Dyet v. McKinley

• Decision Date: 04 December 2003
• Docket Number: No. 28628.,28628.
• Citation: 81 P.3d 1236,139 Idaho 526
• Parties: Mari Ann DYET, Plaintiff-Respondent-Cross Appellant, v. William Shane McKINLEY, Defendant-Appellant-Cross Respondent.
• Court: Idaho Supreme Court

81 P.3d 1236

139 Idaho 526

Mari Ann DYET, Plaintiff-Respondent-Cross Appellant, v. William Shane McKINLEY, Defendant-Appellant-Cross Respondent.

No. 28628.

Supreme Court of Idaho, Pocatello, September 2003 Term.

December 4, 2003.

Cooper & Larsen, Pocatello, for appellant. Garry L. Cooper argued.

McBride & Roberts, Idaho Falls, for respondent. Michael R. McBride argued.

SCHROEDER, Justice.

This is a personal injury case arising out of an automobile collision. Mari Ann Dyet (Dyet) was a passenger in her own vehicle which was being driven by her daughter, Charlotte Hansen (Hansen). Shane McKinley (McKinley) was driving the other car involved in the collision. A jury awarded Dyet damages and both parties appeal. The primary issues on appeal are the admissibility of evidence of reductions in the charges for medical services due to Medicare "write downs," and the question of whether the award should be reduced by the amount Dyet received for underinsured motorist benefits from her own insurance company.

I. FACTUAL AND PROCEDURAL BACKGROUND

On October 27, 2000, Hansen and Dyet were traveling in the same car on a highway near Idaho Falls. McKinley was traveling the opposite direction on the same highway and attempted to make a left turn in front of Hansen and Dyet at an intersection. The cars collided and Hansen and Dyet sustained serious injuries. Dyet's right hip and left femur were fractured. Her injuries required multiple surgeries, including the insertion of a new right artificial hip, replacing an artificial hip that had been inserted in 1987. In spite of successful surgeries, she has some remaining impairments as a result of the injuries. The charges from the medical providers for Dyet's care totaled $89,367.71. However, because Dyet was a Medicare patient, the bill was mandatorily reduced by $67,655.22 to $21,712.49. Subsequently, Dyet also received $75,000 in Underinsured Motorist Benefits from her own insurance company.

Dyet sued McKinley for damages arising from his alleged negligent driving. She filed a motion in limine requesting that all evidence be excluded at trial relevant to whether she was insured and relevant to whether she "received monies from any source such as Medicare, Medicaid, underinsured insurance, or private health insurance." The district court granted the motion in limine, allowing Dyet to introduce the charges for the medical services but not allowing any evidence during trial as to the amount she actually paid for the services or the write off required by Medicare. McKinley made an offer of proof during trial showing that Dyet's medical bills were reduced by $67,655.22 due to Medicare regulations and federal law.

The jury returned a special verdict finding McKinley and Hansen, a non-party, both negligent and apportioning 88% of the fault to McKinley and 12% to Hansen. The jury awarded Dyet $400,000 in damages, which amount included $89,367.71 for medical expenses. The district court reduced the verdict by $48,000 for comparative negligence on the part of Hansen and by another $67,665.22 for the reduction in charges required by Medicare regulations and federal law, leaving a net judgment of $284,334.78. The district court refused to reduce the verdict by the $75,000 paid for underinsured motorist coverage. Both parties appeal. Dyet maintains the verdict should not have been reduced. McKinley maintains that he should have been allowed to offer evidence at trial of the actual amount paid for medical expenses and that the verdict should have been reduced by the $75,000 paid as underinsured motorists benefits.

II. THE DISTRICT COURT DID NOT ERR IN PROHIBITING McKINLEY FROM OFFERING PROOF OF THE AMOUNTS ACTUALLY PAID TO DYET'S MEDICAL PROVIDERS

A. Standard of Review

The interpretation of a statute is an issue of law over which this Court exercises free review. Idaho Fair Share v. Idaho Public Utilities Comm'n, 113 Idaho 959, 961-62, 751 P.2d 107, 109-10 (1988), overruled on other grounds by J.R. Simplot Co. v. Idaho State Tax Comm'n, 120 Idaho 849, 820 P.2d 1206 (1991)

. When interpreting a statute, the primary function of the Court is to determine and give effect to the legislative intent. George W. Watkins Family v. Messenger, 118 Idaho 537, 539-40, 797 P.2d 1385, 1387-88 (1990). Such intent should be derived from a reading of the whole act at issue. Id. at 539, 797 P.2d at 1387-88. If the statutory language is unambiguous, "the clearly expressed intent of the legislative body must be given effect, and there is no occasion for a court to consider rules of statutory construction." Payette River Property Owners Ass'n v. Board of Comm'rs of Valley County, 132 Idaho 551, 557, 976 P.2d 477, 483 (1999). The plain meaning of a statute will prevail unless clearly expressed legislative intent is contrary or plain meaning leads to absurd results. George W. Watkins Family, 118 Idaho at 540,

797 P.2d at 1388.

When a statute is ambiguous, the determination of the meaning of the statute and its application is also a matter of law over which this Court exercises free review. Kelso & Irwin, P.A. v. State Insur. Fund, 134 Idaho 130, 134, 997 P.2d 591, 595 (2000); J.R. Simplot Co. v. Western Heritage Ins. Co., 132 Idaho 582, 584, 977 P.2d 196, 198 (1999). If it is necessary for this Court to interpret a statute, the Court will attempt to ascertain legislative intent, and in construing a statute, may examine the language used, the reasonableness of the proposed interpretations, and the policy behind the statute. Kelso & Irwin, P.A. at 134, 997 P.2d at 595.

B. The district court correctly refused to allow McKinley to present evidence to the jury regarding the amounts actually paid to Dyet's medical providers.

Idaho Code § 6-1606, entitled "Prohibiting double recoveries from collateral sources" states:

[I]n any action for personal injury or property damage, a judgment may be entered for the claimant only for damages which exceed amounts received by the claimant from collateral sources as compensation for the personal injury or property damage, whether from private, group or governmental sources, and whether contributory or noncontributory. For purposes of this section, collateral sources shall not include benefits paid under federal programs which by law must seek subrogation ... Evidence of payment by collateral sources is admissible to the court after the finder of fact has rendered an award. Such award shall be reduced by the court to the extent the award includes compensation for damages, which have been compensated independently from collateral sources.

The central issue in this case is whether or not Medicare write-offs are a collateral source under I.C. § 6-1606 or, if not, if the write-offs should be treated the same as a collateral source.

I.C. § 6-1606 is clearly a statute that was designed to prevent double recovery. In the Statement of Purpose accompanying House Bill 745, currently I.C. § 6-1606, the legislature stated that:

This bill would modify the collateral source rule of evidence in certain circumstances in which the court determines that a double payment will exist [sic] the court is given the authority to modify an award of damages so that the damages would be paid once but not twice.

Both parties argue that a Medicare write-off is not a collateral source under I.C. § 6-1606. However, this is the extent to which they agree. Dyet argues that the write-off amount falls into the non-collateral "federal benefits under which by law must seek subrogation" category, but that it should be inadmissible under I.R.E. 403, analogous to the existence of liability insurance. McKinley argues that the statute cannot be construed to include the write-off as a collateral source, and as such, should be admissible at trial. McKinley maintains that misstating the total amount paid for the medical expenses artificially inflates the damages awarded by the jury.

The district court followed a rule adopted by many states with statutes similar to that of Idaho. Citing Kastick v. U-Haul, 740 N.Y.S.2d 167, 292 A.D.2d 797 (2002) and Loncar v. Gray, 28 P.3d 928 (Alaska 2001), the district court stated that "these jurisdictions hold that while Medicare write-offs are technically not payments from a collateral source, plaintiffs may not recover the amount of the write-off from a tortfeasor because it was not an item of damages for which the plaintiff ever became obligated."

Neither the language of I.C. § 6-1606 nor its Statement of Purpose specifically deal with write-offs, but the district court's reasoning is sound. By treating a Medicare write-off as a collateral source, the danger of prejudice contemplated in I.R.E. 403 is avoided, and the jury will not be influenced by the existence of Medicare. At the same time, the policy of I.C. § 6-1606 contained in both the statute and the legislative history to prevent a double payment for the damages is preserved. Although the write-off is not technically a collateral source, it is the type of windfall that I.C. § 6-1606 was designed to prevent. As reasoned by the New York court in Kastick, "Although the write-off technically is not a payment from a collateral source within the meaning of [the collateral source statute], it is not an item of damages for which plaintiff may recover because plaintiff has incurred no liability therefore." Id., 740 N.Y.S.2d at 169, 292 A.D.2d at 798.

III. THE DISTRICT COURT DID NOT ERR IN DENYING McKINLEY'S MOTION FOR NEW TRIAL

A. Standard of Review

When reviewing a trial court's ruling on a motion for new trial, this Court applies an abuse of discretion standard. State v. Davis, 127 Idaho 62, 896 P.2d 970 (1995). A trial court has wide discretion to grant or refuse to grant a new trial, and on appeal this Court will not disturb that exercise of discretion absent a showing of manifest abuse. State v. Olin, 103 Idaho 391, 648 P.2d 203 (1982). In State v. Hedger, 115 Idaho 598, 768 P.2d 1331 (1989), this Court set...