Schonberger v. Roberts, 89-800

• Decision Date: 23 May 1990
• Docket Number: No. 89-800,89-800
• Parties: Rodney J. SCHONBERGER, Appellee, v. Carroll John ROBERTS and Buck Hummer Trucking, Inc., Appellants.
• Court: Iowa Supreme Court

Page 201

456 N.W.2d 201

Rodney J. SCHONBERGER, Appellee, v. Carroll John ROBERTS and Buck Hummer Trucking, Inc., Appellants.

No. 89-800.

Supreme Court of Iowa.

May 23, 1990.

Rehearing Denied June 20, 1990.

Frank J. Comito of Neu, Minnich, Comito & Hall, P.C., Carroll, for appellants.

Russell S. Wunschel and Dee Ann Wunschel of Wunschel & Eich, Carroll, and Barry T. Bruner of Bruner & Bruner, Carroll, for appellee.

Considered en banc.

HARRIS, Justice.

When the legislature, in two separate statutes, prohibits the application of a rule of common law we are clearly obliged to yield to the mandate. The question here is whether we should give the mandate double effect. This appeal calls for interpretation of an Iowa statute which is in part designed to deal with a situation already controlled by another statute. A literal interpretation of the latter statute, in view of the prior one, would call for doubling an intended reduction in tort recoveries. We believe the goal of the two statutes should be fully realized, but only once. We affirm the trial court.

On July 22, 1987, the plaintiff, Rodney Schonberger, was driving west on U.S. Highway 30 in Carroll, Iowa. He had picked up his employer's mail and was headed to work when an accident occurred. Schonberger was preparing to turn into his employer's parking lot when he was struck by the defendant, Carroll John Roberts, who was driving a truck owned by defendant Buck Hummer Trucking, Inc.

As a result of the accident Schonberger was unable to return to work for three and one-half weeks. He suffered injuries to his neck, back, and knee. His medical bills totaled $7625.40 at the time of trial. These expenses, as well as future medical expenses, are being reimbursed as a part of the workers' compensation benefits Schonberger is receiving. Schonberger's injuries were permanent, and he will continue to incur medical expenses as a result of the accident.

Schonberger then brought this tort suit for his injuries which resulted in a jury verdict in his favor. The jury assessed eighty percent of the negligence to Roberts and twenty percent to Schonberger. It determined past damages were $18,000 and that future damages were $115,000. The jury also found that Schonberger was not wearing a seat belt and determined the award should be reduced an additional two percent.

Although defendants assert the damage awards were excessive--a matter we later address--the preeminent issue in the case is defendants' challenge to a trial court ruling refusing to admit evidence. Defendants sought to introduce evidence regarding the payment of medical bills and other workers' compensation benefits to Schonberger. The trial court ruled the evidence inadmissible. This ruling is defendants' first assignment of error on appeal.

Since 1913 an Iowa statute, now Iowa Code section 85.22 (1989), has provided a right of indemnity to workers' compensation employers (or their insurers) for amounts paid under the Act from recoveries realized by the worker in tort actions for the same injuries. Without doubt Schonberger's workers' compensation insurer is entitled to be compensated from his recovery in this suit for any amounts paid to or for him on account of this injury. See e.g. Liberty Mut. Ins. Co. v. Winter, 385 N.W.2d 529, 531-32 (Iowa 1986).

In 1987 the General Assembly amended the comparative fault Act, to include a special provision, Iowa Code § 668.14, ¹ also aimed at prohibiting an injured worker to recover twice for the same industrial injury. Both section 85.22 (in a limited situation) and section 668.14 (in a broader sense) are limitations on the collateral source rule, a principle long recognized as a part of our common law. Under the collateral source rule a tortfeasor's obligation to make restitution for an injury he or she caused is undiminished by any compensation received by the injured party from a collateral source. Clark v. Berry Seed Co., 225 Iowa 262, 271, 280 N.W. 505, 510 (1938).

The trial court's rejection of the proffered evidence was in reaction to the obvious inconsistency between compelling the injured worker to pay back his benefits from his recovery and at the same time have the jury reduce his recovery because of them. To remedy this inconsistency the trial court rested its exclusion of evidence of workers' compensation benefits on Iowa rule of evidence 402 (all irrelevant evidence is inadmissible). Schonberger argues in support of the ruling in part by contending that the workers' compensation Act is, because of its design and regulated status, a state program. State programs are expressly exempted from the sweep of section 668.14.

I. There are well-recognized limits to the extent to which courts will slavishly ascribe literal meanings to the words of a statute. Because legislative intent is the polestar of statutory interpretation

it is clear that if the literal import of the text of an act is inconsistent with the legislative meaning or intent, or if such interpretation leads to absurd results, the words of the statute will be modified to agree with the intention of the legislature.

2A Sutherland, Statutory Construction § 46.07 (Sands 4th Ed.1984) (citing Graham v. Worthington, 259 Iowa 845, 854, 146 N.W.2d 626, 633 (1966)).

In construing various statutes we have often applied this rule by refusing to attribute to the General Assembly an intention to produce an absurd result. Harden v. State, 434 N.W.2d 881, 884 (Iowa 1989); Metier v. Cooper Transp. Co., 378 N.W.2d 907, 913 (Iowa 1985); Baldwin v. City of Waterloo, 372 N.W.2d 486, 493 (Iowa 1985); DeMore v. Dieters, 334 N.W.2d 734, 737 (Iowa 1983); Welp v. Iowa Dep't of Revenue, 333 N.W.2d 481, 483 (Iowa 1983); Hanover Ins. Co. v. Alamo Motel, 264 N.W.2d 774, 778 (Iowa 1978); Egy v. Winterset Motor Co., 231 Iowa 680, 686-87, 2 N.W.2d 93, 97 (1942); Trainer v. Kossuth County, 199 Iowa 55, 59, 201 N.W. 66, 67 (1924).

In the last cited case we were faced with a statute which, literally interpreted, would lead to an absurd result. We said:

Such absurdity of result calls for scrutiny of the statute. Ad absurdum is a "Stop" sign, in the judicial interpretation of statutes. It is indicative of fallacy somewhere, either in the point of view or in the line of approach. In such case, it becomes the duty of the court to seek a different construction, and to presume always that absurdity was not the legislative intent. To this end, it will limit the application of literal terms of the statute, and, if necessary, will even engraft an exception thereon.

Trainer, 199 Iowa at 59, 201 N.W. at 67 (citations omitted).

A literal application of section 668.14 under the present circumstances would also lead to an absurd result. Under section 85.22 Schonberger must repay from his recovery his workers' compensation insurer any benefits he has received. The only conceivable purpose of informing the jury of those benefits is to invite the jury to reduce his recovery because of them. But, to any extent the jury does reduce the damage award because of the benefits, Schonberger is in effect paying, not once, but twice. We are convinced the legislature did not intend to call for this double reduction.

To avoid this unintended result we interpret the statute so as to deem its requirements satisfied when the requirements of section 85.22 are complied with. The case is remanded to district court for a proceeding in which it must be established that the proceeds of any recovery received by Schonberger are pledged to reimburse his workers' compensation insurer in accordance with Iowa Code section 85.22. Upon such a showing the judgment of the trial court shall stand as affirmed.

II. Defendants also complain of the amount of the award which, by present standards, does appear to be generous for the injuries sustained. The amount is not however so flagrantly excessive as to compel our interference. See Sallis v. Lamansky, 420 N.W.2d 795, 799 (Iowa 1988).

AFFIRMED AND REMANDED.

All Justices concur except McGIVERIN, C.J., and NEUMAN, and ANDREASEN, JJ., who dissent.

McGIVERIN, Chief Justice (dissenting).

I respectfully dissent.

The majority opinion substantially sets aside the clear terms of Iowa Code section 668.14 and, as a practical matter, fully reinstates the judicially created collateral source rule by use of Iowa Rule of Evidence 402, at least in cases where collateral benefits are paid subject to a statutory right of subrogation.

Unlike the majority, I believe that the terms of section 668.14 can be respected without visiting inequity on Schonberger and others in his position.

I. Iowa Code section 668.14, enacted in 1987, is the product of a broad-ranging study conducted by the Iowa Liability and Liability Insurance Study Commission, an entity created by the legislature to study

liability and liability insurance issues and report on those issues to the legislature. Final Report of the Iowa Liability and Liability Insurance Study Commission 8 (1986) [hereinafter Liability Report ]. The commission's voting membership consisted of eight legislators and four members of the public. Id. Its final report included both a majority and minority recommendation on whether to retain, modify or abolish the judicially created collateral source rule in Iowa law. Id. at 133-34, 162-63.

Under the collateral source rule, damages awarded to a successful tort plaintiff against a tort defendant are not reduced by any sums which the plaintiff has received, or will receive, from another source (a "collateral source") on account of the plaintiff's injury. See Groesbeck v. Napier, 275 N.W.2d 388, 391-92 (Iowa 1979); 22 Am.Jur.2d Damages § 566 (1988). Typically these sources are insurance benefits of one form or another, such as the workers' compensation benefits in this case. As a common law rule of evidence, the collateral source rule bars evidence of such "collateral benefits." See, e.g., Stewart v. Madison, 278 N.W.2d 284, 293-94 (Iowa 1979)....