In March 2022, LPMG presented J.P. Electric with a $5,000 offer of judgment to settle their claims. However, in a surprising twist, J.P. Electric rejected this offer, setting the stage for a courtroom showdown that would keep everyone on the edge of their seats.
The High-Stakes Showdown:
In July 2022, a bench trial unfolded, and as the drama reached its climax, the court granted LPMG’s motion for a directed verdict. This led to LPMG’s bold move to file a motion for counsel fees, which ultimately faced denial.
The Argument Unveiled:
The intrigue deepened as LPMG argued on appeal that an involuntary dismissal under court Rule 4:37-2(b), typically applied to the dismissal of actions, should be considered an adjudication on the merits of the case. However, the panel’s response added a surprising twist to the tale. They pointed out that Rule 4:58-3(c), which applies to the court’s offer of judgment rules, only allows for the offeror to recover fees if its offer is not accepted and the claimant secures a judgment that favors the offeror. Importantly, this rule does not apply when the claim is dismissed or results in a no-cause verdict.
NJ Panels upholds Elliott Greenleaf Construction Spat Denial : The Final Verdict
Appellate Judge Jack Sabatino delivered the ultimate revelation when he stated, “because a successful motion under Rule 4:37-2(b) results in the ‘dismissal of the action’ as ‘the plaintiff has shown no right to relief,’ no verdict was returned, so the trial court’s denial of fees was manifestly correct.”
A Matter of Policy:
The twist in the plot lies in the panel’s argument that the policy behind the zero-recovery exceptions to the court’s offer of judgment rules would be undermined if the award of counsel fees were permitted. Judge Sabatino left no room for ambiguity, stating, “Lest there be any doubt, a mid-trial involuntary dismissal does not entitle a defendant offeror to fee-shifting under the rule.”
