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Brethren Mutual Insurance Co. v. Suchoza

Court of Special Appeals of Maryland

May 29, 2013

BRETHREN MUTUAL INSURANCE CO.
v.
KENNETH SUCHOZA

Meredith, Woodward, Matricciani, JJ.

OPINION

Woodward, J.

The instant appeal arises from a lawsuit filed on March 12, 2010, in the Circuit Court for Prince George's County by appellee, Kenneth Suchoza, against appellant, Brethren Mutual Insurance Company ("Brethren"), alleging that Brethren failed to pay benefits under an uninsured motorist ("UM") policy between Brethren and appellee's employer, Matrix Mechanical, Inc. ("Matrix"). Appellee's UM claim resulted from injuries sustained during a May 29, 2007 motor vehicle accident caused by an uninsured motorist while appellee was driving within the scope of his employment with Matrix.

On August 15 and 16, 2011, a trial was held in circuit court, at the conclusion of which a jury returned a verdict in favor of appellee for $535, 876.00. Following the entry of judgment, Brethren filed a Motion for New Trial and to Alter or Amend Judgment, seeking, among other things, to have the judgment reduced by the amount of workers' compensation benefits previously received by appellee. On January 19, 2012, the circuit court denied Brethren's motion for a new trial but amended the judgment by reducing the amount thereof from $535, 876.00 to $356, 669.03 to reflect the amount of workers' compensation benefits received by appellee as of the time of trial.

On appeal, Brethren presents three questions for our review, which we have slightly rephrased:

I. Did the trial court err or abuse its discretion by refusing to admit testimony of the payment of appellee's medical expenses by his workers' compensation carrier and the acceptance thereof as full payment by his health care providers?
II. Did the trial court err by failing to reduce the judgment in favor of appellee by the amount of workers' compensation benefits received by appellee from the trial date to the date of the court's ruling on Brethren's post-trial motion?
III. Did the trial court err by entering judgment in favor of appellee where appellee was entitled to recover future workers' compensation benefits?

For the reasons set forth below, we will answer all three questions in the negative and thus affirm the judgment of the circuit court.

BACKGROUND

On May 29, 2007, appellee was driving an E-250 commercial cargo van within the scope of his employment as a Service Technician with Matrix. While stopped at a stoplight in Prince George's County, Maryland, the van driven by appellee was struck in the rear by a 1988 Dodge Dakota pickup truck, which was sitting at the stoplight directly behind appellee. The pickup truck was propelled into the back of appellee's van when the driver of a third vehicle, a Dodge Caravan, failed to control his vehicle and struck the rear end of the pickup truck. At the time of the accident, the driver of the Dodge Caravan was an uninsured motorist.

As a result of the accident, appellee sustained injuries to his neck and left shoulder, causing him to undergo a cervical discectomy and fusion surgery. Following surgery, it was determined that appellee sustained a "40% whole person impairment, " had reached his "maximum surgical improvement, " and could return to work in a different capacity. Appellee then sought relief by: (1) filing a workers' compensation claim, and (2) filing a complaint in circuit court to collect benefits under Matrix's UM policy with Brethren.

Appellee's Workers' Compensation Claim

At the same time appellee was proceeding with his complaint in the circuit court, he was pursuing a claim before the Workers' Compensation Commission, seeking benefits for injuries and losses he sustained as a result of the accident. As of the date of trial, appellee had received workers' compensation benefits of $179, 206.97, including: $69, 496.97 in medical expenses and $109, 710.00 in lost wages. In addition, appellee's workers' compensation claim was not fully resolved, and he was entitled to future workers' compensation benefits. Between the close of trial and the date on which the trial court resolved Brethren's post-trial motion, appellee was awarded an additional $56, 639.00 in workers' compensation benefits, $9, 339.00 of which was received by appellee.

Appellee's Uninsured Motorist Claim

Matrix maintained a UM policy with Brethren that, according to appellee, "was specifically contracted for by [Matrix] to provide for all medical treatment, lost wages, and any other relevant damages and injuries rendered to their employees as a result of an uninsured driver." The insurance policy contained a provision limiting Brethren's liability in the event that an employee recovered workers' compensation benefits stemming from the same accident for which UM benefits were sought. The relevant provision states:

We will not pay for any element of "loss" [i]f a person is entitled to receive payment for the same element of "loss" under any workers' compensation, disability or similar law. However, this applies only to that amount for which the provider of the workers' compensations [sic] benefits has not been reimbursed.

Appellee filed a claim with Brethren under its UM policy, which Brethren denied. On March 12, 2010, appellee filed a complaint in circuit court, asserting that Brethren's denial of UM benefits pursuant to Brethren's UM insurance policy with Matrix constituted a breach of contract.

In light of the UM provision limiting Brethren's liability based upon workers' compensation recovery by appellee, the parties filed a Consent Motion to Stay Proceedings on January 11, 2011, requesting that the circuit court case be stayed pending the resolution of appellee's workers' compensation claim. On January 25, 2011, the trial court entered an order denying the request.

On August 15 and 16, 2011, a jury trial was held in the circuit court. At trial, appellee introduced into evidence the medical bills, totaling $129, 876.00, that he incurred as a result of the accident, along with the testimony of his treating physician that such bills were fair, reasonable, and necessary. Brethren sought to introduce evidence of the reasonable value of the medical services rendered to appellee by proffering evidence of the actual payments made by appellee's workers' compensation carrier[1] and accepted as full payment by the health care providers. The trial court did not allow the admission of the evidence of such payments, stating that it was a "collateral source." The jury returned a verdict in favor of appellee for a total of $535, 876.00, comprised of: $156, 000.00 in lost wages, $129, 876.00 in medical expenses, and $250, 000.00 in non-economic damages. On September 6, 2011, the circuit court entered judgment in favor of appellee in the amount of $535, 876.00.

Following the trial court's entry of judgment, Brethren filed a Motion for New Trial and to Alter or Amend Judgment on September 19, 2011. Brethren's motion was "based upon (1) the exclusion of evidence of the actual amounts accepted by [appellee]'s doctors in full payment for treatment, (2) the trial court's failure to reduce the Judgment by the amount of workers' compensation benefits paid, and (3) the entry of Judgment for [appellee] absent a prima facie showing that [Brethren] breached the applicable contract of insurance." On January 13, 2012, the circuit court heard argument on Brethren's motion. On January 19, 2012, the circuit court denied Brethren's motion for a new trial but reduced the amount of the judgment from $535, 876.00 to $356, 669.03 to reflect the amount of workers' compensation benefits received by appellee as of the date of trial. Brethren noted a timely appeal to this Court.

DISCUSSION

Reasonable Value of Medical Services Rendered

At trial on August 15 and 16, 2011, the trial court ruled on the admissibility of evidence regarding the fair and reasonable value of medical services rendered by health care providers in treating appellee for injuries sustained as a result of the accident. Appellee offered medical bills totaling $129, 876.00 as evidence of the expenses incurred by him for medical treatment rendered for such injuries. Appellee played portions of the videotaped deposition of Dr. Christopher Urban for the jury, in which Dr. Urban testified that he had reviewed such medical bills and that the amounts of those bills were fair and reasonable. The court admitted appellee's medical bills into evidence.[2]

Brethren sought to introduce evidence of the payments actually made by appellee's workers' compensation carrier to—and accepted as full payment by—appellee's health care providers. Brethren's counsel made the following proffer to the court:

[A]t this point the defense would offer testimony of Lori Shook. She is the workers['] compensation adjuster for [appellee]'s claim. We would elicit testimony from Ms. Shook concerning [appellee]'s workers['] compensation claim, his entitlement to recover under workers['] compensation, the amounts paid by workers['] compensation, the amounts accepted by providers from workers['] compensation, [] testimony concerning the pending status of the matter [] that [appellee] is still entitled to recover additional funds pursuant to workers['] compensation and that there has been no reimbursement.

(Emphasis added). Brethren did not proffer any expert testimony or other competent evidence regarding the reasonableness of the amounts actually paid for appellee's medical treatment. The court ruled that Brethren's proffered evidence was not admissible, finding that it was a "collateral source, " and thus would violate the collateral source rule.

In the instant appeal, Brethren contends that "the trial court abused its discretion by excluding evidence concerning amounts accepted as full payment by [appellee's] health care providers." According to Brethren, "[t]he dollar amount written on the invoice [submitted by appellee] bears little relation to the value of the service or the amount these providers actually accept[ed]." Brethren further asserts that the collateral source rule is not applicable in contract cases, such as the instant matter. Even if the collateral source rule is applicable, according to Brethren, the admission of lesser amounts accepted as full payment of medical bills is not violative of such rule. Brethren concludes that the trial court's exclusion of evidence concerning payment actually accepted for appellee's medical treatment prejudiced Brethren by "affecting the jury's decision concerning the reasonable value of the medical care, " and thus constitutes reversible error.

Appellee contends that the "trial court did not abuse its discretion in excluding the medical bills reflecting reduced amounts accepted as payment for medical services." According to appellee, the collateral source rule does apply, because although the original action was for breach of contract, appellee's claim was "the result of a tortious automobile accident, " and, therefore, Brethren "st[ands] in the shoes of the tortfeasor." Appellee argues that the court did not preclude Brethren from offering contradictory evidence concerning the reasonableness of the medical bills offered by appellee; however, Brethren "never made an attempt to get that type of evidence before the jury." Further, appellee contends that Brethren "cannot show that any prejudice was probable, because [Brethren] did nothing to refute the testimony that the medical bills were fair and reasonable for the necessary treatment provided to appellee."

Recently, in Washington Metropolitan Area Transit Authority v. Washington, ___Md.App. ___, No. 769-11 (Mar. 21, 2013), this Court set forth the standard of review governing an appellate court's review of a trial court's determination of evidentiary issues involving relevancy. We stated:

Md. Rule 5-402, governing the admissibility of relevant or irrelevant evidence, provides: "Except as otherwise provided by constitutions, statutes, or these rules, or by decisional law not inconsistent with these rules, all relevant evidence is admissible. Evidence that is not relevant is not admissible." Thus, although a trial court has "wide discretion" in weighing the relevance of evidence, it does not have discretion to admit irrelevant evidence. Id.; State v. Simms, 420 Md. 705, 724 (2011).
In evaluating the correctness of the trial court's ruling, we engage in a two-pronged analysis. First, we consider whether the evidence is legally relevant, a conclusion of law which we review de novo. Simms, 420 Md. at 725. Evidence is relevant if it 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." Md. Rule 5-401. If we conclude that the challenged evidence meets this definition, we then determine whether the court nonetheless abused its discretion by admitting relevant evidence which should have been excluded because its ...

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