Meek v. 8th Judicial District , 379 Mont. 150 ( 2015 )

May 13 2015
OP 14-0786
Case Number: OP 14-0786
IN THE SUPREME COURT OF THE STATE OF MONTANA
2015 MT 130
_________________
SHARON MEEK, as Personal Representative of
the ESTATE OF JUDY J. MEEK, Deceased,
Plaintiff and Petitioner,
OPINION
v.
AND
ORDER
MONTANA EIGHTH JUDICIAL DISTRICT
COURT, CASCADE COUNTY, THE HONORABLE
JON A. OLDENBURG, Presiding Judge,
Respondent.
_________________
¶1 This matter comes before the Court on a Petition for Writ of Supervisory Control
filed by Petitioner Sharon Meek, as personal representative of the Estate of Judy J. Meek,
arising from Cascade County Cause No. BDV-12-0657, Meek v. Bennett Motors, et al.
This Court adopted a briefing schedule and conducted oral argument on March 11, 2015.
Jeffrey G. Winter argued for Petitioner, Cathy Lewis argued for Respondent, and Anders
Blewett argued for Amicus Curiae Montana Trial Lawyers Association. The matter
having been submitted for decision, we grant the petition and exercise supervisory
control.
¶2 The issue is whether the District Court properly granted a defense motion in
limine to restrict the medical damages evidence admissible at trial, and granted summary
judgment against Meek on that issue.
BACKGROUND
¶3 Judy Meek passed away on January 23, 2012, after a fall at a business premises on
November 2, 2011. Sharon Meek, as personal representative of Judy’s Estate (Meek),
brought this action against the business where the fall happened, seeking damages for
survival and wrongful death.
¶4 In the period between the fall and Judy’s death, Judy’s medical providers billed
$197,154.93 for her care. Judy was covered by Medicare and had supplemental coverage
through Blue Cross/Blue Shield. Medicare and BCBS together paid a total of $70,711.26
to Judy’s medical providers. The District Court concluded that despite the billing from
the medical providers, Judy had “no exposure or obligation to pay any charges beyond
those actually paid pursuant to the Medicare rules and the insurance policy with Blue
Cross/Blue Shield.”
¶5 The issue in the present case arises from the District Court’s decision on a pre-trial
motion filed by one of the defendants, Pierce’s Dodge City. The motion sought to limit
Meek’s medical expense recovery to the amounts paid to the providers by Medicare and
BCBS, and to prevent Meek from presenting evidence to the jury as to the amounts
actually billed by the medical providers. After briefing, the District Court concluded that
while there was a split of authority nationally, the legal issue has been decided in
Montana, citing this Court’s decisions in Conway v. Benefis Health System, 2013 MT 73,
369 Mont. 309, 297 P.3d 1200 and Newbury v. State Farm, 2008 MT 156, 343 Mont.
279, 184 P.3d 1021.
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¶6 The District Court determined that since Meek had no liability exposure to the
medical care providers in excess of the amount paid by Medicare and BCBS, the only
medical expense evidence that she could present to the jury were the amounts that had
been paid to the providers. The District Court concluded that the amount actually billed
by the providers was not representative of the reasonable value of the medical services
provided to Judy and that the amount billed by the health care providers was inadmissible
because it “is irrelevant” to any issue or to damages in the case.
¶7 The District Court granted the motion in limine to limit medical damage evidence,
and granted summary judgment against Meek on that issue. Meek seeks supervisory
control over that order.
STANDARD OF REVIEW
¶8 This Court exercises supervisory control in appropriate cases pursuant to Article
VII, Section 2(2) of the Montana Constitution and Rule 17(a), M. R. App. P. Supervisory
control is appropriate where the district court is proceeding upon a mistake of law which,
if not corrected, would cause significant injustice for which appeal is an inadequate
remedy. Inter-Fluve v. Eighteenth Judicial District Court, 2005 MT 103, ¶ 17, 327
Mont. 14, 112 P.3d 258.
¶9 A motion in limine can seek to prevent or limit the introduction of evidence at
trial, and the authority to grant or deny the motion rests in the inherent power of the
district court to admit or exclude evidence so as to ensure a fair trial. Hulse v.
Department of Justice, 1998 MT 108, ¶ 15, 289 Mont. 1, 961 P.2d 75. Where a decision
on a motion in limine involves the exercise of discretion, this Court will not overturn the
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district court absent an abuse of discretion. State v. Weldele, 2003 MT 117, ¶ 41, 315
Mont. 452, 69 P.3d 1162. Where a decision on a motion in limine involves a conclusion
of law or interpretation of statute, we review to determine whether the result is correct.
State v. Peterson, 2011 MT 22, ¶ 8, 359 Mont. 200, 247 P.3d 731.
¶10 This Court reviews a district court’s decision on summary judgment to determine
whether it is correct, using the same criteria under Rule 56, M. R. Civ. P. Pilgeram v.
GreenPoint Mortgage, 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839.
DISCUSSION
¶11 We do not address Meek’s claim regarding the damages she may recover for
medical expenses because that is an issue that can be adequately addressed on appeal if
necessary. The only issue we address in this pretrial proceeding is whether the District
Court properly limited the evidence that is admissible at trial regarding medical expenses.
¶12 The parties agree that Meek is entitled to damages “representing the reasonable
value of the medical expenses for medical services obtained by Judy Meek.” This is
consistent with Montana law, which requires that in all cases damages must be
reasonable, and that no party has a right to unconscionable and grossly oppressive
damages that are contrary to substantial justice. Section 27-1-302, MCA; Tidyman’s
Management Services v. Davis, 2014 MT 205, ¶ 40, 376 Mont. 80, 330 P.3d 1139.
¶13 The District Court concluded and the respondents argue that amounts billed by
health care providers are “not a reliable or accurate indicator of the reasonable value of
the services” because they are unreasonably inflated and few patients ever actually pay
the billed amount. Respondents argue that the amount the providers actually receive
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from insurers or other benefit programs is a “far better indicator of the reasonable value
of a provider’s services.” Further, they argue that allowing Meek to present evidence of
medical bills in excess of what has been actually paid could lead to a windfall recovery.
¶14 The ultimate issue is whether Meek’s medical bills are admissible at trial or
whether, as the District Court held, they are irrelevant and inadmissible. All relevant
evidence is admissible, except when otherwise provided. Rule 402, M. R. Evid.
Relevant evidence is evidence that has “any tendency to make the existence of any fact
that is of consequence to the determination of the action more probable or less probable
than it would be without the evidence.” Rule 401, M. R. Evid.; Alexander v. Bozeman
Motors, Inc., 2012 MT 301, ¶¶ 41-42, 367 Mont. 401, 291 P.3d 1120. Therefore,
evidence should not be excluded simply because there may be contrary evidence or
because it may be subject to impeachment. Although the District Court ruled that the
amount of expenses billed is irrelevant when there is no claim for future medical
expenses, medical bills received by a tort victim can be relevant evidence of issues such
as the nature and severity of the injuries, and of the medical procedures and treatments
that were required. Chapman v. Mazda Motor of Am., 7 F. Supp. 2d 1123, 1125
(D. Mont. 1998).
¶15 The respondents’ factual arguments regarding the nature and reliability of medical
billings therefore do not provide adequate grounds for a pre-trial order excluding the
evidence of the amounts billed by Meek’s medical providers. If supported by competent
evidence at trial, these arguments could provide matters of impeachment, and could affect
the weight the jury might give to the evidence. Without more, however, these factual
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contentions do not justify exclusion of the evidence. The District Court’s pretrial ruling
to exclude all medical bills and grant summary judgment was not justified here, where
Meek presented the affidavit of her primary physician that affirmed that the medical
services represented in the billings were reasonably necessary to her care. The affidavit
also affirmed that the amounts billed were reasonable, were the usual and customary rates
for such treatment, and that they represented the reasonable value of the treatment.
¶16 Ultimately, there is a factual dispute in the case over the nature of the bills
presented by the medical providers and whether they represent a reasonable measure of
the value of the services provided. The reasonableness of the medical bills as a measure
of damages is a matter to be determined by the jury. Burley v. Burlington Northern, 2012
MT 28, ¶ 91, 364 Mont. 77, 273 P.3d 825. The existence of genuine issues of material
fact precludes summary judgment. Redies v. Attorney Liability Prot. Soc., 2007 MT 9,
¶ 26, 335 Mont. 233, 150 P.3d 930. This does not end the inquiry in this case, however,
since the District Court also issued an order in limine, limiting the medical expense
evidence that would be admissible at trial.
¶17 The District Court’s order admitting only evidence of amounts the insurers paid to
Meek’s health care providers violates § 27-1-308, MCA. That statute, referred to as the
collateral source rule, requires that a jury determine its award “without consideration of
any collateral source.” Section 27-1-308(3), MCA (emphasis added). A collateral
source, generally, is “a payment for something that is later included in a tort award and
that is made to or for the benefit of a plaintiff or is otherwise available to the plaintiff.”
Section 27-1-307(1), MCA. The statute provides, however, that in a separate post-trial
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proceeding the district court must reduce a jury’s verdict in a personal injury case “by
any amount paid or payable from a collateral source that does not have a subrogation
right.” Section 27-1-308(3), MCA.
¶18 The District Court ruled that the “amount of the write-down” (the medical billings
not covered by Medicare or BCBS) was not a benefit or was not otherwise “available” to
Meek and therefore did not meet the definition of a collateral source under the statute.
However, the payments made by Medicare to satisfy the providers’ billings are clearly a
collateral source. The District Court’s order in this case, and now the Dissent, would not
only require that these collateral source payments be considered by the jury, but would
also make the collateral source payment conclusively determinative of Meek’s medical
damages. This is a clear violation of § 27-1-308(3), MCA. The statute prohibits the jury
from considering any collateral sources and evidence of collateral source payments is not
admissible on the issue of a personal injury claimant’s medical expenses.
¶19 Respondents contend that allowing Meek to present evidence of the medical bills
from her providers could result in a “windfall” recovery. This contention is addressed by
§ 27-1-308(1) and (3), MCA, which provides that after a jury verdict in favor of the
plaintiff, the district court must hold a hearing and determine whether there were any
collateral source payments to account for. If so, the recovery must be reduced by the
amount paid or payable from a collateral source.
¶20 Contrary to the District Court’s conclusions, the issues in this case were not
decided in Newbury and Conway. Both of those cases involved contract disputes
between insureds and insurers over application of insurance policy language, and neither
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case involved the admissibility of evidence in a personal injury action against a
tortfeasor. Most significantly, neither case involved application of the collateral source
statute, § 27-1-308, MCA. Neither case resolves the issues raised in the present case.1
¶21 The parties have devoted considerable argument to identifying the majority and
minority national rules on whether a tort claimant is limited to introducing evidence of
medical expenses paid by third parties. See, e.g., Bynum v. Magno, 101 P.3d 1149 (Haw.
2004). We do not decide the present case through application of national trends, but
through application of the Montana Rules of Evidence and the Montana collateral source
statute, § 27-1-308, MCA.
¶22 We reiterate that Montana law requires that damages be reasonable, § 27-1-302,
MCA, and Tidyman’s, ¶ 40, and that it is up to the jury to determine what is reasonable
under the circumstances, Burley, ¶ 91. This statutory requirement of reasonable damages
must be construed along with the collateral source statute, § 27-1-308, MCA, so as to
give effect to both. Section 1-2-101, MCA; Hanson v. Edwards, 2000 MT 221, ¶ 19, 301
Mont. 185, 7 P.3d 419. Therefore, if at trial Meek introduces evidence of Judy Meek’s
medical bills the defendants may contest the reasonableness of those bills as a measure of
damages. If so, evidence of the amount that Medicare pays to other health care providers
for the same or similar service could be relevant to that issue, as long as there is no
evidence or argument that Judy Meek was covered by Medicare or other insurance, or
that Medicare or an insurer paid any part of her medical expenses. Those matters may be
1
Likewise, Harris v. Billings Clinic, 2013 MT 207, 371 Mont. 133, 305 P.3d 852, cited in the
Dissent, neither involves issues in a direct action against a tortfeasor or application of
§ 27-1-308, MCA.
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considered only by the District Court and only after a verdict, as provided in
§ 27-1-308(3), MCA.
¶23 Therefore,
¶24 IT IS ORDERED that the Petition for Writ of Supervisory Control is GRANTED.
¶25 IT IS FURTHER ORDERED that the District Court order on Pierce’s Dodge
City’s motions in limine and summary judgment against Meek, as discussed above, are
VACATED and this matter is remanded for further proceedings consistent with this
Opinion and Order.
¶26 The Clerk of this Court is directed to provide copies of the Opinion and Order to
counsel of record in Cascade County Cause No. BDV 12-0657, counsel for Amicus
Curiae Montana Trial Lawyers Association and Montana Defense Trial Lawyers, and to
the Honorable Jon A. Oldenburg, presiding District Judge.
DATED this 13th day of May, 2015.
/S/ MIKE McGRATH
We Concur:
/S/ MICHAEL E WHEAT
/S/ PATRICIA COTTER
/S/ BETH BAKER
/S/ JAMES JEREMIAH SHEA
/S/ JIM RICE
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Justice Laurie McKinnon, dissenting.
¶27 I dissent. The Court’s decision is inconsistent with Montana’s statutes defining
damages, §§ 27-1-201, -202, MCA, and with our precedent, specifically Newbury v. State
Farm Fire & Casualty Insurance, 2008 MT 156, 343 Mont. 279, 184 P.3d 1021, Conway
v. Benefis Health System, 2013 MT 73, 369 Mont. 309, 297 P.3d 1200, and Harris v. St.
Vincent Healthcare, 2013 MT 207, 371 Mont. 133, 305 P.3d 852. The Court allows a
person injured by another person’s tortious conduct to recover more than the actual
amount she paid or for which she incurred liability for past medical care and expenses.
In my opinion, sums beyond that actually expended are not damages. Fundamental
principles of compensatory damages in tort actions compel the conclusion that a plaintiff
may recover no more than her actual loss. Additionally, the collateral source rule is a
rule of evidence that prevents a jury from knowing that the plaintiff has received payment
from a source not associated with the tortfeasor; it therefore has no relevance in
establishing the appropriate measure for determining the reasonableness of damages. The
Court fails to observe this distinction.
¶28 In these proceedings, which do not include a claim for future medical expenses,
there is no question about the appropriate measure of recovery: the Estate is entitled to
recover the reasonable value of medical care and services reasonably required and
attributable to the tort. “Damages must in all cases be reasonable, and where an
obligation of any kind appears to create a right to unconscionable and grossly oppressive
damages contrary to substantial justice, no more than reasonable damages can be
recovered.” Section 27-1-302, MCA. Accordingly, a plaintiff may recover as economic
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damages no more than the reasonable value of the medical services received. The focus
on “reasonable value” in § 27-1-302, MCA, is therefore a limitation on recovery, not an
expansion of recovery beyond a plaintiff’s actual loss or liability. The question here
involves the application of that measure; that is, whether the “reasonable value” measure
of damages means that a plaintiff may recover sums beyond that actually expended.
¶29 In tort actions, damages are normally awarded for the purpose of compensating the
plaintiff for the injury suffered, restoring her as nearly as possible to her former position
or giving her some pecuniary equivalent. In Montana, compensatory damages are
awarded to “redress the concrete loss that a plaintiff has suffered by reason of a
defendant’s wrongful conduct.” Seltzer v. Morton, 2007 MT 62, ¶ 148, 336 Mont. 225,
154 P.3d 561. The law of torts “works to ensure that an award of damages restores an
injured party as near as possible to the party’s pre-tort position—no better, no worse.”
Lampi v. Speed, 2011 MT 231, ¶ 21, 362 Mont. 122, 261 P.3d 1000 (citing Sunburst Sch.
Dist. No. 2 v. Texaco, Inc., 2007 MT 183, ¶ 32, 338 Mont. 259, 165 P.3d 1079). We
stated in Sunburst that an “‘injured party is to be made as nearly whole as possible—but
not to realize a profit. Compensatory damages are designed to compensate the injured
party for actual loss or injury—no more, no less.’” Sunburst, ¶ 40 (quoting Burk
Ranches v. State, 242 Mont. 300, 307, 790 P.2d 443, 447 (1990)). Therefore, damages in
a tort action “attempt[] primarily to put an injured person in a position as nearly as
possible equivalent to his position prior to the tort.” Restatement (Second) of Torts § 901
cmt. a (1979). Moreover, in “determining the measure of compensation, indemnity or
restitution, the law of torts ordinarily does not measure its recovery as do the rules based
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upon unjust enrichment, on the benefit received by the defendant. This first purpose of
tort law leads to compensatory damages.” Restatement (Second) of Torts § 901 cmt. a.
¶30 Section 911 of the Restatement (Second) of Torts provides guidance for the
measure of “reasonable value.” While the measure of recovery for the costs of services
rendered by a third party is ordinarily the reasonable value of those services, “[i]f . . . the
injured person paid less than the exchange rate, he can recover no more than the amount
paid, except when the low rate was intended as a gift to him.” Restatement (Second) of
Torts § 911 cmt. h. Section 911 articulates a rule, applicable to recovery of tort damages
generally, which establishes that the “reasonable value” of services rendered is the
exchange rate, and if a person has paid less, she can recover no more than the amount
paid. Thus, a personal injury plaintiff may recover the lesser of (1) the amount paid or
incurred for medical services, or (2) the reasonable value of the services.
¶31 This rule is likewise consistent with our statutes which allow compensation for the
“detriment” proximately caused by the tortious conduct. Section 27-1-317, MCA,
provides for recovery of damages measured by “the amount which will compensate for
all the detriment proximately caused” by the tort. “Detriment” is defined as “a loss or
harm suffered in person or property.” Section 27-1-201, MCA (emphasis added). The
right to recover compensatory damages is defined by the “detriment” that a person
suffers. Section 27-1-202, MCA. While the measure of damages for pain and suffering,
emotional disturbances, and even future medical expenses necessarily must be left to the
discretion of the jury, the measure of damages for past medical expenses must be the
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amount that was expended for the service, limited only by what was reasonably
attributable to the tortious conduct.
¶32 Newbury, Conway, and Harris also establish that the reasonable value of medical
expenses is limited to what was actually incurred. In Newbury, we determined that
while it was reasonable for Newbury to expect that his State Farm policies
would pay his medical expenses (up to the policy limits of $10,000.00)
once the State Fund had paid all it was required to pay, it was not
reasonable for Newbury to expect to receive funds in excess of his medical
expenses.
Newbury, ¶ 38. This Court, in Newbury, recognized that medical payments benefits are
payable only for medical expenses, and when a plaintiff received full payment of his
medical expenses and owed nothing more to his healthcare providers, a windfall would
result if the plaintiff were to receive additional money in excess of his total medical
expenses. Newbury, ¶¶ 39, 47. In Conway, we stated:
Here, the record shows that Benefis accepted Kemper’s payment of
$1,866.29 as payment in full for the actual cost of Conway’s medical
treatment that resulted from the accident. Conway does not owe Benefis
any remaining amount. Even though all of Conway’s medical expenses
have been paid, he still seeks to pocket $1,203.55 in medical payments
coverage benefits, representing the difference between Kemper’s payment
to Benefis and the TRICARE reimbursement rate. We disagree. Conway
is no more entitled to pocket excess medical payments here than he would
be under the circumstances in Newbury, or any other situation in which all
of his medical expenses are paid by his insurer under its medical payments
coverage.
Conway, ¶ 35.
¶33 We again explained in Harris that an injured party was not entitled to receive the
difference in payment between the actual cost of medical treatment and the amount that
the physician billed. Harris, ¶¶ 16-17. I concurred in Harris, noting that the plaintiffs
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had not suffered any “detriment or legally cognizable damages necessary to support their
claim.” Harris, ¶ 36 (McKinnon, J., concurring). Accordingly, it is my opinion that the
decision reached today by the Court is inconsistent, indeed irreconcilable, with the
foregoing precedent.
¶34 In these proceedings, Judy Meek did not incur liability for her providers’ full bills
because at the time the charges were incurred, her providers had already agreed to accept
a certain amount from both Medicare and Blue Cross/Blue Shield in exchange for their
services. Having never incurred the full bill, the Estate cannot recover it in damages for
economic loss. As a result of paying her premiums, Judy Meek obtained the benefit of
medical services at a reduced rate. She would have paid these premiums and received the
benefit of reduced rates regardless of any tortious conduct. Therefore, there is no need to
determine the reasonable value of the services where, as here, the exact amount of
expenses has been established by contract and has been satisfied.
¶35 Finally, the Court fails to appreciate the distinction between an evidentiary rule
and an appropriate measure of reasonable value. The collateral source rule is a rule of
evidence which prevents admission of evidence showing that the plaintiff has received
payments from sources independent of the tortfeasor. The rule is premised upon the idea
that there is minimal probative value in considering the actions of an unrelated third party
when assessing the conduct of the tortfeasor and determining compensatory damages. In
contrast, it would be very prejudicial to the plaintiff if a jury were to learn that the
plaintiff has already been compensated. The collateral source rule also has a substantive
aspect apart from its evidentiary basis. Based upon numerous policy considerations, the
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collateral source rule serves to protect payments conferred on the injured party from other
sources unconnected to the tortfeasor from being credited against the tortfeasor’s liability.
Despite the Court’s conclusion to the contrary, Opinion, ¶ 18, a district court can apply a
correct measure for reasonable value—the exchange rate—while still adhering to the
collateral source rule that prevents the jury from knowing that the plaintiff has been
otherwise compensated. A jury does not need to hear the source of the payment, or that a
bill has been satisfied; all a jury need hear is the amount of the plaintiff’s past expense.
The rule enunciated by the Court today would prove much more problematic for a district
court to navigate.
¶36 Accordingly, I do not agree that medical bills, other than the amount actually paid
and received, are “relevant evidence of issues such as the nature and severity of the
injuries, and of medical procedures and treatments that were required.” Opinion, ¶ 14.
These issues may be established through the testimony of treating physicians and health
care providers and not by the admission of bills for amounts over and above what was
received and accepted by Judy Meek’s medical providers. The desire to present higher
bills in order to gain a larger recovery for other types of damages should not override
fundamental principles of compensatory damages, our precedent, and Montana’s statutes.
The evidence is simply not admissible for such a purpose and is not relevant, absent a
claim for future medical expenses. Here, the amounts disallowed will not assist in
developing a foundation for a life care plan or possible future medical procedures and
needs. See Willink v. Boyne USA, Inc., No. CV 12-74-BU-DLC, 2013 U.S. Dist. LEXIS
152566, at *6-7 (D. Mont. Oct. 23, 2013).
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¶37 For the foregoing reasons, I dissent from the Court’s decision.
/S/ LAURIE McKINNON
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