The New Jersey Supreme Court affirmed the judgment of the Appellate Division, holding that a high-low agreement is a settlement agreement subject to the rules of contract interpretation. Before trial, plaintiff served defendant with an offer of judgment for $750,000 “inclusive of costs and prejudgment interest.” The offer letter contained a warning that if the offer was rejected, plaintiff would seek “all reasonable litigation expenses including costs, interest, and attorney’s fees in accordance with Rule 4:58,” the rule governing offers of judgment. At the conclusion of the trial, prior to the announcement of the jury verdict, the parties entered into a high-low agreement on the record. The “low” was $300,000 and the “high” was $1,000,000. After obtaining the maximum award the plaintiff moved for litigation expenses, including attorney’s fees. The Supreme Court stated that the crucial aspect of any high-low agreement is finality, and the Court ruled that the high-low contract superseded and extinguished the offer of judgment. Therefore, plaintiff could not seek additional expenses allowed by the offer of judgment rule.
Schenck Price attorneys James Sharp and Benjamin Hooper represented the defendant-respondent before the Appellate Division and before the New Jersey Supreme Court.