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Tesoroni v. Arch Insurance Co.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


December 5, 2008

ROBERT A. TESORONI, III, PLAINTIFF-RESPONDENT,
v.
ARCH INSURANCE COMPANY, DEFENDANT-APPELLANT.

On appeal from Superior Court of New Jersey, Law Division, Cape May County, Docket No. L-48-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued November 13, 2008

Before Judges Lihotz and Messano.

In this declaratory judgment action, defendant appeals from a March 14, 2008 Law Division order compelling arbitration and denying defendant's cross-motion to enforce an alleged settlement. See Wein v. Morris, 194 N.J. 364, 380 (2008) (order compelling arbitration is a final judgment appealable as of right). Defendant argues plaintiff did not "revoke, change, alter, or otherwise amend [his] settlement demand." Thus, the trial court erred in failing to enforce the settlement. We disagree and affirm.

The underlying litigation stemmed from a motor vehicle accident, which occurred on September 2, 2003. On September 11, 2006, the tortfeasor offered $100,000, the limits of her policy coverage, to settle the matter with plaintiff, Robert A. Tesoroni, III. On September 12, 2006, plaintiff sent correspondence to his carrier, defendant, Arch Insurance Company, through its claims manager. Plaintiff advised an offer to settle was tendered by the tortfeasor and sought authorization to accept payment. Longworth v. Van Houten, 223 N.J. Super. 174, 186 (App. Div. 1988). Plaintiff also gave notice of his request for underinsured motorists' benefits (UIM). Defendant did not preserve its subrogation rights. By correspondence dated October 17, 2006, plaintiff notified defendant he planned to accept the tortfeasor's offer and issue a release, which he did ten days later.

In his communication to defendant, plaintiff reinforced his intention to pursue a UIM claim. Defendant accepted plaintiff's UIM claim and on March 15, 2007 extended an offer of $35,000 as full settlement. Plaintiff rejected the offer and identified his selection of an arbitrator.

Settlement discussions continued over the ensuing months. On November 2, 2007, plaintiff advised he would be willing to settle the UIM claim for $50,000. Follow-up telephone calls to defendant on November 5, 10, and 20 went unanswered. On November 21, 2007, plaintiff reiterated a desire to quickly conclude the matter with payment of $50,000. Plaintiff was advised defendant had not given settlement authority to counsel. On December 4, 2007, plaintiff's counsel called and left a message stating plaintiff was no longer interested in settling for $50,000 and sought to proceed to arbitration. A confirming letter was sent on December 6, 2007. That correspondence stated in pertinent part:

This letter will follow[-]up the message I left for you on December 4, 2007 . . . . This [UIM] claim has been pending for over a year.

Accordingly, at this point I would ask that you please name an Arbitrator so that the plaintiff's Arbitrator and the defense Arbitrator can select a neutral. I would like to schedule a date for arbitration.

Defendant did not immediately respond. Defense counsel called plaintiff's attorney on January 14, 2007 and claims to have left a message authorizing payment of $50,000 to resolve plaintiff's claim. On that date, a verified complaint and order to show cause initiating this action were executed and sent for filing. The complaint specifically rejected the proposed $50,000 offer. The pleadings were faxed to defendant on January 15, 2008. Correspondence memorializing defendant's settlement offer was sent on January 16, 2008. The court filed plaintiff's complaint on January 25, 2008.*fn1

On March 15, 2008, Judge Visalli heard oral argument on plaintiff's order to show cause and defendant's motion to compel settlement.*fn2 The court determined "the logical inference from reading the [December 6, 2007] letter is a withdrawal because you don't name an arbitrator, or require the naming of an arbitrator if there is still an offer out there." The judge entered the order now challenged by defendant.

Defendant argues plaintiff did not formally revoke the offer to settle his claims for $50,000 and, therefore, defendant's January 14, 2008 correspondence accepting the offer binds plaintiff.

When reviewing judicial factfinding, our scope of review is limited. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). We determine whether the findings made are reasonably supported by adequate, substantial, credible evidence present in the record. Ibid.; Fanarjian v. Moskowitz, 237 N.J. Super. 395, 406 (App. Div. 1989).

A binding agreement to settle litigation can be enforced only when the "parties agree on essential terms and manifest an intention to be bound by those terms[.]" Weichert Co. Realtors v. Ryan, 128 N.J. 427, 435 (1992). Unqualified acceptance is required. Id. at 435-36; Gamble v. Connolly, 399 N.J. Super. 130, 141 (App. Div. 2007).

Following our review of the record and after consideration of the arguments presented on appeal, we concur with Judge Visalli's determination that plaintiff's December 4, 2007 telephone call and December 6, 2008 correspondence demonstrate plaintiff's changed position: plaintiff intended to proceed with arbitration because settlement was no longer viable. Such intent was made abundantly clear by the preparation and filing of a complaint and order to show cause seeking to enforce the arbitration clause of the insurance contract. We conclude defendant's subsequent January 14, 2008 telephone message and January 16, 2008 correspondence (sent after the complaint was faxed) was not acceptance of an unqualified proposal to settle.

Plaintiff's intent to do otherwise was clear and no agreement to settle plaintiff's claims was reached.

Affirmed.


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