Court Opinion

ID: 9727771
Source: CourtListenerOpinion
Date Created: 2023-08-26 13:50:10.967959+00
Date Added: 2024-06-11T18:25:42.599061
License: Public Domain

*26WIEAND, Judge:
The issue in this appeal concerns the application of Pa.R. C.P. 238 to a verdict against joint tortfeasors where one of them settled prior to trial and took in exchange a joint tortfeasor’s release.
On January 28, 1980, Dawn Baciotti1 commenced an action against Michael V. Simmons and Strasburg Township to recover damages for personal injuries sustained in an automobile accident occurring in Lancaster County on December 13, 1978. On March 1, 1982, Strasburg Township made a written offer to settle Baciotti’s claim for $50,-000.00, its policy limits, in exchange for a joint tortfeasor’s release, but Baciotti rejected the offer. Simmons, on March 6, 1982, offered to pay Baciotti $100,000.00 if she would execute a joint tortfeasor’s release in his favor. This offer was accepted. Although Strasburg Township’s offer of $50,000.00 was not revoked prior to trial, Baciotti continued to reject it. On April 27, 1982, following trial, a jury returned a verdict for Baciotti, fixed her damages at $150,-000. 00. and apportioned negligence as follows: Baciotti— 10%; Simmons — 40%; and Strasburg Township — 50%. Baciotti then filed a petition to mold the verdict. Included was a request for delay damages pursuant to Pa.R. C.P. 238. The trial court heard argument and thereafter awarded delay damages against Strasburg Township in the amount of $7,901.37.2 This was computed on $35,000.00, which was the amount of the verdict that Strasburg Township was required to pay ($135,000.00 less $100,000.00 already paid *27by Simmons). The court refused to assess delay damages against Simmons. Baeiotti appealed.
Pa.R.C.P. 238 provides in pertinent part as follows:
Rule 238. Award of Damages £« Belay In am Action for Bodily Injury, Death or Property Damage
(a) Except as provided in subdivision (e), in an action seeking monetary relief for bodily injury, death or property damage, or any combination thereof, the court or the arbitrators appointed under the Arbitration Act of June 16, 1836, P.L. 715, as amended, 5 P.S. § 30 et seq., or the Health Care Services Malpractice Act of October 15, 1975, P.L. 390, 40 P.S. § 1301.101 et seq., shall
(1) add to the amount of compensatory damages in the award of the arbitrators, in the verdict of a jury, or in the court’s decision in a nonjury trial, damages for delay at ten (10) percent per annum, not compounded, which shall become part of the award, verdict or decision;
(2) compute the damages for delay from the date the plaintiff filed the initial complaint in the action or from a date one year after the accrual of the cause of action whichever is later, up to the date of the award, verdict or decision.
(e) If a defendant at any time prior to trial makes a written offer of settlement in a specified sum with prompt cash payment to the plaintiff, and continues that offer in effect until commencement of trial, but the offer is not accepted and the plaintiff does not recover by award, verdict or decision, exclusive of damages for delay, more than 125 percent of the offer, the court or the arbitrators shall not award damages for delay for the period after the date the offer was made.
The rule was adopted by the Supreme Court in 1978 “as an extension of the compensatory damages necessary to make a plaintiff whole.” Feingold v. Southeastern Pennsylvania Transportation Authority, 339 Pa.Super. 15, 31, 488 A.2d 284, 293 (1985), quoting Laudenberger v. Port Au*28thority of Allegheny County, 496 Pa. 52, 66, 436 A.2d 147, 154 (1981), appeal dismissed sub nom., Bucheit v. Laudenberger, 456 U.S. 940, 102 S.Ct. 2002, 72 L.Ed.2d 462 (1982). An award of delay damages “serves to compensate the plaintiff for the inability to utilize funds rightfully due him, but the basic aim of the rule is to alleviate delay in the disposition of cases, thereby lessening congestion in the courts.” Greenspan v. United Service Automobile Association, 324 Pa.Super. 315, 323, 471 A.2d 856, 860 (1984), quoting Laudenberger v. Port Authority of Allegheny County, supra 496 Pa. at 59, 436 A.2d at 151. By providing that delay damages are tolled after a written offer of settlement has been made which, in retrospect, is eighty percent or more of the ultimate verdict, the rule attempts not only to encourage pre-trial settlement but to foster settlement at an early date. Laudenberger v. Port Authority of Allegheny County, supra, 496 Pa. at 59, 436 A.2d at 151. Defendants are given an opportunity to protect themselves from exposure to pre-judgment interest by making a reasonable offer of settlement in good faith and in a timely fashion. Id., 496 Pa. at 59-60, 436 A.2d at 151. Accord: Krupa v. Williams, 316 Pa.Super. 408, 423, 463 A.2d 429, 436 (1983).
The purposes to be accomplished by Pa.R.C.P. 238 provide us with guidelines in our effort to determine liability for delay damages and the amount payable in joint tortfeasor situations. We must also give consideration to the provisions of the Uniform Contribution Among Tortfeasors Act, 42 Pa.C.S. § 8321 et seq. Pursuant to this Act, where one of two joint tortfeasors has made payment to the plaintiff and has taken a release providing for pro rata reduction of damages recoverable against the other tortfeasor, the tortfeasor who has not settled, in making satisfaction of plaintiffs verdict, is entitled to the benefit of any overpayment made by the settling tortfeasor. 42 Pa.C.S. § 8326; Daugherty v. Hershberger, 386 Pa. 367, 126 A.2d 730 (1956); Mong v. Hershberger, 200 Pa.Super. 68, 186 A.2d 427 (1963).
*29In this case, the release executed by Baciotti discharged Simmons from any duty to pay damages for delay. Specifically, the written agreement released him “from all claims, damages, actions and suits of whatsoever kind, known or unknown, prior to and including the date hereof____” This evidenced an intent by the parties to effect a total settlement and release Simmons from any and all claims for damages of any kind. The release included liability for delay damages under Pa.R.C.P. 238.
In order to assess the liability of Strasburg Township for delay damages, it will be necessary to examine three distinct phases of the pre-verdict negotiations. The first phase consists of the period from the commencement of Baciotti’s action until the time when Strasburg Township made an offer of $50,000.00. The second phase of settlement negotiations is the period between the time this first offer was made and the time when Baciotti accepted Simmons’ offer of $100,000.00. The third period includes the time between Baciotti’s acceptance of $100,000.00 from Simmons and the time of the verdict.
For the period following the filing of the complaint on January 23, 1980 and continuing until March 1, 1982, when Strasburg Township made its offer, Baciotti was clearly entitled to recover damages for delay from Strasburg Township. Pa.R.C.P. 238(a). During this period no offers of settlement were made by either defendant.3 The delay damages recoverable from Strasburg Township during this period are computed on the amount of the verdict at a rate of ten percent per annum. Pa.R.C.P. 238(a)(1). The total verdict recovered by Baciotti, however, must be apportioned in the same manner in which the jury apportioned liability. “It would be unrealistic to require each defendant to offer nearly the full amount of damages ultimately recovered in an action, where the amount finally attributed *30to each defendant is only a percentage of the total [verdict]____” Richardson v. LaBuz, 81 Pa.Cmwlth. 436, 458, 474 A.2d 1181, 1196 (1984). Thus, the liability of Strasburg Township is computed on the amount of $75,000.00, the proportionate part of the total verdict assessed against the Township.
Delay damages must be measured in the same manner after the Township made an offer of $50,000.00 and before Simmons settled for $100,000.00. The Township’s offer was inadequate to terminate its liability for delay damages. The amount of its liability, i.e., $75,000.00, as found by the jury, exceeded its offer by more than 125 percent. This offer, therefore, did not terminate the Township’s liability for' Rule 238 damages. See: Pa.R.C.P. 238(e).
When we examine the findings of the jury and apply them retrospectively to the absence of adequate settlement negotiations prior to March 6, 1982, we see that Strasburg Township’s liability during this period of time was $75,-000.00. Both the adequacy of its offer and the computation of delay damages, therefore, must be measured against this amount of $75,000.00. This was the Township’s liability, as found by the jury, and this is the amount which must be used to measure the reasonableness of the demands made by the plaintiff and the offers made by the Township during negotiations.
After Simmons had settled for $100,000.00, however, there was necessarily a change in the focus of negotiations between Baciotti and Strasburg Township. Both parties knew that under existing law the Township was now entitled to a credit for any overpayment made by Simmons. Their continuing negotiations, therefore, were controlled primarily by the amount which Strasburg Township would be required to pay Baciotti. To expect that the parties would thereafter negotiate with respect to the amount of a possible verdict, without considering the actual amount which would have to be paid, would be wholly unrealistic.
*31In this case, Baciotti’s recovery was fixed by the jury at $135,000.00. Because Simmons had already paid $100,-000.00, the only amount which Strasburg Township was liable to pay was $35,000.00. On March 1, 1982, the Township had made an offer of $50,000.00. This offer was made in writing and was continued in effect until the commencement of trial. It is clear that the offer was greater than the Township’s liability to pay damages to Baciotti. Strasburg Township’s liability for Rule 238 damages, therefore, was terminated on March 6, 1982. Thereafter, its offer had continued to remain open for an amount in excess of its liability as determined by the jury and reduced by application of the Uniform Contribution Among Tort-feasors Act. See: Pa.R.C.P. 238(e). By comparing the township’s settlement offer to the ultimate amount of the verdict, as reduced by the amount which Baciotti had already received from Simmons, the dual purposes of Pa.R.C.P. 238 are best served. Baciotti’s compensation for the deprivation of use of money withheld from her was tolled after the settlement with Simmons was complete because the continuing offer of $50,000.00 was reasonable in light of the jury’s findings. Baciotti’s rejection of it, in view of the jury’s findings, was unreasonable.
We conclude, for these reasons, that Strasburg Township is liable for delay damages from January 23, 1980 to March 6, 1982. Those damages must be computed at the rate of ten percent per annum on the sum of $75,000.00.
Remanded for the entry of judgment consistent with the foregoing opinion. Jurisdiction is not retained.
CAVANAUGH, J., files a dissenting opinion in which SPAETH, President Judge, and McEWEN and BECK, JJ., join.

. Also named as plaintiffs were Carmen Baciotti and Melanie Baciotti, but their claims were dismissed at trial for reasons not relevant to the present appeal.

. The trial court relied upon the jury’s finding that Strasburg Township was liable for $75,000.00 to determine that the Township’s offer of $50,000.00 was inadequate for purposes of tolling its liability for delay damages. In calculating the amount of delay damages, however, the trial court used the figure of $35,000.00 which the Township was actually required to pay. The court, therefore, required the Township to pay 10% of $35,000.00 for each year elapsing after the filing of the complaint until the date of the verdict.

. During this period Simmons would also have been liable for delay damages if it had not been released therefrom as a part of its settlement with Baciotti. See: Lavin v. Mylecraine, 307 Pa.Super. 564, 567-568, 453 A.2d 1031, 1032 (1982).