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A New York appellate court has ruled that, once triggered by a jury verdict, a "high-low" agreement is a settlement for enforcement purposes. Accordingly, the Court disallowed an attempt to collect interest that would have been due had the award been considered a judgment.
In Cunha v. Shapiro, 2007 WL 1295844 (N.Y. App. Div. May 1, 2007), Cunha sued the estate of Shapiro seeking damages for personal injuries. Before the issue of damages was presented to the jury, the parties agreed to a "high-low" settlement whereby Cunha would obtain no less than $75,000 and no more than $325,000.
The jury verdict came in at $400,000, thus triggering the "high" end of the agreement. Shapiro's counsel requested a general release from Cunha, but none was provided. Six weeks later, when payment had not yet been received, Cunha sought enforcement of the judgment, plus interest and costs.
In denying Cunha's motion, the Court ruled that when parties to a dispute initially arrive at a settlement range, they have reached a "conditional settlement." That condition is triggered if a jury verdict comes in outside of the established range. If the verdict fell within the range, the verdict would be enforceable as a judgment.
The significance of the distinction is that judgments and settlements are enforced by different sets of rules. Specifically, a judgment can be enforced by the court – with interest and costs added – if payment is not received within 30 days of the verdict. A settlement is due in 21 days, but only after the plaintiff issues a general release, and no interest would be due until after that time.
In the present case, since the conditional settlement agreement was "triggered," there was a settlement rather than a judgment, and since Cunha's attorney never provided a release, the timeline for making payment never started to run. As such, Shapiro owed no interest or costs.
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