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applying collateral source rule, despite the fact that the defendant did not present Jones interrogatories to the jury, because there was "no doubt involved in interpreting what losses the jury's award is intended to compensate for—since a jury cannot award damages for which no evidence has been presented"
Summary of this case from Wasilewski v. Abel Womack, Inc.Opinion
No. CV-06-6000215-S
April 20, 2009
FACTS
In this action for underinsured motorist benefits, the self-insurer/defendant, the Connecticut Department of Public Safety, is seeking a reduction of the jury award for the following amounts:
1. Workers' compensation benefits paid and payable (minus $9,500 paid back) $110,139.99.
2. Tortfeasor payment $20,000
3. Comparative negligence $27,775.23
4. Medical billing write-offs (minus five percent) $31,119.22
This subtraction is attributed to the jury's determination that five percent of the plaintiff's damages were the result of his own comparative negligence. See part VB below.
TOTAL: $189,034.44
At the outset, the plaintiff/insured, Darren Perillo, seems to characterize all reductions sought by the defendant (presumably, aside from the comparative negligence figure) as "collateral source" payments as defined by General Statutes § 52-225b. From this conclusion, he argues that the defendant is not entitled to any reductions for these collateral source payments because it failed to submit interrogatories to the jury, and, as a result, it is impossible to determine how the jury calculated damages. Therefore, the plaintiff's argument continues, Connecticut law prohibits the defendant from seeking the desired reductions because it is impossible to determine which damages the plaintiff has already been compensated for. The plaintiff also argues that any reductions to which the defendant is entitled should be made against the $1,000,000 underinsured motorist policy limit, not the gross jury award of damages itself. Finally, in his "Objection to Defendant's Motion for Reduction of Jury Award," the plaintiff also contests the reduction sought for medical billing write-offs, and states, without providing further argument or law, that only the amount of medical bills actually paid through workers' compensation — and not any portion of the medical bills written off — may be treated as collateral source payments capable of reducing the policy limits.
General Statutes § 52-225b provides: "For purposes of sections 52-225a to 52-225c, inclusive: `Collateral sources' means any 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."
The defendant, on the other hand, argues that all reductions sought must operate to reduce the total amount of economic damages awarded to the plaintiff, not the $1,000,000 policy limit itself. It also contends that jury interrogatories were not necessary here because the plaintiff submitted a "Schedule of Economic Damages" to the jury which outlined all damages sought, and the jury awarded exactly the amount claimed in that document. Because of this, the defendant contends that the court need not speculate as to what the jury's award was intended to compensate for when determining what reductions should be made. Furthermore, it argues that, aside from the tortfeasor payment, the reductions sought are not treated like collateral source payments at all, that § 38a-334-6(d) of the Regulations of Connecticut State Agencies controls instead, and that that provision has been interpreted to allow for the relevant reductions sought. To this end, it suggests that any law relied upon by the plaintiff pertaining to collateral source payments is irrelevant. Next, it argues that Connecticut case law has approved of the practice of reducing the jury verdict for workers' compensation benefits payable in the future, not just those paid in the past. Finally, it contends that Connecticut courts have permitted reductions based on medical bill write-offs so long as those write-offs were made pursuant to a contract or statute that expressly requires the write-offs. In the present case, it takes the position that the write-offs were made as the result of just such a contractual provision, and may therefore be deducted from the jury award.
The defendant's motion and the plaintiff's objections were argued before the court on March 2, 2009.
I. The Law of Uninsured/Underinsured Motorist Benefits
"General Statutes § 38a-336(b) requires that an insurer pay its insured up to the limits of the policy's [underinsured] motorist coverage after the liability limits of all other applicable insurance policies have been exhausted by payment of judgments or settlements. This statutory subsection, together with the other provisions of the [underinsured] motorist statute, § 38a-336, reflects the public policy of [Connecticut] to afford a personal injury claimant access to insurance protection to compensate for the damages that would have been recoverable if the [underinsured] motorist had maintained an adequate policy of liability insurance." (Internal quotation marks omitted.) Fahey v. Safeco Ins. Co. of America, 49 Conn.App. 306, 309, 714 A.2d 686 (1998).
To flesh out the statutory provisions pertaining to underinsured motorist insurance, the legislature has turned to the Connecticut insurance commissioner, whose properly enacted regulations are given the force and effect of statute. Vitti v. Allstate Ins. Co., 245 Conn. 169, 182, 713 A.2d 1269 (1998). Thus, the "rules, exclusions and reductions [applicable to uninsured and underinsured motorist protection] are governed not specifically by statute, but by the regulations of the insurance commissioner . . . promulgated pursuant to [General Statutes] § 38a-334(a), which requires the [insurance] commissioner to adopt such regulations `with respect to minimum provisions to be included in automobile liability insurance policies,' and which provides that such regulations `shall relate to the insuring agreements, exclusions, conditions and other terms applicable to . . . the uninsured motorists coverages under such policies . . .'" Piersa v. Phoenix Ins. Co., 273 Conn. 519, 524, 871 A.2d 992 (2005). It has been said that these rules and regulations must be read in light of a public policy reflected by the relevant underinsured statutes, that being "to afford a personal injury claimant access to insurance protection to compensate for the damages that would have been recoverable if the [underinsured] motorist had maintained an adequate policy of liability insurance." (Internal quotation marks omitted.) Fahey v. Safeco Ins. Co. of America, supra, 49 Conn.App. 309.
General Statutes § 38a-334 provides in relevant part: "Minimum provisions in automobile liability policies. (a) The Insurance Commissioner shall adopt regulations with respect to minimum provisions to be included in automobile liability insurance policies issued after the effective date of such regulations and covering private passenger motor vehicles, as defined in subsection (e) of section 38a-363 [and] motor vehicles with a commercial registration, as defined in section 14-1 . . . registered or principally garaged in this state. Such regulations shall relate to the insuring agreements, exclusions, conditions and other terms applicable to the bodily injury liability, property damage liability, medical payments and uninsured motorists coverages under such policies, shall make mandatory the inclusion of bodily injury liability, property damage liability and uninsured motorists coverages and shall include a provision that the insurer shall, upon request of the named insured, issue or arrange for the issuance of a bond which shall not exceed the aggregate limit of bodily injury coverage for the purpose of obtaining release of an attachment.
"(b) The commissioner, before adopting such regulations or any subsequent modifications or amendments thereof, shall consult with insurers licensed to write automobile liability insurance in this state and other interested parties. Nothing contained in such regulations or in sections 38a-334 to 38a-336a, inclusive, 38a-338 and 38a-340 shall prohibit any insurer from affording broader coverage under a policy of automobile liability insurance than that required by such regulations."
A dueling public policy, which states "that an injured party is entitled to full recovery only once for the harm suffered," is also codified in "General Statutes § 38a-335(c), which . . . provides in part that `[i]n no event shall any person be entitled to receive duplicate payments for the same element of loss.'" Id., 310. Thus, it has been said that "[a]n insured may not recover double payment of damages under overlapping insurance coverage;" (internal quotation marks omitted) Buell v. American Universal Ins. Co., 224 Conn. 766, 775, 621 A.2d 262 (1993); and that "the purpose of underinsured motorist insurance is to place the insured in the same position as, but no better position than, the insured would have been had the underinsured tortfeasor been fully insured." (Emphasis in original; internal quotation marks omitted.) Fahey v. Safeco Ins. Co. of America, supra, 49 Conn.App. 309.
The insurance commissioner has apparently taken heed of these dueling public policies by promulgating a regulation designed to permit an insurer to limit its liability under an uninsured motorist policy for various losses the insured has already been compensated. Section 38a-334-6(d) provides in relevant part:
Limits of liability. (1) The limit of the insurer's liability may not be less than the applicable limits for bodily injury liability specified in subsection (a) of section 14-112 of the general statutes, except that the policy may provide for the reduction of limits to the extent that damages have been
(A) paid by or on behalf of any person responsible for the injury,
(B) paid or are payable under any workers' compensation law, or
(C) paid under the policy in settlement of a liability claim.
(2) The policy may also provide that any direct indemnity for medical expense paid or payable under the policy will reduce the damages which the insured may recover under this coverage . . .
In this same vein, § 38a-334-6(a) provides: "The insurer shall undertake to pay on behalf of the insured all sums which the insured shall be legally entitled to recover as damages from the owner or operator of an uninsured or underinsured motor vehicle . . ." This phrase has been understood to incorporate "into the uninsured/underinsured motorist compensation scheme the Connecticut law as to damages. The uninsured and underinsured motorist statutes and regulations incorporate the negligence law of liability and damages. Collins v. Colonial Penn Ins. Co., 257 Conn. 718, 741-42 (2001) . . . The statute and regulation have the salutary effect of equalizing the damage award obtainable from an adequately insured tortfeasor and that obtainable from uninsured/underinsured motorist coverage. The Connecticut legislature in enacting the apportionment offset did not intend to create a separate law of damages for uninsured/underinsured motorist claims than exists for traditional tort awards. Collins v. Colonial Penn Ins. Co., supra, 742 . . .
"For example, this language would justify the application of collateral source setoffs authorized by [General Statutes] § 52-225a on the basis that what the claimant is `legally entitled to recover as damages' is his award minus the collateral source payment of [General Statutes] § 52-225a(a) . . ." (Citation omitted.) J. Berk M. Jainchill, Connecticut Law of Uninsured Underinsured Motorist Coverage (3d Ed. 2004) § 1.8.4, p. 115.
General Statutes § 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, . . . personal injury or wrongful death . . . 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 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.
"(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."
"(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."
The term "collateral sources" is defined in § 52-225b, which is quoted, supra, at footnote two of this memorandum.
CT Page 7057
II. Whether the Tortfeasor Payments Already Recovered Should be Deducted from the Policy Limits or the Economic Damages Determined by the Jury
The plaintiff argues that all of the reductions sought by the defendant should be categorized as collateral source payments, and that collateral source payments operate to reduce the applicable policy limits — here, $1,000,000 — not the jury's damages award. The defendant seems to agree that the $20,000 tortfeasor payment should be treated as a collateral source payment, but argues that all other reductions sought are not collateral source payments, as that term is defined by § 52-225b. This issue is discussed infra at part III. Relevant here, however, is the defendant's argument that Connecticut law requires that all collateral source payments be deducted from the actual jury award of economic damages when underinsured motorist benefits are sought from the insurer.A. Cases Fahey v. Safeco Ins. Co. of America
The defendant primarily relies upon Fahey v. Safeco Ins. Co. of America, supra, 49 Conn.App. 306, wherein the Appellate Court largely addressed the same arguments being made by the parties in the present case. There, the plaintiff/insured settled his claim with the tortfeasor's insurer for $100,000, which constituted the full amount available under the policy limits. Id., 307. The plaintiff then filed a claim against his insurance company seeking the benefits available under his underinsured motorist policy, and the jury awarded the plaintiff $90,064.77. Id., 308. "Because of the $100,000 [settlement] recovery by the plaintiff, the [trial] court concluded that he already had received compensation in excess of the value of his damages and was, therefore, not entitled to underinsured motorist benefits." Id.
On appeal, the plaintiff argued that the trial court improperly interpreted the insurance policy endorsement that the defendant/insurer relied upon to limit its liability. Id., 317-19. That endorsement read, in relevant part: "The limit of liability shall be reduced by all sums: (1) Paid, because of the bodily injury, by or on behalf of persons or organizations who may be legally responsible . . ." (Internal quotation marks omitted.) Id., 319. As the Appellate Court pointed out, this language tracked that of § 38a-334-6(d) of the Regulations of Connecticut State Agencies, which provides in relevant part: "The limit of the insurer's liability may not be less than the applicable limits for bodily injury liability specified in subsection (a) of section 14-112 of the general statutes, except that the policy may provide for the reduction of limits to the extent that damages have been (1) paid by or on behalf of any person responsible for the injury . . ." (Internal quotation marks omitted.) Id., 318. The insurance endorsement further clarified the limits of the insurer's liability by stating, "in no event shall anyone be entitled to receive duplicative payments for the same element of loss." (Internal quotation marks omitted.) Id., 319.
The plaintiff argued that this language "only discuss[ed] the reduction of underinsured motorist coverage by the tortfeasor recovery and [did] not seek a reduction in damages." (Emphasis added.) Id., 318. However, the Appellate Court noted that the Supreme Court had previously interpreted the language of § 38a-334-6(d), which the endorsement tracked, "to permit an insurer who provides underinsured motorist coverage to limit its liability by deducting amounts paid personally by the tortfeasor and settlement payments from the damages owed to its insured. Lumbermens Mutual Casualty Co. v. Huntley, 223 Conn. 22, 30, 610 A.2d 1292 (1992); Buell v. American Universal Ins. Co., supra, 224 Conn. 775." (Emphasis added.) Id.
The Appellate Court noted that the prohibition against double recovery found in the endorsement largely echoed General Statutes § 38a-335(c), "which sets forth minimum policy provisions for automobile liability policies [and] provides in part that `[i]n no event shall any person be entitled to receive duplicative payments for the same element of loss.'" Id., 310. Furthermore, as the Appellate Court observed, the Supreme Court had earlier interpreted "almost verbatim policy language and concluded that `[i]n light of the legislative intent to provide a certain minimum level of protection, but to prevent double recovery on the part of the insured . . . an insurer may limit its liability by deducting a settlement payment from the damages owed to its insured. To hold otherwise would provide the insured a windfall by permitting duplicative payments from the same injury.'" Id., 319 (quoting Buell v. American Universal Ins. Co., supra, 224 Conn. 775). As such, the Appellate Court upheld the ruling of the trial court and denied the plaintiff's attempt to make what it deemed would be a double recovery, given the earlier $100,000 settlement obtained from the tortfeasor's insurer. Id.
Piersa v. Phoenix Ins. Co.
Returning to the present case, the plaintiff seems to argue that because § 38a-334-6(d)(1) refers to a reduction of "limits," as opposed to "damages," any collateral source payments should operate to reduce the $1,000,000 underinsured policy limit, rather than the damages awarded by the jury. However, this is essentially the argument made by the plaintiff in Fahey, and it was rejected by the Court. The only case law cited by the plaintiff on this topic is Piersa v. Phoenix Ins. Co., supra, 273 Conn. 519. Piersa merely dealt with the following issue: "whether a self-insured municipal employer may reduce the limits of its uninsured motorist coverage by the amount of workers' compensation benefits paid, without having created a writing effectuating such a reduction." Id., 521. The Supreme Court concluded that while such reductions were permissible under § 38a-334-6 of the Regulations of Connecticut State Agencies, to take advantage of the permitted reductions in limits, a self-insured municipal employer must state its intention to do so in some written document. Id., 531.
B. Analysis
In the present case, the defendant claims that the insurance memorandum regarding uninsured/underinsured motorist coverage that was in effect at the time of the plaintiff's accident stated in relevant part: "It is the intent of the State of Connecticut in designing and funding its self-insurance program to avail itself of all rights and benefits conferred to insurers under General Statutes [§] 38a-336, the applicable Regulations of Connecticut State Agencies, including 38a-334-6, and the case law interpreting those statutes and regulations. The State specifically reserves the right to limit its liability pursuant to the Regulations of Connecticut State Agencies [§] 38a-334-6(d) by reducing the limits of its [uninsured/underinsured motorist] coverage by all sums (a) paid by or on behalf of any person responsible for the injury . . ."
"This incorporated language would satisfy the requirement of a writing as outlined in Piersa. The language is also substantially the same as that interpreted by the Appellate Court in Fahey. There, the language was determined to reduce the amount of damages recoverable by the insured under the underinsured motorist policy by the amount already recovered, so as to prevent a windfall double recovery, given the overlap of insurance policies. Thus, in the present case, the court should reduce the damages awarded the plaintiff in an amount commensurate with any tortfeasor payments the court determines have already been made (apparently $20,000).
III. Whether Workers' Compensation Payments Made to the Plaintiff Should Be Treated as Collateral Source Payments
The plaintiff argues that the workers' compensation benefits he received as a result of his injuries should be treated as collateral source payments, subject to what he interprets as a strict rule prohibiting an insurer from limiting its liability by deducting collateral source payments made when the insurer failed to issue interrogatories to the jury. That interpretation is examined, infra, at part VI. Meanwhile, and relevant here, the defendant argues that workers' compensation benefits paid or payable to the plaintiff are not treated as collateral source payments subject to the collateral source doctrine, but rather as the basis for permissible reductions under § 38-334-6(d) of the Regulations of Connecticut State Agencies. Thus, the defendant argues that any law regarding collateral source payments is irrelevant.
A. Cases Vitti v. Allstate Ins. Co.
In Vitti v. Allstate Ins. Co., supra, 245 Conn. 169, the Supreme Court was asked to determine "whether an insurer is entitled to a reduction of its limits of liability for uninsured and underinsured motorist coverage . . . by an amount equal to the sum of social security disability benefits paid or payable to the insured." Id., 170. Specifically, the Supreme Court was required to examine § 38-334-6(d)(1)(B), which, at the time, provided that an underinsured motorist policy "may provide for the reduction of limits to the extent that damages have been . . . paid or are payable under any workers' compensation or disability benefits law . . ." (Emphasis in original.) Id., 172 n. 3. The Supreme Court determined that by allowing for a reduction based on the payment of benefits under any disability benefits law, the regulation — and therefore the insurance policy, which materially tracked the language of the regulation — permitted a reduction for social security disability benefits paid or payable, since the Social Security Act, 42 U.S.C. § 301 et seq., was a type of disability benefits law. Id., 179.
The amendment of this regulation is discussed supra at footnote six.
The legislature subsequently amended General Statutes § 38a-336(b) to abrogate the holding of Vitti to the extent that it permitted a reduction on the basis of social security disability benefits recovered by a plaintiff in an uninsured/underinsured motorist suit. See Martanis v. Liberty Mutual Fire Ins. Co., Superior Court, judicial district of Ansonia-Milford at Derby, Docket No. CV 99 0065733 (February 8, 2002, Nadeau, J.) ( 31 Conn. L. Rptr. 488, 495 n. 13) (recognizing the abrogation).
Section 38a-336(b) now reads as follows: "An insurance company shall be obligated to make payment to its insured up to the limits of the policy's uninsured and underinsured motorist coverage after the limits of liability under all bodily injury liability bonds or insurance policies applicable at the time of the accident have been exhausted by payment of judgments or settlements, but in no event shall the total amount of recovery from all policies, including any amount recovered under the insured's uninsured and underinsured motorist coverage, exceed the limits of the insured's uninsured and underinsured motorist coverage. In no event shall there be any reduction of uninsured or underinsured motorist coverage limits or benefits payable for amounts received by the insured for Social Security disability benefits paid or payable pursuant to the Social Security Act, 42 USC Section 301, et seq. The limitation on the total amount of recovery from all policies shall not apply to underinsured motorist conversion coverage purchased pursuant to section 38a-336a." (Emphasis added.)
Importantly, after the legislature amended § 38a-336(b), the insurance commissioner responded by amending § 38-334-6(d)(1)(B), a portion of the corresponding regulation, to remove all reference to disability benefits. See Sepe v. Bethke, Superior Court, judicial district of Waterbury, Docket No. CV 99 0155209 (February 27, 2004, Agati, J.) ( 36 Conn. L. Rptr. 633, 634-35) (discussing the amendment to § 38-334-6(d)(1)(B)). Thus, the statutory amendment should not affect the court's analysis in the present case, since the defendant seeks a reduction for workers' compensation benefits recovered by the plaintiff.
Relevantly, the Supreme Court also rejected an argument made by the plaintiff that the reduction should not be allowed because to permit one would create an abnormality whereby a defendant injured by an underinsured motorist/tortfeasor would collect less in damages than a defendant injured by an adequately insured tortfeasor. Id., 180-81. This, according to the plaintiff, would be the case because "the collateral source doctrine . . . would not permit a tortfeasor or the tortfeasor's insurer to offset social security disability benefits against a tort judgment." Id., 180-81. The Supreme Court assumed arguendo that the collateral source doctrine would prohibit such an offset in favor of the tortfeasor. Id., 181. Nevertheless, it determined that this discrepancy would be permissible, since §§ 38a-334 and 38a-336, the provisions of the General Statutes that provide the insurance commissioner with his regulatory authorities, only require "that the amount of overall benefits available to a plaintiff be equal to the amount of coverage available from a tortfeasor with an equivalent policy." (Emphasis in original.) Id., 189.
Notably, in reaching this conclusion, the Supreme Court expressly declined "to look to the collateral source doctrine, applicable to first party suits against a tortfeasor, for guidance in interpreting what alternative sources of payment would constitute a double recovery in the area of uninsured and underinsured motorist coverage." Id., 189. In a footnote, the decision to ignore the collateral source doctrine was further explained:
In Smith v. Safeco Ins. Co. of America, 225 Conn. 566, 570-72, 624 A.2d 892 (1993), we concluded that § 52-225a does not affect the amount of coverage available pursuant to an uninsured and underinsured motorist policy. We concluded that § 52-225a "defines the offset for collateral source payments as reducing awards for economic damages from personal injury or wrongful death. A claim concerning coverage under an insurance policy does not, in common parlance, give rise to an award for damages of any kind, let alone to an award for damages resulting from personal injury or wrongful death." Id., 570. Consequently, coverage pursuant to a policy for uninsured and underinsured motorist coverage is not controlled by the collateral source rule. The singular applicability of the collateral source rule to a claim for uninsured or underinsured motorist coverage is to permit an insurer to reduce the amount of damages sustained by the claimant by the amount of "collateral source payments" received by the claimant. Id., 573. That which may or may not qualify as a collateral source under § 52-225a does not control the determination of which offsets are applicable in the uninsured and underinsured motorist context. As we concluded in Smith, neither § 38a-336 nor the corresponding regulation, § 38a-334-6, permit reference to § 52-225a in determining appropriate limitations and exclusions. Id., 571-72. Rather, § 38a-334-6(d) exclusively governs "the grounds upon which such [uninsured and underinsured] insurance may be excluded or limited." Id., 572.
Id., 188 n. 18.
CT Page 7062
B. Analysis
In the present case, the plaintiff offers no case law that would rebuff Vitti's express determination that the collateral source doctrine does not control when determining whether workers' compensation benefits paid or payable should operate to offset an insurer's liability under an underinsured motorist policy. Section 38a-334-6(d)(1)(B) has been interpreted to allow for just such a reduction, and the defendant notes that, like the policy at issue in Vitti, the insurance memorandum that controls in the present case tracks the language of § 38a-334-6(d)(1)(B). Therefore, the court should ignore the collateral source doctrine and whatever result it might produce. The regulation and the insurance memorandum at issue both authorize a reduction on the basis of workers' compensation benefits paid and payable.IV. Whether the Defendant Is Entitled to a Reduction for Future, Payable Workers' Compensation Benefits
The plaintiff argues that, to the extent that workers' compensation benefits paid or payable may be used by the defendant to reduce its liability, only those benefits already paid may be relied upon, not any future benefits to which the plaintiff is entitled but has not yet collected. The plaintiff characterizes future benefits as being too speculative to permit a reduction. The defendant, on the other hand, contends that both paid workers' compensation benefits and future payable workers' compensation benefits may be used to offset its liability.
A. Cases Rydingsword v. Liberty Mutual Ins. Co.
In arguing that future, payable workers' compensation benefits may be used to reduce its liability, the defendant points to Rydingsword v. Liberty Mutual Ins. Co., 224 Conn. 8, 615 A.2d 1032 (1992). There, the Supreme Court considered "whether an insurer is entitled to set off against its liability for underinsured motorist coverage an amount equal to the value of an unrealized workers' compensation award for which the claimant has not yet chosen to apply." Id., 9.
In Rydingsword, the plaintiff was injured in an automobile accident caused by an underinsured driver. Id., 10. The accident occurred while the plaintiff was in the course of his employment, meaning that aside from being covered by a $300,000 uninsured/underinsured motorist policy, he was also entitled to recover benefits under his employer's workers' compensation insurance policy. Id. After applying for and recovering workers' compensation benefits designed to reimburse medical expenses, lost wages and permanent disfigurement, an award for twenty percent permanent disability of the lumbar spine was also approved, but the plaintiff neither pursued this award nor terminated his workers' compensation case. Id., 10-11. Instead, he exercised his rights under the insurance policy and demanded an arbitration proceeding, wherein he sought underinsured motorist benefits from the insurance carrier/defendant, all while leaving the workers' compensation case open. Id., 11.
The arbitration panel found that the plaintiff suffered damages in the amount of $98,050.13, then subtracted from that sum, as a credit, the amount the plaintiff collected from the tortfeasor, as well as that already recovered pursuant to his workers' compensation claim. Id., 12. The panel also used a statutory formula to calculate the present value of the amount the plaintiff would be entitled to receive pursuant to the yet-uncollected workers' compensation award designed to compensate for the lumbar spine disability. Id. Upon making the calculation, it provided a credit for this uncollected award; id.; since the insurance policy tracked the language of § 38a-334-6(d) and provided "that the limit of liability for uninsured/underinsured motorist coverage would be reduced, inter alia, by all sums `paid or payable . . . under . . . workers' compensation law . . ." Id., 11-12. The plaintiff then appealed only the decision to allow a credit for unpaid workers' compensation benefits, and the trial court reversed the arbitration decision. Id., 13. It held that the exclusionary provision did not permit a reduction for prospective workers' compensation benefits. Id.
On appeal directly to the Supreme Court, the trial court's decision was reversed. Id., 9. The Supreme Court found that the language of the endorsement was not ambiguous, and that therefore the general rule that ambiguous provisions of insurance contracts must be construed in favor of the insured did not apply. Id., 14-15. In so doing, it found that "`[s]um' is defined as `an indefinite or specified amount of money,'" and that the term, as used in the endorsement, could refer to both a definite and an indefinite amount of money. (Internal quotation marks omitted.) Id., 15 (quoting Webster, Third New International Dictionary). It also found that the phrase "paid or payable" was not a unitary term, and that "[t]he word `payable' clearly connotes that something need only be capable of being paid." (Internal quotation marks omitted.) Id., 16. It "reject[ed] as unduly restrictive a construction that would allow the exclusion only if the claimant has already secured an award from the workers' compensation commissioner but has not yet received actual payment in a fixed and determined amount at the time of the underinsured motorist arbitration hearing." Id., 16-17. Instead, the Supreme Court concluded "that the phrase `sums . . . payable' is not ambiguous but plainly means an ascertained amount of money that is capable of being paid." Id., 17.
Noting that the underlying intent of the uninsured/underinsured motorist statute is to allow a plaintiff injured by an underinsured driver "to recover for the damages he or she would have been able to recover if the uninsured motorist had maintained a policy of liability insurance," but to also compensate the injured party only once and thereby prevent a double recovery when insurance coverage overlaps, the Supreme Court determined that the defendant was entitled to a reduction in the amount of the future, yet-unpaid workers' compensation award. Id., 18. Further bolstering this conclusion, the Court continued, was the fact that "[w]orkers' compensation awards . . . are exempt from attachment and execution and there is no provision for third party intervenors in workers' compensation proceedings. General Statutes § 31-320. The underinsured motorist insurance carrier is thus unable to place a lien for reimbursement upon any future workers' compensation benefits awarded. [Therefore,] [u]nder current practices, the uninsured/underinsured motor vehicle insurance carrier must claim a credit of a workers' compensation award during the underinsured arbitration [or litigation] process, or not at all." Id., 20. The Court concluded that to prohibit the insurance carrier from claiming a credit for workers' compensation benefits awarded but not yet collected would be to allow the injured claimant to collect once under to the underinsured motorist policy, and again, at some later time, pursuant to the already determined workers' compensation award. Id.
B. Analysis
In its memorandum of law, the defendant represents that, at trial, there was testimony to the effect that the plaintiff applied for and received workers' compensation benefits designed to compensate for permanent injury, and that the plaintiff had collected $15,041.76 and was still owed an additional $21,935. If true, under the holding in Rydingsword it is apparent that the defendant would be entitled to credits for these amounts. Furthermore, that case impliedly demonstrates that the credit is to be applied against the jury's award of damages, not the policy limit. In Rydingsword, the underinsured motorist policy provided for a $300,000 limit and the plaintiff was found to have suffered only $98,050.13 in damages. Yet the court applied the credit against the damages award, not the policy limit itself. This is no doubt because to do otherwise would permit the plaintiff to make a double recovery.
The plaintiff briefly argues that if the defendant is entitled to a reduction at all, only workers' compensation benefits already paid may be considered. However, he provides no substantive law to this effect. Therefore, the court will allow a reduction based upon both benefits paid through workers' compensation insurance, as well as those awarded but not yet collected.
V. Whether the Defendant Is Entitled to a Reduction for Medical Bill Write-Offs
The defendant argues that, in addition to the plaintiff's medical bills actually paid through workers' compensation, it is also entitled to offset its liability on the basis of that portion of the plaintiff's medical bills that were forgiven or "written off" by the medical provider, either as a reduction made pursuant to § 38a-334-6(d)(1)(B) for workers' compensation benefits paid, or as a collateral source reduction. This, the defendant argues, is because these write-offs were the result of a contract between the medical provider and the defendant, a provision of which required the write-offs. The plaintiff argues that if the defendant is entitled to a reduction on the basis of medical bills paid, only those bills actually paid, and not those that were written off, may be used as the basis for a reduction.
A. Cases Hassett v. New Haven
The defendant refers to a line of Superior Court cases, beginning with Hassett v. New Haven, 49 Conn.Sup. 7, 858 A.2d 922 (2004) [ 37 Conn. L. Rptr. 735], aff'd, 91 Conn.App. 245, 880 A.2d 975 (2005). These cases all deal with a situation in which the plaintiff is injured by the negligence of another and suffers damages in the form of medical bills. A portion of those medical bills are covered by some third-party source (e.g., workers' compensation insurance, Medicaid/Medicare), and the remaining portion is forgiven, or "written off" by the medical provider, sometimes voluntarily, sometimes in agreement with the terms of a contract or statute. The question then becomes whether that portion of the medical bills that has been written off should operate to reduce the defendant's damages.
In Hassett, the plaintiff, a lieutenant in the New Haven police department, was injured by an uninsured motorist while on duty. Id., 8. The plaintiff then commenced an action for uninsured motorist benefits against the defendant, the City of New Haven, who was both his employer and his insurer. Id. The parties stipulated that the plaintiff suffered $4,130.50 in economic damages on the basis of medical bills, and that "as a result of the benefits available through his employment, [the plaintiff] received $3,009.03 in reimbursement of his medical expenses . . ." Id., 9. The remaining portion of his medical bills were forgiven by his health care providers. Id. The defendant contended that it was entitled to a collateral source reduction on the basis of that portion of the plaintiff's medical bills that was forgiven, a claim disputed by the plaintiff. Id. Thus, the dispute centered on whether the definition of "collateral sources" found in § 52-225b encompassed forgiven medical bills. Id. Section 52-225b defines collateral sources as "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." Id., 9-10.
Section 52-225b and its definition of "collateral sources" is found supra at footnote two of this memorandum.
Given this definition, the trial court noted that "`[p]ayment' is not a talismanic word," and that "[i]n economic terms, at least, the forgiveness of a debt is as much a payment as a transfer of money." (Internal quotation marks omitted.) Id., 10. Thus, the trial court concluded that the forgiveness of medical bills could be considered a payment as that term is used to define "collateral sources." Id. However, the court concluded that the medical bills forgiven by the plaintiff's medical providers could not have been collateral sources because this "payment" was "not made `by or pursuant to' either (1) `[a]ny . . . insurance' or (2) `any contract or agreement' within the meaning of § 52-225b. Rather, as far as the record reflect[ed], the forgiveness . . . was the voluntary act of the medical care providers themselves." Id. Thus, the trial court concluded that the portion of the plaintiff's medical bills written off by the medical care providers were not collateral source payments, and the defendant was therefore not entitled to a collateral source reduction. Id.
The trial court's opinion in Hassett was subsequently reviewed and affirmed by the Appellate Court. Hassett v. New Haven, 91 Conn.App. 245, 880 A.2d 975 (2005). In a short opinion that provided no analysis, the Appellate Court stated that "[t]he issues were resolved properly in the trial court's well reasoned opinion," and that "[b]ecause that opinion fully address[ed] the arguments raised in [the] appeal, [it] adopt[ed] it as a proper statement of the issues and the applicable law concerning those issues." Id., 247.
Since then, and as the plaintiff points out, other trial courts have examined Hassett and taken away from it a clear implication; namely, that where a medical provider writes off a plaintiff's medical bills pursuant to a contract or agreement, those write-offs do qualify as collateral source payments capable of reducing the plaintiff's recoverable economic damages. See McInnis v. Hospital of St. Raphael, Superior Court, judicial district of New Haven, Docket No. CV 03 0480767 (August 15, 2008, Skolnick, J.T.R.) ( 46 Conn. L. Rptr. 176) (amount of medical bills written off by medical provider that accepted Medicaid and Medicare was collateral source payment because write-off was statutorily required); Bonsanti v. Newman, Superior Court, judicial district of Fairfield, Docket No. CV 03 0401098 (February 3, 2006, Gilardi, J.) [ 40 Conn. L. Rptr. 700] (amount of medical bills written off by medical provider was collateral source payment because write-off was made pursuant to term of contract with group health plan's administrator).
B. Analysis
At the March 2, 2009 hearing on this matter and in its memorandum of law, the defendant contends that it did in fact have a contract with the plaintiff's medical providers and that one provision required them to write off any medical bills over a certain amount. If the court determines that the write-offs were made pursuant to such a contract, then the line of cases beginning with Hassett clearly dictates that the write-offs be characterized as collateral source payments, thereby entitling the defendant to a reduction of the jury verdict.
The plaintiff, without providing any case law, briefly argues that the defendant is only entitled to a reduction, if at all, for the medical bills paid through workers' compensation insurance, regardless of any contract requiring the write-offs. This assertion clearly contradicts the case law outlined above.
The court notes two other issues, first the Hassett opinions characterize the write-offs as collateral source payments, not reductions made pursuant to an uninsured/underinsured motorist contract. The defendant contends that the court should nevertheless consider the desired reductions as controlled by the insurance memorandum's underinsured motorist endorsement and § 38a-334-6(d) of the Regulations of Connecticut State Agencies. This, it argues, is because the write-offs should be understood as workers' compensation payments. The distinction is probably ultimately immaterial, but it is worth noting that § 38a-334-6(d) would only permit a reduction for damages "paid or payable under any workers' compensation law." Here, it appears that the write-offs were actually made pursuant to an independent contract between the State of Connecticut and the plaintiff's medical providers, not "any workers' compensation law." Therefore, the reduction sought should be understood as a collateral source reduction.
Second, the defendant notes quite correctly that the medical bill write-off must itself be reduced by five percent before making the reduction to the jury's economic damages award. Although the plaintiff obviously does not dispute this subtraction, it is worth noting that it is mandated by that portion of the collateral source doctrine which is codified at General Statutes § 52-225a(a), which provides for an exception to otherwise permissible collateral source reductions for the portion of "the claimant's economic damages attributable to his percentage of negligence . . ." In the present case, it appears the jury found that the plaintiff's own negligence was responsible for five percent of his damages. Thus, a five percent deduction from the medical bill write-off used as the basis for the desired collateral source reduction must be made.
The text of General Statutes § 52-225a is provided supra at footnote four of this memorandum.
VI. The Ramifications of the Defendant's Failure to Use Jury Interrogatories
The plaintiff argues that because the defendant failed to submit jury interrogatories designed to outline exactly what losses the jury's award of economic damages was intended to cover and in what amount, the defendant is precluded from seeking any of the reductions outlined in the earlier parts of this memorandum. The defendant, on the other hand, argues that the law relied upon by the plaintiff is irrelevant because it deals with the collateral source doctrine and, aside from the tortfeasor payment, the reductions it seeks are not based upon collateral source payments. Regardless, the defendant argues that because the plaintiff provided the jury with a "Schedule of Economic Damages" outlining all economic damages sought, and because the jury awarded exactly that amount, the court can ascertain with certainty the specific economic damages awarded.
A. Cases
The plaintiff relies on Jones v. Kramer, 267 Conn. 336, 838 A.2d 170 (2004). There, the Supreme Court undertook to determine "whether § 52-225a requires the trial court to deduct all collateral source payments from the plaintiff's economic damages award, or only those payments that were allocated to the specific items of damages actually included within the fact finder's verdict." Id., 339. In Jones, the plaintiff sought more than $40,000 in economic damages stemming from an automobile accident caused by the defendant's negligence, "including more than $30,000 in medical expenses and $10,000 in lost wages. The jury returned a verdict for the plaintiff, awarding him $15,000 in economic damages and $35,000 in noneconomic damages." (Internal quotation marks omitted.) Id., 339-40. The defendant then sought a collateral source credit of $12,000 on the basis of medical bills paid by the plaintiff's insurance carrier. Id., 340. However, the defendant argued that "[t]he jury had not delineated the amount awarded for each specific item of damages, and the defendant had not proven whether the economic damages awarded by the jury included any of the medical bills or other benefits paid by the plaintiff's insurance carrier." Id. Nevertheless, the trial court awarded the $12,000 collateral source reduction and the Appellate Court upheld the decision. Id., 340-41.
The text of General Statutes § 52-225a is provided supra at footnote four of this memorandum.
For clarity's sake, in Jones, the defendant was actually the executor of the tortfeasor's estate, since the tortfeasor apparently died prior to the commencement of the action. Jones v. Kramer, supra, 267 Conn. 339.
On appeal, the Supreme Court reversed. Id., 339. It held that § 52-225a does not justify reductions in a jury's economic damages award for all collateral source payments collected by the plaintiff, but only for those collateral source benefits received that were designed to compensate the plaintiff for economic damages that the jury also included in its damages award. Id., 347. The Court then applied this rule to the facts before it:
We next address the procedure by which trial courts may ascertain which items of damages are subject to a collateral source reduction, and which items are not. In the present case . . . the plaintiff claimed more than $30,000 in medical expenses, which were covered only partially by collateral sources, and more than $10,000 in lost wages, which were not covered by collateral sources. The jury awarded the plaintiff a total of $15,000 in economic damages, without delineating the amount awarded for each specific item of damages. Therefore, to apply a collateral source reduction pursuant to § 52-225a, in a manner that is faithful to the purposes of tort reform, the trial court must know the specific types of damages that were awarded by the jury. That information was missing in this case.
We conclude that the defendant, as the party seeking to reduce the amount of economic damages awarded by the fact finder, bears the burden of proving that the verdict includes items of damages for which the plaintiff has received a collateral source benefit. Specifically, the defendant who is seeking a collateral source reduction must, at the conclusion of the evidence, submit interrogatories to the jury concerning the specific items of damages included within the verdict. Although we acknowledge that § 52-225a is silent concerning burdens of proof . . . we believe that placing the burden on the defendant to submit jury interrogatories is most consistent with the equitable balance that the statute seeks to strike between barring plaintiffs from recovering twice for the same loss, on the one hand, and preventing defendants from benefitting from reduced judgments due to collateral source payments, on the other. Moreover, because it is the defendant who is seeking to reduce the award, the defendant should bear the burden of proving that the items of damages corresponding with the desired collateral source reduction actually are included in the award.
(Citation omitted.) Id., 349-50. As such, the Supreme Court determined that the defendant had not proven that the verdict included the items of damages for which the plaintiff had received a collateral source benefit, and therefore found that the defendant was not entitled to a collateral source reduction. Id., 351.
Importantly, however, in a footnote the Court considered an argument made by the defendant that "to submit interrogatories to the jury in every case would be `unwieldy and contrary to the clear mandate of [§ 52-225a].'" Id., 350 n. 7. In response, the Court noted that "[i]t is axiomatic . . . that in every tort action, the fact finder may award economic damages only if the plaintiff has proven those damages to a reasonable certainty and has shown that the defendant had proximately caused the damages." Id. However, in the case before the Court, the jury obviously did not make this finding, since it awarded the plaintiff only a portion of the economic damages claimed. Id. Thus, the Court concluded, jury interrogatories were necessary to prove that the collateral sources recovered by the plaintiff were designed to compensate for the same economic damages awarded by the jury. Id.
B. Analysis
Again, the plaintiff advocates for a strict interpretation of the Jones decision, arguing that because the defendant did not submit jury interrogatories, it is precluded from making a collateral source reduction. However, footnote seven of the Jones opinion, as outlined above, seems to suggest that where a jury awards all economic damages sought, and where there is, as a result, no doubt involved in interpreting what losses the jury's award is intended to compensate for — since a jury cannot award damages for which no evidence has been presented — there is no need for jury interrogatories. Furthermore, as the defendant argues, since the jury awarded the full amount of economic damages sought, the "Schedule of Economic Damages" submitted to the jury accomplishes, in essence, exactly what jury interrogatories would be designed to accomplish: the delineation of the specific elements of the jury's economic damages award.
Thus, the court determines that the jury's award of economic damages can be readily interpreted, element by element, without any room for confusion, and also finds that the defendant has met its burden of proving that the verdict included the items of damages for which the plaintiff received a collateral source benefit, and allows the reductions sought. See, e.g., Saraceno v. Hartford Ins. Co. of the Midwest, Superior Court, judicial district of Hartford, Docket No. CV 01 0811755 (November 24, 2004, Beach, J.) ( 38 Conn. L. Rptr. 325, 326-27) (allowing collateral source reduction in "the narrow circumstances of the case" after considering Jones v. Kramer — even though defendant failed to submit jury interrogatories — because jury's award of economic damages and its exact meaning were absolutely clear).
Finally, the defendant argues that Jones is entirely irrelevant to reductions sought on the basis of the insurance memorandum, § 38a-334-6(d), and the corresponding statutes. However, both the collateral source statutes and the underinsured/uninsured motorist statutes and corresponding regulations are designed not only to compensate a claimant for his or her losses, but to also prevent a double recovery. Given this congruence in purpose, the spirit of Jones would seem to apply regardless of how one characterizes the reductions sought.
VII. Conclusion
The workers' compensation benefits received by the plaintiff should not be characterized as "collateral sources" controlled by the collateral source doctrine, but should rather be examined in light of § 38a-334-6(d) and the exclusionary language of the insurance memorandum that tracks the language of that regulation. As such, the defendant is entitled to a reduction in its liability in the amount of workers' compensation benefits received by the plaintiff. Furthermore, as the court is satisfied that the evidence presented to it at trial demonstrates that the plaintiff will be entitled to recover future workers' compensation benefits, the defendant should also receive a reduction in its liability on that basis. Additionally, as the court is satisfied that a portion of the plaintiff's medical bills were written off by his medical providers, and that this write-off was made pursuant to a contract with the State of Connecticut, the defendant should also receive a collateral source reduction to its liability commensurate with the amount of the write-off. Also, the defendant is clearly entitled to a collateral source reduction on the basis of the $20,000 tortfeasor payment. It is also apparent that all reductions are to be taken from the jury's economic damages award and not the $1,000,000 policy limits. To determine otherwise would to be to allow a windfall double recovery.
Finally, the defendant's failure to issue jury interrogatories will not preclude these reductions in that the court is satisfied that the specific elements of the jury's economic damages award are readily discernable.