July 28, 2011
SUSAN M. BUTTITTA, INDIVIDUALLY, AND AS EXECUTRIX TO THE ESTATE OF MARK BUTTITTA, PLAINTIFF-RESPONDENT,
ALLIED-SIGNAL, INC., ALLIED CORPORATION, ALMA PRODUCTS CO.,ASBESTOS FIBER CORP., BORG-WARNER CORP., HONEYWELL INTERNATIONAL, INC., A SUCCESSOR CORPORATION TO ALLIED SIGNAL, INC., AND AS A SUCCESSOR IN INTEREST TO HONEYWELL INTERNATIONAL, INC., BENDIX, LAKE ASBESTOS OF QUEBEC, LTD., NATIONAL GYPSUM CO., RAYMARK INDUSTRIAL DIVISION, UNION CARBIDE CORP., AND UNION INSULATING CO., DEFENDANTS, ANDASBESTOS CORPORATION LTD., DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-9592-02.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted May 25, 2011 - Before Judges Sapp-Peterson and Simonelli.
In this negligence, products liability and wrongful death matter, defendant Asbestos Corporation, Ltd. (ACL) appeals from a judgment entered pursuant to the offer of judgment rule, Rule 4:58, requiring ACL to pay all costs and reasonable litigation expenses and attorneys' fees incurred by plaintiff Susan Buttitta, plus eight percent prejudgment interest from December 26, 2007 to June 2010. ACL contends plaintiff's offer was invalid because it did not settle all claims against all defendants in this multi-defendant, multiple-claim, joint and several liability case. ACL also contends the judgment violates its federal and state due process rights because Rule 4:58 provided no notice of ACL's potential sole liability under the Rule. Alternatively, ACL contends the trial judge erred by holding ACL liable for all costs and attorneys' fees from December 2007 to June 2010 without assessing only those fees that were compelled by ACL's non-acceptance of plaintiff's offer.
We hold that plaintiff's offer of judgment to ACL is valid, and ACL's due process rights were not violated. We also hold that the trial judge correctly found ACL to be liable for, and correctly calculated, all of the costs and reasonable litigation expenses and attorneys' fees incurred by plaintiff beginning ninety days from service of the offer of judgment, plus eight percent prejudgment interest from the date of completion of discovery.
The underlying facts of this matter are set forth in two unpublished opinions rendered in this matter. Buttitta v. Asbestos Corp. (Buttitta I), No. A-6101-04 (App. Div. Aug. 16, 2006); Buttitta v. Allied Signal, Inc. (Buttitta II), Nos. A-5263-07, A-5268-07 (App. Div. Apr. 5, 2010), certif. denied, 203 N.J. 93 (2010), certif. denied, 202 N.J. 344 (2010). We incorporate herein the facts set forth in those opinions.
The facts germane to this appeal are straightforward. Plaintiff filed a complaint against numerous defendants, alleging they were jointly and severally liable for the death of her husband, Mark Buttitta, resulting from mesothelioma caused by his exposure to asbestos while employed at a warehouse of General Motors Corporation (GM). Plaintiff sued various defendants, including ACL, a Canadian asbestos mining company.
Throughout the course of this matter, ACL refused to provide certain discovery, arguing that the Quebec Business Concerns Records Act (QBCRA), R.S.Q. Ch. D-12, subjected it to criminal penalty for removing from Canada the discovery plaintiff sought. The trial judge found the QBCRA to be inapplicable, and entered an order striking ACL's answer without prejudice and limiting ACL's participation at trial to cross-examining witnesses.
ACL filed a motion for leave to appeal, which we granted. We reversed and remanded for consideration of ACL's discovery argument pursuant to the factors set forth in Societe Nationale Industrielle Aerospatiale v. United States District Court for the Southern District of Iowa, 482 U.S. 522, 107 S. Ct. 2542, 96L. Ed. 2d 461 (1987). Buttitta I, supra, slip op. at 48-49. On remand, a different judge conducted the proper analysis, reinstated ACL's answer, and ordered it to provide discovery. ACL filed another motion for leave to appeal, which we denied.
Subsequently, the judge entered an order striking ACL's answer with prejudice. Thereafter, on September 27, 2007, plaintiff filed and served an offer of judgment to resolve all claims against ACL for $10,000,000. ACL did not accept the offer or file a counter-offer.
Prior to trial, plaintiff resolved her claims against most of the defendants. A trial occurred in February 2008 as to the remaining defendants -- ACL, Borg-Warner Corporation (Borg- Warner), C.L. Zimmerman Company (Zimmerman), and Honeywell International, Inc. and its predecessor, Bendix (collectively, Honeywell/Bendix). Zimmerman and Honeywell/Bendix settled during the trial, leaving only ACL and Borg-Warner on the verdict sheet. The jury returned a verdict in plaintiff's favor against ACL and Borg-Warner, jointly and severally, for $30,312,204, which clearly exceeded 120% or more of plaintiff's $10,000,000 offer of judgment to ACL.
ACL filed a motion for judgment notwithstanding the verdict or a new trial, which the judge denied. The judge entered final judgment on June 17, 2008. ACL appealed, and we affirmed. Buttitta II, supra, slip op. at 73. Of significance here is our conclusion that the trial judge correctly denied Borg-Warner's motion to include the settling defendants, GM, Honeywell/Bendix and Zimmerman, on the verdict sheet for the purpose of allocating fault because "Borg-Warner failed to present sufficient evidence from which the jury could have allocated its percentage of liability . . . ." Id. at 47-48. We subsequently denied ACL's motion for reconsideration, and our Supreme Court denied certification. Buttitta v. Allied Signal, Inc., 203 N.J. 93 (2010), 202 N.J. 344 (2010).
Prior to the disposition of the appeal, plaintiff filed a motion pursuant to Rule 4:58 for all costs of suit, reasonable litigation expenses and attorneys' fees, plus eight percent prejudgment interest beginning September 27, 2007, the filing date of the offer of judgment. ACL opposed the motion, contending it was premature and lacked sufficient information showing the amount of costs, expenses and fees plaintiff incurred as the result of ACL's non-acceptance of the offer of judgment, and plaintiff did not establish what fees were compelled by ACL's non-acceptance. ACL argued that plaintiff would have incurred much, if not all, of the fees sought regardless of whether ACL accepted plaintiff's offer of judgment because she still had to prepare for trial against multiple other defendants. ACL also contended that plaintiff was not entitled to an award from September 27, 2007; rather, because ACL did not affirmatively communicate a non-acceptance, non-acceptance could not occur until the offer expired on the tenth day prior to trial.
Following oral argument, the judge found the motion was timely filed, plaintiff was entitled to an award, "ACL must accept the consequences associated with the rejection of plaintiff's offer [of judgment]," and ACL could challenge the amount sought, which amount the judge would determine at a later date. Citing Palmer v. Kovacs, 385 N.J. Super. 419 (App. Div.), certif. denied, 188 N.J. 356 (2006), the judge concludedplaintiff was entitled to reasonable attorneys' fees and costs beginning ninety days after plaintiff served the offer of judgment, which is December 26, 2007, plus prejudgment interest calculated from the date of completion of discovery. The judge declined to determine the amount to award and withheld entering final judgment pending disposition of ACL's appeal.
Plaintiff's counsel and co-counsel submitted certifications of services, with supporting time records, requesting, $53,147.45 for costs and $252,401.50 for attorneys' fees, and $111,819.50 for attorneys' fees, respectively, for the period December 26, 2007 through August 19, 2008. Following disposition of ACL's appeal, plaintiff's counsel and co-counsel submitted supplemental certifications of services incurred for the appeal, with supporting time records, requesting an additional $2,170.55 for costs and $93,458 for attorneys' fees, and $40,767 for attorneys' fees, respectively, for the period August 20, 2008 to June 8, 2010. Plaintiff's appellate counsel sought $3,594.43 for costs and $156,695.75 for attorneys' fees. ACL objected to paying any costs, expenses and fees that "were not directly associated to ACL, but to other defendants." The judge declined to proportionally reduce the award, concluding,
[I]t would be fair to say that a significant amount of time and effort went to the trial and prosecuting the claim against all the defendants. They started to settle out, but nonetheless, that work would have had to have been done, anyway.
Even if there was one defendant left, which would have been Borg
Warner, assuming ACL settled . . . .
. . . . . But the fact of the matter is
that the same
amount of effort went into
trying the case against one, as
against both, and under joint and several liability,
clearly they . . . are jointly
and severally liable for the
The judge also concluded the services rendered and fees charged were reasonable and recoverable under Rule 4:58-2. The judge entered judgment against ACL for $885,341.13, consisting of $58,912.43 for litigation costs and expenses and $654,693.75 for reasonable attorneys' fees for the period December 26, 2007 to June 2010, plus $171,744.95 in prejudgment interest. This appeal followed.
We begin by rejecting ACL's contention that plaintiff's offer of judgment is invalid because it did not resolve all claims against all defendants in this joint and several liability case. ACL misreads and misapplies the cases it claims supports this contention: Schettino v. Roizman Dev., Inc., 158 N.J. 476 (1999); Cripps v. DiGregorio, 361 N.J. Super. 190 (App. Div. 2003); Wiese v. Dedhia, 354 N.J. Super. 256 (App. Div. 2002), certif. denied, 175 N.J. 546 (2003); Firefreeze WorldwideInc. v. Brennan & Assocs., 347 N.J. Super. 435 (App. Div. 2002); City of Cape May v. Coldren, 329 N.J. Super. 1 (App. Div. 2000); and Debrango v. Summit Bancorp, 328 N.J. Super. 219 (App. Div. 2000).
For example, in Schettino, supra, the Court held that "[a] plaintiff who has asserted that multiple defendants are jointly and severally liable for a claim is not subject to the financial consequences of Rule 4:58-3 for rejecting an offer by a single defendant to settle its share of liability."*fn1 158 N.J. at 484. The Court reasoned as follows:
The imposition of a financial penalty on a plaintiff for rejecting a settlement offer by a single joint defendant would undermine the purpose of joint and several liability. "Joint and several liability was designed to obviate a plaintiff's burden of proving which share of the injury each of several defendants was responsible for; the burden of proof is removed from the innocent plaintiff and placed upon the wrongdoers to determine among themselves." Applying the offer-of-judgment rule, however, would shift to plaintiffs, when evaluating the fairness of a settlement offer, the burden of determining a single defendant's share of liability. Rather, plaintiffs need consider only an offer to settle the entire liability on behalf of all defendants. [Ibid. (citation omitted).]
In Cripps, supra, we determined that the plaintiff's rejection of the defendants' separate offers of judgment did not trigger the consequences of Rule 4:58. 361 N.J. Super. at 195-97. Wiese, supra, is factually distinguishable because it did not involve multiple defendants; rather, it involved a joint offer of judgment by the plaintiffs, a husband and wife, in an automobile negligence action against the other driver, a single defendant. 354 N.J. Super. at 258-59, 264. We held that separate offers of judgment are not required of multiple plaintiffs who have no apparent conflict of interest. Id. at 262-64.
In Firefreeze, supra, we concluded that Rule 4:58 allowed a plaintiff to submit an offer of judgment that would dispose of a defendant's counterclaim, as well, and thus, the offer applied to the entire case. 347 N.J. Super. at 442. Firefreeze also involved a plaintiff who made an offer against a single defendant; it was not a multiple defendant case. Id. at 438. We also declined "to consider whether Rule 4:58 would allow a party to submit an offer of judgment that does not encompass all the claims asserted in an action." Id. at 442 n.3.
City of Cape May, supra, involved an offer made by a plaintiff to resolve a single remaining counterclaim, which the defendant rejected. 329 N.J. Super. at 3-4. Thus, the case is distinguishable from the facts of this appeal. However, in the City of Cape May, we noted that the Schettino Court had determined that the plaintiff could not be subject to Rule 4:58 where there was no total offer disposing of the entire case, and thus, attorneys' fees could not be assessed against the plaintiff. Id. at 8-9.
Finally, in Debrango, supra, we reiterated that in a multiple defendant case, "[i]t is only an offer [by one defendant] to settle the entire case on behalf of all defendants that triggers a potential claim [against the plaintiff] for counsel fees under R. 4:58-1." 328 N.J. Super. at 226. An offer by a single defendant to the plaintiff would not settle the entire case and did not invoke Rule 4:58. Ibid.
ACL also misreads and misapplies our holding in Schettino v. Roizman Dev., Inc., 310 N.J. Super. 159 (App. Div. 1998), aff'd, 158 N.J. 476 (1999). In Schettino, certain defendants filed a joint offer of judgment, which the plaintiff ostensibly did not accept. Id. at 162-63. The trial court awarded defendants' counsel fees pursuant to Rule 4:58-3. Id. at 163. We reversed, observing that "[Rule] 4:58-2 deals with theconsequences of one defendant's response to a claimant's offer where there are multiple defendants against whom a joint and several judgment is sought." Id. at 167-68. We made this observation despite Rule 4:58's silence as to whether it applies to a claimant's offer to a single defendant in a multiple defendant, joint and several liability case. See R. 4:58-2. We also concluded that "it is sufficiently clear that the intention of the three-part Rule [of 4:58] is to address and obviate piecemeal offers or acceptances thereunder by either a claimant or defendant in multi-party actions . . . ." Id. at 168 (emphasis added). Moreover, we did not revisit our holding in Schettino when we decided Firefreeze, supra. In fact, as aforementioned, in Firefreeze, we declined "to consider whether Rule 4:58 would allow a party to submit an offer of judgment that does not encompass all the claims asserted in an action." 347 N.J. Super. at 442 n.3.
Following the Court's decision in Schettino, the Civil Practice Committee issued the "Report of the Offer of Judgment Subcommittee - 2005", see 2006 Supplemental Report of the Supreme Court Civil Practice Committee, App'x C, at 193, available at http://www.judiciary.state.nj.us/reports2006/civilsup.pdf, wherein the Subcommittee identified "the operation of an offer of judgment in cases with multiple defendants" as one of the specific issues for potential revision, id. at 196. When discussing "Multiple Defendant Cases," the Subcommittee reported:
[I]f the package offer from the plaintiff were tendered to less than all of the defendants, the verdict sheet would need to allocate the percentage shares of liability for each defendant, so that the "success" of the plaintiff against the defendants who rejected the pretrial offer can be measured.
The Subcommittee did agree . . . that a plaintiff should be able to tender an offer of judgment to a single defendant in a multi-defendant case, so long as the verdict sheet allocates fault so that [a] single defendant's liability can be fixed and compared with the pretrial offer. A simple amendment to the Rule authorizing such one-defendant-at-a-time offers could be beneficial. [Id. at 202 (emphasis added).]
Although Rule 4:58 was not subsequently amended to reflect these recommendations vis-a-vis the verdict sheet, we find that this report supports our view in Schettino, supra, 310 N.J. Super. at 167, that Rule 4:58-2 applies to an offer of judgment by a plaintiff to a single defendant in a multi-defendant, joint and several liability case.
Further, case law implies that a plaintiff in a multi-defendant case may choose to make separate offers of judgment to each defendant or one joint offer, but is not required to do one or the other. See, e.g., Schettino, supra, 158 N.J. at 483 (indicating that "plaintiffs are permitted [not "required"] to act in respect of the total judgment" (emphasis added)); Wiese, supra, 354 N.J. Super. at 263 (indicating that "in cases of multiple defendants, R. 4:58-2 permits [not "requires"] plaintiffs to act in respect of the total judgment" (emphasis added)). Accordingly, we conclude that plaintiff's offer of judgment to ACL was valid.
We also reject ACL's contention, raised for the first time on appeal, that the judgment violates its due process rights because Rule 4:58 provides no notice of ACL's potential liability for all of plaintiff's costs, expenses and attorneys' fees in a multi-defendant case. Generally, we "'will decline to consider questions or issues not properly presented to the trial court when an opportunity for such a presentation is available' unless the matter involves the trial court's jurisdiction or is of public importance." Alloway v. Gen. Marine Indus., L.P., 149 N.J. 620, 643 (1997) (quoting Nieder v. Royal Indem. Ins. Co.,62 N.J. 229, 234 (1973)). No exception applies here. Nevertheless, addressing the merits, we conclude ACL's contention lacks merit. In Schettino, supra, the Court stated that "a plaintiff may obtain costs and attorney's fees from a single defendant who offers to settle only its share of liability." 158 N.J. at 483-84. Accordingly, if a plaintiffmay obtain costs and fees from a single defendant who made a pro rata offer, then even more so, a plaintiff may obtain the same from a single defendant who not only refused to accept the plaintiff's offer to settle its share of liability, but also made no counteroffer, joint or otherwise, to settle. Thus, we are satisfied that Schettino provided sufficient notice to ACL of its potential liability for all of plaintiff's costs, expenses and attorneys' fees.
Moreover, ACL had notice of plaintiff's motion pursuant to Rule 4:58, filed its opposition, and also had two opportunities to be heard prior to the entry of the award. Accordingly, there was no due process violation.
We now turn to ACL's alternative contention the judge erred by holding ACL liable for all costs and attorneys' fees from December 2007 to June 2010, without assessing only those costs and fees that were compelled by ACL's non-acceptance of the offer. We review an award of attorneys' fees and costs under an abuse-of-discretion standard. Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 443-44 (2001). Applying this standard, we discern no reason to disturb the judgment.
Rule 4:58-1b provides,If at any time on or prior to the 10th day before the actual trial date the offer is accepted, the offeree shall serve on the offeror and file a notice of acceptance withthe court. The making of a further offer shall constitute a withdrawal of all previous offers made by that party. An offer shall not, however, be deemed withdrawn upon the making of a counter-offer by an adverse party but shall remain open until accepted or withdrawn as is herein provided. If the offer is not accepted on or prior to the 10th day before the actual trial date or within 90 days of its service, whichever period first expires, it shall be deemed withdrawn and evidence thereof shall not be admissible except in a proceeding after the trial to fix costs, interest, and attorney's fee. The fact that an offer is not accepted does not preclude a further offer within the time herein prescribed in the same or another amount or as specified therein.
Rule 4:58-2(a) provides,
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, excluding allowable prejudgment interest and counsel fees, 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 allowable; and (3) a reasonable attorney's fee for such subsequent services as are compelled by the non-acceptance.
By the plain language of the Rules, ACL is responsible for all of plaintiff's costs and all reasonable litigation expenses that follow its non-acceptance from "the 10th day before the actual trial date or within 90 days of its service, whichever period first expires," Rule 4:58-1b, (emphasis added), as well as the payment of prejudgment interest "from the date of the offer or the date of completion of discovery, whichever is later," Rule 4:58-2(a)(2). Unlike Rule 4:58-2(a)(3), Rule 4:58-2(a)(1) and (a)(2) do not restrict payment of costs and expenses to only those that "are compelled by" ACL's non-acceptance. Accordingly, the judge correctly determined that ACL was liable for all of plaintiff's costs and reasonable litigation expenses incurred within ninety days of the service of the offer, which is December 26, 2007. The judge also properly determined ACL was liable for eight percent prejudgment interest accruing from the date of completion of discovery.
By contrast, as mentioned above, Rule 4:58-2(a)(3) limits the award of reasonable attorney's fees to those "compelled by" ACL's non-acceptance. In this case, plaintiff's proofs were not unique to any defendant, there was no allocation of liability among the defendants, and ACL is jointly and severally liable for the entire judgment. Accordingly, we conclude that ACL is responsible for all of plaintiff's reasonable attorneys' fees, which were compelled by its non-acceptance.