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)

CourtNew Jersey Superior Court Appellate Division
DecidedMay 21, 2019
DocketA-4272-17T2/A-4275-17T2
StatusUnpublished

This text of 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)) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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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).

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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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.

Plaintiffs-Respondents,

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

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 2 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 3 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 4 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 5 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 6 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):

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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), Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-jersey-physicians-united-reciprocal-exchange-vs-vasilios-vikatos-njsuperctappdiv-2019.