A Capehart Scatchard Blog

Offer of Judgment Sanctions Found Inapplicable in Multidefendant Case

By on August 17, 2018 in Litigation with 0 Comments

Plaintiff Josh Willner suffered an injury while climbing a rock climbing wall that was owned by his employer (Ivy League Day Camp). He sued the camp, the manufacturer of wall and parts in the wall (Vertical Reality, Inc. and ASCO Numatics) under product liability theories. Before trial, he made a single offer of judgment as to all defendants in the amount of $125,000. The jury awarded him a total of $358,000. The issue in the New Jersey Supreme Court case, Willner v. Vertical Reality, 2018 N.J. LEXIS 1004 (2018), was his entitlement to sanctions under the offer of judgment rule against the individual defendants in this multidefendant case.

The jury’s verdict apportioned liability 30% against Numatics and 70% against Vertical Reality. (Ivy League Day Camp had been dismissed out before trial by summary judgment.) After the jury award, based upon his offer of judgment, Willner filed a motion for attorneys fees. The trial judge granted the motion, ruling that the offer of judgment sanctions were triggered because the total award of $358,000 was more than 120% of the offer of $125,000 made by the plaintiff. Attorneys fees of $62,963 plus costs of $12,160.83 were awarded to the plaintiff.

Numatics appealed this decision to the Appellate Division, which affirmed the trial court judge’s decision to award fees. Numatics filed a petition for certification to the Supreme Court, which petition was granted. That petition also sought to overturn the liability verdict, which the Supreme Court declined to overturn. However, it did reverse the award of the attorneys fees.

Numatics argued that the rule should be inapplicable to it because its 30% share of the verdict equaled $107,400, which was less than the $125,000 offer of judgment. The plaintiff argued, however, that the total amount of the jury verdict must be compared against the offer and the total amount of the jury verdict exceeded 120% of the offer of judgment made.

The Supreme Court noted that the offer of judgment rule was designed as a mechanism to “encourage, promote, and stimulate” early out of court settlements. The rule provides an incentive to settle by imposing financial consequences on a party who rejects a settlement offer that turns out to be more favorable than the judgment. For a plaintiff to invoke the sanctions, if the plaintiff obtains a money judgment 120% or more than the offer of judgment, the plaintiff can be awarded sanctions of attorneys fees, expenses, and costs of suit from the time of the offer.

The rule leaves as unclear whether sanctions should be imposed on an individual defendant in a multidefendant case when the plaintiff makes a global offer to multiple defendants, there is no acceptance of the offer, and no counteroffer is made in response. The Court found this scenario problematic because if would force an individual defendant who was less liable than its co-defendants to consider settling for an amount greater than its liability to avoid the imposition of sanctions.

The Supreme Court found that was the exact circumstance in this case because Numatics was found only 30% liable. Hence, the Court held it would be unfair to impose sanctions upon Numatics under these circumstances and reversed the award of attorneys fees and costs.

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Betsy G. Ramos

About the Author

About the Author:

Ms. Ramos is an Executive Committee Member and Co-Chair of the Litigation Department at Capehart Scatchard, P.A. located in Mount Laurel, New Jersey. She is an experienced litigator with over 25 years experience handling diverse matters. Practice areas include tort defense, business litigation, estate litigation, tort claims and civil rights defense, construction litigation, insurance coverage, employment litigation, shareholder disputes, and general litigation.

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