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Osborne v. O''Reilly

Decided: May 12, 1993.

KENNETH R. OSBORNE, PLAINTIFF,
v.
WILLIAM L. O'REILLY AND EINHORN & HARRIS, DEFENDANTS



Yanoff, J.s.c. (retired and temporarily assigned on recall).

Yanoff

[267 NJSuper Page 329] This opinion discusses problems ancillary to those considered in Spaudling v. Hussain, 229 N.J. Super. 430, 551 A.2d 1022 (App.Div.1988), in a different context. In that case, defendant Hussain

was a physician who agreed to testify in a negligence action and refused to appear at the trial. Plaintiff sued, alleging that, by reason of Hussain's failure to appear, he had been forced to settle the case for less than its value.

The claim against Hussain was a contract action predicated upon Hussain's agreement to testify. At the trial in which plaintiff's tort cause of action was "retried," the jury rendered a verdict in favor of the plaintiff in the amount of $250,000. This was reduced by 35%, representing plaintiff's negligence in respect of the original accident, which yielded $162,500. Id. at 430, 551 A.2d 1022.

At the first trial, plaintiff's attorney settled for $75,000 because he could not produce a doctor. The Appellate Division found, as a matter of law, that this was a correct decision.

With respect to prejudgment interest, Judge Pressler ruled:

The final issue before us is that of prejudgment interest. As we view the matter, plaintiff was entitled to be made whole by defendant for the loss he sustained by reason of defendant's nonappearance. Our predicate, as was the trial Judge's, is that had defendant testified at the Cumberland trial, plaintiff, as of January 7, 1985, the date of the defendant's tort and contract breach, would have been entitled to a verdict of $162,500 plus prejudgment interest thereon. As of that date, however, plaintiff received only the $75,000 settlement proceeds. He did have the use of that sum thereafter. What he did not, however, then have but was entitled to was the difference between $162,500 plus all the prejudgment interest which had already accrued thereon less the $75,000. In our view, therefore, in order to be made whole within the intendment of R. 4:42-11(b),*fn4 two separate calculations have to be made. First, the full verdict value of $162,500, including prejudgment interest to January 7, 1985, must be calculated. From that sum, $75,000 must be deducted. The difference is the amount of plaintiff's economic loss and is also the amount on which prejudgment interest should be calculated from January 7, 1985, forward.

[229 N.J. Super. at 444-45, 551 A.2d 1022.]

Thus, plaintiff obtained interest on interest, a problem in this case. However, the Hussain ruling was the court's factual assessment of the controversy. No legal principle, other than that plaintiff was

entitled to be "made whole" (id. at 444, 551 A.2d 1022), was enunciated. There is no ruling on the question of allocation of interest which controls a trial court. Therefore, I feel free to examine the interest problems in this legal malpractice case.

This was a trial within a trial. Plaintiff's complaint was dismissed in the first negligence action because of a failure of discovery. The dismissal was sustained on appeal. Malpractice was stipulated in this action. The trial conducted here was to determine what the verdict would have been had there been no malpractice.

On this motion for new trial, alternatively for remittitur, there are two issues: whether there was evidence of negligence, and whether the verdict was excessive.

The rulings on these issues were discussed in a separate opinion which was not submitted for publication. The motions for new trial and remittitur were denied and a verdict of $450,000, with a finding of 85% fault on the part of defendant and 15% fault on plaintiff's part, was not disturbed.

This opinion concerns plaintiff's application for interest. Except to the extent that Spaulding v. Hussain, supra, 229 N.J. Super. 430, 551 A.2d 1022, dealt with the problem, no New Jersey case has articulated the rules as to interest in a trial-within-a-trial context. ...


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