Verdicts

The case went before a jury. As the jury was deliberating, the parties entered into the high-low agreement, under the terms of which the plaintiff would receive not less than $300,000 and no more than $1 million. Later that day, the jury returned a plaintiff verdict of $6 million, meaning that Serico was entitled to receive the $1 million high amount she had accepted in the high-low agreement. This was above her offer of judgment amount by $250,000.

Serico then moved for costs and attorney fees in accordance with New Jersey's offer of judgment rule, which provides that if an offer of judgment is made and rejected and the plaintiff obtains a judgment in excess of 120% of the offer, then she is also entitled to collect from the defendant costs and attorney fees accruing after the failure to accept. R. 4:58-2(a). Despite the fact that Serico had received an award in excess of 120% of her offer, the court denied her motion because she did not expressly reserve the right to seek attorney fees under the offer of judgment rule in the high-low agreement. Lacking any specific written or oral record from which to analyze the parties' intent regarding fees and costs, the trial judge turned to his own 42-year experience as a trial litigator and judge — in which he had never seen a prevailing party in a high-low agreement situation obtain fees or costs — and concluded that “in the absence of a contrary oral or written contemporaneous statement by counsel that the Offer of Judgment Rule will survive a high-low agreement, the Offer of Judgment Rule sanctions cannot be enforced after a high-low agreement.”

Serico appealed, claiming that although she did not make a reservation of rights in the high-low agreement and none was made to the court on the record, she also did not do anything to waive her rights under the offer of judgment rule when entering into the agreement.

The appeals court applied de novo judgment to the facts and the law to determine that, by entering into the high-low agreement, the plaintiff had given up her right to recover any amount beyond the “high” to which she agreed. In support of its determination that the agreement limited the total amount of the defendant's obligation to the ceiling of $1 million, the court pointed to its own precedent in Malick v. Seaview Lincoln Mercury, 398 N.J. Super. 182 (App. Div. 2008), in which it quoted Benz v. Pires, 269 N.J. Super. 574, 579-80 (App. Div. 1994) for that case's explanation of possible outcomes in a high-low agreement situation:

• If there is a no-cause verdict, the agreed floor controls, and plaintiff takes that amount. There is nothing to calculate interest on. There is only the agreed minimum recovery.
• If there is a damage verdict below the agreed floor, interest is calculated on the verdict and plaintiff receives the total, up to the agreed ceiling; if the total does not exceed the floor, plaintiff receives the floor.
• If there is a damage verdict of the floor or more, but less than the agreed ceiling, interest is calculated on the verdict. Plaintiff receives the full amount up to the ceiling.
• If there is a damage verdict of the ceiling or more, plaintiff receives the amount of the ceiling.

Here, the plaintiff could have negotiated to reserve her right to collect the disputed amounts, but the responsibility for preserving that reservation of right on the record lay with her and her attorney — and they had not even mentioned these things during negotiations or before the trial judge. This being the case, ordinary contract law applied to the high-low agreement, and its terms must be enforced as written. Thus, because Serico was entitled to receive no more than the $1 million “high” she had agreed to, the court affirmed the trial court's denial of the plaintiff's motion for attorney's fees pursuant to the offer of judgment rule.

Criminal Act Deemed Intervening Cause of Harm

The Supreme Court of Georgia has thrown out a $3.7 million verdict against a dental office in a sex-assault case that asked whether the dental practice should have done more to prevent a contractor anesthetist from molesting the plaintiff (and several of the practice's other patients). Goldstein Garber & Salama LLC v. J.B., 2017 Ga. LEXIS 101 (GA, 2/27/17).

The dental practice of Goldstein Garber & Salama LLC (GGS) had contracted with Certified Anesthesia Providers (CAP) to provide it with anesthesia services. On the day of plaintiff J.B.'s two-part dental procedure in September 2009, CAP sent certified registered nurse anesthetist Paul Serdula to provide anesthetic services. CAP had conducted an independent credentialing inquiry on Serdula prior to sending him to GGS — nothing amiss was revealed.

During a gap between phases of J.B.'s dental procedure that day, she was left alone in the room with Serdula for 35 minutes. When Serdula's phone was found at a later date in the bathroom of GGS's offices — where it had been set to secretly film people using the bathroom — three films of Serdula sexually assaulting J.B. were discovered, along with similar films involving other patients. Serdula pleaded guilty to sexually assaulting several patients and is now serving a life sentence.

J.B. sued GGS on theories of professional negligence and negligence per se. A jury found for the plaintiff and the court of appeals affirmed, even though it allowed that there was no evidence that GGS knew that Serdula had previously sexually assaulted any patients. However, that court found that it was known in the dental care community that sexual assaults of anesthetized patients do occur and also that the level of anesthesia J.B. was given was likely to render her “a more vulnerable target” to sexual assault. The court of appeals, in upholding the verdict, stated that it was “not persuaded … that the relatively uncommon nature of Serdula's intervening acts compels a determination that GGS could not reasonably have foreseen them.”

In reversing, Georgia's Supreme Court turned that logic around, observing that “the fact that the dental profession is aware that sexual assaults of sedated patients can occur, and recognizes that such events should never happen, does not alone convert GGS's alleged breach of its duty to properly supervise Serdula into liability on GGS's part, nor does GGS's failure to ensure that a recovering patient be attended by a second appropriately trained person.” Instead, in order for any alleged breach of GCS's duty to rise to the level of “proximate cause” of the plaintiff's injury, Serdula's actions would have to have been: 1) the probable or natural consequence of that breach; and 2) reasonably foreseeable. These things the court found lacking.

As to the negligence per se cause of action, it rested on the fact that the dentists overseeing Serdula did not have the state-mandated permits required to oversee the administration of anesthesia to patients. The State Supreme Court found no basis for recovery on this theory, as the purpose of the permit requirement is to prevent medical complications arising from the improper administration of anesthesia. J.B.'s injuries were non-medical, and so this state permit requirement was not meant to prevent them, and it could not be used as a reason to hold GCS accountable.
Despite the unanimous decision, J.B.'s attorneys have petitioned the Supreme Court of Georgia for reconsideration, arguing that not only is the decision wrong under the law, it also exhibits an “out of touch and dangerous view of sexual assault that does not accord with modern knowledge and understanding.”

High-Low Agreement Did Not Provide for Extras

Although a trial judge erred in relying on his own experience to determine that a high-low agreement that did not reserve the plaintiff's right to costs and attorney fees extinguished those rights, the appellate court agreed with that judge's final decision and so affirmed the decision. Serico v. Rothberg, 2017 N.J. Super. LEXIS 19 (N.J. App. (App. Div. 2/16/17)

Plaintiff Lucia Serico sued her deceased husband's doctor, alleging failure to diagnose the colon cancer that caused his death. In accordance with New Jersey's offer of judgment rule, Serico offered to accept $750,000, to include costs and prejudgment interest. That offer was never acknowledged by the defendant.

The case went before a jury. As the jury was deliberating, the parties entered into the high-low agreement, under the terms of which the plaintiff would receive not less than $300,000 and no more than $1 million. Later that day, the jury returned a plaintiff verdict of $6 million, meaning that Serico was entitled to receive the $1 million high amount she had accepted in the high-low agreement. This was above her offer of judgment amount by $250,000.

Serico then moved for costs and attorney fees in accordance with New Jersey's offer of judgment rule, which provides that if an offer of judgment is made and rejected and the plaintiff obtains a judgment in excess of 120% of the offer, then she is also entitled to collect from the defendant costs and attorney fees accruing after the failure to accept. R. 4:58-2(a). Despite the fact that Serico had received an award in excess of 120% of her offer, the court denied her motion because she did not expressly reserve the right to seek attorney fees under the offer of judgment rule in the high-low agreement. Lacking any specific written or oral record from which to analyze the parties' intent regarding fees and costs, the trial judge turned to his own 42-year experience as a trial litigator and judge — in which he had never seen a prevailing party in a high-low agreement situation obtain fees or costs — and concluded that “in the absence of a contrary oral or written contemporaneous statement by counsel that the Offer of Judgment Rule will survive a high-low agreement, the Offer of Judgment Rule sanctions cannot be enforced after a high-low agreement.”

Serico appealed, claiming that although she did not make a reservation of rights in the high-low agreement and none was made to the court on the record, she also did not do anything to waive her rights under the offer of judgment rule when entering into the agreement.

The appeals court applied de novo judgment to the facts and the law to determine that, by entering into the high-low agreement, the plaintiff had given up her right to recover any amount beyond the “high” to which she agreed. In support of its determination that the agreement limited the total amount of the defendant's obligation to the ceiling of $1 million, the court pointed to its own precedent in Malick v. Seaview Lincoln Mercury , 398 N.J. Super. 182 (App. Div. 2008), in which it quoted Benz v. Pires , 269 N.J. Super. 574, 579-80 (App. Div. 1994) for that case's explanation of possible outcomes in a high-low agreement situation:

• If there is a no-cause verdict, the agreed floor controls, and plaintiff takes that amount. There is nothing to calculate interest on. There is only the agreed minimum recovery.
• If there is a damage verdict below the agreed floor, interest is calculated on the verdict and plaintiff receives the total, up to the agreed ceiling; if the total does not exceed the floor, plaintiff receives the floor.
• If there is a damage verdict of the floor or more, but less than the agreed ceiling, interest is calculated on the verdict. Plaintiff receives the full amount up to the ceiling.
• If there is a damage verdict of the ceiling or more, plaintiff receives the amount of the ceiling.

Here, the plaintiff could have negotiated to reserve her right to collect the disputed amounts, but the responsibility for preserving that reservation of right on the record lay with her and her attorney — and they had not even mentioned these things during negotiations or before the trial judge. This being the case, ordinary contract law applied to the high-low agreement, and its terms must be enforced as written. Thus, because Serico was entitled to receive no more than the $1 million “high” she had agreed to, the court affirmed the trial court's denial of the plaintiff's motion for attorney's fees pursuant to the offer of judgment rule.

Criminal Act Deemed Intervening Cause of Harm

The Supreme Court of Georgia has thrown out a $3.7 million verdict against a dental office in a sex-assault case that asked whether the dental practice should have done more to prevent a contractor anesthetist from molesting the plaintiff (and several of the practice's other patients). Goldstein Garber & Salama LLC v. J.B., 2017 Ga. LEXIS 101 (GA, 2/27/17).

The dental practice of Goldstein Garber & Salama LLC (GGS) had contracted with Certified Anesthesia Providers (CAP) to provide it with anesthesia services. On the day of plaintiff J.B.'s two-part dental procedure in September 2009, CAP sent certified registered nurse anesthetist Paul Serdula to provide anesthetic services. CAP had conducted an independent credentialing inquiry on Serdula prior to sending him to GGS — nothing amiss was revealed.

During a gap between phases of J.B.'s dental procedure that day, she was left alone in the room with Serdula for 35 minutes. When Serdula's phone was found at a later date in the bathroom of GGS's offices — where it had been set to secretly film people using the bathroom — three films of Serdula sexually assaulting J.B. were discovered, along with similar films involving other patients. Serdula pleaded guilty to sexually assaulting several patients and is now serving a life sentence.

J.B. sued GGS on theories of professional negligence and negligence per se. A jury found for the plaintiff and the court of appeals affirmed, even though it allowed that there was no evidence that GGS knew that Serdula had previously sexually assaulted any patients. However, that court found that it was known in the dental care community that sexual assaults of anesthetized patients do occur and also that the level of anesthesia J.B. was given was likely to render her “a more vulnerable target” to sexual assault. The court of appeals, in upholding the verdict, stated that it was “not persuaded … that the relatively uncommon nature of Serdula's intervening acts compels a determination that GGS could not reasonably have foreseen them.”

In reversing, Georgia's Supreme Court turned that logic around, observing that “the fact that the dental profession is aware that sexual assaults of sedated patients can occur, and recognizes that such events should never happen, does not alone convert GGS's alleged breach of its duty to properly supervise Serdula into liability on GGS's part, nor does GGS's failure to ensure that a recovering patient be attended by a second appropriately trained person.” Instead, in order for any alleged breach of GCS's duty to rise to the level of “proximate cause” of the plaintiff's injury, Serdula's actions would have to have been: 1) the probable or natural consequence of that breach; and 2) reasonably foreseeable. These things the court found lacking.

As to the negligence per se cause of action, it rested on the fact that the dentists overseeing Serdula did not have the state-mandated permits required to oversee the administration of anesthesia to patients. The State Supreme Court found no basis for recovery on this theory, as the purpose of the permit requirement is to prevent medical complications arising from the improper administration of anesthesia. J.B.'s injuries were non-medical, and so this state permit requirement was not meant to prevent them, and it could not be used as a reason to hold GCS accountable.
Despite the unanimous decision, J.B.'s attorneys have petitioned the Supreme Court of Georgia for reconsideration, arguing that not only is the decision wrong under the law, it also exhibits an “out of touch and dangerous view of sexual assault that does not accord with modern knowledge and understanding.”