NEW JERSEY PHYSICIANS UNITED RECIPROCAL EXCHANGE VS. VASILIOS VIKATOS VASILIOS VIKATOS VS. HACKENSACK UNIVERSITY MEDICAL CENTER (L-0066-18, MERCER COUNTY, AND L-9345-14, BERGEN COUNTY AND STATEWIDE) (CONSOLIDATED)

New Jersey Superior Court Appellate Division·Decided May 21, 2019·No. A-4272-17T2/A-4275-17T2·Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

DOCKET NOS. A-4272-17T2

A-4275-17T2

NEW JERSEY PHYSICIANS UNITED RECIPROCAL EXCHANGE,

Plaintiff-Appellant,

v.

VASILIOS VIKATOS and AERI KIM VIKATOS,

Defendants-Respondents.

VASILIOS VIKATOS and AERI KIM VIKATOS,

Plaintiffs-Respondents,

v.

HACKENSACK UNIVERSITY MEDICAL CENTER, AMY GORE, M.D., ATUHANI BURNETT, M.D., GARIMA DOSI, M.D., GALE LEVY, M.D., and JONATHAN JOSSE, M.D.,

Defendants,

and

PETER KAGAN, M.D. and JOSEPH MANNO, M.D.,1

Defendants-Respondents.

NEW JERSEY PHYSICIANS UNITED RECIPROCAL EXCHANGE,

Intervenor-Appellant.

Argued April 29, 2019 – Decided May 21, 2019 Before Judges Fasciale, Gooden Brown and Rose.

On appeal from Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-0066-18 and Bergen County, Docket No. L-9345-14.

Thomas Kane argued the cause for appellant (Epstein Becker & Green, PC, attorneys; Anthony Argiropoulos, of counsel and on the briefs; William Gibson, on the briefs).

Paul A. O'Connor, III, argued the cause for respondents Vasilios Vikatos and Aeri Kim Vikatos (O'Connor, Parsons, Lane & Noble, LLC, attorneys; Paul A.

O'Connor, III, of counsel; Alexandra Loprete, on the brief).

PER CURIAM

1 Improperly pled as Joseph Mano, M.D.

A-4272-17T2

In these consolidated actions, New Jersey Physicians United Reciprocal Exchange (NJ PURE) appeals from Law Division orders entered in two vicinages: (1) an April 10, 2018 order upholding a "high-low" agreement between NJ PURE's insured and his patient in the underlying medical negligence action filed in Bergen County (A-4275-17)2; and (2) an April 24, 2018 order dismissing NJ PURE's declaratory judgment action filed in Mercer County, seeking a determination that the agreement was not final (A-4272-17). For the reasons that follow, we affirm both orders.

I.

We commence our review with a discussion of well-settled legal principles to give context to the trial judges' decisions and the validity of the high-low agreement at issue.

"Public policy favors the settlement of disputes." Willingboro Mall, Ltd.

v. 240/242 Franklin Ave., LLC, 215 N.J. 242, 253 (2013). Among its other benefits, "[s]ettlement spares the parties the risk of an adverse outcome and the time and expense—both monetary and emotional—of protracted litigation. . . . [and] also preserves precious and overstretched judicial resources." Id. at 253-

2 NJ PURE was not named as a party in the medical negligence action; we granted NJ PURE's motion to intervene in A-4275-17.

A-4272-17T2

54 (citation omitted). In furtherance of the strong policy of enforcing settlements, "our courts strain to give effect to the terms of a settlement wherever possible." Brundage v. Estate of Carambio, 195 N.J. 575, 601 (2008) (internal quotation marks omitted).

Accordingly, an agreement to settle a lawsuit will be honored and enforced in the absence of fraud or other compelling circumstances. Pascarella v. Bruck, 190 N.J. Super. 118, 124-25 (App. Div. 1983). "[T]he party seeking to set aside the settlement agreement has the burden of proving . . . [an] extraordinary circumstance sufficient to vitiate the agreement[,]" Jennings v. Reed, 381 N.J. Super. 217, 227 (App. Div. 2005), by clear and convincing evidence. Smith v. Fireworks by Girone, Inc., 380 N.J. Super. 273, 291 (App. Div. 2005).

"A high-low agreement is a device used in negligence cases in which a defendant agrees to pay plaintiff a minimum recovery in return for plaintiff's agreement to accept a maximum sum regardless of the outcome of the trial." Benz v. Pires, 269 N.J. Super. 574, 578 (App. Div. 1994); see also R. 4:24A (defining a high-low agreement and setting forth the requirements of disclosure

A-4272-17T2

to the court and other parties). 3 The parties also agree to accept any outcome between these limits. Benz, 269 N.J. Super. at 578-79. "A high-low agreement protects a plaintiff from the danger of receiving less than the floor amount and protects a defendant from exposure to a judgment higher than the agreed ceiling." Id. at 579.

Nonetheless, a high-low agreement is a contract subject to traditional rules of contract interpretation. Malick v. Seaview Lincoln Mercury, 398 N.J. Super. 182, 186 (App. Div. 2008); see also Shafer v. Cronk, 220 N.J. Super. 518, 521- 22 (Law Div. 1987) (high-low agreements are treated as settlements).

The "court's role is to consider what is written in the context of the circumstances at the time of drafting and to apply a rational meaning in keeping with the expressed general purpose." Sachau v. Sachau, 206 N.J. 1, 5-6 (2011) (internal quotation marks omitted). "To the extent that there is any ambiguity in the expression of the terms of a settlement agreement, a hearing may be necessary to discern the intent of the parties at the time the agreement was entered and to implement that intent." Quinn v. Quinn, 225 N.J. 34, 45 (2016) (citing Pacifico v. Pacifico, 190 N.J. 258, 267 (2007)). Not every factual dispute

3 Rule 4:24A was adopted effective September 2018, after the trial judges entered the orders at issue in these appeals.

A-4272-17T2

on a motion requires a plenary hearing; a plenary hearing is only necessary to resolve a genuine issue of a material fact. See e.g., Eaton v. Grau, 368 N.J. Super. 215, 222 (App. Div. 2004).

We review a trial court's decision to enforce a settlement for abuse of discretion. Brundage, 195 N.J. at 613; Chattin v. Cape May Greene, Inc., 216 N.J. Super. 618, 626 (App. Div. 1987). However, our review of a trial court's interpretation of an agreement is de novo. Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Cantone Research, Inc., 427 N.J. Super. 45, 57 (App. Div. 2012); see also Kieffer v. Best Buy, 205 N.J. 213, 222 (2011) (recognizing the interpretation of a contract is ordinarily a legal question for the court, which is subject to de novo appellate review). The reviewing court must evaluate the common intention of the parties and the purpose they tried to achieve. See Tessmar v. Grosner, 23 N.J. 193, 201 (1957).

II.

Applying those legal standards here, we turn to the pertinent facts and procedural history that form the focal point of these appeals.

In October 2014, Vasilios Vikatos filed a complaint in the Law Division of Bergen County alleging medical negligence against Hackensack University Medical Center (HUMC), Dr. Peter Kagan, Dr. Joseph Manno, and other A-4272-17T2

physicians.4 As their malpractice carrier, NJ PURE provided a defense and indemnification for Drs. Kagan and Manno.

Prior to trial, Judge Lisa Perez Friscia, in her assignment as the civil settlement judge of the Bergen Vicinage, held four pretrial settlement conferences with counsel between September 26, 2017 and the adjourned trial date of December 4, 2017. Pertinent to these appeals, after jury selection had commenced before another judge but prior to opening statements, Vikatos' counsel received the following correspondence, signed by NJ PURE's claims manager, on December 4, 2017 (emphasis added):

This will confirm that you've rejected NJ PURE's previous HIGH-LOW settlement offer on behalf of Dr.

Kagan comprised of a HIGH (maximum) of $1,200,000 and a guaranteed LOW (minimum) of $350,000 and conditional [sic] upon releasing Dr. Manno from this lawsuit. At this time, NJ PURE hereby extends an unconditional HIGH-LOW settlement offer on behalf of Dr. Kagan, comprised of a HIGH (maximum) of $1,350,000 and a guaranteed LOW (minimum) of

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NEW JERSEY PHYSICIANS UNITED RECIPROCAL EXCHANGE VS. VASILIOS VIKATOS VASILIOS VIKATOS VS. HACKENSACK UNIVERSITY MEDICAL CENTER (L-0066-18, MERCER COUNTY, AND L-9345-14, BERGEN COUNTY AND STATEWIDE) (CONSOLIDATED), (N.J. Ct. App. 2019).

NEW JERSEY PHYSICIANS UNITED RECIPROCAL EXCHANGE VS. VASILIOS VIKATOS VASILIOS VIKATOS VS. HACKENSACK UNIVERSITY MEDICAL CENTER (L-0066-18, MERCER COUNTY, AND L-9345-14, BERGEN COUNTY AND STATEWIDE) (CONSOLIDATED) (NEW JERSEY PHYSICIANS UNITED RECIPROCAL EXCHANGE VS. VASILIOS VIKATOS VASILIOS VIKATOS VS. HACKENSACK UNIVERSITY MEDICAL CENTER (L-0066-18, MERCER COUNTY, AND L-9345-14, BERGEN COUNTY AND STATEWIDE) (CONSOLIDATED)) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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