Offer in Judgment Enforced as to All Claims; Litigants Can’t Pick and Choose

Puglia v. Phillips, Docket No. A-5367-18 (N.J. Super. Ct. App. Div. August 15, 2022)

This matter involves a mix of estate, property and procedural issues, including offers of judgment.

The decedent’s children were the beneficiaries of her estate (“Estate”). A lengthy, acrimonious dispute arose regarding the Estate’s primary asset, a sixty-seven-acre farm (the Property).  In the Probate Part, defendants filed a complaint against plaintiffs, alleging that improper use of the Property.  Plaintiffs filed a counterclaim against defendants and the Estate, alleging, among other things, wrongful eviction under the Anti-Eviction Act, N.J.S.A. 2A:18-61.1 to -61.12. After extensive litigation in the Probate Part, defendants purchased the Property from the Estate. Plaintiffs’ counterclaims were severed and transferred to the Law Division.

Ultimately, the Law Division judge entered orders denying plaintiffs partial summary judgment and granting defendants partial summary judgment.  The court dismissed plaintiffs’ claim for wrongful eviction and denied plaintiffs’ motion for reconsideration.

In the interim, defendants filed an offer of judgment allowing plaintiffs to take judgment against them in the amount of $10,107.77.  By letter dated April 1, 2019, and filed with the court on April 2, plaintiffs’ counsel responded to the offer, telling defense counsel and the court that his clients accepted the offer of judgment.  The next day, April 3, 2019, by separate letter to the judge, plaintiffs’ counsel acknowledged his previous acceptance of the offer of judgment but asserted that it only applied to the open claims currently before the court and did not apply to the claims under the Anti-Eviction Act.

After considering oral argument, the judge entered judgment in plaintiffs’ favor for $10,107.77.

Plaintiffs appealed.  The Appellate Division affirmed.

After reviewing Rule 4:58-4(c) and its history and amendments, the appeals court determined that:

Nothing in the Rule limits the claims covered by the settlement offer to only those still pending before the court. Allowing a party to accept an offer of judgment only as to claims still pending, while at the same time permitting extinct claims to be resurrected for purposes of appeal, is not only contrary to the plain language of the Rule but also undermines the general purpose of the Rule, which is to foster settlements.

Puglia v. Phillips, Docket No. A-5367-18 at *13.

Therefore, plaintiffs’ acceptance of defendants’ offer of judgment settled all claims by and against defendants, under Rule 4:58-4(c), including plaintiffs’ claims dismissed by interlocutory orders on summary judgment and for which reconsideration was denied.