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Ness v. New Jersey Manufacturers Insurance Co.

August 13, 2009

BRUCE NESS, ADMINISTRATOR OF THE ESTATE OF PATRICIA M. NESS AND BRUCE NESS, INDIVIDUALLY, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
v.
NEW JERSEY MANUFACTURERS INSURANCE COMPANY, DEFENDANT-APPELLANT/CROSS-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-5375-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 25, 2009

Before Judges Lihotz and Messano.

Defendant New Jersey Manufacturers Insurance Company (NJM) issued a personal automobile insurance policy to plaintiff Bruce Ness that provided uninsured motorist (UM) coverage benefits in the amount of $300,000. On December 4, 2001, plaintiff's wife, Paticia M. Ness, was fatally injured in a motor vehicle accident, and plaintiff, individually and on behalf of her estate, made a claim for UM benefits under the policy. The matter was arbitrated, resulting in an award of $245,000 to plaintiff. NJM refused to pay the award, and plaintiff filed suit.

Shortly thereafter, on August 31, 2005, plaintiff served an offer of judgment, Rule 4:58-1 through -5 (the Rule), upon NJM in the amount of the arbitration award. The matter proceeded through discovery, and ultimately to trial, NJM not accepting plaintiff's offer. The jury returned a verdict of $737,000 in plaintiff's favor, apportioned $137,000 to the estate, and $600,000 personally to plaintiff.

NJM moved to mold the judgment to the limits of its policy. Plaintiff moved to recover "costs, fees and interest in accordance with R. 4:58-2." NJM opposed the request. During oral argument on the motions, plaintiff conceded that "it[] [was] appropriate under the law" for the judge to mold the verdict to the UM policy limits. Over NJM's objection, however, the judge awarded plaintiff prejudgment interest of eight percent under the Rule, computed upon the jury verdict of $737,000. Plaintiff also voiced objection to this calculation, arguing that under the Rule, he was also entitled to prejudgment interest pursuant to Rule 4:42-11(b). The judge then awarded plaintiff attorney's fees in the amount of $38,000 under the Rule, specifically finding counsel's hourly rate of $300 reasonable. Lastly, the judge awarded costs, pursuant to the Rule, in the amount of $8396.72. She specifically refused to include in her award of costs, hours of work performed by an investigator, Gary R. Krohn, who was an employee of plaintiff's counsel.

NJM appeals from that portion of the order that awarded plaintiff interest under the Rule computed "upon the entire verdict as rendered" by the jury. It argues the interest award must be calculated using the "molded verdict" of $300,000. Plaintiff counters that the judge properly computed the interest portion of the award based upon the entire verdict, citing, as did the trial judge, Gonzalez v. Safe & Sound Sec. Corp., 185 N.J. 100 (2005), for authority.

Plaintiff cross-appeals. He contends the judge erred in arriving at the counsel fee portion of the judgment. He argues that although the judge approved his hourly rate of $300, she failed to explain the reasons why she disallowed a significant portion of hours contained in his certification of services.

Plaintiff further contends that the hours spent by the investigator were not "overhead," and he should be permitted to recoup them as expenses. In addition, plaintiff appeals from the interest portion of the judgment, arguing that he was also entitled to prejudgment interest pursuant to Rule 4:42-11(b).

In its brief in opposition to plaintiff's cross-appeal, NJM contended the judge's award of counsel fees was reasonable. However, at oral argument before us, it conceded that the judge failed to make adequate findings and conclusions regarding the disallowance of a portion of counsel's time spent on the case. NJM did not oppose a remand in this regard. As to the other points of plaintiff's cross-appeal, NJM argues the judge correctly denied any award of expenses based on the investigator's time, and correctly denied plaintiff's prejudgment interest request under Rule 4:42-11(b).

We have considered these arguments in light of the record and applicable legal standards. We affirm in part, reverse in part, and remand the matter for further proceedings consistent with this opinion.

The Rule provides in pertinent part

If the offer of a claimant is not accepted and the claimant obtains a money judgment, in an amount that is 120% of the offer or more . . . the claimant shall be allowed, in addition to costs of suit: (1) all reasonable litigation expenses incurred following non-acceptance; (2) prejudgment interest of eight percent on the amount of any money recovery from the date of the offer or the date of completion of discovery, whichever is later, but only to the extent that such prejudgment interest exceeds the interest prescribed by R. 4:42-11(b), which also shall be ...


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