Before Judges Keefe, Eichen and Steinberg.
The opinion of the court was delivered by: Keefe, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
On appeal from the Superior Court of New Jersey, Law Division, Atlantic County.
This appeal requires an interpretation of the Offer of Judgment rule. R. 4:58-1 to -4. Specifically, we are asked to interpret the provisions of Rule 4:58-3, and the consequences of non-acceptance of an offer made by a party who is not a claimant.
Plaintiff, Bernice Lobel, instituted suit against defendants, Trump Plaza Hotel and Casino (Trump) and Harvey's Deli, for personal injuries allegedly caused by the negligence of a waiter who spilled hot coffee on her while she was in Harvey's Deli. Harvey's Deli is located within Trump's casino. The complaint was filed on October 20, 1997. Trump answered on behalf of itself and Harvey's Deli on December 5, 1997. *fn1
On December 23, 1998, Trump offered to allow judgment to be taken against it in the amount of $6,000. Plaintiff did not accept the offer. The case was thereafter tried to a jury. The jury returned a verdict in favor of plaintiff in the amount of $750. The total judgment entered in favor of plaintiff against Trump was in the amount of $1,027.07. The judgment included the jury verdict of $750, prejudgment interest of $72.99, and taxed costs in the amount of $204.08.
Trump filed a motion for fees and costs pursuant to Rule 4:58-3. The trial judge denied the motion. In a letter opinion dated August 20, 1999, Judge Higbee held that the phrase "the amount awarded to the claimant" as used in the rule meant the jury verdict award, and because the jury verdict was $750, Trump was not entitled to costs and fees. An order was entered denying Trump's motion from which Trump now appeals.
On appeal, Trump contends that Judge Higbee erred in her interpretation of the rule. It contends that "the amount awarded" must include prejudgment interest and taxed costs, because to do so would foster settlement, the underlying purpose of the rule, and avoid the "paradox" that the Supreme Court identified in Schettino v. Roizman Development, 158 N.J. 476, 488 (1999). Plaintiff, on the other hand, contends that Trump's argument fails to appreciate the distinction between an "award," which she maintains is the equivalent of a jury verdict, and a "judgment," which includes the jury verdict, plus interest, and taxed costs.
It is helpful to compare the grammatical structure of relevant sections of the Offer of Judgment rule as they existed in 1999, when the subject motion was decided. Rule 4:58-2, which addresses the consequences of the non-acceptance of a claimant's offer to take judgment in the claimant's favor, read in full:
If the offer of a claimant is not accepted and the claimant obtains a verdict or determination at least as favorable as the rejected offer, the claimant shall be allowed, in addition to costs of suit, (a) all reasonable litigation expenses incurred following non-acceptance; (b) eight 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 (c) a reasonable attorney's fee, which shall belong to the client, for such subsequent services as are compelled by the non-acceptance. In an action for unliquidated damages, however, no allowances under this rule shall be granted to the offeror unless the amount of the recovery is in excess of 120% of the offer. A claimant entitled to interest under R. 4:42-11(b) shall be allowed interest under this rule only to the extent it may exceed the interest allowed under R. 4:42-11(b). [(emphasis added).]
If the offer of a party other than the claimant is not accepted and the determination is at least as favorable to the offeror as the offer, the offeror shall be allowed, in addition to costs of suit, litigation expenses and attorney's fee as prescribed by R. 4:58-2, and any such allowances shall constitute a prior charge upon the judgment. In an action for unliquidated damages, however, no allowances under this rule shall be granted to such offeror unless the amount awarded to the claimant is in excess of $750.00 and is less than 80 per cent of the offer. [(emphasis added).]
The word "judgment" has a very definite meaning in the context of the Rules Governing Civil Practice. R. 4:1 to 4:101. Rules 4:42-1 to - 11, make it clear that a "judgment" includes, the verdict of the court or jury, the taxed costs, including counsel fees if permitted, and prejudgment interest if appropriate. Further, Rule 4:47 makes it clear that the "judgment" is the final decretal act of the court, while the "verdict" is not. However, the word judgment is used only once in the Offer of Judgment rule, and that is in Rule 4:58-3. There, the word is used in the context of defining the fund available to an offeror for the satisfaction of an award made in the offeror's favor as a consequence of the claimant's failure to accept an offer. That is, a successful offeror under Rule 4:58-3 is given a lien against the largest available source of funds resulting from the litigation, i.e., the damage verdict, taxed costs, and prejudgment interest. In all other respects, however, the Offer of Judgment rule used the words "verdict," "determination," "recovery," or "awarded" to describe the threshold number or starting point for deciding whether an offeror is entitled to fees and costs under the rule. The word "verdict" has an unmistakable connotation. In the context of an unliquidated damages case, "verdict" means the jury's assessment of the value of plaintiff's claim expressed in dollar terms. The verdict does not include prejudgment interest or taxed costs. Those items are added to the verdict by the judge and clerk in order to arrive at the judgment that is entered. See, ...