Bob had a can’t-lose case, on a contingency-fee arrangement to boot.  He hung tough at a mediation session.  Although the mediation did not result in a settlement, Bob was able to wring, from one of the two defendants anyway, a “high-low agreement.”  Under the agreement, Bob’s client Rose and defendant “1” narrowed the range of Rose’s recoverable damages against defendant “1” by establishing the “high” and “low” limits of any jury award. 

Bob and defendant “1” concluded that they could not keep this agreement from the trial judge.  They therefore informed her of their agreement:

(a)  At the trial, with respect to defendant “1” only, Rose shall be entitled to a judgment in a minimum amount of $300,000 (the “Low Award”) and a maximum amount of $700,000 (the “High Award”).  Neither Rose nor defendant “1” shall seek any post-trial relief or file any appeal with respect to the jury’s verdict regarding Rose’s claims against defendant “1.”

(b)  If the jury denies Rose’s claim against defendant “1” or awards Rose an amount against defendant “1” that is less than the amount of the Low Award, judgment then shall be entered in favor of Rose and against defendant “1” in the amount of the Low Award.  

(c)  If the jury verdict is in favor of Rose and against defendant “1” in an amount greater than the amount of the High Award, judgment then shall be entered in favor of Rose and against defendant “1” in the amount of the High Award.

(d)  If the amount of the jury verdict in favor of Rose and against defendant “1” is between the amount of the Low Award and the amount of the High Award, judgment then shall be entered in favor of Rose and against defendant “1” in the amount of the jury verdict.

(e)  This high-low agreement shall not be disclosed to defendant “2.” 

The high-low agreement worked like a charm.  The jury verdict was in favor of Rose.  It was against defendant “1” for $200,000 and against defendant “2” for $800,000.  Rose and Bob are now laughing all the way to the bank;  defendant “1” will have to pay the “low” of $300,000 (even though the jury awarded only $200,000 against this defendant); and, at least by Bob’s calculation, defendant “2” will have to pay $800,000.  Bob turned a million dollar verdict into a million dollar plus award.

At least until Bob read his morning mail.  The first part of defendant “2”’s post-trial motion included all the usual stuff – the verdict was “against the weight of the evidence”; defendant “2” was “surprised” by Rose’s expert’s damage calculations; the trial judge “erred in admitting” some post-accident photographs.  Bob’s confidence grew as he read the motion papers.  He knew that defendant “2” could not prevail on any of these post-trial boilerplate arguments. 

Bob then turned to the next section of the motion papers.  There, defendant “2” argued that the trial court should set aside the verdict – the entire verdict.  Reason: defendant “2” and the jury were not informed of the high-low agreement and this ethical lapse tainted the trial.  Defendant “2” acknowledged that it could not prove any collusion, at least right now, between Rose and defendant “1.”  But defendant “2” argued that it had been prejudiced because concealing the high-low agreement took away its right to cross examine Rose or defendant “1”’s witnesses regarding the high-low agreement or any resulting bias or prejudice.  Defendant “2”’s conclusion:

Plaintiff had an undisclosed interest in minimizing the amount of the verdict against defendant “1” and in maximizing the amount of the v