York v. Paakkonen

• Jurisdiction: Oregon
• Parties: Billie Joe YORK, Plaintiff–Appellant, v. Preston PAAKKONEN, Defendant–Respondent.
• Citation: 313 P.3d 332,259 Or.App. 276
• Docket Number: 100811414,A151107.
• Court: Oregon Court of Appeals
• Decision Date: 30 October 2013

259 Or.App. 276

313 P.3d 332

Billie Joe YORK, Plaintiff–Appellant,

v.Preston PAAKKONEN, Defendant–Respondent.

100811414; A151107.

Court of Appeals of Oregon.

Argued and submitted June 12, 2013.

Decided Oct. 30, 2013.

Michael H. Bloom argued the cause for appellant.With him on the briefs was Michael H. Bloom, P.C.

Ralph C. Spooner argued the cause for respondent.With him on the brief were Melissa J. Ward and Spooner & Much, P.C.

Before NAKAMOTO, Presiding Judge, and SCHUMAN, Judge, and EGAN, Judge.

EGAN, J.

Plaintiff brought a personal injury action and obtained a jury award for her economic damages.After judgment was entered, defendant filed a motion for partial satisfaction pursuant to ORS 31.555 in which he sought to reduce the amount of the judgment by the amount that defendant's insurance carrier had previously provided to plaintiff in personal-injury-protection (PIP) benefits.Plaintiff appeals from the trial court's order directing the court clerk to enter that partial satisfaction; she contends that the trial court erred under ORS 31.555(2).Plaintiff also seeks attorney fees.For the following reasons, we reverse and remand.

The facts are not in dispute.Plaintiff was riding in a vehicle driven by defendant when it struck another vehicle.Defendant's insurer, State Farm, paid plaintiff $25,000 in PIP benefits.Those benefits, which were the maximum amount available under defendant's policy, were paid solely to cover plaintiff's medical expenses.Defendant also had liability protection under that same policy.

Plaintiff brought a negligence action against defendant, in which she prayed for $225,000 in noneconomic damages, $50,000 for future medical expenses, $45,382.57 in medical bills that she had previously incurred, and $30,000 for past and future loss of earning capacity.At trial, plaintiff proposed the use of a segregated jury verdict form, which would have specified the categories of damages as follows:

“2.What are the plaintiff's damages?

“ANSWER:

+----------------------------------------------------------------------------+
                ¦          ¦“Economic Damages:                                ¦ ¦          ¦ ¦
                +----------+--------------------------------------------------+-+----------+-¦
                ¦          ¦“Past Medical Expenses (may not exceed $45,382.57)¦$¦          ¦ ¦
                +----------+--------------------------------------------------+-+----------+-¦
                ¦          ¦“Future Medical Expenses (may not exceed $50,000) ¦$¦          ¦ ¦
                +----------+--------------------------------------------------+-+----------+-¦
                ¦          ¦“Past Loss of Earnings (may not exceed $20,000)   ¦$¦          ¦ ¦
                +----------+--------------------------------------------------+-+----------+-¦
                ¦          ¦“Future Loss of Earnings (may not exceed $10,000) ¦$¦          ¦ ¦
                +----------+--------------------------------------------------+-+----------+-¦
                ¦          ¦“Noneconomic Damages                              ¦$¦          ¦”¦
                +----------------------------------------------------------------------------+
                

Defense counsel objected to the proposed verdict form.Although conceding that using plaintiff's proposed form would not be in error, defense counsel urged that the trial court use a nonsegregated verdict form, i.e., one that asked the jury to distinguish only between economic and noneconomic damages.After the trial court opted for defendant's nonsegregated verdict form, the jury returned a verdict specifying $45,382.57 in “[e]conomic” damages—the exact amount that plaintiff sought for past medical expenses—and no noneconomic damages.

After a general judgment was entered on the verdict, defendant moved under ORS 31.555 for a partial satisfaction of judgment in the amount of $25,000—the amount that State Farm had previously paid to plaintiff in PIP benefits.In support of that motion, defendant provided a declaration of the claims representative in charge of the liability claim against defendant, which stated that “State Farm acknowledges its obligation to make reimbursements for such PIP payments made for the medical expenses encompassed in the jury's verdict in the amount of $25,000.00.”The trial court then issued an order directing the court clerk to enter a partial satisfaction of judgment in that amount.Plaintiff timely appeals from that order.SeeORS 19.205(3)(providing that “[a]n order that is made in the action after a general judgment is entered and that affects a substantial right” may be appealed);Dougherty v. Gelco Express Corp.,79 Or.App. 490, 492–93, 719 P.2d 906(1986)(a partial satisfaction order is an order that “affects a substantial right”).

Plaintiff argues that the trial court erred under ORS 31.555 by ordering entry of the partial satisfaction.Plaintiff's assignment of error presents questions of law, and we therefore review for errors of law.Wade v. Mahler,167 Or.App. 350, 352, 1 P.3d 485,rev. den.,331 Or. 334, 23 P.3d 986(2000).As relevant to this appeal, ORS 31.555(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.”

“[T]he legislative purpose of [ORS 31.555] 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.’ ”Wade,167 Or.App. at 356, 1 P.3d 485(brackets omitted)(quotingDougherty,79 Or.App. at 495, 719 P.2d 906).¹

We have previously addressed the application of that statute on several occasions.In Dougherty, a jury awarded the plaintiff $20,000 in general damages and $7,068.05 in special damages.²79 Or.App. at 492, 719 P.2d 906.The plaintiff had previously received PIP payments to cover $5,000 in medical expenses and $9,000 in lost wages.On appeal from the entry of the defendant's requested satisfaction, the plaintiff apparently conceded that the insurer was entitled to a reduction for the $5,000 in medical PIP payments, but argued that there was no way to tell, from the nonsegregated verdict form, what portion of the $20,000 general damage award was allocable to the $9,000 that had been sought for lost wages.We first noted that the fact that “it cannot be determined what portion of the general damage award was for pretrial lost wages does not lead inexorably to the conclusion that the jury awarded [the plaintiff] less than $9,000 on that damage claim.”Id. at 495, 719 P.2d 906.We then stated the “ Dougherty rule”:

“[ORS 31.555] does not provide for a reduction in the offset amount when it cannot be determined whether the jury actually awarded the plaintiff damages already compensated for by the PIP payments.Even if we were permitted to read such a provision into the statute, which we are not, ORS 174.010, we would refuse to do so, because that would permit a plaintiff to defeat the legislative purpose of avoiding double recovery by including medical expenses and/or pretrial lost wages in the general damage claim.”

Id. at 495–96, 719 P.2d 906.Thus, when a plaintiff pleads and proves damages subject to PIP benefits, and 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 damage award under ORS 31.555.Wade,167 Or.App. at 356, 1 P.3d 485.

In Brus v. Goodell,119 Or.App. 74, 849 P.2d 552(1993), on the other hand, we determined that the record showed that there was no overlap in the damages awarded by the jury and the previously paid PIP amounts.In that case, the trial court“specifically instructed [the jury] not to include any award of damages for medical expenses or lost wages, the losses for which plaintiff received PIP payments”; the trial court also found “that plaintiff was permitted to plead and prove such damages, but clearly chose not to do so.”Id. at 76, 849 P.2d 552(internal quotation marks omitted).Accordingly, we concluded that ORS 31.555(2) and (3) only entitled a judgment debtor to obtain an offset for amounts actually received “by reason of PIP coverage.”Id. at 78, 849 P.2d 552.We also distinguished Dougherty by stating that

“[Dougherty ] concerned a situation where the plaintiff could and did claim damages at trial for some of the same losses that had been compensated by PIP benefits.We said in Dougherty that the statute did not provide for a reduction in the offset when it cannot be determined whether the PIP payments and the damages award cover overlapping losses.The application of that principle where it can be determined that there is no overlap makes no sense, is not compelled by the statutory language and does not advance the statutory objective.”

Brus,119 Or.App. at 78, 849 P.2d 552(internal citation omitted; emphasis in original).

Finally, in Wade, as here, the plaintiff proposed a segregated verdict form that would have required the jury to categorize the type of economic damages awarded; as here, the defendant proposed a verdict form that only distinguished between economic and noneconomic damages.167 Or.App. at 353, 1 P.3d 485.The trial court opted to use the defendant's form, and after the jury returned a plaintiff's verdict for $5,300 in economic damages, but before judgment was entered, the defendant sought the entry of a partial satisfaction under ORS 31.555(2) for PIP benefits that the plaintiff had previously obtained.The plaintiff argued that the use of the defendant's nonsegregated verdict form made it impossible to determine if the jury had awarded economic damages previously compensated for by PIP benefit payments; therefore, he reasoned, the defendant was not entitled to the entry of a partial satisfaction.In assessing that argument, we observed...