On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, L-3272-97.
Before Judges Conley, Newman and Parrillo.
The opinion of the court was delivered by: Parrillo, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 11, 2002
This case involves dual issues concerning the applicability of both:
(1) R. 4:58-1 to husband and wife plaintiffs whose offer of judgment was rejected by defendant; and (2) R. 4:42-11(b) to an award of future lost earnings. The trial judge found these rules inapplicable and therefore denied plaintiffs' request for attorney's fees, costs and interest, as well as plaintiff husband's request for pre- judgment interest on his award of future lost income. We reverse these determinations. We further find that the issues raised by defendant on cross appeal are without merit and do not warrant discussion in a written opinion. R. 2:11- 3(e)(1)(A)&(E).
Plaintiffs John and Elizabeth Wiese, husband and wife, filed this automobile negligence action against defendant Jamir Dedhia to recover for their personal injuries and for the wife's loss of services and consortium. Plaintiffs' claims were submitted to mandatory arbitration, N.J.S.A. 39:6A-25a and R. 4:21A-1(a)(1). The arbitrators awarded damages of $60,000 to husband and $17,500 to wife. Defendant rejected the arbitration award and demanded a trial de novo. R. 4:21A-6. Prior to trial, plaintiffs tendered a joint offer of judgment for $75,000 within the time prescribed by R. 4:58-1. The offer was not accepted by defendant who neither requested that the offer be broken down individually between the Wieses nor countered with an itemized offer of settlement. The case was then tried before a jury which found defendant 95% negligent and awarded compensatory damages of $83,814 to John Wiese and $20,336 to Elizabeth Wiese. *fn1
John Wiese's post verdict application for pre-judgment interest on that portion of his award representing future lost earnings was rejected by the trial judge who instead allowed $7,452.62 in pre-judgment interest on the other components of the husband's damage verdict. The trial judge also allowed $4,062 in pre-judgment interest to Elizabeth Wiese who received no damages for future lost earnings.
Both plaintiffs then sought an award of counsel fees, costs and interest against defendant and his insurer, Rutgers Casualty *fn2 , pursuant to R. 4:58-1, commonly referred to as the offer of judgment rule, which entitles a claimant who obtains a verdict equal to or exceeding the rejected offer to costs, interest and reasonable attorney's fees. However, an exception to this general rule states that in a negligence action, as here, counsel fees are recoverable only if the verdict exceeds 120% of the offer. Plaintiffs' combined award of more than $90,000 qualified as being in excess of 120% of the $75,000 joint offer. Defendants opposed on the ground that R. 4:58-1 only allows separate offers from individual parties and, in any event, neither plaintiff is eligible thereunder since the larger adjusted award of $79,243.30 to John Wiese, exclusive of pre-judgment interest, *fn3 does not exceed 120% of the rejected offer of $75,000. The trial court agreed with defendants' argument and denied plaintiffs' application, reasoning:
[O]ne of the problems is that when you talk jointly, you're offering a package. . . . . [O]ften you have joint demands . . . usually and especially with a husband and wife scenario or sometimes a parent/child scenario. It's the same family; the money is going to go into the same coffer. It really is irrelevant how it's divided up or whacked up. They could care less. But it's not always a joint demand, even when one represents both . . . And they're not always settled . . . together. I mean there are all different approaches that are made.
But if you have a situation where two people have individual claims and only an approach is taken by plaintiffs that a joint offer of demand is made, it could well be . . . that maybe one of the litigants and the insurance company could reach an accord on the value of that case. But the carrier is precluded from reaching an accord on that case when he disagrees with the value of the second independent, individual case. And therefore, because they cannot settle the other, the second of the two cases, they're forced to go to trial on both and risk the increased exposure that's attendant to a verdict like this where the percentages meet an allowance of fees and awards. Had they been allowed to settle one case, they could have reduced that exposure. . . .
I don't think that the offer of judgment was designed to accomplish a result that [Plaintiff] is arguing here. . . . It may be in this case that maybe the carrier could have settled one of those two cases if they had an individual demand. But they were precluded from settling it because they were met with a joint demand and that increased their exposure for fees and costs appreciably. And I think that's that problem with the joint offer of demand. So I think that the joint demand was inappropriate and improper. And accordingly, that the defendant would not be responsible for fees and costs.
Under the trial court's view of R. 4:58, husband and wife plaintiffs with both individual and derivative claims, no known or apparent conflict of interest, and desirous of resolving the entire case, would be required to make separate offers of judgment. We disagree. We find nothing in the language or policy of R. 4:58 that requires ...