New Jersey Supreme Court Establishes New Requirements for Additur or Remittitur

In Orientale v. Jennings, (A-43-17/079953) (Decided September 23, 2019), the Supreme Court of New Jersey revised the requirements for additur or remittitur. Going forward, when a damages award is deemed a miscarriage of justice requiring the grant of a new trial, the acceptance of a damages award fixed by the judge must be based on the mutual consent of the parties. If both parties accept the remittitur or additur, then the case is settled; if not, a new trial on damages must proceed before a jury.

New Jersey Supreme Court Establishes New Requirements for Additur or Remittitur

Additur and Remittitur

The practice of judges setting damages awards through remittitur and additur dates back hundreds of years. However, it has often been controversial because of its tension with the constitutional right to trial by jury.

Under New Jersey’s existing common law jurisprudence, when a jury’s damages award is so grossly excessive that it shocks the judicial conscience, the trial judge may, with the consent of the plaintiff, grant a remittitur – the highest award that, in the judge’s view, could be sustained by the evidence. If the plaintiff accepts the remitted amount, the defendant is bound by that judicial finding, subject to the right to appeal.

Likewise, when a jury’s damages award is so grossly inadequate that it shocks the judicial conscience, the trial judge may, with the consent of the defendant, grant an additur – an increased award that, in the judge’s view, could be sustained by the evidence. If the defendant accepts the additional amount, the plaintiff is bound by that judicial finding, subject to the right to appeal.

Facts of Orientale v. Jennings

Plaintiff Barbara Orientale brought a personal-injury lawsuit against defendant Darrin Jennings for allegedly setting off an automobile accident that caused her to suffer permanent injuries. The trial court entered partial summary judgment against Jennings, finding that he was at fault for causing the accident. Orientale and Jennings then settled the lawsuit for $100,000, the full amount of liability coverage on Jennings’s vehicle.

Orientale maintained an underinsured motorist policy with defendant Allstate New Jersey Insurance Company (Allstate) that provided coverage for damages up to $250,000. Orientale initiated a claim for her personal-injury damages in excess of $100,000 allegedly caused by the accident. Although the jury returned a verdict finding that Orientale suffered a permanent injury, it awarded damages in the amount of only $200. Because the jury award did not exceed Orientale’s $100,000 settlement with Jennings, Allstate’s underinsured motorist coverage policy was not triggered. Therefore, the judge entered a no-cause-of-action judgment.

Orientale moved for a new damages trial or an additur. The judge vacated the damages award, finding that it constituted a miscarriage of justice, and granted an additur in the amount of $47,500, the lowest award in his estimation that a reasonable jury could have returned in light of the evidence presented at trial. Allstate accepted the additur. Because Orientale’s damages did not exceed $100,000, the judge again entered a judgment in favor of Allstate, which the Appellate Division affirmed in an unpublished decision.

On appeal, Orientale argued that “additur is constitutionally infirm because it requires the judge to be a super jury in awarding [damages] after the jury’s verdict shocked the judicial conscience.” Meanwhile, Allstate maintained that the additur should stand.

NJ Supreme Court’s Decision in Orientale v. Jennings

The New Jersey Supreme Court reversed, concluding that Orientale is entitled to a new trial on damages.  “We hold that when a damages award is deemed a miscarriage of justice requiring the grant of a new trial, then the acceptance of a damages award fixed by the judge must be based on the mutual consent of the parties,” Justice Barry Albin wrote for the court.

According to the New Jersey Supreme Court, changes were needed to bring the use of remittitur and additur “in line with basic notions of fair play and equity.” As Justice Albin explained, “The current practice, which places the parties on unequal footing, cannot be squared with fundamental notions of fairness and cannot be justified in the name of judicial efficiency or cost-effectiveness.”

The court went on to “exercise our superintendence over the common law and our constitutional authority over the practices and procedures of the courts to revise the doctrines of remittitur and additur.” Under the new requirements, plaintiffs and defendants are on a level playing field. As explained by Justice Albin:

Going forward, in those rare instances when a trial judge determines that a damages award is either so grossly excessive or grossly inadequate that the grant of a new damages trial is justified, the judge has the option of setting a remittitur or an additur at an amount that a reasonable jury would award given the evidence in the case. Setting the figure at an amount a reasonable jury would award — an amount that favors neither side — is intended to give the competing parties the greatest incentive to reach agreement. If both parties accept the remittitur or additur, then the case is settled; if not, a new trial on damages must proceed before a jury.

Given that the trial court declared that the damages award was so grossly inadequate that it shocked the judicial conscience and because Orientale did not consent to the court’s additur, the court found that Orientale is entitled to a new trial on damages. It remanded the case accordingly.

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