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Orientale v. Jennings

Supreme Court of New Jersey

September 23, 2019

Barbara Orientale, Plaintiff-Appellant,
v.
Darrin L. Jennings, Defendant, and Michael Orientale, Plaintiff, and Allstate New Jersey Insurance Company, Defendant-Respondent.

          Argued October 9, 2018

          Re-Argued April 24, 2019

          On certification to the Superior Court, Appellate Division.

          Christina Vassiliou Harvey argued the cause for appellant (Lomurro, Munson, Comer, Brown & Schottland, attorneys; Christina Vassiliou Harvey, on the briefs, and Jonathan H. Lomurro, of counsel and on the briefs).

          Frederic J. Regenye argued the cause for respondent (Law Office of Kenneth N. Lipstein, attorneys; Frederic J. Regenye, on the briefs).

          Amos Gern argued the cause for amicus curiae New Jersey Association for Justice (Starr, Gern, Davison & Rubin, attorneys; Amos Gern, of counsel and on the briefs, and Ana Rita Ferreira, on the briefs).

          William S. Bloom argued the cause for amicus curiae New Jersey Defense Association (Methfessel & Werbel, attorneys; William S. Bloom and Leslie A. Koch, of counsel and on the brief, and Natale Donis and James V. Mazewski, on the brief).

          David R. Kott argued the cause for amicus curiae New Jersey Business & Industry Association (McCarter & English, attorneys; David R. Kott, Edward J. Fanning, and Amanda M. Munsie, of counsel and on the brief).

          Emily A. Kaller argued the cause for amicus curiae Trial Attorneys of New Jersey (Greenbaum, Rowe, Smith & Davis and Trial Attorneys of New Jersey, attorneys; Emily A. Kaller and Michael Ricciardulli, on the brief).

          Thomas J. Manzo argued the cause for amicus curiae New Jersey State Bar Association (New Jersey State Bar Association, attorneys; John E. Keefe, Jr., President, of counsel and on the brief, and Thomas J. Manzo, Craig J. Hubert, William H. Mergner, Jr., and Brandon C. Simmons, on the brief).

          ALBIN, J., writing for the Court.

         In this case, the Court considers the practices of additur and remittitur. Currently, when a jury's damages award is so grossly excessive that it shocks the judicial conscience, the trial judge may, with the consent of the plaintiff, grant a remittitur -- the highest award that, in the judge's view, could be sustained by the evidence. If the plaintiff accepts the remitted amount, the defendant is bound by that judicial finding, subject to the right to appeal. Likewise, when a jury's damages award is so grossly inadequate that it shocks the judicial conscience, the trial judge may, with the consent of the defendant, grant an additur -- an increased award that, in the judge's view, could be sustained by the evidence. If the defendant accepts the additional amount, the plaintiff is bound by that judicial finding, subject to the right to appeal.

         Plaintiff Barbara Orientale brought a personal-injury lawsuit against defendant Darrin Jennings for allegedly setting off an automobile accident that caused her to suffer permanent injuries. The trial court entered partial summary judgment against Jennings, finding that he was at fault for causing the accident. Orientale and Jennings then settled the lawsuit for $100, 000, the full amount of liability coverage on Jennings's vehicle.

         Orientale maintained an underinsured motorist policy with defendant Allstate New Jersey Insurance Company (Allstate) that provided coverage for damages up to $250, 000. Orientale initiated a claim for her personal-injury damages in excess of $100, 000 allegedly caused by the accident. Although the jury returned a verdict finding that Orientale suffered a permanent injury, it awarded damages in the amount of only $200. Because the jury award did not exceed Orientale's $100, 000 settlement with Jennings, Allstate's underinsured motorist coverage policy was not triggered. Therefore, the judge entered a no-cause-of-action judgment.

         Orientale moved for a new damages trial or an additur. The judge vacated the damages award, finding that it constituted a miscarriage of justice, and granted an additur in the amount of $47, 500, the lowest award in his estimation that a reasonable jury could have returned in light of the evidence presented at trial. Allstate accepted the additur. Because Orientale's damages did not exceed $100, 000, the judge again entered a judgment in favor of Allstate, which the Appellate Division affirmed in an unpublished decision. The Court granted Orientale's petition for certification. 232 N.J. 154 (2018).

         HELD: The Court brings the use of remittitur and additur in line with basic notions of fair play and equity. When a damages award is deemed a miscarriage of justice requiring the grant of a new trial, then the acceptance of a damages award fixed by the judge must be based on the mutual consent of the parties. Going forward, in those rare instances when a trial judge determines that a damages award is either so grossly excessive or grossly inadequate that the grant of a new damages trial is justified, the judge has the option of setting a remittitur or an additur at an amount that a reasonable jury would award given the evidence in the case. Setting the figure at an amount a reasonable jury would award -- an amount that favors neither side -- is intended to give the competing parties the greatest incentive to reach agreement. If both parties accept the remittitur or additur, then the case is settled; if not, a new trial on damages must proceed before a jury.

         1. In the early English common law, additur did not exist, and remittitur did not bear any resemblance to how it is practiced today. In 1822, United States Supreme Court Justice Joseph Story, sitting as a Circuit Justice, upheld a verdict on liability but found the damages award was excessive. Blunt v. Little, 3 Mason 102, 102 (1822). Justice Story noted, "I believe that I go to the very limits of the law, " in concluding "that it is reasonable, that the cause should be submitted to another jury, unless the plaintiff is willing to remit $500 of his damages. If he does, the court ought not to interfere farther." Ibid. Justice Story did not seek the defendant's consent to the remittitur. In time, Justice Story's use of remittitur was accepted by the United States Supreme Court. Nonetheless, in a case involving a constitutional challenge to additur, the Court reexamined the validity of the then-accepted practice of remittitur and reasoned that Justice Story's use of remittitur rested on a shaky legal foundation. Dimick v. Schiedt, 293 U.S. 474, 482-86 (1935). In the end, additur was deemed unconstitutional under the Seventh Amendment because it requires the plaintiff "to forego his constitutional right to the verdict of a jury, " while remittitur survived, primarily due to its long-standing history in federal jurisprudence. Id. at 484-85, 487-88. (pp. 13-21)

         2. As of 1917, both remittitur and additur were accepted practices in New Jersey. Forty years later, the Court addressed a constitutional challenge to additur based on the Dimick decision. See Fisch v. Manger, 24 N.J. 66, 72-73, 80 (1957). The Court explained that the "constitutional right of trial by jury relates to substance rather than form and does not preclude efficient procedural devices, " id. at 75, and was "satisfied that the practices of remittitur and additur violate none of our constitutional interdictions" when fairly invoked to resolve a "manifest denial of justice." Id. at 80. Although the doctrines of remittitur and additur have long been a part of our jurisprudence, remittitur in particular has come under increasing scrutiny. The arguments presented in this appeal have compelled the Court to look anew at the fairness of a trial judge granting a remittitur or additur without the mutual assent of the parties. (pp. 21-25)

         3. Remittitur and additur allow just one party the option of avoiding the unnecessary expense and delay of a new trial. The other party is bound by a judge's setting the quantum of damages and denying a new trial -- subject only to an appeal challenging the trial court's exercise of discretion in granting or setting the remittitur or additur amount. The heart of the problem is lack of mutual consent to the judge's assessment of the proper quantum of damages. Because both parties are not required to accept the remittitur or additur, a new trial can be denied without the mutual consent of the parties. Under New Jersey's court rules, however, both parties generally have the right to demand and receive a jury trial on damages. See R. 4:35-1(a), (d). A party entitled to a new damages trial because of a grossly excessive or inadequate damages award should be in no different position. The Court now holds that in the unusual case where a damages award was grossly excessive or grossly inadequate, the trial court retains the power to declare that a jury's damages award shocks the conscience and to grant a new trial or offer the parties a remittitur or an additur. Going forward, however, unless both parties consent to a remittitur or an additur, the court must grant a new trial. The Court modifies additur and remittitur based on its authority over the common law and practices and procedures of the courts; it does not address the constitutional right-to-jury-trial argument. (pp. 25-29)

         4. Under this new scheme, a remittitur and an additur are essentially settlement figures suggested by the trial court. This settlement scheme will not work effectively if the court sets the figure at the highest or lowest damages award that could be sustained by the evidence. In setting the remittitur or additur, the court should not accord any deference to a damages award that shocks the judicial conscience. Instead, the court must attempt the difficult task of determining the amount that a reasonable jury, properly instructed, would have awarded. Even if the parties do not consent to the remittitur or additur, the court's evaluation of the damages may spur the parties to reach a settlement on their own terms. In any event, when a trial court declares that a damages award is so grossly excessive or inadequate that it shocks the judicial conscience, the parties are entitled to a new trial, unless the court offers a remittitur or additur that the parties mutually accept. Although the party objecting to the court's grant of a new trial may appeal that decision, no appeal may be filed from the court's setting of the remittitur or additur amount. The parties have the power simply to reject the amount fixed by the court. (pp. 30-32)

         5. Because the trial court in this case declared that the damages award was so grossly inadequate that it shocked the judicial conscience and because Orientale did not consent to the court's additur, Orientale is entitled to a new trial on damages. (p. 32)

         The matter is REMANDED for further proceedings.

          CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, PATTERSON, FERNANDEZ-VINA, SOLOMON, and TIMPONE join in JUSTICE ALBIN's opinion.

          OPINION

          ALBIN JUSTICE

         Under our common law jurisprudence, when a jury's damages award is so grossly excessive that it shocks the judicial conscience, the trial judge may, with the consent of the plaintiff, grant a remittitur -- the highest award that, in the judge's view, could be sustained by the evidence. If the plaintiff accepts the remitted amount, the defendant is bound by that judicial finding, subject to the right to appeal. Likewise, when a jury's damages award is so grossly inadequate that it shocks the judicial conscience, the trial judge may, with the consent of the defendant, grant an additur -- an increased award that, in the judge's view, could be sustained by the evidence. If the defendant accepts the additional amount, the plaintiff is bound by that judicial finding, subject to the right to appeal.

         The practice of judges setting damages awards through remittitur and additur -- without the consent of both parties -- has been well established for a long period in this State. That practice, however, was not recognized in the early common law. In the early common law, remittitur did not allow for the reduction of a jury's damages award as permitted today, and additur did not exist.

         In the appeal before us, plaintiff has challenged the constitutionality of additur on the basis that the judge acts as a "super jury" in setting a damages award in violation of the right to a jury trial. We take this occasion to reexamine, with the assistance of many stakeholders in the bar and bench, the current practices of both additur and remittitur.

         Plaintiff and a number of amici curiae argue that the current practices of remittitur and additur are in tension with the constitutional right to trial by jury. We need not address the constitutional issue before us, however. Instead, we choose to exercise our superintendence over the common law and our constitutional authority over the practices and procedures of our courts to bring the use of remittitur and additur in line with basic notions of fair play and equity. We hold that when a damages award is deemed a miscarriage of justice requiring the grant of a new trial, then the acceptance of a damages award fixed by the judge must be based on the mutual consent of the parties.

         Going forward, in those rare instances when a trial judge determines that a damages award is either so grossly excessive or grossly inadequate that the grant of a new damages trial is justified, the judge has the option of setting a remittitur or an additur at an amount that a reasonable jury would award given the evidence in the case. Setting the figure at an amount a reasonable jury would award -- an amount that favors neither side -- is intended to give the competing parties the greatest incentive to reach agreement. If both parties accept the remittitur or additur, then the case is settled; if not, a new trial on damages must proceed before a jury.

         We now turn to the facts of this case and the jurisprudence that has led us to our conclusion.

         I.

         A.

         Plaintiff Barbara Orientale brought a personal-injury lawsuit against defendant Darrin Jennings for allegedly setting off a chain-reaction automobile accident that caused her to suffer permanent injuries. While stopped in traffic, Orientale's car was struck from behind and propelled into the vehicle in front of it. The trial court entered partial summary judgment against Jennings, finding that he was at fault for causing the accident. Orientale and Jennings then settled the lawsuit for $100, 000, the full amount of liability coverage insuring Jennings's vehicle.

         Orientale maintained an underinsured motorist policy with her insurer, defendant Allstate New Jersey Insurance Company (Allstate), that provided coverage for damages up to $250, 000.[1] Orientale initiated a claim against Allstate for her personal-injury damages in excess of $100, 000 allegedly caused by the accident. That matter proceeded to a jury trial on damages. The jury knew nothing about the earlier settlement.

         Orientale testified that despite undergoing surgery on both her shoulders and receiving nerve-block injections and physical therapy, she remained in constant pain, suffered limitations in her physical movements, had difficulty sleeping, and struggled to perform routine household chores. Although the jury returned a verdict finding that Orientale suffered a permanent injury, it awarded damages in the amount of only $200.

         Because the jury award did not exceed Orientale's $100, 000 settlement with Jennings, Allstate's underinsured motorist coverage policy was not triggered. Therefore, the judge entered a no-cause-of-action judgment.

         Based on the alleged inadequacy of the damages award, Orientale moved for a new damages trial or, in the alternative, an additur. The trial judge vacated the damages award, finding that it constituted a miscarriage of justice. The judge granted an additur in the amount of $47, 500, the lowest award in his estimation that a reasonable jury could have returned in light of the evidence presented at trial.

         Under the governing case law, only Allstate had the option of accepting the additur or rejecting it and proceeding to a new damages trial. Allstate accepted the additur. Orientale's underinsured motorist coverage came into play only if her damages exceeded the $100, 000 she had already received from Jennings. In light of Allstate's decision, the judge again entered a no-cause-of-action judgment in favor of Allstate.

         B.

         In an unpublished per curiam opinion, the Appellate Division affirmed the trial court's judgment. It reasoned that additur and remittitur present "mirror images" of remedies designed to correct a damages award constituting a manifest injustice. Because, when applying remittitur, an excessive award should be remitted to the highest amount supported by the evidence, citing Fertile ex rel. Fertile v. St. Michael's Med. Ctr., 169 N.J. 481, 500 (2001), the Appellate Division reasoned a similar approach should apply to additur -- the inadequate award should be raised to the lowest amount supported by the evidence. It rejected Orientale's argument that the trial court should have "determin[ed] the amount that a reasonable jury, properly instructed, would have awarded, " quoting Tronolone v. Palmer, 224 N.J.Super. 92, 103 (App. Div. 1988). In determining that the additur award did "not shock the judicial conscience, " the Appellate Division stated that the trial judge not only expressed a "familiarity with the record and 'feel ...


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