Awards

In the published decision of Haines v. Taft, 2017 N.J. Super. LEXIS 64 (App. Div. June 1, 2017), the Appellate Division ruled that a plaintiff may recover medical expenses that exceed their $15,000 personal injury protection (PIP) limits in their automobile policy. At the trial court level, the trial judge had barred the admission of those expenses. However, that decision was reversed upon this appeal.

This issue was the subject of dispute due to conflicting decisions on the Law Division level. However, this published appellate decision resolved this dispute.

This case involved two plaintiffs (Joshua Haines and Tuwona Little) in automobile negligence actions in which both plaintiffs had minimum $15,000 PIP policies based upon a selection of this PIP option. However, they both incurred expenses in excess of that limit. Haines incurred $43,000 and she sought to introduce into evidence the $28,000 in uncompensated medical expenses. Little incurred $25,488 in medical expenses and sought to introduce into evidence $10,488 in medical bills not satisfied by PIP benefits.

The defendants argued to the trial court that all expenses between $15,000 and $250,000 should be inadmissible and barred at trial. The trial court accepted that argument and barred the introduction of medical bills that exceeded the plaintiffs’ limit in PIP benefits provided in each of their policies.

In deciding this issue, the Appellate Division reviewed the language in the pertinent statute, N.J.S.A. 39:6A-12, which makes inadmissible “evidence of the amounts collectible or paid under a standard automobile insurance policy … in a civil action for recovery of damages for bodily injury by such injured person.”  Defendants argued that this language makes inadmissible evidence of the first $250,000 in medical expenses an insured incurs, because $250,000 is the PIP limit in a “standard” policy, unless the insured elects a different option. Plaintiffs argued that this language makes inadmissible only evidence of those medical expenses that have been or are eligible to be paid under an insured’s policy per the PIP option selected.

The Court recognized that the automobile statute refers to PIP coverage of $250,000 as a standard policy. However, it also noted that automobile insurers must provide options of $150,000, $75,000, $50,000, or $15,000 per person per accident. If the insured does not select any of these options, then $250,000 is the default benefit.

In these two cases, the named insureds on the policies chose the $15,000 PIP option. The Court rejected the defendants’ argument that this selection made expenses incurred in excess of the $15,000 limit inadmissible into evidence. Essentially, the Appellate Division found that this interpretation would be reading this language too literally.

The Court noted that this statutory provision refers to $250,000 as the maximum PIP coverage available but also makes available options in lesser amounts. Thus, a “standard” policy is capable of providing one of five limits of PIP benefits. Accordingly, the Appellate Division rejected the premise that the language in N.J.S.A. 39:6A-12, referring to a “standard” policy, equates to a policy providing $250,000 in PIP benefits.

Instead, the Court found that this language refers to those PIP limits in a standard policy covering the subject insured, making inadmissible only those medical expenses up to and including the PIP limits in that insured’s policy. The amounts “collectible or paid” referred to in Section 12 of the statute depends on the limit of the insured’s PIP coverage. Because both policies selected $15,000 limits, the plaintiffs are barred from admitting evidence of medical expenses up to that amount but evidence of their medical expenses between $15,000 and $250,000 are admissible and recoverable against the tortfeasors.

Sometimes plaintiffs throw in claims for punitive damages in what is obviously a simple negligence claim arising from an automobile accident. In the District Court case, Gillman v. Rakouskas, 2017 U.S. Dist. LEXIS 10835 (D.N.J. Jan. 26, 2017), the plaintiffs George and Florence Gillman sued defendants Michael and Elaine Rakouskas, alleging negligence and gross negligence and requested both compensatory and punitive damages against the defendants due to a motor vehicle accident between plaintiff George Gillman (“Gillman”) and defendant Elaine Rakouskas (“Rakouskas”). Defendants filed a motion to dismiss the punitive damages claims.

Plaintiffs alleged that, while Gillman was driving on the New Jersey Turnpike, the defendant’s vehicle suddenly struck the right shoulder, ricocheted in the opposite direction towards plaintiff’s vehicle, causing both vehicles to collide. Gillman’s vehicle began to spin uncontrollably and flipped over, causing him multiple injuries.

Plaintiffs claimed that defendant Rakouskas was reckless in that she consciously and intentionally operated her vehicle in such a manner that she knew injury to another was probable and/or operated her vehicle with wanton and reckless disregard for the safety of others and in reckless disregard of the consequences of her acts. Plaintiff provided a long list of actions that defendant failed to take that caused the automobile accident, such as failing to observe due care in operating her vehicle, disregarding traffic lanes, patterns and other devices, being inattentive, and operating her vehicle into plaintiff’s lane of travel.

Defendants filed a motion to dismiss the punitive damages claim, arguing that plaintiffs failed to state a claim with regard to this claim for damages. The District Court noted that punitive damages are only available in New Jersey if the plaintiff demonstrates that the defendant acted with the level of culpability as required by the New Jersey Punitive Damages Act, N.J.S.A. 2A:15-5.9, et seq. (“PDA”).

Under the PDA, for the plaintiff to obtain a punitive damages award, the plaintiff must show “by clear and convincing evidence, that the harm suffered was the result of the defendant’s acts or omissions, and such acts or omissions were actuated by actual malice or accompanied by a wanton and willful disregard of persons who foreseeably might be harmed by those acts or omissions.” Actual malice is defined as “an intentional wrongdoing in the sense of an evil-minded act.” As for willful and wanton conduct, that means “a deliberate act or omission with knowledge of a high degree of probability of harm to another and reckless indifference to the consequences of such act or omission.”

The Court pointed out that mere commission of a tort is insufficient to meet the standard for an award of punitive damages. Circumstances of aggravation and outrage are needed to justify punitive damages.

The defendants argued that plaintiffs failed to plead any facts showing actual malice or meeting the wanton or willful disregard standard. The District Court agreed.

In reviewing the allegations of the complaint, the Court found no evil-minded act or a deliberate act or omission that was sufficient to state a claim for punitive damages. Neither negligence nor gross negligence will suffice as a basis for punitive damages. The mere allegation that defendant operated the vehicle in a “conscious and intentional” manner, that she knew injury to another was probable, and/or operated it with “wanton and reckless” disregard of the consequences was a legal conclusion without any factual support in the complaint.

Thus, the District Court granted the defendants’ motion to dismiss the punitive damages claim.

This case points out the importance in reviewing a complaint’s claims for relief carefully and, if punitive damages are alleged in a simple negligence case, the defendant should move to dismiss that claim well before trial to ensure that a punitive damages claim would not be submitted to a jury. Unless the circumstances are egregious, this motion to dismiss would typically be successful.

Plaintiff Lucia Serico entered into a high-low agreement with defendant Robert M. Rothberg, M.D. to resolve her claim against the defendant. However, in reaching this settlement, plaintiff did not expressly reserve her rights to recover fees under the Offer of Judgment rule. Based upon the jury award, the plaintiff would have been entitled to these fees under the rule. In the published decision of Serico v. Robert M. Rothberg, M.D., 2017 N.J. Super. LEXIS 19 (App. Div. February 16, 2017), the Appellate Division was asked to decide whether the failure to preserve the right to pursue fees, in entering into the high-low agreement, barred the plaintiff from pursuing such fees.

This case was a medical malpractice action filed against the defendant due to the failure to diagnose Benjamin Serico’s colon cancer. Before trial, plaintiff made an offer to accept judgment against defendant in the amount of $750,000. Defendant did not respond to the offer. During the trial, while the jury was deliberating, the parties entered into a high-low agreement, in which the agreed upon low was $300,000 and the high was $1 million.

During the negotiations for this high-low agreement, there was no mention of the offer of judgment rule or plaintiff’s possible entitlement to any award based upon the defendant’s rejection of her offer of judgment. Plaintiff never expressed any intention to waive or pursue the offer of judgment remedies, nor did the defendant ask for a release or waiver of plaintiff’s rights under the rule.

The jury returned a verdict of $6 million. Because the judgment exceeded 120% of the offer, that would have entitled the plaintiff to an award of attorney’s fees and costs. After the verdict, plaintiff filed a motion for these fees, claiming that she never intended to waive or release the provisions of the offer of judgment. The defendant opposed the application on the basis that the plaintiff never mentioned, nor expressed any intention of preserving her right to attorney’s fees during the negotiations for the high-low settlement.

The trial court judge relying on the “custom and usage” in the industry denied the plaintiff’s application. He found that there was nothing in the agreement reached between the parties to indicate the intent to preserve this claim and that successful parties rarely made fee applications following a high-low agreement. If they did make such an application, it was denied.

The Appellate Division confirmed the trial court judge’s ruling but utilized basic contract principles in reaching the same conclusion. The Court noted that a high-low agreement is a device used in negligence cases whereby a defendant agrees to pay plaintiff a minimum recovery in exchange for the plaintiff’s agreement to accept a maximum sum, regardless of the jury verdict.

In this case, the parties’ high-low agreement did not mention the defendant’s rejection of plaintiff’s offer of judgment. The Court noted that a basic assumption of a high-low agreement is that a plaintiff cannot recover more than the maximum agreed upon amount. Awarding a plaintiff any sum more than the “high” would be contrary to the purpose of encouraging defendants to settle.

The Court stated that the parties are always free to preserve a claim that they might have pursuant to a court rule or otherwise in settling a case. Here, the plaintiff did not produce any evidence that she preserved her rights to pursue fees under the offer of judgment rule, despite the high-low agreement. A claim for additional amounts beyond the “high,” including attorney’s fees, is considered to be encompassed within a negotiated settlement unless expressly preserved. Accordingly, because the jury’s verdict was in excess of the high, the Appellate Division found that the trial court correctly ruled that plaintiff’s claim was limited to the $1 million high number and that number included all fees and costs to which she might have been entitled under the offer of judgment rule.

A motion for remittitur is used by a defendant to attempt to obtain a reduction of an excessive jury verdict. A court has the power to reduce an excessive award through a grant of remittitur. In the recent case of Cuevas v. Wentworth Group, 226 N.J. 480 (2016), the New Jersey Supreme Court held that a judge should not rely on either personal knowledge of other verdicts or comparative verdict methodology when deciding a remittitur motion.

If a court determines that a jury award is excessive, it may grant remittitur, reducing the award to the highest amount that could be sustained by the evidence. The plaintiff then has the choice to accept the award “as remitted” or proceed with a new damages trial before a new jury. To grant the motion, the judge must find that the award is so grossly excessive that it “shocks the judicial conscience.” Remittitur allows the parties the option of avoiding the unnecessary expense and delay of a new trial.

Cuevas involved a racial discrimination claim brought by two brothers employed by the defendant Wentworth Group who claimed they were subject to frequent degrading remarks based upon being of Hispanic descent and, when one of them complained, they were fired. The defendant claimed they were fired due to poor job performance.

The case was tried before a jury and awards were entered for both plaintiffs. The jury awarded plaintiff Ramon Cuevas $625,000 for past lost earnings; $400,000 for future lost earnings; $800,000 in emotional distress damages; and $52,500 in punitive damages. The jury awarded plaintiff Jeffrey Cuevas $150,000 for past lost earnings; $600,000 in emotional distress damages; and $32,500 in punitive damages.

The trial judge denied the defendants’ post-trial motions to vacate the jury’s verdict and the damages award. The defendants’ motion for a remittitur of the emotional distress damages was also denied. The judge determined that, based upon the evidence presented, the emotional distress damages award did not “shock the judicial conscience.” The Appellate Division upheld the trial court’s decision to deny this motion. This decision was further appealed to the New Jersey Supreme Court.

The trial court found the plaintiffs to be credible and genuine. Both plaintiffs presented extremely well. The judge noted that the jury seemed attentive throughout the trial and fully understood the charge.

The Supreme Court pointed out that courts must exercise great restraint in granting remittitur because, in our constitutional justice system, “the jury – not the judge – is charged with the responsibility of deciding the merits of a civil claim and the quantum of damages to be awarded a plaintiff.” In this case, the remittitur motion involved a request to reduce the amount of the pain and suffering of a victim of racial discrimination. The Court noted that the proper compensation for such claim is not susceptible to scientific precision. There is no neat formula for determining the amount of money to compensate a victim of racial discrimination in the work place.

The Court explained that a jury’s verdict has a presumption of correctness. A judge may not substitute his or her judgment for that of a jury just because he would have ruled otherwise.

The Supreme Court held that a jurist’s reliance on his or her own personal experiences as a practicing attorney or as a judge is not a sound or workable approach in ruling on a remittitur motion. Essentially, this approach would be too subjective and would depend on the happenstance of the personal experiences of the trial judge assigned to his case. Thus, the Supreme Court found that a judge’s personal experiences would not be relevant in deciding a remittitur motion.

The Court also held that purportedly comparable verdicts should not form the basis to grant a remittitur. The facts and plaintiffs in every personal injury or discrimination case are so different that a true comparative analysis is illusory.

To determine whether an award “shocks the judicial conscience, a judge must look at the facts and testimony presented in that particular case. The Supreme Court held that the judge should conduct “a thorough analysis of the case itself; of the witnesses’ testimony; of the nature, extent, and duration of the plaintiff’s injuries; and of the impact of those injuries on the plaintiff’s life.” That analysis “will yield the best record on which to decide a remittitur motion.”

In this case, the Court pointed out that the plaintiffs testified to being subjected to nine months of racial harassment and hostility carried out in the presence of high ranking officers of the company. They were subjected to crude and degrading remarks that “invidiously stereotyped them and their heritage.”  They testified as to being humiliated, degraded, depressed, and anxious over their financial security. While the Supreme Court felt that the emotional distress damage awards were on the high side, the justices did not feel that they were so manifestly unjust that they shocked the judicial conscience. Thus, the Court upheld the Appellate Division’s affirmance of the denial by the trial court of the remittitur motion.