Opinion
NNHCV136037443
12-01-2015
Dawn Katucki v. Stephen Mount et al
UNPUBLISHED OPINION
MOTION FOR COLLATERAL SOURCE REDUCTION #150
Richard E. Burke, J.
FACTS
Before the court is the defendants', Stephen Mount's and David Crysler's, motion for a collateral source reduction of the jury's award of $41, 753.76 for the plaintiff, Dawn Katucki, in her personal injury action arising out of an automobile accident that took place on June 5, 2011. The following facts were found by the jury on June 4, 2015. This action, commenced on April 5, 2013, and amended on February 24, 2014, concerned a motor vehicle accident between the plaintiff and Mount, who was operating a motor vehicle owned by Crysler. The motor vehicle operated by Mount struck the plaintiff's vehicle, and caused the plaintiff to suffer and sustain injuries.
On June 4, 2015, a jury rendered a verdict for the plaintiff in the amount of $41, 753.76 against the defendants for both economic and noneconomic damages. The jury's interrogatories, signed by the jury's foreperson and dated June 4, 2015, provided that the jury found that the plaintiff suffered damages as a result of the defendants' negligence and that the amount of damages suffered by the plaintiff totaled $41, 753.76 (interrogatories). The court presented the jury with a verdict form that listed eleven medical care providers that provided services to the plaintiff as a result of the accident. The plaintiff's verdict form, also signed by the jury's foreperson, provided that the jury found damages for the plaintiff in the following amounts: (1) past economic (medical) damages of $29, 253.76; (2) future (medical) economic damages of $0; and (3) noneconomic damages of $12, 500 (verdict form).
Based on the jury's interrogatories, the damages were not apportioned between the two defendants and therefore, the motion for collateral source reduction was filed on behalf of both of the defendants.
The $29, 253.76 includes medical treatment and related expenses from ten of the medical care providers listed on the jury verdict form. The jury determined that one medical charge was unrelated.
The plaintiff's medical expenses were partially paid by her employee welfare benefit plan, the UTC-Cigna plan, established and funded by her employer, Sikorsky Aircraft, to conform with the Employee Retirement Income Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. This plan is a fully self-funded ERISA plan with a right of subrogation. Of the $29, 253.75 in medical expenses, UTC-Cigna was billed $8, 817.67, paid the plaintiff's medical providers $6, 950.93, and is now asserting an ERISA lien in the amount of $6, 950.93 against the plaintiff's jury award. The remainder of the medical expenses were covered by insurance premiums and out of the plaintiff's own pocket.
On June 12, 2015, the defendants filed a motion for a reduction of the jury verdict to account for collateral source payments, along with a supporting memorandum of law. On August 3, 2015, the plaintiff filed an objection to the defendants' motion along with a supporting memorandum of law, to which the defendants filed a reply on August 14, 2015. The matter was heard at the short calendar on August 17, 2015.
DISCUSSION
Pursuant to General Statutes § 52-225a, the defendants move for a reduction of the jury verdict to account for collateral source payments. Collateral sources are defined in General Statutes § 52-225b as: " [A]ny payments made to the claimant, or on his behalf, by or pursuant to: (1) Any health or sickness insurance, automobile accident insurance that provides health benefits, and any other similar insurance benefits, except life insurance benefits available to the claimant, whether purchased by him or provided by others; or (2) any contract or agreement of any group, organization, partnership or corporation to provide, pay for or reimburse the costs of hospital, medical, dental or other health care services. 'Collateral sources' do not include amounts received by a claimant as a settlement."
Section 52-225a provides: " (a) In any civil action, whether in tort or in contract, wherein the claimant seeks to recover damages resulting from (1) personal injury or wrongful death occurring on or after October 1, 1987, or (2) personal injury or wrongful death, arising out of the rendition of professional services by a health care provider, occurring on or after October 1, 1985, and prior to October 1, 1986, if the action was filed on or after October 1, 1987, and wherein liability is admitted or is determined by the trier of fact and damages are awarded to compensate the claimant, the court shall reduce the amount of such award which represents economic damages, as defined in subdivision (1) of subsection (a) of section 52-572h, by an amount equal to the total of amounts determined to have been paid under subsection (b) of this section less the total of amounts determined to have been paid, contributed or forfeited under subsection (c) of this section, except that there shall be no reduction for (A) a collateral source for which a right of subrogation exists, and (B) the amount of collateral sources equal to the reduction in the claimant's economic damages attributable to the claimant's percentage of negligence pursuant to section 52-572h.
The procedure for the reduction of collateral source payments is set forth in § 52-225a. Section 52-225a provides in relevant part: " (a) In any civil action, whether in tort or in contract, wherein the claimant seeks to recover damages resulting from (1) personal injury . . . and wherein liability is admitted or is determined by the trier of fact and damages are awarded to compensate the claimant, the court shall reduce the amount of such award which represents economic damages, as defined in . . . section 52-572h, by an amount equal to the total of amounts determined to have been paid under subsection (b) of this section less the total of amounts determined to have been paid, contributed or forfeited under subsection (c) of this section, except that there shall be no reduction for (A) a collateral source for which a right of subrogation exists . . . (b) Upon a finding of liability and an awarding of damages by the trier of fact and before the court enters judgment, the court shall receive evidence from the claimant and other appropriate persons concerning the total amount of collateral sources which have been paid for the benefit of the claimant as of the date the court enters judgment. For purposes of this subsection, evidence that a [provider] . . . accepted an amount less than the total amount of any bill generated by such [provider] . . . or evidence that an insurer paid less than the total amount of any bill generated by such [provider] . . . shall be admissible as evidence of the total amount of collateral sources which have been paid for the benefit of the claimant as of the date the court enters judgment. (c) The court shall receive evidence from the claimant and any other appropriate person concerning any amount which has been paid, contributed or forfeited, as of the date the court enters judgment, by, or on behalf of, the claimant or members of his immediate family to secure his right to any collateral source benefit which he has received as a result of such injury or death."
General Statutes § 52-572h(a)(1) defines economic damages as " compensation determined by the trier of fact for pecuniary losses including, but not limited to, the cost of reasonable and necessary medical care, rehabilitative services, custodial care and loss of earnings or earning capacity excluding any noneconomic damages . . ."
General Statutes § 52-225c details the prohibition against recovery of collateral source benefits. It provides: " Unless otherwise provided by law, no insurer or any other person providing collateral source benefits as defined in section 52-225b shall be entitled to recover the amount of any such benefits from the defendant or any other person or entity as a result of any claim for damages for personal injury or wrongful death regardless of whether such claim or action is resolved by settlement or judgment. The provisions of this section shall apply to insurance contracts issued, reissued, or renewed on or after October 1, 1986."
In support of their motion for a collateral source reduction of the jury's award of economic damages, the defendants argue that, since the plaintiff's medical providers involuntarily wrote off a portion of their charges pursuant to contracts between the medical providers and the plaintiff's health insurance company, UTC-Cigna, an ERISA plan with a right of subrogation, they are entitled to recover these amounts, which total $22, 302.83. While the defendants state that ERISA preempts application of Connecticut's subrogation doctrine, they argue that ERISA preemption is limited to state action that demonstrably burdens ERISA plan and Connecticut's subrogation statute only remotely relates to employer financial health plans; therefore the rule does not affect the defendants' right to a collateral source adjustment as to the involuntary medical bill write offs. The defendants also argue that ERISA plans are analogous to Medicare and Medicaid, and thus, involuntary write offs made pursuant to an ERISA plan should be deemed to be collateral source payments. The defendants cite to exhibits in their memorandum of law, but did not submit any of them.
Courts have held that medical expenses that exceed the amount covered by Medicare and Medicaid are write offs that a defendant is required to make, and are therefore involuntary. See McInnis v. Hospital of St. Raphael, Superior Court, judicial district of New Haven, Docket No. CV-03-0480767-S (August 15, 2008, Skolnick, J.) (46 Conn. L. Rptr 176). Thus, these courts have held that these involuntary write offs are collateral source payments within the meaning of § 52-225b. See Furlong v. Merriman, Superior Court, judicial district of Hartford, Docket No. CV-04-400416-S(May 4, 2006, Shapiro, J.). The defendants contend that involuntary write offs made pursuant to ERISA plans should be treated similarly to Medicare and Medicaid. There is no Connecticut case law, however, to support this contention.
In opposition, the plaintiff counters that first, there is no right to a collateral source reduction because the defendants' right to a reduction is trumped by ERISA. The plaintiff contends that her medical bills were paid by her health insurer, who under ERISA, has a right of subrogation and § 52-225a provides that there shall be no reduction for a collateral source for which a right of subrogation exists. Second, the plaintiff argues that even if there were a right of collateral source reduction, the amount of the claimed reduction is offset by the insurance premiums she and her employer have paid, as well as her out of pocket payments. In support of her motion, the plaintiff attached a letter from NexClaim Recoveries dated November 21, 2011, along with a Summary Plan Description (Exhibit A); a letter from NexClaim Recoveries dated May 12, 2015, along with the plaintiff's claim history (Exhibit C); and a summary of the premiums paid by the plaintiff's employer and the plaintiff (Exhibit D).
In their reply memorandum of law, the defendants reiterate that they rightly seek a collateral source reduction for the amounts that the plaintiff's medical providers involuntarily wrote off, pursuant to the contracts between the medical providers and the health insurance carrier. The defendants also argue that any premium offset is negated because the amount the health insurance carrier paid on behalf of the plaintiff to secure the benefit is being paid back in the form of the ERISA lien.
" ERISA is a comprehensive regulation of employee welfare and pension benefit plans [that] extends to those that provide medical, surgical, or hospital care or benefits for plan participants or their beneficiaries through the purchase of insurance or otherwise. [Section 3(1) of ERISA], 29 U.S.C. § 1002(1). The federal statute does not go about protecting plan participants and their beneficiaries by requiring employers to provide any given set of minimum benefits, but instead controls the administration of benefit plans . . . It envisions administrative oversight, imposes criminal sanctions, and establishes a comprehensive civil enforcement scheme. [Sections 501-15 of ERISA], 29 U.S.C. § 1131-45. It also preempts some state law. [Section 514 of ERISA], 29 U.S.C. § 1144." (Internal quotation marks omitted.) Napoletano v. CIGNA Healthcare of Connecticut, Inc., 238 Conn. 216, 237, 680 A.2d 127 (1996), cert. denied, 520 U.S. 1103, 117 S.Ct. 1106, 137 L.Ed.2d 308 (1997). " The preemption provision of ERISA, 29 U.S.C. § 1144(a) [(2006]), preempts any state law that 'may now or hereafter relate to any employee benefit plan . . .' A law that 'relates to' a benefit plan and that also 'regulates insurance' pursuant to 29 U.S.C. § 1144(b)(2)(A) and (B) is, however, exempt from ERISA preemption." (Emphasis added; footnote omitted.) Id., 233-34. " The [U.S.] Supreme Court has . . . concluded that a state law may 'relate to' a benefit plan, and thereby be [preempted], even if the law is not specifically designed to affect such plans, or the effect is only indirect." (Internal quotation marks omitted.) Id., 237. " [V]arious courts . . . have focused on the [U.S.] Supreme Court's primary concerns with respect to ERISA preemption and, consequently, have followed the lead of the [Supreme Court] by limiting ERISA preemption to state action that demonstrably burdens ERISA plans." Id., 240.
" Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in [29 U.S.C. § 1003(a)] of this title and not exempt under [29 U.S.C. § 1003(b)] of this title." 29 U.S.C. § 1144(a) (2006). ---------
" [Section] 52-225a is one of those state statutes of general applicability which only remotely relates to employer funded health plans in that such an ERISA plan may at times provide collateral source payments on behalf of a participating employee who is also a prevailing plaintiff in a civil case. If the statute has any demonstrable impact on ERISA health plans, it protects the plan and its participants by prohibiting collateral source reductions when a right of subrogation exists. This prohibition works to preserve an ERISA plan's right to be reimbursed for any payments made on behalf of the participant. Therefore, § 52-225a does not demonstrably burden ERISA health plans and it is not preempted by 29 U.S.C. § 1144(a). [Section] 52-225c, on the other hand, does burden ERISA health plans. Section 52-552c is Connecticut's anti-subrogation statute which would prevent an ERISA health plan from independently pursuing its right of subrogation against a defendant . . . [Section] 52-225c is the type of state law contemplated by the U.S. Supreme Court which might produce such acute, albeit indirect, economic effects, by intent or otherwise, as to force an ERISA plan to adopt a certain scheme of substantive coverage or effectively restrict its choice of insurers, and . . . might indeed be preempted under 29 U.S.C. § 1144(a)." (Footnote omitted; internal quotation marks omitted.) Bonsanti v. Newman, Superior Court, judicial district of Fairfield, Docket No. CV-03-0401098-S (February 3, 2006, Gilardi, J.) (40 Conn. L. Rptr. 700, 701-02).
Furthermore, " [s]everal Connecticut trial court opinions have . . . recognized ERISA preemption." Gauntlett v. Webb, Superior Court, judicial district of Fairfield, Docket No. CV98-0352842-S (August 13, 2003, Ballen, J.) (35 Conn. L. Rptr. 419, 421); see also Sharron v. USAA Casualty Ins. Co., Superior Court, judicial district of Hartford, Docket No. CV-97-047881-S (August 18, 1998, Gaffney, J.) (22 Conn. L. Rptr. 586) (reasoning that prohibition against subrogation under § 52-225c may be preempted by ERISA); Connecticut Steel Corp. v. Cordova, Superior Court, judicial district of New Haven, Docket No. CV-95-0248271-S (July 5, 1995, Gaffney, J.) (granting prejudgment remedy on grounds that ERISA preempts § 52-225c); Fuller v. First National Supermarkets, Superior Court, judicial district of Fairfield, Docket No. CV-91-0279444-S (March 17, 1994, Belinkie, J.) (11 Conn. L. Rptr. 285) (holding that Connecticut anti-subrogation law, § 52-225c, is preempted by ERISA); Hartford Hospital Medical Plan v. State Farm Mutual Automobile Ins. Co., Superior Court, judicial district of Hartford, Docket No. CV-09-5030876-S (May 5, 2010, Hale, J.) (50 Conn. L. Rptr. 3) (holding that ERISA preempts Connecticut's anti-subrogation statute). Thus, " if the medical bills . . . were paid by an ERISA medical insurance plan, no collateral source reduction is permitted under [§ 52-225a]." Couture v. Donnarumma, Superior Court, judicial district of Tolland, Docket No. CV-06-6000060-S (November 5, 2007, Vacchelli, J.) (44 Conn. L. Rptr. 455, 458).
In Bonsanti v. Newman, supra, 40 Conn. L. Rptr. 700 , the defendant brought a motion for a collateral source reduction of the jury's award of $1, 105, 700 for the plaintiff, in his personal injury action arising out of an automobile accident. The award consisted of both economic and non-economic damages. Id. The bulk of the plaintiff's medical expenses were paid by his group health plan, FlexPlus plan, established and funded by his wife's employer, TJX Companies, to conform with ERISA. Id. The defendant sought a reduction of the economic damages paid for by the plaintiff's FlexPlus plan. Id. The court held that ERISA did apply to the FlexPlus plan and as a result, ERISA preempted § 52-225c, and pursuant to § 52-225a, the verdict should not be reduced as to the amount paid by his group health plan because TJX Companies retained its right of subrogation. Id.
Similarly, in the present case, the plaintiff's medical expenses were partially paid by her employee welfare benefit plan, the UTC-Cigna plan, established and funded by her employer, Sikorsky Aircraft, to conform with ERISA. Of the $29, 253.75 in medical expenses, UTC-Cigna was billed $8, 817.67 and is asserting an ERISA lien in the amount of $6, 950.93. Since the plaintiff's medical bills were partially paid for by UTC-Cigna, an ERISA medical insurance plan, § 52-225c is preempted by ERISA, and UTC-Cigna maintains its right to subrogation. As a result, no collateral source reduction is permitted under § 52-225a. Thus, based on ERISA preemption, the defendants' motion for a collateral source reduction of the jury's award of economic damages is denied.
In addition to arguing ERISA preemption, the plaintiff also argues that even if there were a right of collateral source reduction, the amount of the claimed reduction is offset by the insurance premiums. In Alvarado v. Black, 248 Conn. 409, 410-11, 728 A.2d 500 (1999), the defendant filed a motion for collateral source reduction and moved to have the jury's economic damage award reduced by the amount of medical expenses that had been paid by the plaintiff's health insurance carrier. The plaintiff contended that she had paid health insurance premiums and was therefore entitled to an offset. Id., 412.
According to the court, " [Section] § 52-225a . . . permits a plaintiff to offset the amount of a reduction for collateral source benefits the plaintiff has received by any amount which has been paid, contributed, or forfeited . . . by, or on behalf of, the claimant or members of his immediate family to secure his right to any collateral source benefit which he has received as a result of such injury or death. Thus, the language of § 52-225a . . . manifests the legislature's intention to permit a claimant to offset a reduction for collateral source benefits received from the claimant's health insurance carrier by premiums the claimant paid to obtain health insurance coverage . . . The payments an employer makes to purchase health insurance for an employee are not gratuitous. Instead, those payments are made as part of the employee's compensation. Because an employer's premium payments are really indirect payments by the employee, we conclude that the legislature intended that § 52-225a . . . encompass premiums paid by a claimant's employer to purchase the claimant's health insurance coverage." (Citation omitted; emphasis omitted; footnotes omitted; internal quotation marks omitted.) Id., 415-16. The court concluded: " To summarize, § 52-225a . . . permits claimants to offset any collateral source benefits paid by the claimant's health insurance carrier by the amount of premiums paid by the claimant, directly or indirectly to obtain benefits . . . Consequently, in the calculation of collateral source reduction of the jury's award of economic damages, the plaintiff was entitled to an offset for the amount of premiums her employer had paid on her behalf to purchase her health insurance." Id., 418-19.
Similarly here, the plaintiff contends that if there were a right of collateral source reduction, the amount of the claimed reduction is offset by the insurance premiums paid. The plaintiff attached a summary of the insurance premiums paid by her employer and herself to her memorandum of law in opposition to the defendants' motion (Exhibit D), which represents that she paid $4, 663.81 and her employer paid $28, 224.89 to secure health benefits. Therefore, the plaintiff argues that because this totals $32, 888.70, which is greater than the collateral source sought, there is no basis for a collateral source reduction. Applying the court's analysis in Alvarado to the present case, pursuant to § 52-225a, the plaintiff here is permitted to offset a reduction for collateral source benefits received from UTC-Cigna by premiums the plaintiff and her employer paid to obtain her UTC-Cigna health insurance coverage. Because the premiums paid are greater than the collateral source sought, there is no basis for a collateral source reduction and the defendants' motion for a collateral source reduction is denied on this basis as well.
CONCLUSION
For the aforementioned reasons, the court denies the defendants' motion for a collateral source reduction.
(b) Upon a finding of liability and an awarding of damages by the trier of fact and before the court enters judgment, the court shall receive evidence from the claimant and other appropriate persons concerning the total amount of collateral sources which have been paid for the benefit of the claimant as of the date the court enters judgment. For purposes of this subsection, evidence that a physician or physician assistant, dentist, chiropractor, naturopath, physical therapist, podiatrist, psychologist, social worker, mental health professional, an emergency medical technician, optometrist, or advanced practice registered nurse, accepted an amount less than the total amount of any bill generated by such physician, physician assistant, dentist, chiropractor, naturopath, physical therapist, podiatrist, psychologist, social worker, mental health professional, emergency medical technician, optometrist or advanced practice registered nurse, or evidence that an insurer paid less than the total amount of any bill generated by such physician, physician assistant, dentist, chiropractor, naturopath, physical therapist, podiatrist, psychologist, social worker, mental health professional, emergency medical technician, optometrist or advanced practice registered nurse, shall be admissible as evidence of the total amount of collateral sources which have been paid for the benefit of the claimant as of the date the court enters judgment. (c) The court shall receive evidence from the claimant and any other appropriate person concerning any amount which has been paid, contributed or forfeited, as of the date the court enters judgment, by, or on behalf of, the claimant or members of his immediate family to secure his right to any collateral source benefit which he has received as a result of such injury or death."