Tri–County Equip. & Leasing, LLC v. Klinke

• Decision Date: 28 June 2012
• Docket Number: No. 55121.,55121.
• Citation: 286 P.3d 593,128 Nev. Adv. Op. 33
• Court: Nevada Supreme Court
• Parties: TRI–COUNTY EQUIPMENT & LEASING, LLC, Appellant, v. Angela KLINKE, Respondent.

286 P.3d 593

128 Nev. Adv. Op. 33

TRI–COUNTY EQUIPMENT & LEASING, LLC, Appellant,

v.Angela KLINKE, Respondent.

No. 55121.

Supreme Court of Nevada.

June 28, 2012.

Burton Bartlett & Glogovac, Ltd., and Scott A. Glogovac, Gregory J. Livingston, and Michael A. Pintar, Reno, for Appellant.

Kilpatrick Johnston & Adler and Charles M. Kilpatrick, Carson City, for Respondent.

Before the Court En Banc.

OPINION

By the Court, HARDESTY, J.:

In this appeal, we consider whether proof of California workers' compensation payments can be admitted into evidence in a personal injury action in Nevada. Because Nevada, the forum state, and California, the state in which the payments were made, both have statutes that permit proof of workers' compensation payments to be allowed into evidence in personal injury actions, we conclude that Nevada law governs. Applying Nevada law, we conclude that evidence of the actual amount of workers' compensation benefits paid should have been admitted and that a clarifying jury instruction provided by statute should have been given. We therefore reverse the judgment and remand for further proceedings.

FACTS AND PROCEDURAL HISTORY

Respondent Angela Klinke filed a complaint in a Nevada district court for personal injury against appellant Tri–County Equipment & Leasing, LLC, after a generator towed by a Tri–County truck in Nevada struck Klinke's vehicle, injuring her. At the time of the accident, Klinke was a California resident acting in the course and scope of her employment with her California employer. For her injuries, Klinke received California workers' compensation benefits through her employer. Pursuant to negotiations between the workers' compensation carrier and Klinke's medical providers, Klinke's medical providers allegedly accepted as full payment for their services an amount less than the amount stated in their bills; these types of negotiated discounts are often referred to as “write-downs.”

Prior to trial, Klinke and Tri–County filed motions in limine regarding the workers' compensation payments and medical expense write-downs. Klinke sought, in relevant part, to exclude evidence of the workers' compensation payments and write-downs under the collateral source rule, which bars evidence of payments for injuries made by an independent third party, and she argued that NRS 616C.215, the Nevada statute governing admissibility of workers' compensation payments, did not apply. Conversely, Tri–County argued in its own motion that Klinke's workers' compensation payments were admissible under NRS 616C.215. Tri–County also argued, in opposition to Klinke's motion, that “evidence of California workers['] compensation payments and/or other benefits is admissible under both Nevada and California law as an exception to the collateral source rule.” Equating NRS 616C.215 to a provision in the California Labor Code, Tri–County maintained that “just as Nevada provides a mechanism for the full recovery of all monies paid on behalf of an employee for a workers ['] compensation claim, so does California.” The district court summarily concluded, without citation to legal authority, that NRS 616C.215 did not apply because Klinke had received payments pursuant to California's, rather than Nevada's, workers' compensation scheme. Inexplicably, after addressing NRS 616C.215, the district court failed to address the applicability of California law, despite Tri–County's argument that Klinke's workers' compensation payments were admissible “under both California and Nevada law.” ¹ (Emphases added).

After the trial concluded, a jury awarded Klinke damages in the total principal amount of $27,510. The special jury verdict form stated that the award included $17,510 for medical expenses; however, pursuant to the negotiated write-downs, Klinke's medical providers accepted substantially less as full payment for their services. Tri–County subsequently moved the district court to reduce the jury's verdict on the medical cost damages to the amount actually paid, but the district court denied the motion. This appeal followed.

DISCUSSION

On appeal, Tri–County repeats its view that “under both California and Nevada law, evidence of worker[s'] compensation payments is admissible as an exception to the collateral source rule,” which generally renders evidence of a collateral source of payment for an injury inadmissible. Proctor v. Castelletti, 112 Nev. 88, 90, 911 P.2d 853, 854 (1996). Because both Nevada, the forum state, and California, the state in which the payments were made, have an interest in this case, and Tri–County addresses the outcome under the law of both states, we examine whether a conflict-of-law analysis is necessary. This issue is a question of law and the district court's decision that NRS 616C.215 did not apply must be reviewed de novo. See Stephans v. State, 127 Nev. ––––, ––––, 262 P.3d 727, 730 (2011); see also Canfora v. Coast Hotels & Casinos, Inc., 121 Nev. 771, 775, 121 P.3d 599, 602 (2005).

When the laws of more than one state potentially apply, before undertaking a conflict-of-law analysis, a court should determine whether a conflict of law actually exists. 15A C.J.S. Conflict of Laws § 30 (2012). See, e.g., Johnson v. Nextel Communications, Inc., 660 F.3d 131, 138 (2d Cir.2011); Estate of Doe v. Islamic Republic of Iran, 808 F.Supp.2d 1, 20 (D.D.C.2011); Edifecs Inc. v. TIBCO Software Inc., 756 F.Supp.2d 1313, 1317 (W.D.Wash.2010). “A conflict of law exists when two or more states have legitimate interests in a particular set of facts in litigation, and the laws of those states differ or would produce different results in the case.” AIG Premier Ins. Co. v. RLI Ins. Co., 812 F.Supp.2d 1315, 1321 (M.D.Fla.2011) (internal quotations omitted). “If there is no conflict, no further analysis is necessary, and the law of the forum state usually applies.” 15A C.J.S. Conflict of Laws § 30 (2012) (emphasis added); Edifecs, 756 F.Supp.2d at 1317. While both Nevada and California have legitimate interests in this Tri–County argues, evidence of Klinke's workers' compensation payments would be admissible under the law of either state. SeeNRS 616C.215(10); Cal. Lab.Code § 3855 (West 2011).² As such, there is no conflict, and Nevada law applies even though Klinke received California workers' compensation payments.³

The collateral source doctrine does not change this result. As noted, this court has adopted “a per se rule barring the admission of a collateral source of payment for an injury into evidence for any purpose.” Proctor, 112 Nev. at 90, 911 P.2d at 854. However, Nevada recognizes a limited exception to the collateral source rule for workers' compensation payments. In Cramer v. Peavy, this court expressly held that NRS 616C.215(10) creates an exception to the collateral source rule. 116 Nev. 575, 580, 3 P.3d 665, 669 (2000). Pursuant to NRS 616C.215(10), “[i]n any trial of an action by the injured employee ... against a person other than the employer or a person in the same employ, the jury must receive proof of the amount of all payments made or to be made by the insurer or the Administrator [of the Division of Industrial Relations].” (Emphases added.) The court must then instruct the jury to follow the court's damages instructions without reducing any award by the amount of workers' compensation paid, thus leaving unaltered the general substantive law on calculating damages. The jury-instruction language specifically suggested by the statute reads:

Payment of workmen's compensation benefits by the insurer, or in the case of claims involving the Uninsured Employers' Claim Account or a subsequent injury account the Administrator, is based upon the fact that a compensable industrial accident occurred, and does not depend upon blame or fault. If the plaintiff does not obtain a judgment in his or her favor in this case, the plaintiff is not required to repay his or her employer, the insurer or the Administrator any amount paid to the plaintiff or paid on behalf of the plaintiff by the plaintiff's employer, the insurer or the Administrator.

If you decide that the plaintiff is entitled to judgment against the defendant, you shall find damages for the plaintiff in accordance with the court's instructions on damages and return your verdict in the plaintiff's favor in the amount so found without deducting the amount of any compensation benefits paid to or for the plaintiff. The law provides a means by which any compensation benefits will be repaid from your award.

NRS 616C.215(10). We have previously recognized that this statute benefits both the plaintiff and the defendant by preventing jury speculation as to workers' compensation benefits received. See Cramer, 116 Nev. at 581, 3 P.3d at 669.

NRS 616C.215(10)'s application to “ any trial” gives the statute universal applicability to trials involving a plaintiff receiving workers' compensation payments, at least when the plaintiff is required to first use any recovery to reimburse the insurer for amounts paid.

The Supreme Court of North Carolina addressed a similar issue in Frugard v. Pritchard, 338 N.C. 508, 450 S.E.2d 744 (1994). In that case, the plaintiff was permitted to exclude from her North Carolina trial evidence of Virginia workers' compensation payments that she received as a result of an accident in North Carolina. Id. at 744–45. On appeal, the court addressed whether it “should hold that under [North Carolina's] case law, evidence of out-of-state worker[s'] compensation payments is not admissible when by statute evidence of in-state payments is admissible.” ⁴Id. at 746. The court saw “nothing in the distinction between the[ ] two situations that ma[de] a difference.” Id. Thus, believing that North Carolina “should have a uniform rule,” the court concluded “that evidence of out-of-state worker[s'] compensation payments [was] admissible in actions against third parties.” Id.

In this case, because the primary purpose of the statute is to...