O'Bryan v. Hedgespeth, 93-SC-963-DG

• Decision Date: 19 January 1995
• Docket Number: No. 93-SC-963-DG,93-SC-963-DG
• Parties: Richard A. O'BRYAN and Nancy O'Bryan, Appellants, v. Catherine M. HEDGESPETH, Appellee.
• Court: United States State Supreme Court — District of Kentucky

Page 571

892 S.W.2d 571

Richard A. O'BRYAN and Nancy O'Bryan, Appellants, v. Catherine M. HEDGESPETH, Appellee.

No. 93-SC-963-DG.

Supreme Court of Kentucky.

Jan. 19, 1995.

Jeanie Owen Miller, Russ Wilkey, Castlen & Wilkey, P.S.C., Owensboro, for appellants.

B.R. Paxton, Jonathan S. King, Central City, for appellee.

E. Andre Busald, William J. Kathman, Jr., Joseph A. McGee, Busald Funk Zevely, P.S.C., Florence, for amicus curiae.

LEIBSON, Justice.

At issue is the constitutionality of KRS 411.188, a statute enacted in 1988 legislating the practice and procedure to apply to all civil actions wherein the plaintiff has received "collateral source payments" related to the same expenses for which he seeks damages in a civil action. Subsection (2) of the statute provides for notice to parties who "hold subrogation rights to any award received by the plaintiff as a result of the action," and an opportunity "to assert subrogation rights by intervention," and Subsection (3) of the statute specifies that "[c]ollateral source payments ... shall be an admissible fact in any civil trial."

The statute does not specify how the jury, as trier of fact, is to apply this evidence in deciding the damages to which the plaintiff is entitled in the pending case. In this case the evidence was the medical bills incurred by the appellant, Richard O'Bryan, totaled $48,068.04, his out-of-pocket expenses were $18,390.08, and he had received some $30,000 in collateral source payments. The jury awarded $18,400 for the medical expenses he had incurred. Without question, the jury simply awarded the plaintiff the amount submitted as evidence of his out-of-pocket expenses. Whether those entities who made collateral source payments had intervened to assert subrogation rights and were thus entitled to reimbursement from "any final award received by the plaintiff as a result of the action" as provided for in KRS 411.188, is not clear; nor was this explained to the jury, or covered by the judgment. To the extent that subrogation rights are protected, the statute contemplates the subrogees rather than O'Bryan would have first claim on the award for medical expenses regardless of the jury's intention.

The essential facts are as follows. The complaint alleges personal injuries suffered by Richard A. O'Bryan in two separate motor vehicle collisions, the first occurring June 4, 1989, wherein the appellee, Catherine M. Hedgespeth, is the defendant, and a second on July 14, 1989, involving Rebecca C. Murphy. The complaint included a claim on behalf of the appellant, Nancy O'Bryan, as Richard's wife, for loss of consortium. Claims against Ms. Murphy were settled before trial, and dismissed. Immediately before trial appellants made a motion in limine to exclude evidence of collateral source payments, specifying as grounds "the statute is unconstitutional and will be ... finally adjudicated so," and objecting "to any mention of collateral source during the course of this trial." The trial court responded, "your objection is on the record and I'll overrule it for the record. We'll go by the statute."

The judge having ruled that evidence of collateral source payments would be admitted, the plaintiff prepared and introduced a chart labeled "Medical Bills of Richard O'Bryan," specifying in columns: "Provider, Amount, Collateral Source, (and) Paid by O'Bryan." Plaintiff's Exhibit 6. As previously stated, the jury awarded damages for the plaintiff's out-of-pocket medical expenses rather than some lesser figure which might suggest some question as to whether all of these bills constituted reasonable and necessary expenses.

The jury verdict also awarded Mr. O'Bryan $3,200 for mental and physical pain and suffering, $3,500 for loss of wages and income, zero for permanent impairment of earning power, and zero for future medical expenses. The total award for damages was $25,100. Pursuant to other instructions covering liability and apportionment, the jury apportioned fault 100% to Hedgespeth and zero to O'Bryan in the case at issue, the accident involving Catherine Hedgespeth, but then attributed 50% of plaintiff's total damages to the accident involving Rebecca Murphy which had been settled before trial. The jury awarded zero to the appellant, Nancy O'Bryan, on her claim for loss of consortium. Pursuant to the jury award of $25,100 in total damages, 50% attributable to each accident, the trial court entered final judgment against the appellee, Catherine M. Hedgespeth, for $12,550. After the plaintiffs' motion for a new trial was overruled, the plaintiffs pursued an appeal to the Court of Appeals, which affirmed the judgment.

The issues presented and rejected in the Court of Appeals were: (1) whether the collateral source statute, KRS 411.188, is unconstitutional, and therefore the trial court erred in allowing the jury to hear evidence introduced pursuant to the statute of collateral source payments made to the plaintiff; (2) whether, if the statute is constitutional, nevertheless the trial court should have excluded evidence regarding the portion of collateral source payments which constituted payment of no-fault benefits; and (3) whether the award of zero dollars for permanent impairment of earning power was inadequate as a matter of law. The Court of Appeals overruled the challenge to the constitutionality of KRS 411.188, citing its previous decision in Edwards v. Land, Ky.App., 851 S.W.2d 484 (1992); agreed with the appellants that "no-fault benefits or PIP payments are not a collateral source within the purview of KRS 411.188(3)," citing our Court's decision in Ohio Casualty Insurance Co. v. Ruschell, Ky., 834 S.W.2d 166 (1992), but then held that "this issue is not preserved for our review"; and rejected the claim for a new trial because no award was made for permanent impairment of earning power, on grounds that under the evidence "the jury had every right to believe that O'Bryan was not permanently impaired by the accident with Catherine Hedgespeth."

We granted discretionary review to consider whether, as appellants claim, KRS 411.188 is unconstitutional, an issue of institutional importance because the statute impacts the trial of a great many civil actions. If this statute were constitutional, we would agree with the Court of Appeals that the appellants should not prevail on the remaining issues. The objection on constitutional grounds to all evidence of collateral source payments did not raise the separate question of whether no-fault benefits classify as collateral source payments. Further, we would not second-guess the Court of Appeals' decision affirming the jury award of zero dollars for permanent impairment of earning power. We reverse the award and order a new trial on damages only in the context that all evidence of collateral source payment was constitutionally impermissible, and prejudicial to the jury's consideration of damages.

On the other hand, we reject the appellee's claim the appellants' motion in limine, when denied, failed to preserve their objection to evidence of collateral source payments. The appellants elected to go forward with the evidence of collateral source payments in the presentation of their case once their motion in limine was overruled, rather than to leave it to the defendant to present this evidence. The judge had ruled admissible evidence that some $30,000 in medical expenses O'Bryan had incurred had already been reimbursed from other sources. The evidence as presented through the plaintiffs' case obviously prejudiced the jury's award. Left for the defendant to present after the plaintiffs had apparently concealed it, such evidence would have been even more devastating, adding insult to injury. The appellee argues that we should not assume that if the plaintiffs had not gone forward with this evidence the defendant would have done so. If such was not the defendant's intention, the time to say so was when the motion to exclude the evidence was made, thus mooting the issue. The likelihood the defendant would not present this evidence after prevailing against the motion in limine borders on absurdity.

Further, the record shows the exhibit the plaintiffs prepared, listing medical bills and collateral source payments, after the motion in limine was overruled incorporated defense counsel's "suggestion," confirming intent to present such evidence. Finally, we note that in the trial court's order overruling the plaintiffs' motion for a new trial the court specifically rejects lack of preservation, stating as follows:

The Defendant argued that it was the Plaintiff who presented the collateral source payments and that is true. However, the Defendant argued against the Plaintiff's motion in limine to exclude any evidence of collateral source payments. The Court must assume that if the Plaintiff had not introduced such evidence, then the Defendant would have.

Kentucky practice concerning "Motions in Limine" was somewhat uncertain until recently codified in KRE 103(d), which provides in pertinent part:

A party may move the court for a ruling in advance of trial on the admission or exclusion of evidence.... A motion in limine resolved by order of record is sufficient to preserve error for appellate review .... (Emphasis added.)

The appellee cites intermediate appellate court decisions from two states, Oregon and Illinois, to support the waiver argument. Both are different from the present case in essential facts, and both fail to present reasons which would justify applying waiver here. The only reasonable interpretation of KRE 103(d) is that, as a general rule, once a motion in limine to exclude evidence has been overruled, a party may go forward with adverse evidence to avoid the appearance of concealment and still "preserve error for appellate review." KRE 103(d), as quoted supra. To construe a motion in limine as waived in present circumstances would defeat the purpose of KRE 103(d) and destroy the value of...