchecked, within present-day philosophies as to the efficient functioning of litigation.” Id. (citing Silverstein v. Abco Vending Serv., 37 N.J.Super. 439 (App.Div.1955)). Most recently, this Court commented that “the doctrine expresses a judicial policy that when a matter is presented to a judicial forum, the litigants should not fractionalize their claims to the detriment of the system.” Thornton v. Potamkin Chevrolet, 94 N.J. 1, 8 (1983).¹

Since its inception, the doctrine has been understood as a rule designed to preserve essential fairness and to avoid duplicitous litigation. These aims were suggested in William Blanchard Co. v. Beach Concrete Co., supra, 150 N.J.Super. 277, a multi-party and multi-claim action commenced in 1970. There two of the litigants waited until 1975 to assert in a separate action some of their claims, citing in support of their delay “the necessity to present a united front against common opponents.” Id. at 291. The Appellate Division was unmoved, and affirmed the trial court’s finding that the entire controversy doctrine barred the subsequent assertion of the claims. Judge Pressler stated:

[A] component of the controversy may not be unfairly withheld * * * and a withholding is by definition unfair if its effect is to render the pending litigation merely one inning of the whole ball game. [Id. at 294 (citation omitted).]

See also 9W Contractors, Inc. v. Englewood Cliffs Borough, 176 N.J.Super. 603 (App.Div.1980); Zaromb v. Borucka, 166 N.J.Super. 22 (App.Div.1979).

The articulated purposes of the conventional doctrine were synthesized quite effectively when it was stated that it serves “to eliminate delay, prevent harassment of a party and unnecessary clogging of the judicial system, avoid wasting the time and effort of the parties, and promote fundamental fairness.” Barres v. Holt, Rinehart & Winston, Inc., 74 N.J. 461, 465 (1977) (Schreiber, J., dissenting). The doctrine has become such an integral and component part of this state’s approach to the resolution of disputes or controversies that it has been held generally applicable in the field of administrative law. See, e.g., City of Hackensack v. Winner, 82 N.J. 1 (1980); Hinfey v. Matawan Regional Bd. of Educ., 77 N.J. 514 (1978). It has been recognized that the underlying principles of the doctrine—“finality and repose; prevention of needless litigation; avoidance of duplication; reduction of unnecessary burdens of time and expenses; elimination of conflicts, confusion and uncertainty; and basic fairness” — have a central place in the adjudication of all legal controversies. City of Hackensack v. Winner, supra, 82 N.J. at 32-33.

The same basic considerations that prompted the development and recognition of the doctrine with respect to joinder of claims apply with equal cogency to joinder of persons.² The essence of the entire controversy doctrine is its objective — to conclude an entire controversy in a single action. The resolution of an entire controversy justly and expeditiously in a single judicial proceeding necessarily embraces not only related claims between the litigants but also all persons who have a recognizable interest in the controversy. The ultimate goals to be advanced by the entire controversy doctrine are judicial economy, administrative efficiency, fairness to litigants, and the just resolution of disputes. These goals are served by the joinder in one action of all persons — those against whom claims can be made as well as those with claims against others — provided all such claims arise out of the same transaction or series of transactions, or present some common question of law or fact.

Of course, the doctrine must be invoked flexibly and sensibly. As in federal practice, the trial court would be vested with the discretion to excuse joinder when there is good reason for doing so. See Fed.R. Civ.P. 42(b) (court may order separate trials “in furtherance of convenience or to avoid prejudice”). The resolution of joinder problems must center upon a balancing of the competing interests in providing a forum to plaintiffs for recovery of merited relief, affording defendants the opportune time to defend, avoiding the private and public burdens of multiple litigation, enhancing the justness of litigational results, and protecting parties and interested absentees from prejudice. See Lewis, “Mandatory Joinder of Parties in Civil Proceedings: The Case for Analytical Pragmatism,” 26 U.Fla.L.Rev. 381, 431 (1974). The trial court, when presented with the necessity of applying the doctrine or invoking its preclusive effect, must engage in a weighing of these salient values.

Compulsory joinder of parties, combined with judicial discretion to waive the requirement in sufficiently compelling circumstances, offers special benefits to the administration of justice — virtually the same benefits that are derived from the compulsory joinder of claims. First, the rule serves pragmatic concerns for judicial efficiency and economy. Efficiency of the civil justice process is an important consideration, insofar as all litigants are beneficiaries of rules and procedures that reduce the demands upon the system. Successive repetitive litigation poses several evils, as it either “requires the expenditure of additional resources on adjudication, or, if expenditure remains constant, it diverts those resources from resolution of other controversies of significance. That diversion may appear as delay; or it may be a reduction of the time given to examination of any or all controversies presented, with resulting loss of quality.” McCoid, “A Single Package for Multiparty Disputes,” 28 Stan.L.Rev. 707 (1976).

“Another product of multiplicity is inconsistency. The spectre of public dismay over a system that decides like cases differently is a disturbing one.” Id. We have struggled to avoid inconsistent adjudications whenever feasible in the interests of justice. City of Hackensack v. Winner, supra, 82 N.J. 1; Hinfey v. Matawan Regional Bd. of Educ., supra, 77 N.J. 514. Consistency in the results of decided cases fosters the credibility — and acceptability — of the justice system. Inconsistency, on the other hand, ultimately engenders loss of confidence in the administration of justice.

Diseconomies and multiplicity are not the only concerns at stake in cases of fragmented litigation of essentially one controversy. The entire controversy doctrine has evolved in response to concerns for basic fairness to the immediate and prospective litigants to a dispute. On the one hand, an essential purpose of the rule is “to assure a party to litigation that litigation will be conclusive as to the entire matter which is its real subject.” McFadden v. Turner, 159 N.J.Super. 360, 369 (App.Div.1978). “It is in effect a principle of respose intended to protect one who is already a party to litigation from the expense, delay and harassment implicit in multiple successive actions whose individual scopes are limited to a fragment of the dispute.” Id.

Similarly, considerations of fairness and justness extend to those potentially affected persons who should, because of their stake in a given proceeding, or by virtue of their potential liability, be joined in a single action and given the opportune forum to defend their interests. For example, it has been noted that the fairest resolution of tort claims follows a trial where all allegedly negligent parties are represented in a single action. Van Horn v. William Blanchard, supra, 88 N.J. at 108 (Handler, J., dissenting); Prosser, “Comparative Negligence,” 51 Mich.L.Rev. 465 (1953). If, as in the instant case, “this failure to jointly assess liability is coupled with a significant ulterior incentive — one unrelated to the merits of the controversy or the search for truth — to underinclude parties, the judicial process can be distorted and the proper administration of justice disserved.” Van Horn v. William Blanchard, supra, 88 N.J. at 108 (Handler, J., dissenting).

The entire controversy doctrine as traditionally invoked is not without some disadvantages. These drawbacks will not be demonstrably greater or different in the extension of the doctrine to embrace related claims involving non-parties. For example, it is not assumed that the rule at present, or upon expansion, will always result in convenience to the court in the particular case. Frequently, comprehensive, all-embracing litigation is complex litigation. Excessive complexity can result in unmanageability. However, the court in any given case can react accordingly.³ What must be stressed are the comparative benefits in disposing of an entire controversy in a single, comprehensive, though complex, litigation, as opposed to piecemeal disposition of one controversy in successive actions.

It must be noted too that the limits of a policy favoring mandatory joinder of claims and nonparties with an interest in the controversy that is the subject of the litigation are reached when the joinder would result in significant unfairness or jeopardy to a clear presentation of the issues and a just result. Implicit in the development of the entire controversy doctrine is the recognition that economies and the efficient administration of justice should not be achieved at the expense of these paramount concerns. The entire controversy doctrine does not demand monolithic adjudications. Any possible unfairness to litigants, confusion in the presentation of issues, administrative unmanageability, or distortion in the truth-determining process that may result from compulsory joinder of parties — or claims — can be eliminated or at least minimized by a trial court possessed of the discretion to excuse joinder or to order severance.

In sum, the arguments advanced in favor of the entire controversy doctrine as applied to joinder of issues support extension of the rule to joinder of parties. There is not an advantage or disadvantage inherent in the one context that is not implicated in the other. The facts in this case present a telling example of the need for the explicit extension of the entire controversy doctrine to parties as well as claims. As noted in this Court’s opinion, the Department of Transportation, a defendant in the first Union County proceeding, sought to join Volkswagen as defendant in that action. Plaintiffs’ counsel strongly opposed this joinder. But, he concealed from the court the fact that he had already instituted suit against Volkswagen in Bergen County. Had the court been apprised of this development, it may have been persuaded, as an bAercise of sound judicial management, to compel Volkswagen’s joinder or to transfer and consolidate the Bergen County action. Moreover, by failing to serve the Volkswagen defendants named in the Bergen County complaint until after the Union County litigation had been disposed of, plaintiffs precluded Volkswagen from seeking intervention in that action.

Plaintiffs’ counsel’s fragmentation of the controversy and tactical maneuvers have traduced the doctrine’s goals of judicial conservation, fairness to litigants, avoidance of confusion and uncertainty, and assurance of just results. His actions cannot be reconciled with the strong policy of single litigation encompassed by the entire controversy doctrine. As stated by the majority, “where, as here, a litigant knows of a potentially responsible party, and has already sued that party in another action, the principles that underlay the entire controversy doctrine should come into play. A party should not be permitted to maintain such independent action when a directly related suit is pending.” Ante at 343.

The aims served by a rule mandating the joinder of parties in circumstances such as these are so central to a responsive and principled system of judicial administration that it is unacceptable to leave the decision of joinder to the parties themselves. Procedural maneuvering by attorneys that spread-eagles litigation and squanders judicial resources ostensibly to achieve the best result for a client will only rarely and fortuitously produce the just and fair result that is the goal of the justice system. Such conduct should not be unmonitored. See New Jersey Highway Auth. v. Renner, 18 N.J. 485, 495 (1955). As exemplified by this case, parties are too often motivated by strategic or tactical concerns that do not serve the larger interests of justice. The rule must be judicially applied.

Here, plaintiffs’ counsel took advantage of the procedural rules and past practices to avoid the timely and wholly appropriate joinder of Volkswagen as a party defendant.⁴ While joinder in these circumstances was not compelled by our rules or any prior decision, it was nonetheless allowable as a matter of judicial discretion. Counsel, through his sharp practice and lack of candor, totally frustrated the proper and sound exercise of that discretion by the trial court, and thereby disserved the administration of justice. If the Court were dealing only with counsel — and were unconcerned with fairness to plaintiffs themselves — I would not in these circumstances hesitate to urge the dismissal of plaintiffs’ action against Volkswagen on the basis of the entire controversy doctrine. I am, however, constrained to join the majority in allowing plaintiffs to pursue their successive action against Volkswagen only because we have not before this case announced this rule. To apply the doctrine now would penalize plaintiffs for the derelictions of their attorney.

1 See also Gareeb v. Weinstein, 161 N.J.Super. 1 (App.Div.1978) ("the doctrine is grounded on the proposition that the sound administration of the judicial system requires that all facets of a single dispute between parties be completely determined in one action”); S.D. Sales Corp. v. Doltex Fabrics Corp., 96 N.J.Super. 345 (App.Div.1966) ("except to advance needs of justice, the fragmentation and multiplication of litigation should not be encouraged."); Central Penn. Nat'l Bank v. Stonebridge Ltd., 185 N.J.Super. 289 (Ch.Div.1982) ("the single controversy doctrine is designed to promote the need for judicial economy and efficiency and the desirability to adjudicate all controversies between parties to the same proceeding”).

2 In its present form the doctrine applies essentially to preclude a subsequent claim from being brought against one who was a party to a previous suit between the same parties. (Though the preclusionary effect of nonjoinder of claims existed in the case law, the Rules were not updated to reflect the single controversy principle until September 10, 1979, when Rule 4:27-1(b) was adopted. Aetna v. Gilchrist Bros., supra, 85 N.J. at 558. This Rule provides: "Each party to an action shall assert therein all claims which he may have against any other party thereto insofar as may be required by the application of the entire controversy doctrine.”) We have, however, on several occasions intimated that circumstances may inhere in particular party and claim relationships so as to require joinder of all parties to a suit arising out of the same transaction or occurrence. For example, in Aetna v. Gilchrist Bros., Inc., supra, 85 N.J. 550, we noted:

It may be that under some circumstances the failure of a party to be joined or to intervene in a prior action should, after adjudication, bar a second action against that party involving the same subject matter. [Id. at 559.]

In the context of determining the validity of an administrative rule concerning the participation of parties in contested administrative cases, this Court stated:

The [single controversy] doctrine extends not only to joining all related causes but also, under appropriate circumstances, to all parties in a single action. [In re Uniform Administrative Procedure Rules, 90 N.J. 85, 102 n. 6 (1982) (citing Van Horn v. William Blanchard Co., 88 N.J. 91, 108 (1981) (Handler, J., dissenting); River Edge Savings & Loan Ass’n v. Clubhouse Assocs., Inc., 178 N.J.Super. 177, 182 (App.Div.1981)).]

Similarly, the Appellate Division has observed that

extraordinary circumstances may inhere in particular party and claim relationships which require joinder of otherwise separate claims by separate litigants. [McFadden v. Turner, supra, 159 N.J.Super. 360, 371 n. 2 (App.Div.1978).]

3 A number of procedural devices are available to the trial court to prevent such a result. These include pretrial conferences, stipulations of the parties as to matters of fact, and utilization of special verdicts to help clarify issues for the jury.

4 In fact, the practice of instituting successive lawsuits against interested parties who were known at the onset to be potentially liable for a single injury is not uncommon in our jurisdiction. See, e.g., Aetna v. Gilchrist Bros., Inc., supra, 85 N.J. 550; Van Horn v. William Blanchard Co., supra, 88 N.J. 91; Cartel Capital Corp. v. Fireco of New Jersey, 81 N.J. 548 (1980).