Opinion
No. 5-587 / 04-1893
Filed November 9, 2005
Appeal from the Iowa District Court for Scott County, Nancy S. Tabor, Judge.
Clinton Physical Therapy Services, P.C., appeals from the district court's denial of a motion for new trial and evidentiary ruling during trial. AFFIRMED.
Peter C. Riley of Tom Riley Law Firm, P.L.C., Cedar Rapids, and George Pillers of Pillers, Pillers, and Zimmerman, Clinton, for appellant.
Jeffrey D. Martens of Bozeman, Neighbour, Patton Noe, L.L.P., Moline, for appellee.
Heard by Huitink, P.J., Zimmer, J., and Brown, S.J.
Senior Judge assigned by order pursuant to Iowa Code section 602.9206 (2005).
Clinton Physical Therapy Services, P.C. (CPT) appeals from the district court's denial of a motion for new trial alleging an inconsistent jury verdict and the district court's exclusion of evidence during trial. We affirm on appeal.
Background Facts and Proceedings.
CPT provides physical therapy services at various locations in Iowa and Illinois. John Deere Health Care, Inc. and John Deere Health Plan, Inc. f/k/a Heritage National Health Plan, Inc. (John Deere) is a health maintenance organization that provides health care plans to its members. CPT and John Deere contracted in April 1996 to include CPT's then-existing locations as "in-network" providers for John Deere plan members. In August 1997, CPT decided to open a new office in Davenport called Plaza Physical Therapy and notified John Deere of such. CPT still considered the new offices covered by the 1996 network provider contract, and continued attending to and billing John Deere plan members and John Deere for services provided at the new facility.
John Deere initially paid claims submitted by the Plaza office; however, a dispute arose between the parties over billing location identification codes, and whether the new CPT branch office was considered a network location. John Deere believed it had approval rights under the 1996 contract to any new office proposed by CPT as additional network locations. CPT did not agree with John Deere's interpretation of the 1996 contract and continued to treat plan members at the Plaza office. John Deere denied any subsequent billing for services at that location, and on April 23, 1999, John Deere notified CPT it did not consider the Plaza office an approved plan location under the 1996 contract. CPT continued to treat John Deere plan members at the Plaza location subsequent to John Deere's notice.
CPT brought a breach of contract suit against John Deere in February 2003. John Deere asserted numerous affirmative defenses to the petition, including CPT's failure to mitigate damages. Prior to trial John Deere filed a motion in limine seeking to exclude any reference to Section 12 of the subsequent 2001 contract between CPT and John Deere. Section 12 of the 2001 contract expressly provides John Deere approval rights to any new CPT locations, and John Deere requested its exclusion at trial as a subsequent remedial measure. The district court granted the motion in limine as to Section 12 of the 2001 contract just prior to opening statements, on the grounds of relevancy. CPT did make an offer of proof on Section 12 (Plaintiff's Exhibit 2) when it rested its case in chief.
The case was submitted to the jury on special verdicts. Failure to mitigate damages was submitted to the jury as John Deere's affirmative defense. CPT and John Deere agreed to a sealed verdict, although the agreement does not appear in the record. The jury began deliberating that morning and delivered their verdict to the court by afternoon. The district court discharged the jury before contacting either party to inform them of the verdict. The district court did not make an official record of the proceedings when the jury returned its verdict, nor is it clear in the record whether the district court inspected the verdict before discharging the jury. The jury found John Deere breached the 1996 contract with damages to CPT of $138,750, but reduced that amount by $128,200 for CPT's failure to mitigate damages. However, the jury had previously answered "No" to Question No. 4 on the verdict form, "Did the Plaintiff fail to mitigate its damages?"
CPT first objected to the inconsistent verdict in a motion for new trial requesting new trial based on (1) an inconsistent verdict, (2) jury selection, and (3) the exclusion of Section 12 of the 2001 contract. The district court issued its ruling denying a new trial, but only addressed the inconsistent verdict issue, finding the jury's verdict was not inconsistent based upon corrections to the form and questions the jury asked the district court during deliberation. CPT now appeals the district court's denial of its motion for new trial on two grounds: (1) inconsistency of the jury verdict, and (2) admissibility of Section 12 of the 2001 contract.
I. Scope of Review.
We review the actions of the district court for corrections of errors at law. Iowa R. App. P. 6.4. Our standard of review of a trial court's action on a motion for new trial is for abuse of discretion. Foggia v. Des Moines Bowl-O-Mat, Inc., 543 N.W.2d 889, 891 (Iowa 1996).
II. Inconsistency of the Jury Verdict.
CPT contends the district court abused its discretion when it found the jury verdict consistent and denied CPT's motion for a new trial. John Deere argues CPT waived its right to a new trial by not requesting resubmission of the case before the jury was discharged, thereby failing to properly preserve this issue for appellate review. It is uncontested that the parties agreed to a sealed verdict, although that agreement was not made part of the official record in the case.
The purpose of a sealed verdict is primarily one of convenience. Permitting the jury to seal its verdict before separation assures the verdict's propriety without needless waiting at the courthouse by the litigants, counsel and court officials for reception of the verdict. It also allows the jury to separate if it reaches a verdict while court is not in session.
Rutledge v. Johnson, 282 N.W.2d 111, 113 (Iowa 1979) (citations omitted).
Inherent in an agreement to seal a verdict is the risk that a verdict may be inconsistent, but the jury will be discharged before one may object to the inconsistency. While there is no Iowa law directly on point, our courts have indicated that a party should object to an inconsistent verdict before the jury is discharged.
The court should not discharge a jury until the court has determined the verdict or verdicts are consistent with the total damages and percentages of fault. Iowa Code § 668.3(6); Cowan v. Flannery, 461 N.W.2d 155, 157 (Iowa 1990). The parties agreed to a sealed verdict. [FN1]
FN1. Plaintiff should have made her objections to the inconsistent verdict before the jury was discharged. Defendant has not contended by agreeing to a sealed verdict plaintiff did not preserve error and we do not address this issue.
Neumann v. Service Parts Headquarters, 572 N.W.2d 175, 176 (Iowa Ct.App. 1997); cf. Cowan, 461 N.W.2d at 160. Due to the absence of Iowa authority on this issue and the lack of clarity in the record as to CPT's opportunity to object before discharge of the jury, we address the merits of CPT's claim on inconsistency.
On the merits of the inconsistent verdict issue, CPT's motion for new trial fails nonetheless. Although the negative answer to the special verdict concerning whether CPT had failed to mitigate damages facially appears inconsistent with the jury's later award of $10,550, this is not the whole story. In the special verdict fixing the value of CPT's services, the jury originally wrote in the figure of $10,550. This was later crossed out, and the amount of $138,750 was substituted. The next special verdict asked for the "amount of damages which [CPT] failed to mitigate. The original answer was "0." This was crossed out, and $128,200 was substituted. Then the next special verdict asked for "the total amount of recoverable damages to [CPT]" and the jury's answer was $10,550.
Verdicts that cannot be reconciled "in any reasonable manner consistent with the evidence and its fair inferences, and in light of the instructions of the court" must be set aside. Hoffman v. Nat'l Med. Enter., Inc., 442 N.W.2d 123, 126-27 (Iowa 1989); accord Bangs v. Pioneer Janitorial of Ames, Inc., 570 N.W.2d 630, 632 (Iowa 1997) ("If a verdict is internally inconsistent . . . and there is no way to determine the jury's intent, the proper remedy is a new trial."). The district court's ruling on the motion for new trial determined that the jury's corrected answers to the special verdicts as to damages were consistent with each other, supported by the evidence presented at trial, and effected substantial justice between the parties. The court found that this consistency, considered with the questions asked by the jury during deliberations, evinced the jury's intent to find CPT failed to mitigate its damages even though the jury answered "No" to the first failure-to-mitigate question. Where the answers of a special verdict are consistent with each other but inconsistent with the general verdict, the trial court has three alternatives: (1) order judgment appropriate to the answers; (2) order a new trial; or (3) send the jury back for further deliberations. Crookham v. Riley, 584 N.W.2d 258, 269 (Iowa 1998); see also Dutcher v. Lewis, 221 N.W.2d 755, 762 (Iowa 1974) (jury answers on an assumption of the risk affirmative defense were consistent with each other, but inconsistent with a general verdict granting recovery to the plaintiff). Here, the special verdicts on damages were consistent with each other: that CPT incurred the bulk of its claimed damages after it received notice from John Deere and as a result of its failure to mitigate. The answers on damages, however, contradicted the preceding special verdict that CPT did not fail to mitigate. However, the damage special verdict specifically found CPT did fail to mitigate and fixed the amount. The jury made several corrections to its initial damage assessments on the verdict form, but the end result was the same with an award of $10,550 to CPT. The jury reduced the damages sought by CPT of $138,750 by $128,200, or the reasonable amount of services fees incurred by CPT after the April 1999 notice that John Deere would not be paying for services from the Plaza office. This calculation is supported by and consistent with the evidence presented at trial. Therefore, the district court did not abuse its discretion in finding the verdict consistent and denying CPT's motion for a new trial on this issue. Consequently, we affirm the district court's denial of the motion for new trial as to verdict inconsistency.
III. Admissibility of Section 12 in the 2001 Contract.
CPT preserved error on the evidence issue by opposing John Deere's motion in limine and making its offer of proof during trial when the district court resolved and ruled on the issue, even though the district court did not address the issue as raised by the motion for new trial. See Meier v. Senecaut III, 641 N.W.2d 532, 538-39 (Iowa 2002); Bellach v. IMT Ins. Co., 573 N.W.2d 903, 906 (Iowa 1998).
We review rulings of the district court on the admission of evidence for correction of errors at law. Bangs v. Maple Hills, Ltd., 585 N.W.2d 262, 265 (Iowa 1998). "Error may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of the party is affected." Iowa R. Evid. 5.103(a). We will not disturb the trial court's evidentiary rulings "unless there is a clear and prejudicial abuse of discretion." Gamerdinger v. Schaefer, 603 N.W.2d 590, 594 (Iowa 1999).
CPT made its offer of proof and argument for admissibility of Section 12 of the 2001 contract on the grounds that it was relevant to contract interpretation and the parties' intent at the time of contract formation. The district court ultimately excluded the evidence on the grounds of relevance, ruling that the subsequent contract provision was irrelevant to show the parties intent and a meeting of the minds when the 1996 contract was formed. CPT also asserts the 2001 contract provisions are relevant to the reasonableness of its actions in continuing to treat John Deere members after April 1999. CPT contends that, as prior drafts of contracts may be used to aid interpretation, it is also appropriate to consider subsequent contracts entered into by the parties. However, CPT does not provide any law supporting this position.
It is clear Section 12 of the 2001 contract was added after CPT and John Deere began disputing the terms of the 1996 contract. Section 12 of the 2001 contract is irrelevant to the interpretation and intent of the parties at the formation of the 1996 contract because it was the direct result of CPT and John Deere's dispute after the 1996 contract was executed. Furthermore, CPT cannot demonstrate it suffered any prejudice from exclusion of Section 12. The jury found in CPT's favor on the 1996 contract terms, determining John Deere breached the 1996 contract because there was no provision giving it approval power over CPT's new locations. We find that the district court did not err by excluding the 2001 contract on these grounds.
CPT also asserts now on appeal that the "clear lack of veto power in the April 15, 1996 contract, as shown by the change in the 2001 contract, would make CPT's conduct in continuing to see John Deere members more reasonable." This is not the ground upon which CPT offered the 2001 contract at trial and preserved for appeal, when it argued for admissibility only on relevance as to the intent of the parties and interpretation of the 1996 contract. A proponent's theory of admissibility should be provided in the offer of proof, and grounds of admissibility urged at trial are binding on appeal. State v. Gartin, 271 N.W.2d 902, 909-10 (Iowa 1978); Lemke v. Mueller, 166 N.W.2d 860, 871 (Iowa 1969); Iowa Power Light Co. v. Abild Construction Co., 259 Iowa 314, 144 N.W.2d 303, 313 (1966). We find CPT did not preserve error on admissibility of the 2001 contract as it relates to its reasonableness in failing to mitigate damages. We affirm the district court's ruling on this issue.
We note that after CPT was notified by John Deere it was refusing payment for the Plaza office, CPT continued to treat John Deere members for over two years before the 2001 contract was executed. The 2001 contract could not logically have been considered by CPT when gauging the reasonableness of its actions when the contract was not in existence.
AFFIRMED.