Combating the “Empty Chair” Defense by Requiring Insurance Policy Limits be Deposited with the Court

In multi-defendant lawsuits, there are instances where one of the parties responsible for your personal injuries may not have enough insurance coverage to satisfy all of your damages.  In such a case, insurance companies and their lawyers will attempt to resolve your lawsuit for the minimal insurance policy limit in place. But, how does a $15,000 insurance policy limit compensate you for a catastrophic injury?  It doesn’t. Still, insurance companies will insist on you taking the minimal policy limit in exchange for dismissing your claims against their insured. This is a mistake.

Later at trial the remaining co-defendants will use what is known as an “empty chair” defense. Essentially, the remaining co-defendants will each argue that the defendant YOU allowed out of the case was the party to blame. This dismissed party is then allowed to be considered by the jury when they deliberate, which could result in the dismissed party being found liable for all of your injuries, which means you get nothing!

So, what do you do?

In such a case you must be prepared to reject the offer of the policy limit and instruct the defendant’s lawyer to have the policy limit deposited with the Court. This will ensure the money is there for you to take later while still allowing you to keep the defendant in the lawsuit!

Court Rule 4:57-1 controls the deposit of money with the Clerk of Court:

In any action in which any part of the relief sought is a judgment for a sum of money or the disposition of a sum of money, a party, upon notice to every other party, and by leave of court, may deposit with the court all or any part of the sum.

This rule is intended to allow a party who disclaims any interest in a sum of money to deposit that sum into the court. AC Berwick Transporters v. Sendall, 176 N.J. Super. 339, 341 (Ch. Div. 1980).

But, why would an insurance company agree to deposit money in the Court for you if you do not agree to dismiss their insured from the lawsuit? The insurance company will do this to stop the tolling of pre-judgment interest, so it does not have to pay more money later. But, in the meantime you get to proceed with your lawsuit against the defendant personally (if they have assets to go after) and protect against the “empty chair” defense.

You must contact a personal injury attorney who can protect your best interests.  Contact V&L today!