The New Jersey Supreme Court on Wednesday set limits on a plaintiff’s ability to win sanctions under the offer-of-judgment rule in cases of multiple defendants, even when the ultimate damages award is well beyond the original judgment.
In a unanimous ruling, the court overturned an award of sanctions in a products liability case where a jury ordered two defendants to pay an injured teenager far beyond what his attorney had demanded in a pretrial offer of judgment.
Justice Faustino Fernandez-Vina, writing for the court, said it would be unjust to hold a defendant in a multidefendant case to sanctions if that defendant’s share of the judgment is equal to or below the amount of the plaintiff’s offer.
“It would be unfair to impose sanctions in a case where the only means for a party to avoid sanctions would be to pay a greater amount than the jury’s verdict against the party, without advance notice of that consequence,” Fernandez-Vina said in Willner v. Vertical Reality.
According to the decision, the plaintiff in the case, Josh Willner, was injured on July 19, 2006, when he was 16. Willner was an employee of the Ivy League Day Camp in Manalapan. He was climbing a rock wall when the equipment holding the ropes in place broke, leading him to fall about 15 feet to the ground, breaking his ankle.
Willner sued the builder of the rock wall, Vertical Reality, and the manufacturer of the equipment used, ASCO Numatics. Others were named, but those two were the only defendants to proceed to trial, the court said.
Before trial, Willner’s attorney made a global offer of judgment of $125,000, which both defendants rejected, according to the decision.
Later a Monmouth County jury awarded Willner $358,000 in damages, far above the 120 percent threshold needed for a judge to impose sanctions under Rule 4:58.
The trial judge imposed sanctions of $62,963 in counsel fees, $12,160 in costs and $115,727 in prejudgment interest.
The Appellate Division upheld the sanctions, and both defendants appealed.
ASCO Numatics argued it should not face sanctions since its liability was apportioned at 30 percent, or about $107,400 of the total damages award, which was less than the $125,000 offer of judgment.
The court on Wednesday agreed.
“The rule leaves unclear the circumstances triggering the imposition of sanctions on an individual defendant when a single plaintiff makes a global offer to multiple defendants, there is no acceptance of the offer, and no counteroffer is made in response,” Fernandez-Vina said.
Making a global offer of judgment in a case such as this is problematic, he said.
“Such a requirement [that sanctions be imposed] would force defendants who are likely less liable than their codefendants to consider settling for an amount greater than their individual liability simply to avoid sanctions,” Fernandez-Vina said.
He added, “We find such an outcome unfair.”
The defendants were represented by Joseph DiRienzo of DiRienzo, DiRienzo & Dulinski in Westfield. He didn’t return a call about the decision.
No attorney was listed for Willner, and it’s unclear whether he participated in arguments before the Supreme Court. Cynthia Walters of Budd Larner in Short Hills had represented Willner at the Appellate Division level. She didn’t return a call.
Michael Ferrara, who heads a firm in Cherry Hill, represented an amicus, the New Jersey Association for Justice, the state’s main plaintiffs bar group. He, too, didn’t return a call for comment.