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Crudup v. Marrero

Decided: January 25, 1971.


For modification and remandment -- Chief Justice Weintraub and Justices Francis, Hall, Schettino and Haneman. For affirmance -- Justice Proctor. The opinion of the Court was delivered by Francis, J. Proctor, J. (dissenting).


The issue here is whether Rules 4:58-1 et seq., the Offer of Judgment rules, apply to the Unsatisfied Claim and Judgment Fund, N.J.S.A. 39:6-61 et seq. Except for matrimonial causes, the rules were in effect on an experimental basis in all actions tried in the Law Division of the Superior and County Courts of Essex and Middlesex Counties, at the time of trial of the case which gave rise to this appeal. After pointing out that the statutory Fund represents public money deposited therein to satisfy claims and judgments against uninsured motor vehicle operators, the trial judge felt that for reasons of public policy it should not be subjected to the counsel fee and interest assessments contemplated by Rules 4:58-1 et seq. Consequently, he held that even though the amount of plaintiffs' recovery brought the case within the rules' mandate, he should exercise his general rule-relaxing authority under R. 1:1-2 and deny the request for such allowances. We certified the plaintiffs' subsequent appeal before it was argued in the Appellate Division.

The rules, insofar as they are pertinent here provide:

"* * * [A]ny party may, at any time more than 20 days before the action is first scheduled for trial * * * serve upon any adverse party, without prejudice, and file with the clerk of the court, an offer to take judgment in his favor * * * for a sum stated therein * * *." R. 4:58-1.

"If the offer of a claimant is not accepted and he obtains a verdict * * * at least as favorable to him as his offer, he shall be allowed, in addition to costs of suit, six 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 also a reasonable attorney's fee, which shall belong to the client, not exceeding $750.00. In an action for negligence or unliquidated damages, however, no attorney's fee shall be allowed to the offeror unless the amount of the recovery is in excess of 120 per cent of the offer." R. 4:58-2.

In the present case, the plaintiffs served and filed a timely offer to take judgment in the amount of $2500. The Fund declined to settle for that sum but made a counter offer of $1300. Plaintiffs rejected it and the case went to trial resulting in a verdict of $7000 for the infant plaintiff, Theresa Crudup, and $500 on the per quod claim of Horace Crudup, her father. The resulting judgments being more than 120% in excess of the offer of judgment, plaintiffs concluded that the interest and counsel fee mandate of Rule 4:58-2 was applicable. Consequently, they sought a counsel fee of $750 and interest at six percent from the date of their offer until payment by the Fund of the trial judgments.

It will be observed that Rules 4:58-1 and -2 are couched in imperative language. A counsel fee up to $750 plus six percent interest on the judgment from the date specified in Rule 4:58-2 "shall be allowed" when the conditions prescribed therein have been met. The rules, as presently applicable, include negligence and unliquidated damage actions in the two counties mentioned above. Such suits in which the Unsatisfied Claim and Judgment Fund will be responsible for payment of the judgment up to the statutory maximum plus "interest and costs" (N.J.S.A. 39:6-69, 39:6-73, 39:6-84) are not excluded from its coverage.

The Offer of Judgment rules, and particularly Rule 4:58-2, cast as it is in unqualified mandatory terms, were adopted

deliberately by the Supreme Court. They were designed particularly as a mechanism to encourage, promote and stimulate early out-of-court settlement of negligence and unliquidated damage claims that in justice and reason ought to be settled without trial. It is a matter of common knowledge that the vast majority of such cases are ultimately settled. Unfortunately, the disposition too often takes place on the "court house steps" or just before or after a jury is drawn, rather than in the many months that intervene between the institution of the suit and the ultimate trial date. The failure to make earlier adjustments is a major cause of the clogging of the trial lists and the tremendous backlog of automobile negligence cases that burden our judicial system. To illustrate -- at the end of the September 1, 1969-August 31, 1970 court year there were 48,673 civil cases pending in the Law Division of the Superior and County Courts of the State; 28,275 of these were automobile negligence actions. The August 1970 total of all pending cases was over 2,000 more than at the end of the previous court year. Of the automobile negligence cases, 7,547 were in excess of 1 1/2 years old, a substantial number being in excess of 3 years old; 6,985 automobile negligence cases were settled on the trial date during the 1969-1970 court year. The total number of such cases settled in the long period between institution of suit and the trial date was 6,157, or 828 less than the number settled on the trial date. Of all the automobile negligence cases disposed of during that year in the entire State, only 1,746 of them were tried to completion by a jury. The number of such jury cases tried to completion in the larger counties of the State is worthy of note:

Bergen 306

Camden 100

Essex 244

Hudson 102

Mercer 52

Middlesex 281

Monmouth 202

Morris 83

Union 79

In the quest for factors which motivated Rules 4:58-1 et seq., the state of the calendar in the county district courts of the State should not be ignored. The district court has been thought of traditionally as a "poor man's court," i.e., one of limited monetary jurisdiction where there was a high promise of expeditious disposition. Unfortunately, as has been noted on other occasions,*fn1 demands for jury trials there have interfered substantially with the realization of the promise. For example, in the larger counties, the records of the Administrative Director of the Courts show the following with respect to cases pending on August 31, 1970, the end of the 1969-1970 court year:


Total cases pending 3,748

Total jury cases pending 867 or 23%

Jury cases under 6 mos. of age (automobile

negligence) 339

Jury cases 6 to 12 mos. old (automobile

negligence) 210

Jury cases 1 to 1 1/2 yrs. old (automobile

negligence) 18

Jury cases 1 1/2 to 2 yrs. old (automobile

negligence) None

Jury cases over 2 yrs. old (automobile

negligence) 5


Total cases pending 2,266

Total jury cases pending 352 or 15%

Jury cases under 6 mos. of age (automobile

negligence) 82

Jury cases 6 to 12 mos. old (automobile

negligence) 84

Jury cases 1 to 1 1/2 yrs. old (automobile

negligence) ...

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