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A plaintiff who enters into a high-low agreement and later wins a jury verdict within the range is not entitled to seek delay damages if the arrangement is silent on that issue, the 3rd U.S. Circuit Court of Appeals has ruled. In Vargo v. Mangus, a unanimous three-judge panel reversed a lower court’s decision to award $234,390 in delay damages on a $4.25 million verdict where the plaintiff had entered into an agreement with a low of $2 million and a high of $5 million. The ruling is a victory for attorney Carl D. Buchholz III of Rawle & Henderson who represented the defendants, Swift Transportation Corp. and truck driver Sharon Mangus. Buchholz argued that the delay damages award violated the terms of the settlement by adding a condition that was never included. But plaintiffs attorney Michael T. van der Veen of Kats Jamison van der Veen & Associates in Feasterville, Bucks County, argued that the high-low agreement was not a settlement because, under the terms of the agreement, the case “could not be settled until after a jury verdict.” The 3rd Circuit disagreed, finding instead that under Pennsylvania law, a high-low is an enforceable settlement since it “conclusively established the floor and the ceiling of any award.” U.S. Circuit Judge Maryanne Trump Barry found that the agreement “explicitly included conditions other than the settlement amount,” but that “delay damages were not even discussed, much less included as an additional condition.” As a result, Barry concluded that the plaintiffs gave up their right to seek delay damages. “The failure to have provided for delay damages thus constitutes a waiver, a conclusion reinforced by the agreement itself,” Barry wrote. Barry noted that when the lawyers memorialized their agreement during a conference with the trial judge, they made no mention of delay damages. One of the lawyers explained in the conference that if the jury handed up a verdict above $2 million but below $5 million, “then that will be the amount paid.” “For example, if there was a $4 million verdict, they would be paid $4 million,” the lawyer said. Barry found that the agreement therefore explicitly excluded anything more than the jury’s award. “Because the jury returned a verdict in the amount of $4.25 million, plaintiffs should have been awarded $4.25 million, no more and no less,” Barry wrote in an opinion joined by U.S. Circuit Judge D. Brooks Smith and visiting Senior U.S. District Judge Louis H. Pollak of the Eastern District of Pennsylvania. As a result, Barry found that the award of delay damages granted by U.S. District Judge Christopher C. Conner of the Middle District of Pennsylvania violated the terms of the agreement. “If plaintiffs had wanted to preserve their right to delay damages, or simply their right to raise the issue, they could have done so when the agreement was placed on the record. They cannot do so now,” Barry wrote.

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