McDonnell v Tello
Annotate this CaseDecided on May 2, 2005
Supreme Court, Westchester County
Gerald F. McDonnell and Gloria N. McDonnell, Plaintiffs,
against
Segundo Tello and Germania Garzon, Defendants.
22045/02
BROWN & GROPPER, LLP
Attorneys for Plaintiff
275 Seventh Avenue, 25th Fl.
New York, NY 10001
SUSAN B. OWENS, ESQ.
Attorney for Defendant
140 Grand Street, Suite 707
White Plains, NY 10601
Mark C. Dillon, J.
This post-verdict motion highlights the problems and pitfalls that may befall parties that have entered into "high/low" stipulations at trial. High/low agreements are generally favored by courts, attorneys and litigants, as they assure a minimally acceptable recovery to plaintiffs in the event of an unexpectedly small verdict or a defense verdict, while protecting defendants against runaway verdicts. New York has "long favored and encouraged the fashioning of stipulations as a means of expediting and simplifying the resolution of disputes." Mitchell v New York Hospital, 61 NY2d 208, 215 (1984).
In this automobile-related personal injury action, the parties stipulated during trial to a "high/low" of $250,000/$25,000" to protect them against their worst-scenario exposures. The Stipulation was spread upon the record in open court on February 3, 2005 and envisioned three (3) potential verdict circumstances. Under the first circumstance, defendants agreed to pay and the plaintiffs agreed to accept the sum of twenty-five thousand ($25,000) dollars in the event the jury returned a verdict in any amount less that twenty-five thousand ($25,000) dollars. Under the second circumstance, if the jury awarded damages in excess of two hundred fifty thousand ($250,000) dollars, the "defendants would pay and the plaintiffs would accept only two hundred fifty thousand ($250,000) dollars." The third circumstance envisioned a verdict of any amount between twenty-five thousand ($25,000) dollars and two hundred fifty thousand ($250,000) dollars, in which case the "jury's verdict will govern." The Court noted on the record at that time that the stipulation was binding under CPLR §2104.
Dr. Rick Weinstein, a treating orthopedic surgeon, had testified on behalf of the plaintiffs that as a result of the occurrence, the plaintiff, Gerald F. McDonnell ("McDonnell"), incurred a meniscal tear at the left knee with surgical repair, rotator cuff tears of the left and right shoulders with arthroscopic repair to the right and a recommended repair to the left, and scaphulunate disassociation at the right wrist. Testimony was also presented regarding the future prognosis, particularly arthritis and the possible eventual need for a left knee replacement. The defense orthopedic surgery expert, Dr. Michael Rosen, took issue with accident-related causality as to the shoulders, knee and wrist.
The jury determined that McDonnell had sustained an injury that satisfied the "significant limitation" component of Insurance Law §§5102 and 5104. It awarded damages in the sum of four thousand five hundred ($4,500) dollars for past pain and [*2]suffering, four thousand five hundred ($4,500) dollars for lost wages, one thousand ($1,000) dollars for co-plaintiff Gloria N. McDonnell's loss of consortium, and $0 dollars for future pain and suffering. The awards total ten thousand ($10,000) dollars.
Stipulations of Settlement are judicially favored and should not be lightly cast aside. Hallock v. State of New York, 64 NY2d 224, 230 (1984); Vlassis v. Corines, 247 AD2d 609, 610 (2d Dept. 1998). Stipulations may nevertheless be invalidated upon a showing of fraud, collusion, accident, overreaching, unconscionability, illegality, coercion or duress, or mistake of fact. Davis v. New York City Housing Authority, 300 AD2d 531 (2d Dept. 2002); Siltan v. City of New York, 300 AD2d 298 (2d Dept. 2002); Lowe v. Steinman, 284 AD2d 506, 508 (2d Dept. 2001); Quality Ceramic Tile and Marble Co., Ltd., v. Cherry Valley Partnership, 259 AD2d 607 (2d Dept. 1999).
Here, the parties' high/low Stipulation is not a product of fraud, collusion, accident, illegality, overreaching, coercion or duress. Plaintiffs argue that the high/low Stipulation was a mistake, and in seeking additur, impliedly suggest that a twenty-five thousand ($25,000) dollar Judgment would be an unconscionable result given the seriousness of the injuries sustained.
For "mistake" to constitute a basis for setting aside a Stipulation of Settlement, there must be proof that the mistake was mutual at the time the Stipulation was entered into and be so substantial that the Stipulation does not represent the true meeting of the parties' minds. Mahon v. New York City Health and Hospital Corp., 303 AD2d 725 (2d Dept. 2003); Hauck v. State of New York, 2 Misc 3d 770, 773 (Ct. of Claims 2003). Mutual mistake can be evidenced inter alia by stipulation terms that are contradictory (Torres v. Livorno Restaurant Corp., 221 AD2d 197 (1st Dept. 1995)), not an issue here. The burden of proof is upon the party seeking to set aside the Stipulation to demonstrate by clear and convincing evidence that mutual mistake existed. Gillray v. Mental Hygiene Legal Services, 287 AD2d 865, 866 (2d Dept. 2001). Mutual mistake is not established where, as here, one party determines, with the benefit of post-verdict 20/20 hindsight that terms of the Stipulation are difficult or unfortunate. The plaintiffs derived the benefit of their Stipulation in knowing, before the jury determined that a "serious injury" had been incurred and rendered its assessment of damages, that there would be a guaranteed minimum recovery of twenty-five thousand ($25,000) dollars. No mistake was evident at the time the Stipulation was memorialized, much less a mutual one.
Stipulations may be set aside if they are unconscionable, unduly harsh or unjust. Solack Estates, Inc. v. Goodman, 102 Misc 2d 504, 506 (Sup. Ct., App. Term, 1st Dept. 1979), aff'd., 78 AD2d 512 (1st Dept. 1980). Stipulations that may merely seem "unfair" should not be set aside (Bernstein v. Cooke, 103 AD2d 725 (1st Dept. 1984)), as more is [*3]required.
The Court cannot conclude that the stipulation was so grossly unfair or unconscionable that it be set aside on grounds of unconscionability. Proximate causality between the accident and the injury was a question of fact for the jury, and it was uncertain when the stipulation was reached whether the plaintiffs would recover any damages at all. Subtracting from the twenty-five thousand ($25,000) dollar damages the proven lost wages and one thousand ($1,000) dollars for loss of consortium, the balance remaining, while very low for the injuries sustained, represents a trade-off between the acceptance of a stipulated "low" on the one hand and the then-unknown possibility of a
defense verdict on the other. At that time, there was nothing unconscionable about a high/low agreement designating a two hundred fifty thousand ($250,000) dollar maximum and a twenty-five thousand ($25,000) dollar minimum. The plaintiffs, having stated that a twenty-five thousand ($25,000) dollar recovery would be acceptable to them under the worst of circumstances, cannot now claim that the result is unconscionable as to meet the burden of proof for setting it aside.
The parties' Stipulation therefore "settles" the question of damages by raising the jury's verdict from ten thousand ($10,000) dollars to twenty-five thousand ($25,000) dollars, and terminates all the parties' claims. Accord, Esposito v. Wilson, 308 AD2d 432 (2d Dept. 2003); Skogsberg Construction Co. v. Hawthorne Industrial Park, Inc., 94 AD2d 766, 767 (2d Dept. 1983). The Court is bound to enforce the Stipulation even if , with hindsight, it causes an unfavorable result upon either of the parties. Nishman v. DeMarco, 76 AD2d 360 (2d Dept. 1980), app. dism'd., 53 NY2d 642 (1981) and
53 NY2d 796 (1981). The plaintiffs cannot now be relieved of the twenty-five thousand ($25,000) dollar low they agreed upon simply because, with hindsight, they wish the
Court to substitute a higher award by additur. The stipulated settlement of damages also means that the Court does not reach the question of setting aside the jury's verdict.
This constitutes the Decision and Order of the Court.
Dated: May 2, 2005
White Plains, New York [*4]
_________________________________
HON. MARK C. DILLON
JUSTICE OF THE SUPREME COURT
TO:
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