Buck v. Schneider, CX-87-725
| Decision Date | 13 October 1987 |
| Docket Number | No. CX-87-725,CX-87-725 |
| Citation | 413 N.W.2d 569 |
| Parties | Rodney W. BUCK, et al., Appellants, v. Robert Allan SCHNEIDER, Respondent. |
| Court | Minnesota Court of Appeals |
Syllabus by the Court
Appellant's damage award should not have been reduced to reflect his receipt of workers' compensation benefits, because he asserted a subrogation right to those benefits within the meaning of the collateral source statute, Minn.Stat. § 548.36, subd. 2(1) (1986).
Duane M. Peterson, Winona, for appellants.
Jeffrey A. Hanson, Dunlap, Keith, Finseth, Berndt & Sandberg, P.A., Rochester, for respondent.
Heard, considered and decided by FOLEY, P.J., and PARKER and SEDGWICK, JJ.
This appeal is from a judgment for appellants in their negligence action against respondent Robert Schneider. Appellant Rodney Buck settled his claim for workers' compensation benefits with his employer and the employer's insurer. As part of the settlement, the employer and insurer assigned Buck their subrogation rights to the benefits. Applying the recently-enacted "collateral source" statute, the trial court reduced Buck's damage award against respondent to reflect the amount of workers' compensation benefits he had received. Buck contends his assertion of the assigned subrogation rights bars the deduction of collateral sources under the statute. We agree.
In January 1980, Buck was injured while working at the White Water Tavern in Beaver, Minnesota, when Schneider crashed his pickup truck through the tavern's front wall. The tavern and its worker's compensation insurer, the Home Insurance Company (collectively, "employer/insurer") paid Buck certain workers' compensation benefits, but they disputed liability for further benefits.
On March 3, 1983, Buck and the employer/insurer signed an agreement settling Buck's claims for further benefits. Under the agreement, the employer/insurer paid Buck $12,000 and assigned to Buck any claim they might have to a subrogation interest under the workers' compensation statute. See Minn.Stat. § 176.061.
In January 1984, the Bucks brought this negligence action against Schneider. A jury awarded Rodney Buck damages as follows:
Past medical expenses ............................ $4,165
Past lost earnings .............................. $10,000
Past pain, disability and emotional distress ..... $4,500
Future lost earning capacity ........................ -0-
Future pain, disability and emotional distress ... $3,500
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Total ....................................... $22,165
(Ruth Buck was awarded $500 for past lost services and companionship.)
Minn.Stat. § 548.36 (1986), enacted in 1986, provides for the reduction of damage awards by the amount of certain "collateral sources" of compensation, e.g., workers' compensation benefits, available to the plaintiff. In response to Schneider's motion for a determination of collateral sources, the trial court ordered the parties to submit evidence on this issue. See § 548.36, subd. 2. The trial court determined that Buck had received $18,897.80 in workers' compensation benefits (including the $12,000 settlement). The court subtracted from this sum $2,600 in attorney's fees Buck had paid to secure the collateral sources. See § 548.36, subds. 2(2), 3(a).
The trial court reasoned that, since the apparent purpose of the collateral source reduction is to prevent double recovery, the only portions of the verdict that should be reduced are those representing compensation for damages covered by workers' compensation. It therefore only reduced Rodney's awards for past medical expenses and lost earnings, as follows:
$14,165.00 (portion of verdict to which collateral
sources apply)
less 18,897.80 (amount of collateral sources
----------
received)
(4,732.80)
plus 2,600.00 (expenditures to secure collateral
----------
sources)
total (2,132.80)
Buck was granted judgment of $8000, reflecting the portion of the award that was unaffected by the collateral source deduction. The Bucks appeal from the judgment, contending there should have been no reduction for collateral source payments.
Did the trial court err by deducting Buck's workers' compensation benefits from his award of damages?
The collateral source statute provides:
In a civil action, * * * when damages include an award to compensate the plaintiff for losses available to the date of the verdict by collateral sources, a party may [move for a] determination of collateral sources. If the motion is filed, * * * the court shall determine:
(1) amounts of collateral sources that have been paid for the benefit of the plaintiff or are otherwise available to the plaintiff as a result of losses except those for which a subrogation right has been asserted; and
(2) amounts that have been paid [by] the plaintiff * * * to secure the right to a collateral source benefit * * *.
Subd. 3. Duties of the court. (a) The court shall reduce the award by the amounts determined under subdivision 2, clause (1), and offset any reduction in the award by the amounts determined under subdivision 2, clause (2).
Minn.Stat. § 548.36, subds. 2, 3(a) (1986) (emphasis added). The statute defines "collateral sources" to include workers' compensation benefits. Id., subd. 1(1).
Buck argues his workers' compensation benefits should not have been deducted from his damage award because the benefits fall within the exception for collateral sources "for which a subrogation right has been asserted." Id., subd. 2(1). He argues he "asserted" the subrogation rights by stating, in response to the court's order requiring the parties to submit evidence of collateral sources, and in responses to discovery requests, that he had been assigned those rights. For example, his response to the trial court's collateral source order states:
As part of said settlement [of Buck's workers' compensation claim], the Home Insurance Company assigned the plaintiff any and all interest in any right of subrogation and agreed that any rights to subrogation or any independent action for any workers' compensation benefits paid to plain...
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