On appeal from the Superior Court of New Jersey, Law Division, Middlesex County.
Antell and Dreier. The opinion of the court was delivered by Dreier, J.A.D.
Defendant appeals on leave granted from an order setting aside a prior order dismissing this automobile accident case on the basis of a reported settlement. The chronology is simple to state. The accident, a rear end hit, occurred March 24, 1987. Plaintiff filed her complaint just a few weeks later on May 11, 1987. An answer was filed in July, and after some discovery liability was stipulated by defendant. The matter was reported settled on February 28, 1988, and an order of that date dismissed the case with prejudice.
In July 1987, plaintiff had obtained a physician's report from Gautam Sehgal, M.D., a neurologist. In his report the doctor noted objective symptoms of neck and back pain with an "[i]mpression [of] post-traumatic cephalalgia [headaches]; [p]ost-traumatic cervical myofibrositis syndrome and [p]ost-traumatic lumbosacral myofibrositis syndrome [neck and lower back muscle inflammation]." Dr. Sehgal's prognosis was that plaintiff "has suffered significant injuries of a permanent nature to her neck, back and shoulder as a result of the accident. It is probable that she may have repeated flareups of her symptoms in the future."
At about the same time plaintiff's treating chiropractors, John R. Allen and Ira A. Shapiro, prepared a report stating her complaints to be inter alia, headache, neck pain, upper back pain, restriction of neck motion, head and shoulders "feel tired and heavy;" and pain radiating into left shoulder. Their X-rays showed a probable disc bulge at C6-C7, from which they concluded that plaintiff had suffered a "traumatic flexion/extension injury of the cervical and thoracic spine . . . resulting in a facetal separation and avulsion at C6-C7 spinal levels." These significant findings, therefore, related primarily to the neck, with only passing reference to the upper back and no injury to the lower back. The chiropractor further noted that "positive orthopedic findings along with the positive x-ray findings, the patient's symptomatology, and loss of range of motion, point to a poor recovery." Notwithstanding these reports, plaintiff, a legal secretary, settled her case for the sum of $10,000 on February 26, 1988.
Three days later, plaintiff came under the care of her family doctor, Phyllis Hurwitz, M.D., for progressive low back pain radiating down her right side to her right leg. Doctor Hurwitz's diagnosis was a spasm due to a prolapsed disc at L4-L5, causing severe low back pain. Plaintiff was hospitalized from March 9, 1988 through March 23, 1988. On April 8, 1988, she was reexamined by the neurologist, Dr. Sehgal. In addition to Dr. Sehgal's previous impressions, he added "herniated disc disease L3-4 on right (MRI [magnetic resonance imaging] results)."
On or about April 21, 1988, less than two weeks after Dr. Sehgal's reexamination, and less than two months after the settlement, plaintiff moved to set aside the settlement, stating that had she known the serious nature of her condition prior to the settlement, she would not have settled the matter for $10,000. Her counsel's certification similarly states that plaintiff was unaware of the serious nature of her condition and that had plaintiff been so aware, counsel would not have advised her to settle her claim.
Following the settlement, plaintiff neither signed nor delivered a release, nor had the settlement funds been tendered prior to the motion to vacate.
There is no question that "settlement of litigation ranks high in our public policy," Pascarella v. Bruck, 190 N.J. Super. 118, 125 (App.Div.1983), certif. den. 94 N.J. 600 (1983), quoting Jannarone v. W.T. Co., 65 N.J. Super. 472, 476 (App.Div.1961), certif. den. 35 N.J. 61 (1961). With this principle in mind, we approach the judge's decision to set aside this settlement.*fn1 The settlement of a law suit has three aspects: the initial agreement, which is a contract between the parties; the order of the court dismissing the suit, which is subject to the court rule controlling the relief from an order or judgment, R. 4:50-1; and the delivery of a release, a document with independent legal significance.
The short time periods involved in this case, the asserted mutual mistake of the parties concerning the extent of plaintiff's injuries, and the fact that no release had been delivered or payment made, distinguish the ...