Wade v. Mahler

• Decision Date: 17 May 2000
• Citation: 1 P.3d 485,167 Or. App. 350
• Parties: Susan WADE, Appellant, v. Michelle MAHLER, Respondent.
• Court: Oregon Court of Appeals

1 P.3d 485

167 Or. App. 350

Susan WADE, Appellant, v. Michelle MAHLER, Respondent.

(9702-01218; CA A103268)

Court of Appeals of Oregon.

Argued and Submitted June 3, 1999.

Decided May 17, 2000.

Nancy F.A. Chapman argued the cause for appellant. With her on the opening brief was Dan Norman and with her on the reply brief was Donald D. Dartt.

Lance B. Erz, The Dalles, argued the cause for respondent. On the brief was Timothy D. Norwood.

Before De MUNIZ, Presiding Judge, and HASELTON and WOLLHEIM, Judges.

WOLLHEIM, J.

Plaintiff appeals the trial court's entry of a money judgment in favor of defendant. That judgment reduced the jury verdict in favor of plaintiff by the amount of her settlement with a third party and by reason of a personal injury protection (PIP) reimbursement, thereby reducing plaintiff's damages award to zero. The judgment designated defendant as the prevailing party and awarded defendant costs in the amount of $1,000.50. Plaintiff assigns three errors, arguing that the setoff of her award by the third party settlement and PIP reimbursement was not proper and that, in any event, defendant is not the prevailing party and not entitled to costs. Because all of plaintiff's arguments present only questions of law, we review for errors of law. We reverse and remand for entry of judgment in favor of plaintiff in the amount of the jury verdict, for consideration of costs award to plaintiff, and for satisfaction of the judgment in the amount of the verdict but not costs awarded. Selective Services, Inc. v. AAA Liquidating, 126 Or.App. 74, 78-79, 867 P.2d 545 (1994).

This litigation arose from two automobile accidents involving plaintiff. The first accident occurred in March 1995, and Neal was the driver of the other car. The second accident involved defendant and occurred in May 1995. Plaintiff brought a single action against both Neal and defendant, alleged that both were at fault in each of the respective accidents, and prayed for economic and noneconomic damages resulting from both accidents. Plaintiff alleged that the March 1995 accident with Neal caused bruising and injury to the left side of her neck, left shoulder, left buttock, and upper and lower back, bursitis of the right shoulder, and a predisposition to further injury. Plaintiff alleged that the May 1995 accident with defendant caused, in part, straining and spraining injury to the left side of the neck and upper back, dislocation of several spinal vertebrae, and aggravation of the injuries caused by the March 1995 accident.

Neal and plaintiff subsequently reached a settlement in the amount of $7,500. Plaintiff rejected defendant's offer of settlement and went to a jury trial. Plaintiff then filed an amended complaint that dropped Neal as a party and added a few injuries to her claim against defendant. In addition to the straining injuries and aggravation injuries listed above, plaintiff alleged that the May 1995 accident caused brachial plexitisis injuries and thoracic outlet syndrome.

Plaintiff requested submission of a special verdict form that segregated plaintiff's economic damages into past and present medical bills, past wage loss, loss of opportunity and loss of earning capacity, and future wage loss, loss of opportunity and loss of earning capacity. Plaintiff's form also segregated plaintiff's noneconomic damages into several categories. The trial court sent defendant's general verdict form, which distinguished between economic damages and noneconomic damages, to the jury. The trial court instructed the jury under Uniform Civil Jury Instruction (UCJI) Number 21.04 that plaintiff and Neal had settled, that the jury was to consider the issues remaining between plaintiff and defendant, and that the jury was not to reduce the amount of damages awarded, if any, by reason of the settlement. The jury returned a verdict awarding $5,300 in economic damages only.

Plaintiff then submitted a proposed money judgment designating plaintiff as the prevailing party, awarding $5,300 in economic damages and $117.95 in costs. Defendant objected to the proposed money judgment and, before entry of final judgment, moved for "Partial (or Total) Satisfaction of Judgment" under ORS 18.510(2). That motion requested that the judgment be satisfied based on the fact that the damages awarded to plaintiff were paid as PIP benefits through plaintiff's insurance. The motion was accompanied by an affidavit from a representative of defendant's liability insurance carrier, stating that plaintiff's PIP insurer had requested reimbursement for those benefit payments to plaintiff in the amount of $7,368.62. The affidavit also formally acknowledged that defendant's insurance company was obligated to make a reimbursement payment to plaintiff's PIP insurer in the sum of $5,300 or such sum determined by the court pursuant to ORS 18.510(3).

At the hearing on defendant's objections and motion, defendant argued that plaintiff's judgment should be offset either because of the PIP reimbursement or because of plaintiff's settlement with Neal. The trial court agreed that the jury verdict should be offset to zero because of PIP reimbursement and the settlement with Neal. The trial court further reasoned that, because plaintiff received a net money award of zero, judgment should be entered in favor of defendant and defendant should be designated as the prevailing party. The trial court then entered a judgment awarding defendant $1,000.50 in costs.

Plaintiff argues that offsetting her verdict by the amount of the PIP reimbursement or settlement with Neal is impermissible and that, alternatively, even if a satisfaction of the judgment by the PIP reimbursement is warranted, plaintiff is still the prevailing party and defendant should not be awarded costs. We conclude that the PIP reimbursement requires satisfaction of plaintiff's judgment but that plaintiff is the prevailing party.

We consider plaintiff's first assignment of error that it was impermissible to offset her judgment by the amount of her settlement with Neal. We agree. The trial court simply indicated that the jury was instructed about the settlement and that "defendant is entitled to a setoff in the amount of $7,500." However, ORS 18.580(1) provides, in part:

"In a civil action, when a [plaintiff] is awarded damages for bodily injury * * * which are to be paid by [a defendant], and the [plaintiff] received benefits for the injury * * * other than from the [defendant], the court may deduct from the amount of damages awarded, before the entry of final judgment, the total amount of those collateral benefits * * *." (Emphasis added.)

Accordingly, only if the injuries for which Neal paid were the same injuries for which defendant was liable under the judgment may defendant request the court to reduce plaintiff's judgment. See also Bird v. Norpac Foods, Inc., 325 Or. 55, 67, 69-70, 934 P.2d 382(1997) (legislature may alter the collateral source rule, and ORS 18.510 provides a means for obtaining an offset for collateral benefits received); McKee Electric Co. v. Carson Oil Co., 70 Or.App. 1, 8, 688 P.2d 1360 (1984), aff'd 301 Or. 339, 723 P.2d 288 (1986) (collateral source rule embodies the principle that "a negligent defendant is liable for reasonably foreseeable consequential damages attributable to its negligence, and it is generally true that a defendant cannot escape that liability because the injured party is made whole by its own efforts or the efforts of others." (Emphasis added.))

Nothing in the record designated on appeal supports defendant's contention that the injuries were the same as alleged against Neal. Nowhere in her objections or motion or at the hearing did defendant argue that the injuries were the same, and the trial court gave no indication that it considered whether that prerequisite was satisfied before it concluded that defendant was "entitled" to an offset. To the contrary, plaintiff pleaded different injuries resulting from the different accidents, and the jury was instructed to consider the issues remaining between plaintiff and defendant, see UCJI 21.04. Those issues are framed by the amended complaint, and we can discern no overlap in the injuries from the two accidents. The trial court therefore erred as a matter of law in offsetting plaintiff's award by the amount of her settlement with Neal. See York v. Bailey, 159 Or.App. 341, 347-48, 976 P.2d 1181, rev. den. 329 Or. 287, 994 P.2d 122 (1999) (appealing party bears burden to designate record sufficient to demonstrate prejudicial error).

Plaintiff next assigns error to the offset of her judgment by the PIP reimbursement payment. We conclude that, although the reduction on account of the PIP reimbursement was proper as a satisfaction of the judgment, the court erred in reducing the amount of plaintiff's recovery via an "offset" before the entry of judgment. ORS 18.510(2) provides:

"If judgment is entered against a party who is insured under a policy of liability insurance against such judgment and in favor of a party who has received benefits that have been the basis for a reimbursement payment by such insurer under ORS 742.534, the amount of the judgment shall be reduced by reason of such benefits in the manner provided in subsection (3) of this section." (Emphasis added.)

In Dougherty v. Gelco Express Corp., 79 Or.App. 490, 495-96, 719 P.2d 906 (1986), we explained that, when the plaintiff pleads and proves damages subject to PIP benefits and when the plaintiff submits a verdict form from which the jury cannot tell whether the damages award includes losses subject to PIP benefits, the court must reduce the damages award by reason of the PIP benefits. We reasoned that the legislative purpose of ORS 18.510(2) is to "prevent[ ] the injured party from receiving payments from the PIP insurer and the negligent party's insurer that together would be greater than the injured party's proven damages." Id. at 495, 719 P.2d 906....