Palmer v. Kovacs

• Decision Date: 16 May 2006
• Citation: 897 A.2d 429,385 N.J. Super. 419
• Parties: Nancy A. PALMER, Plaintiff-Respondent, v. Kaleena KOVACS and Steven Kovacs, Defendants-Appellants. Nancy A. Palmer, Plaintiff-Appellant, v. Kaleena Kovacs and Steven Kovacs, Defendants-Respondents.
• Court: New Jersey Superior Court

897 A.2d 429

385 N.J. Super. 419

Nancy A. PALMER, Plaintiff-Respondent, v. Kaleena KOVACS and Steven Kovacs, Defendants-Appellants.

Nancy A. Palmer, Plaintiff-Appellant, v. Kaleena Kovacs and Steven Kovacs, Defendants-Respondents.

Superior Court of New Jersey, Appellate Division.

Argued January 18, 2006.

Remanded February 6, 2006.

Resubmitted March 9, 2006.

Decided May 16, 2006.

James D. Carton, III, Manasquan, argued the cause for appellants in A-0956-04T5 and respondents in A-1257-04T5 (Carton Law Firm, attorneys; Mr. Carton, on the brief.).

Michael J. Hanus, Woodbridge, argued the cause for respondent in A-0956-04T5 and appellant in A-1257-04T5 (Gill & Chamas, attorneys); Mr. Hanus, on the brief.

Before Judges SKILLMAN, AXELRAD and SABATINO.

The opinion of the court was delivered by

SABATINO, J.S.C., (temporarily assigned).

As we noted in our opinion dated February 6, 2006, the present appeal and cross-appeal raise multiple issues arising out of a final judgment entered in favor of plaintiff following a four-day jury trial of this automobile accident case in August 2004. In our first opinion we affirmed the trial court's denial of summary judgment to defendants under the Automobile Insurance Cost Reduction Act of 1998 ("AICRA"), N.J.S.A. 39:6A-8, given the sufficiency of plaintiff's injuries and corresponding medical proofs to surmount the AICRA verbal threshold. We also remanded the case to the trial judge for an amplified statement of reasons pursuant to R. 1:7-4(a), more fully expressing his rationale for denying defendants' motion for a new trial or, alternatively, for the remittitur of the jury's $460,000 damages award.

We have since received and reviewed a transcript of the trial judge's amplified statement of reasons, in which he reaffirmed his original denial of defendants' post-trial motion and further explained his basis for that disposition. With the benefit of that submission, we now address defendants' appeal on that particular issue. We also resolve the remaining appellate issues, which concern the trial court's award of counsel fees and other sanctions pursuant to the offer-of-judgment rule, R. 4:58, and its calculation of the supersedeas bond defendants were required to post on appeal pursuant to R. 2:9-6.

Briefly, this case involves an intersection accident on April 10, 2000 in which an automobile driven by plaintiff Nancy Palmer, who was then age twenty-three, was struck by a vehicle operated by defendant Kaleena Kovacs. The force of the collision caused plaintiff's airbag to deploy. Plaintiff sustained neck and back injuries, as reflected by MRI studies and medical examinations, which persisted for more than two years following the accident. Summary judgment on liability was granted in favor of plaintiff.¹ The ensuing trial solely addressed damages, and plaintiff's proofs included no claims for economic loss. The jury awarded her $460,000 for past and prospective pain and suffering.

We now affirm the denial of the defendants' motion to set aside or remit the verdict, modify the trigger dates used by the trial court in shifting fees and other allowances to plaintiff under R. 4:58, and affirm the trial court's calculation of the requisite supersedeas bond pending further proceedings.

I.

[At the direction of the Court, the published version of this opinion omits Part I, which addresses defendant's motion to set aside the verdict on grounds of excessiveness, and Part III, which addresses the calculation of the supersedeas bond posted pending appeal. See R. 1:36-3.]

II.

We next address plaintiff's cross-appeal seeking to modify the trial court's calculation of fees, costs and prejudgment interest pursuant to the offer of judgment rule, R. 4:58-1.

The pertinent chronology is as follows. On March 6, 2002, plaintiff filed and served upon defendants an initial offer of judgment for the sum of $20,000. The defendants did not accept that offer within the ninety-day period for acceptance. After discovery was completed, the case went to arbitration in January 2003, and the arbitrator made a net award to plaintiff of $22,500. Defendants timely rejected the arbitration award in February 2003 and requested a trial de novo. In March 2003, the trial court granted plaintiff summary judgment on liability issues, and in October 2003, the trial court denied defendants' motion for summary judgment under the AICRA verbal threshold. On July 8, 2004, plaintiff filed and served a second offer of judgment in the reduced sum of $10,000. Defendants likewise failed to accept that offer, and the case went to trial on August 3, 2004.

Following the jury's damages verdict, the trial judge determined that plaintiff had obtained a verdict that was 120% or more of her pre-trial offers. See R. 4:58-2. The judge then had to determine whether plaintiff's right to an allowance of counsel fees, costs of suit and enhanced interest under the Rule had been created by plaintiff's original offer in March 2002 or, alternatively, by plaintiff's second offer in July 2004. Plaintiff argued that the date of the first offer controlled the calculation; defendants argued that the date of the second offer governed.

After considering the arguments of counsel on this issue, the trial judge concluded that the second offer of judgment tendered on July 8, 2004 triggered the calculation of sums to be shifted to defendants under the Rule. Using that July 8, 2004 trigger date, the trial court awarded plaintiff $10,813.00 in attorneys fees and $4,175.00 in litigation costs. The trial court also calculated prejudgment interest on the verdict at $74,707.46. The interest was computed based upon a combination of the enhanced eight percent (8%) interest rate prescribed by R. 4:58-2 for the limited period from July 8, 2004 through the date of entry of the judgment, and the ordinary prejudgment interest rate under R. 4:42-11(b) applied to the period before July 8, 2004.

Although the offer of judgment rule was modified effective September 1, 2004, counsel agreed at oral argument before us that the terms of the Rule which had been in effect in August 2004 control this appeal. Specifically, R. 4:58-1 then provided as follows:

Except in a matrimonial action, any party may, at any time more than 20 days before the actual trial date, serve upon any adverse party, without prejudice, and file with the court, an offer to take judgment in the offeror's favor, or as the case may be, to allow judgment to be taken against the offeror, for a sum stated therein or for property or to the effect specified in the offer (including costs). If at any time on or prior to the 10th day before the actual trial date the offer is accepted, the offeree shall serve upon the offeror and file a notice of acceptance with the court. The making of a further offer shall constitute a withdrawal of all previous offers made by that party. An offer shall not, however, be deemed withdrawn upon the making of a counter-offer by an adverse party but shall remain open until accepted or withdrawn as is herein provided. If the offer is not accepted on or prior to the 10th day before the actual trial date or within 90 days of its service, whichever period first expires, it shall be deemed withdrawn and evidence thereof shall not be admissible except in a proceeding after the trial to fix costs, interest and attorney's fee. The fact that an offer is not accepted does not preclude a further offer within the time herein prescribed in the same or another amount or as specified therein.

[Emphasis added.]

Additionally, R. 4:58-2, regarding the consequences of a defendant's non-acceptance of a claimant's offer, prescribed:

If the offer of a claimant is not accepted and the claimant obtains a verdict or determination at least as favorable as the rejected offer, the claimant shall be allowed, in addition to costs of suit, (a) all reasonable litigation expenses incurred following non-acceptance; (b) eight per cent interest on the amount of any money recovery from the date of the offer or the date of completion of discovery, whichever is later; and (c) a reasonable attorney's fee, which shall belong to the client, for such subsequent services as are compelled by the non-acceptance. In an action for unliquidated damages, however, no allowances under this rule shall be granted to the offeror unless the amount of the recovery is in excess of 120 percent of the offer.⁴

A claimant entitled to interest under R. 4:42-11(b) shall be allowed interest under this rule only to the extent it may exceed the interest allowed under R. 4:42-11(b).

Defendants persuaded the trial judge that these provisions, when read in...