What is the proper method of allocating liability where A and B owe contract duties to C under separate contracts, and each breaches independently, and it is not reasonably possible to make a division of the damage caused by the separate breaches? This is called the multiple causation problem, and Arizona needs a statutory solution.
Approaches Taken in Other Jurisdictions
Arizona courts have not considered the multiple causation problem. The jurisdictions that have considered it generally adopt one of two solutions.
In a majority of jurisdictions, if a defendant’s (A or B) breach of contract was a substantial factor in causing the plaintiff’s injury, the defendant bears full responsibility for it even though there were other contributing causes. A substantial factor is defined as something that is more than a slight, trivial, negligible, or theoretical factor in producing a particular result. In some jurisdictions, the injured party is permitted to recover its full amount of damages from each defendant that is a substantial cause of its injury— that is, C can collect twice its amount of damages, once from A and once from B, provided that C can prove that each A and B were substantial causes of the injury. The largest limitation of this approach is the potential for the breaching parties (A and B) to effectively cast blame on each other and escape liability. The potential for this outcome arises because the plaintiff will often be required to maintain separate actions against each defendant and because the plaintiff maintains the burden to prove that each defendant was a substantial cause of the injury.
At least five jurisdictions take an alternative solution and hold A and B jointly and severally liable. Under this solution, C may sue for and recover the full amount of recoverable damages from A or B. The burden of apportioning fault for the injury is shifted from the injured party (C) to the defendants (A and B). Generally, a defendant who pays more than his equitable share of damages to the injured party may sue the other at-fault party for contribution. In this, the risk that either defendant (A or B) is judgement proof (i.e., broke) is shifted from the injured party (C) to the recovered-against defendant (A or B). The primary issue with this approach is that Arizona law disfavors joint and several liability. For example, Arizona abolished joint and several liability with respect to actions for personal injury, property damage, and wrongful death as part of the Uniform Contribution Among Tortfeasors Act, including in the case of indivisible injuries.
A Novel Statutory Solution
Arizona should enact legislation requiring apportionment of liability to breachers who are substantial causes of an indivisible injury by multiplying the injured party’s total damages by the fraction of the breacher’s contract value over the sum of the value of all breachers’ contracts. This approach alleviates the drawbacks of the majority approach by preventing defendants from escaping liability by casting blame on one another because it can be administered in a single action. Moreover, it denies the plaintiff an opportunity to recover twice for a single injury. This approach also comports with Arizona’s preference against joint and several liability by holding each breaching party liable only for his apportioned share of damages. Although this approach leaves collection risks on the injured party, this is not unreasonable because the injured party contracted with the breaching party.