Plaintiff Linda Brehme filed a lawsuit against defendant Thomas Irwin for a rear end accident in which she claimed to have suffered bodily injuries. At trial, plaintiff filed a motion to admit into evidence her projected future medical expenses. This motion was denied by the trial court judge because she had not exhausted her personal injury protection (PIP) limits. The issue before the New Jersey Supreme Court in Brehme v. Irwin, 2025 N.J. Lexis 11 (2025), was whether plaintiff had waived her right to appeal this ruling by accepting payment for the final judgment and executing a warrant to satisfy judgment.
The trial was a damages only trial because Irwin had admitted he was at fault. Plaintiff had a $250,000 PIP policy with his insurance carrier, New Jersey Manufacturers Insurance Company (NJM). NJM paid approximately $142,900 in benefits. Brehme never exhausted her remaining PIP benefits but claims that NJM cut her off, although it is unclear exactly when that occurred or on what basis.
Almost two years after the accident, Brehme filed her personal injury complaint against Irwin. The trial took place three years and eight months later, which was a damages only trial because Irwin admitted liability. Although she received no medical treatment for the three years prior to the trial, in June 2022, Brehme relied on the amended collateral source rule, N.J.S.A. 39:6A-12, and asked the trial court judge to admit into evidence her projected future medical expenses.
The trial court judge denied this motion because Brehme had not exhausted her PIP benefits. During trial, the judge also denied her motion for reconsideration on this issue. Prior to appealing from the final judgment, plaintiff did not seek leave to appeal this interlocutory evidentiary ruling barring her claim for future medical expenses.
Ultimately, the jury awarded Brehme $225,000 for pain, suffering, disability, impairment and loss of enjoyment of life. It also awarded $50,000 for past lost wages and $0 for future lost earnings. The total verdict was $275,000. On July 7, 2022, the trial court judge entered the final judgment, which also included pre and post judgment interest.
Irwin’s insurance company paid the final judgment, which Brehme’s counsel deposited into his trust account. On July 18, 2022, Brehme’s counsel also signed a warrant to satisfy judgment. Thereafter, on July 29, 2022, after Brehme accepted payment of the final judgment and the warrant had been executed, Brehme’s counsel wrote to the trial court judge stating that he was trying to file an appeal regarding the barring of Brehme’s claim for future medical expenses. He submitted a proposed order under the five-day rule, which purportedly memorialized the ruling barring evidence of future medical expenses.
Irwin filed the warrant to satisfy judgment on August 8, 2022. On that same day, Brehme filed her Notice of Appeal (to the Appellate Division) from the final judgment. The Notice of Appeal was filed three weeks after plaintiff had accepted payment of the final judgment and three weeks after her counsel executed the warrant to satisfy judgment.
The Appellate Division denied the appeal as moot. It noted that Brehme never advanced, either on the record or in writing, that she intended to pursue her claim for future medical expenses. Rather, she accepted and received the full final judgment amount and later signed a warrant to satisfy judgment before indicating her desire to appeal. Thus, the Appellate Division concluded that the final judgment precluded her appeal challenging the trial judge’s denial of future medical expenses.
Brehme filed a petition for certification before the New Jersey Supreme Court, seeking to reverse the Appellate Division decision. Certification was granted by the Court.
Before the Supreme Court, Brehme argued that she filed her Notice of Appel within the forty-five-day deadline required under Rule 2:4-1 (time to file an appeal), and that the rule did not require a party to announce its decision to appeal before that deadline. She further argued that, although her attorney executed the warrant to satisfy judgment before writing to the judge to request an order that memorialized his evidentiary ruling, she preserved her right to appeal since she filed the Notice of Appeal on the day that Irwin filed the warrant to satisfy judgment under Rule 4:48 (filing of warrant of satisfaction rule). Plaintiff argued that she should be permitted to appeal the earlier trial evidentiary ruling, excluding her future medical expenses claim and that the Appellate Division made a mistake by dismissing her appeal as moot.
The defendant, however, argued that Brehme failed to clearly make her intention to appeal known before she accepted the benefits of the final judgment. Further, he argued that if Brehme prevailed on the merits, by obtaining permission to admit into evidence future medical expenses, even though her PIP limits have not yet been exhausted, the only remedy would be to vacate the final judgment for the damages trial because evidence of pain and suffering and future medical expenses are not separable. Further, Irwin argued that prevailing on appeal would nullify the final judgment, rather than potentially increase it.
The Supreme Court pointed out that, although Brehme complied with the deadline under Rule 2:4-1, that rule did not address whether a plaintiff can accept final payment of a judgment, execute a warrant to satisfy judgment, and then appeal. The Court further noted that Rule 4:48-1 (warrant of satisfaction rule) also does not address that issue. That rule provides that when a party satisfies a final judgment, a warrant must be executed and delivered to the party making satisfaction.
The Court agreed with Brehme that Rule 4:48-1 does not alter the forty-five-day time period prescribed in Rule 2:4-1, i.e. the time to file a Notice to Appeal. However, the Court also noted that Rule 4:48-1 “also does not explicitly address the legal effect of accepting a judgment and executing a warrant to satisfy the judgment before filing a Notice of Appeal.”
However, the Supreme Court noted that New Jersey common law has addressed in other contexts whether a plaintiff can accept payment of a final judgment, execute a warrant to satisfy that judgment, and then appeal. It noted that the longstanding general rule was “that when a litigant accepts the benefit awarded . . . by a final judgment, that litigant is precluded from afterward challenging the validity of the conditions by an appeal.” When one party pays a judgment and the other accepts the money and executes a warrant to satisfy judgment, “the legal effect of what transpires is that a contract is entered into between the parties to terminate the litigation.”
However, in other case law, the Court explained that an appeal could be maintainable if it would serve to increase but not reduce the amount of the judgment. But, the parties seeking to appeal must make it known prior to accepting final judgment that it intended to appeal an issue which would not impact the final judgment other than to potentially increase it.
Thus, the Supreme Court’s holding was as follows:
When a plaintiff accepts the final judgment, that party may still appeal if the party can show that (1) it made its intention to appeal known prior to accepting payment of the final judgment and prior to executing a warrant to satisfy that judgment, and also that (2) prevailing on the appellate issue will not in any way impact the final judgment other than to potentially increase it.
In applying these principles to the within case, the Court found that plaintiff did not make her intention to appeal known prior to accepting payment of the final judgment and prior to executing a warrant to satisfy that judgment. To the contrary, she accepted payment of the final judgment, her counsel deposited the money into his trust account and also signed a warrant to satisfy judgment. It was not until three weeks later that plaintiff filed her notice of appeal from the final judgment.
As to the second prong of this ruling, the Court found that plaintiff was also unable to show that prevailing on the trial court evidentiary ruling would not impact the final judgment and only potentially increase it. The Supreme Court pointed out that personal injury awards are generally not divisible. Evidence of pain and suffering “is inextricably linked to evidence of future medical expenses.”
The Court noted that one jury could not hear evidence relevant to pain and suffering and another jury hear evidence relevant to future medical expenses. These two claims would need to be considered simultaneously and they are not fairly adjudicated separately. Because plaintiff did not receive treatment for three years, it is possible that a subsequent jury could consider the evidence differently to find that she is entitled to less damages. It would not be guaranteed that the issue of future medical expenses would only increase the sum the jury awarded to her. Because the evidentiary issue on this appeal was not separable from the underlying final judgment, plaintiff could not show that it would only increase the final judgment.
In summary, the Supreme Court found that plaintiff could not show that she expressed her intention to appeal before accepting payment on the final judgment and before her attorney executed the warrant to satisfy the judgment or that the appeal would not impact the final judgment other than to increase it. Hence, the Supreme Court found that plaintiff’s appeal could not proceed and that the Appellate Division properly dismissed it as moot. Thus, the Supreme Court affirmed the Appellate Division decision dismissing the appeal.
