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Thompson v. T.J. Whipple Construction Co.

March 30, 2009

DOUGLAS L. THOMPSON, APPELLANT
v.
T.J. WHIPPLE CONSTRUCTION COMPANY, APPELLEE



Appeal from the Order of January 17, 2008, in the Court of Common Pleas of Erie County, Civil Division, at No. 2005-13538.

The opinion of the court was delivered by: Bowes, J.

BEFORE: BOWES, FREEDBERG AND POPOVICH, JJ.

OPINION

¶ 1 Douglas L. Thompson appeals from the January 17, 2008 order of the Court of Common Pleas of Erie County denying his petition for delay damages on a verdict for injuries he suffered as a result of the negligence of Appellee, T.J. Whipple Construction Company ("Whipple"). We affirm.

¶ 2 The facts of the case are not in dispute. Appellant was injured while carrying out his duties as an employee of Va Tech America Corp. d/b/a Steel Related Technology. In his complaint, Appellant contended the incident occurred as a result of the negligence of one or more agents, officers, or employees of Whipple.

¶ 3 On August 17, 2007, prior to the commencement of trial, Appellant's counsel and Appellee's insurer, Selective Insurance Company ("Selective"), entered into a high/low agreement ("Agreement"). A high/low agreement is "a settlement in which a defendant agrees to pay the plaintiff a minimum recovery in return for the plaintiff's agreement to accept a maximum amount regardless of the outcome of trial." Black's Law Dictionary, 8th ed. (2004); see also Power v. Tomarchio, 701 A.2d 1371 (Pa.Super. 1997) (high/low agreement defining floor and ceiling of potential recovery constitutes a settlement).

¶ 4 The instant Agreement, initiated through telephone conversation, was memorialized and finalized by exchange of correspondence between Appellant's counsel and a litigation specialist for Selective prior to jury selection. The first letter, dated August 17, 2007, from Selective, provides in pertinent part:

¶ 5 This letter will confirm our telephone conversation from today.

As we discussed, we are willing to enter into a high/low agreement, prior to trial, with the high being $1,000,000 and the low $250,000. You indicated you needed to discuss these parameters with Mr. Thompson and did not think you could get back to me today with an answer. Therefore, you were going to discuss further with Paul Grater [Appellee's counsel] on Monday morning.

Defendant-Appellee Letter, 8/17/07, at 1 (Defendant-Appellee Answer to Petition for Delay Damages, Exhibit A).

¶ 6 Appellant's counsel wrote the second letter that was hand delivered to Appellee on August 20, 2007. It states, in pertinent part:

This will confirm that my client has agreed to accept Selective Insurance Company's offer of a high/low agreement. The high will be $1,000,000 and the low will be $250,000. If the jury should award more than $1,000,000 then Mr. Thompson would receive $1,000,000. And if the jury should award less than $250,000, or it should be a defense verdict, Mr. Thompson would receive $250,000.

Plaintiff-Appellant Letter, 8/20/07, at 1 (Defendant-Appellee Answer to Petition for Delay Damages, Exhibit B).

¶ 7 Trial commenced on August 20, 2007. On August 24, 2007, the jury returned a verdict for Appellant in the amount of $1,071,041.67, which was reduced to $1,000,000 in accordance with the Agreement. Appellant thereafter filed a petition for delay damages in the amount of $84,847.04 pursuant to Pa.R.C.P. 238.*fn1 Whipple filed an answer opposing delay damages. On January 17, 2008, following a hearing on the issue, the trial court denied Appellant's petition for delay damages based upon the Agreement. This timely notice of appeal followed.

¶ 8 Appellant raises the following issue of first impression:

1. Whether the trial court erred in denying Appellant's petition for delay damages on the basis that recovery of delay damages was barred by a high/low agreement entered into between Appellant and Appellee's insurance company.

Appellant's brief at 4.

¶ 9 To the extent we must analyze the trial court's denial of delay damages and applicability of the rule, "[w]e review . . . for an abuse of discretion, and we will not reverse a trial court's decision regarding imposition of delay damages absent such an abuse." Krebs v. United Refining Co. of Pennsylvania, 893 A.2d 776, 794 (Pa.Super. 2006).

Concurrently, to the extent we must interpret Pa.R.C.P. 238, which involves questions of law, "we are not constrained by the determination of the trial court; our standard of review is de novo." Jones v. Rivera, 866 A.2d 1148, 1150 (Pa.Super. 2005). Further, ...


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