2004 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit
4-19-2004 

# V a rgo v . M a n gu s P r e c e de n t i al or N on-P r e c e de n t i al : N on-P r e c e de n t i al D ocke t N o . 03-2355

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w . vi l l a no va . e du/thir dc ir c uit_2004/814The Honorable Louis H. Pol lak, Distri ct Judge, United States District Court for the Ea stern Dis trict o f Pe nns ylvan ia, sittin g by d esig natio n. NOT PRECEDE NTIAL UNITED STATES COURT OF APPEALS FO R T HE TH IRD CIR CU IT
No. 03-2355
DAVID V ARGO; LORI VARGO

v. SHARON MANGUS ; S WIF T TRANS PORTAT ION C ORPORAT ION SHARON MANGUS ; S WIF T TRANS PORTAT ION C ORPORAT ION, Third-Par ty Plaintiffs v. MORELLS AUTO SERVICE; THOMA S MORELL, d/b/aMORRELL’S AUTO SERVICE, Third -Party D efen dants Sh aro n M ang us; S wif

t Tra nsp ora tion Co ., Inc ., Ap pellan ts

APPEAL FROM THE UNI TED STATES DIST RICT COURT FO R T HE MID DL E D ISTR ICT O F PE NN SY LV AN IA

D.C. CivilNo. 01-cv-00001 Distri ct Judge: The Honorable Chris topher C. Conner

Argued: Januar

y 9, 2004 Be for e: B AR RY , SM ITH , Circuit Judges , and P OLLAK, * Distri ct Judge2 (Opinion Fi led: Apri l 19, 2004 )

Carl D. Buchholz, III, Esq. (Argued) Rawle & H enderson The Widener Buildi ng One South P enn Sq uare Philadelphia, PA 19107 Atto rney for Ap pellan ts
Michael T. van der

Veen, Esq. ( Argued) Kats, J amison, van der Veen & Associates 25 Bustleton Pike Feaster vill e, PA 19053 Attorney for Appelle es

OPI NION

BA RR Y, Circuit

Judge I. On No vem ber 2 2, 200 0, D avid a nd L ori V argo (herein after “ Va rgo” ) filed su it against Sharon Mangus and the Swift Tr ansport ation Co. , Inc. , in t he Court of Common Pleas of Phi ladelphia County , Pennsylvania , for per sonal i njury damages ari sing out

of a motor vehic le acci dent involving Vargo’s ve hicle and a tra ctor- trai ler owned by Swift and3

operated b y Mang us. Defendan ts remove d the action to the United S tates District Court for the M iddle District of Pe nnsylvania. On Nov embe r 14, 2002 , the District Court gran ted pla intiffs’ m otion to preclu de an y referen ce to p laintiffs ’ failure to repla ce the air bags in t heir motor

vehicl e. Defendants moved for reconsi derati on of the November 14, 2002 order, or, in the al ternative, for permis sion t o file an inte rlocut oryappeal. The Dis trict C our t den ied d efe nda nts’ m otio ns. Because defend ants had filed a notice of limited admission of negligence, the case pr oc ee de d t o t ria l so lel y on th e is su e o f d am ag es . P rio r to clo sin g a rg um en ts t o t he ju ry, however, the parti es entered into a high-l ow agreement on the record during an incham bers c onferenc e. Th e agre eme nt pro vided , in pertin ent pa rt: Th e offer i s a lo w o f tw o m illion dol lars a nd a hig h of five millio n do llars. What that means . . . i s that if the jury

comes back with any

thing l ess than two mill ion doll ars, they will be pa id two mil lion dol lars . If t he jury comes back with any

thing more t

han five mil lion dol lars , the y wil l be pai d five mill ion doll ars. If ther e’s any thing, a verdic t in- between the t wo milli on and the five m illion , then that w ill be the a mo unt paid
. For e xam ple, if the re w as a fo ur m illion do llar verd ict, they wo uld b e paid fou r mil lion dol lars. ( Ap p. at 5 6a)
. Other conditions were al so att ached to t he agreement: confident iality , waiver of the ri ght to appeal , and the absolut e right of plai ntiff

s to t ake the award money when paid. The agreement al so provide d that in the event the award money

was not paid on t

he dates spe cifie d, th e pa rties c oul d re sort t o leg al rem edie s to e nfo rce th e ag reem ent. The jury rendered averdict

of damages in t

he amount of $4.25 mi lli on. Plaintiff s1 Defe ndants on ly appeal the District Co urt’s award of delay dam ages, and n ot the jury

ver dict. 4 then moved for del ay damages pursuant to Pa. R. Civ. P. 238. The Distri ct Court granted the m otio n an d or der ed d efe nda nts to pay d elay d am age s in th e am oun t of $ 234 ,390
. Defendants t imely

appealed. 1 We have juris dicti on pursuant to 28 U.S.C. § 1291, and wil l rev erse . II. The issue on appe al is this : are pl ainti ffs entitled to recover de lay damages even though the hi gh-low agreement , and the condit ions attached t hereto, made no mention of, much less any

provisi on for, del ay damages ? Defendants argue t hat the agreement
con stitute d a s ettlem ent th at pr eclu ded plain tiffs fro m re cov erin g de lay da ma ges . Plaintiffs di sagree, contending that t he high-low agreement w as not a settl ement because under the terms of the a greement, the case “could not be settled unti l aft er a jur y ver dict. ” (A ppe llees ’ Br . at 20 ). We are persuaded t

hat, under Pennsy lvania law, a hi gh-low agreement may be
con strue d as a se ttlem ent, s ubj ect to bas ic co ntra ct pr incip les. See Pow er v. T om archio , 701 A.2d 13 71, 1374 (Pa. Super. Ct. 1997) (holding that a high-l ow agreem ent is a sett lement under

Pa. R. Civ. P. 2039, which gove rns the role of t he court in cases where a mino r is a pa rty); Cerino v. Kaduk , 55 Pa. D. & C.4th 115, 120 (Pa. Ct. Cm. Plea s 2000) (“A high /low agree men t cons titutes a se ttlemen t.”); see also In re Cendant Corp. Pri des Liti gation , 233 F .3d 18 8, 193 (3d C ir. 2000 ) (“bas ic con tract prin ciples d o ind eed a pply to5

sett lement agr eements”) . The Pennsy lvania Superior Court has adopt ed the definiti on of “settlement” as: “[ a] meeting o f minds of parties to [a] trans acti on or contr oversy ; an adjustment of differences or accounts; a coming to an agreement. To fi x or resol

ve conclusively; to make or arrange f or final dis

position. ” Power , 701 A.2d at 1374 (qu otin g B lack 's La w D ictio nar y, Sixth Ed ition ) (em pha sis an d alte ratio ns in orig inal)
. Here, the h igh-low a greeme nt, which w as entered into b efore the D istrict Court and on the re cord, conc lusi vely establ ished t

he floor and the cei ling of any award. The parti es “adjus ted the ir di fferences ,” and expl icitly include d conditi ons other than the sett lement amount . Delay damages were not even di scussed, much less i ncluded as an additional conditi on. The failure to have provided for delay damages thus constit utes a waive r, a conclusion re inforced b y the agreemen t itself, which specifica lly st ated: “If ther e’s a nythin g, a v erd ict in -be twe en th e tw o m illion and the five m illion , then th at will be the am oun t paid . For e xam ple, if the re w as a fo ur m illion do llar verd ict, they wo uld be paid four

mill ion doll ars. ” (emphasis added). Becaus e the j uryretur ned a verdi ct in t

he amount of $4.25 mil lion, plaintiffs s hould have been awarded $4. 25 mill ion, no more and no less. Awarding delay damages on top of t

he $4.25 mil lion vi olate d the te rms of the agree men t. If plaintiffs ha d w anted to pres erve th eir right to delay da mag es, or sim ply their right to rai se the i ssue, they

could have done s o when the agreement was placed on the r eco rd. T hey c ann ot d o so now . III.6

For the fo regoing rea sons, we will reverse the jud gmen t of the D istrict Court
aw ard ing plain tiffs dela y dam age s in th e am oun t of $ 234 ,390
.