Opinion ID: 2559133
Heading Depth: 1
Heading Rank: 2

Heading: The Personal Injury Action: Wood v. Caruso

Text: Plaintiff filed suit in the Law Division against Critelli, the dog owner, his grandmother Caruso, who lodged the dog, and Alfred Vail Mutual Association, the condominium association where Caruso's unit was located, seeking damages for the injuries plaintiff sustained from the attack; plaintiff demanded trial by jury on that complaint. Caruso, who maintained a $500,000 liability policy with defendant New Jersey Manufacturers Insurance Co., tendered the complaint to defendant for a defense and indemnity; defendant responded on behalf of both Caruso and her grandson, providing joint representation through a single counsel for its named insured, Caruso, and for its additional insured, Critelli. The parties submitted the matter to non-binding arbitration, see R. 4:21A-1(a)(2), and the arbitrator determined that plaintiff's economic and non-economic damages totaled $600,000. The arbitrator apportioned liability as follows: ninety percent, or $540,000, to Caruso and ten percent, or $60,000, to the condominium association. The amount of the arbitration award against Caruso obviously exceeded the limits of liability of Caruso's liability policy with defendant. As permitted by Rule 4:21A-6(b)(1) and (c), defendant, on behalf of its insureds Caruso and Critelli, rejected the arbitrator's award and demanded a jury trial de novo. Prior to the start of the jury trial, defendant conducted an internal evaluation of plaintiff's claims. As part of that process, the counsel assigned by defendant to represent Caruso and Critelli recommended that defendant authorize him to settle the case for the full $500,000 limit of the policy; he foresaw that the non-compromisable workers' compensation lien [will be] well into the $400,000.00 [range] and the value of the case will exceed your insured's policy. Likewise, defendant's claims adjuster also recommended that [t]he value of [plaintiff's] case would be in the neighborhood of [defendant's] policy[.] In contrast, defendant's Major Claims Committee conducted its own review and concluded that the value of plaintiff's case would not exceed the $500,000 policy limits; it therefore authorized a $300,000 settlement. That offer of settlement was communicated to, and rejected by, plaintiff. Although plaintiff had rejected defendant's $300,000 settlement offer, her counsel repeatedly asserted to Caruso's and Critelli's assigned counsel that she would accept a settlement at or near the $500,000 policy limits, albeit at a sum greater than the $300,000 rejected offer of settlement. When those efforts were rebuffed and invoking Rova Farms, plaintiff placed defendant on notice that, in her view of the aggregate of the circumstances presented, defendant's $300,000 settlement offer had been made in bad faith, advising that, if she recovered a verdict in excess of the $500,000 policy limits, she would look to defendant for the excess. [2] Defendant remained steadfast in its view that the most it would be willing to pay in settlement of plaintiff's claim was $300,000 even though, before the jury began its deliberations, plaintiff offered to settle the case for $450,000$50,000 less than the policy limits. The jury returned a verdict finding both Caruso and the condominium association negligent in failing to prevent the dog attack on plaintiff. The jury allocated liability as follows: fifty-one percent fault to Caruso, and forty-nine percent fault to the condominium association. The jury assessed damages in favor of plaintiff in the aggregate amount of $2,422,000, consisting of $1,400,000 in pain and suffering, $782,000 in economic damages, and $240,000 on plaintiff's husband's per quod claim. Given the jury's allocation of liability, the trial court molded the verdict and added prejudgment interest. As a result, a molded judgment was entered in plaintiff's favor and against Caruso in the amount of $1,408,320.33, a sum well in excess of her $500,000 policy limits. [3] Defendant filed a motion for a new trial or for remittitur on behalf of Caruso and Critelli, which was denied; defendant did not file a direct appeal therefrom on Caruso's or Critelli's behalf, and neither Caruso nor Critelli pursued their own appeal. Instead, defendant, on behalf of its insureds Caruso and Critelli, tendered and paid the full amount of its $500,000 policy limits to plaintiff; that payment, however, only partially satisfied the judgment plaintiff had recovered against defendant's insureds.