OK that is again 3 degrees of failure (missing by 11, you can spend a Hero Point if you want).
If Paladin suffers a second Staggered he suffer instead the 4th degree of failure and be
incapacitated.
Just as an FYI
A Staggered character is Dazed and Hindered.
Dazed: A dazed character is limited to free actions and a single standard action per turn, although the character may use that action to perform a move, as usual. Stunned supersedes dazed.
Hindered: A hindered character moves at half normal speed (–1 speed rank). Immobile supersedes hindered.
An Incapacitated character is defenseless, stunned, and unaware. Incapacitated characters generally also fall prone, unless some outside force or aid keeps them standing.
Defenseless: A defenseless character has active defense bonuses of 0. Attackers can make attacks on defenseless opponents as routine checks (see Routine Checks). If the attacker chooses to forgo the routine check and make a normal attack check, any hit is treated as a critical hit (see Critical Hits, page 188). Defenseless characters are often prone, providing opponents with an additional bonus to attack checks (see Prone, later in this section).
Stunned: Stunned characters cannot take any actions, including free actions
Unaware: The character is completely unaware of his surroundings, unable to make interaction or Perception checks or perform any action based on them. If the condition applies to a specific sense or senses, they are added to the name of the condition, such as visually unaware, tactilely unaware (or numb), and so forth. Subjects have full concealment from all of a character’s unaware senses.
IF you spend a Hero Point to re-roll, any rolls from 1-10 add +10 to the roll (i.e. when you re-roll you get from a 11-20)
I have never run 3rd ed. myself, but I have run both 1st and 2nd ed. for years and I still have to check everything to make sure that some rules have not changed between the editions 
