December 2, 2024
When I was a junior associate, I had the opportunity to spend a day at a trial. It was not my first time observing a trial, but it was my first time seeing a judge try to settle a case during a trial. Everyone was rushing to get through the conversation because the jurors were waiting, but the topic of a high-low came up. The defense trial lawyer wanted to make the right to appeal part of the high-low agreement. Neither the plaintiff’s attorney nor the judge thought that made sense. The way the lawyers and judge were talking, I assumed, as most lawyers do, that entering a high-low automatically eliminates the right to make a post-trial motion or take an appeal, and preserving the right to appeal was unheard of. It was not until years later that I learned that the experienced lawyers and judges I watched that day were all looking at the issue from the wrong direction. Instead of the defense lawyer asking to negotiate to reinstate the right to appeal, the plaintiff should have been negotiating the elimination of the right to a post-trial motion or appeal. Had the defense attorney said nothing, they would have gotten what they wanted, a high-low that preserved the right to appeal.
A high-low agreement is a settlement, and the parties are free to include or exclude whatever terms they like (see Cunha v Shaprio, 47 AD3d 95 [2d Dept 2007]). However, by their nature, they are conditional settlements that require a valid verdict to come into effect (see Flores v 731 Southern Blvd., LLC, 154 AD3d 518 [1st Dept 2017]). Because of their conditional nature, high-low agreements can result in post-verdict litigation that the parties may not have anticipated when they entered into their agreement. To avoid this, the high-low should try to contemplate as many potential verdicts as possible.
At the outset, the high-low agreement should explicitly state that all post-trial motions and appellate rights are waived. It is not automatic that a high-low waives post-verdict and appellate rights. For example, in Matamoros v Tovbin (82 AD3d 941 [2d Dept 2011]), the parties entered into a pre-verdict high-low agreement. After the jury rendered a verdict in favor of one of the defendants, the plaintiff and the co-defendant made post-trial motions to set aside the verdict and directed a new trial on liability. The trial court granted the motion, and the co-defendant appealed, arguing, among other things, that the trial court should not have considered the motion because of the high-low. While the Appellate Division ultimately held that a new trial was not appropriate, it did find that the trial court was not wrong in considering the post-trial motions because “the parties so-called “high-low” agreement did not expressly prohibit the making of the subject post-verdict motion and cross motion” (Matamoros, 82 AD3d at 941).
Another issue arises when the verdict is inconsistent. During jury deliberation, the parties in Flores, entered into a high-low agreement that was contingent, in part, on the percentage of fault assigned to the plaintiff by the jury. If the jury apportioned 80% or more fault against the plaintiff would receive the low. If the plaintiff were to be apportioned less than 80%, that percentage would be used to calculate the plaintiff’s award, and the plaintiff would receive no less than $200,000 and no more than $1 million. The jury apportioned 51% of the fault to the plaintiff and 49% of the fault to the defendant. Additionally, the jury awarded nothing for past pain and suffering or future pain and suffering but awarded $70,000 for future medical expenses. After the verdict, the plaintiff tendered a release in the amount of $490,000 (49% of $1 million). The defendant moved to enforce the high-low agreement. The trial court agreed that the plaintiff’s release was not consistent with the parties' agreement. However, the court, on its own, determined that the verdict was inconsistent, set it aside, and directed a new trial. The defendant appealed, arguing that the high-low agreement precluded and the parties’ failure to argue inconsistency; the Appellate Division disagreed and noted: “[a] high-low settlement between parties is a condition settlement, triggered only when there is a proper verdict” (Flores, 154 AD3d at 519).
Navigating the complexities of high-low agreements requires careful consideration of potential post-verdict and appellate rights. Contrary to common belief, cases like Matamoros and Flores demonstrate that mid-trial stipulations, particularly high-low agreements, will not automatically waive post-verdict and appellate rights. These cases also show the level of specificity required to avoid the post-trial litigation that high-low agreements are intended to eliminate.
Consulting with appellate counsel throughout the trial process can help identify potential verdict issues early on, enabling the trial attorney to include the appropriate terms in a high-low agreement that will ensure the trial attorney can deliver on their client’s expectation that the verdict will be the end of the case. The experienced team at The Law Offices of Seth M. Weinberg, PLLC is dedicated to ensuring comprehensive and well-thought-out legal solutions that safeguard your client’s interests. Contact us today to assist you in preparing your case for the best possible outcome.