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Taddei v. State Farm Indemnity Co.

June 30, 2008


On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-3457-05.

The opinion of the court was delivered by: Lisa, J.A.D.

* Improperly pled as State Farm Mutual Automobile Insurance Company.



Argued June 4, 2008

Before Judges Lisa, Simonelli and King.

Plaintiff, Leona C. Taddei, was injured in a vehicular accident he alleged was caused by the negligence of the unknown driver of another vehicle with which his vehicle had no contact. Plaintiff was insured by State Farm Indemnity Company (State Farm), and his policy included uninsured motorist (UM) coverage in the amount of $100,000 per person and $300,000 per accident. Plaintiff made a UM claim against State Farm. After efforts to resolve the claim were unsuccessful, plaintiff, and his wife suing per quod, brought this action against State Farm. The complaint alleged causative negligence against the unknown driver, the existence of the UM policy with State Farm, and the inability of the parties to resolve the claim through arbitration, as a result of which plaintiff demanded damages for his injuries and for his wife's loss of consortium. The complaint did not allege bad faith by State Farm.

The case went to trial, and the jury rendered a verdict of $2,500,000 for plaintiff and $100,000 for his wife. Over plaintiff's objection, the judge molded the verdict to reflect the UM coverage limits and entered judgment for $100,000.

Plaintiff appeals, arguing that the judge erred in molding the verdict to the coverage limits, and should have entered judgment for the full $2,600,000, plus prejudgment interest on that sum. Plaintiff further argues that, regardless of the amount of the judgment, the judge erred in failing to award prejudgment interest. We reject plaintiff's argument that the judge erred in molding the verdict to conform with the coverage limits, but we agree with plaintiff that prejudgment should have been awarded. Accordingly, we affirm the judgment, modified to include prejudgment interest.*fn1

The accident happened on July 18, 2001 in Totowa. Plaintiff was taken by ambulance to a local hospital, complaining of pain in his neck and left shoulder. He was evaluated and released with a prescription for pain medication. Two days later, plaintiff consulted a physician after experiencing pain in both shoulders and in his back. For the next four months, plaintiff received physical therapy and massage treatments three times a week. Over the course of the next year, plaintiff consulted with several physicians, who prescribed various treatment modalities, including physical therapy, epidural steroid injections, and cryo therapy.

In May 2003, plaintiff consulted with Dr. Mark Drzala. Based upon his physical examination and review of medical records and diagnostic studies, he diagnosed plaintiff with the following: low back pain syndrome; lumbar degenerative disc disease; lumbar discogenic syndrome; central L5-S1 herniated nucleus pulposis with radiculopathy; grade one L5-S1 retrolisthesis; cervicalgia; left-sided cervical facet syndrome; cervical discogenic syndrome; small focal disc protrusions at the C3-C4, C4-C5, C5-C6, and C6-C7 levels; right shoulder rotator cuff tear; and right shoulder instability. Drzala obtained further diagnostic studies and confirmed and refined his diagnoses.

In July 2003, Drzala performed an intradiscal electrothermal procedure on plaintiff's lumbar spine. This minimally invasive procedure involves putting a needle in the disc through which a flexible copper wire is inserted that wraps around the disc and heats it to 100˚C. The purpose is to thermally modulate the protein in the disc so that it stabilizes. The procedure typically lasts sixteen-and-one-half minutes and has a fifty percent success rate. Following the procedure, plaintiff felt better, but by January 2004, the pain in his back returned. Drzala discussed several surgical options with plaintiff, but ultimately advised against them, and plaintiff has undergone no further surgical procedures.

At the time of the accident, plaintiff, then thirty-six years old, was a miscellaneous mechanic for PSE&G. His job duties required him to perform renovation, electrical, welding, and fabrication work. He missed only three days of work following the accident, and, throughout these proceedings, continued to work at the same job, although he contends he has had to tailor his work assignments because of physical restrictions. He also has curtailed some household chores and participation in activities with his teenage children.

In May 2003, plaintiff's attorney submitted the UM claim to State Farm, and over the next several months forwarded copies of plaintiff's medical reports and records. State Farm submitted the medical information to Dr. Lawrence P. Floriani, who issued a report to State Farm on September 29, 2003, concluding that plaintiff's injuries were as reported by Drzala, were caused by the accident, and that all treatment received to date and recommended was consistent with the injuries and their severity.

On October 30, 2003, State Farm denied plaintiff's UM claim, contending it had information that plaintiff was at fault for the accident. State Farm relied on plaintiff's description of the accident as reflected in the police report and the entry in the police report that driver inattention by plaintiff may have contributed to the accident. Plaintiff demanded UM arbitration. A panel of three arbitrators conducted a hearing on March 21, 2005. They found the unknown driver 100% at fault and awarded plaintiff $92,500 for his injuries.

The parties remained at an impasse in their efforts to resolve the claim. On April 1, 2005, State Farm voluntarily paid plaintiff $50,000, thus reducing the available coverage by that amount. It was understood that State Farm's payment and plaintiff's acceptance of the $50,000 was without prejudice to plaintiff's right to receive a higher amount through "continuing negotiation or alternative means of resolution," and would not constitute a waiver of any defenses State Farm might have "now or in the future, under the policy." On April 15, 2005, State Farm formally rejected the arbitrators' decision and, pursuant to the policy terms, advised plaintiff that if he wished to pursue the matter further he would have to file a Superior Court action, in which State Farm would demand a trial by jury.

Plaintiff filed his complaint on April 26, 2005. As we stated, it contained no allegation of bad faith by State Farm. It sought only compensatory damages for plaintiff's ...

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