Opinion ID: 885205
Heading Depth: 1
Heading Rank: 12

Heading: Did the District Court err in its collateral source reduction determinations regarding workers' compensation and Social Security benefits?

Text: ¶ 107 Klemens argues that the District Court erred when it ruled that the workers' compensation death benefits and Social Security survivor benefits received by Schuff as a result of her husband's death could not be used to offset the jury verdict award pursuant to Montana's collateral source statutes. In turn, Schuff argues that the court similarly erred when it determined that her receipt of medical and funeral expenses from a workers' compensation insurance carrier was a collateral source, and therefore erred when it deducted $203,000, less a $55,000 subrogation settlement, from the jury verdict. ¶ 108 Pursuant to § 27-1-308, MCA, in an action arising from bodily injury or death when the total award against all defendants is in excess of $50,000 and the plaintiff will be fully compensated for his damages, exclusive of court costs and attorney fees, a plaintiff's recovery must be reduced by any amount paid or payable from a collateral source that does not have a subrogation right.  (Emphasis added). Thus, as a threshold determination, if the collateral source at issue possesses a subrogation right, the collateral source reduction statutes do not apply. ¶ 109 Under § 39-71-414, MCA, a workers' compensation insurer is entitled to subrogation for all compensation and benefits paid or to be paid under the Workers' Compensation Act. This statutory right of subrogation prevents workers' compensation benefit payments from being deducted from a judgment as a collateral source, pursuant to § 27-1-308, MCA. Accordingly, we hold that the District Court correctly excluded the continuing workers' compensation death benefits from its application of § 27-1-308, MCA. ¶ 110 On the other hand, we hold that the District Court erred when it deducted the $203,000 workers' compensation medical and funeral expense payments, less the subrogation settlement of $55,000, from the jury verdict pursuant to § 27-1-308, MCA. We further hold that it is immaterial whether the workers' compensation insurer in this instance, at some point, reached a settlement agreement with Schuff regarding its right of subrogation. We conclude that how a workers' compensation carrier exploits its statutory subrogation right does not materially affect the fact that it possesses such a right as a matter of law. ¶ 111 Social Security survivor benefits, however, carry no subrogation rights to tort injury awards. See generally Richardson v. Belcher (1971 ), 404 U.S. 78, 81-86, 92 S.Ct. 254, 257-60, 30 L.Ed.2d 231 (stating that Social Security benefits would not be reduced following injured worker's receipt of proceeds from a tort action); 42 U.S.C § 424(a) (providing for reduction by federal government of Social Security disability benefits to offset state workers' compensation recoveries). ¶ 112 Therefore, we next turn to § 27-1-307, MCA, which provides the definitions for § 27-1-308, MCA, to determine whether the payment of Social Security survivor benefits has been identified by the Legislature as a collateral source that must be deducted from a plaintiff's award for damages. ¶ 113 Under subsection (1), a collateral source is generally defined as 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. Here, Schuff's damage award for her husband's wrongful death specifically included $600,000 for lost earnings of the deceased. It is well-settled that Social Security survivor benefits are intended to compensate for a decedent's lost earnings, and therefore qualify, under subsection (1), as a potential collateral source. See, e.g., Bryant v. New York City Health & Hosps. Corp. (1999), 93 N.Y.2d 592, 695 N.Y.S.2d 39, 716 N.E.2d 1084, 1092. Our inquiry does not end there, however. ¶ 114 We must next turn to the subparts of subsection (1), under § 27-1-307, MCA, where the Legislature has specifically identified the kinds of payments that must be deducted as a collateral source under the directives of § 27-1-308, MCA. Accordingly, in the absence of such clear introductory terms as for example or including but not limited to or may include, the plain meaning of the statute is that if a potential collateral source is not identified in these subparts, it is not subject to reduction under § 27-1-308, MCA. ¶ 115 At this juncture in our review, it is critical to again emphasize that in construing a statute, the office of the judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted or to omit what has been inserted. See § 1-2-101, MCA; McClure v. State Compensation Ins. Fund (1995), 272 Mont. 94, 98, 899 P.2d 1093, 1096. Furthermore, another rule of statutory construction is that those statutes that limit a party's remedy must be strictly construed. See, e.g., Abbott Laboratories v. Portland Retail Druggists Ass'n, Inc. (1976), 425 U.S. 1, 11, 96 S.Ct. 1305, 1313, 47 L.Ed.2d 537. It is beyond discussion that the collateral source reduction statutes at issue here serve to limit a party's recovery for damages, as provided pursuant to §§ 27-1-202 and 203, MCA. ¶ 116 Therefore, we began our review of § 27-1-307, MCA, by simply reading the statute. To aid our reading, this Court frequently turns to familiar maxims or canons of statutory construction, including but not limited to: ejusdem generis (general words will be construed according to more specific and particular preceding words); expressio unius est exclusio alterius (the expression of one thing is the exclusion of another), and a particular intent will control a general one that is inconsistent with it. See Black's Law Dictionary at 517 and 581 (6th ed.1990), and § 1-2-102, MCA. These well-observed rules are followed routinely by this Court. The cases are legion. See, e.g., Walter v. Board of R.R. Comm'rs (1969), 153 Mont. 384, 387-89, 457 P.2d 479, 481-82 (concluding that the term commodities was limited by the preceding terms heavy equipment, tractors, power shovels and could not be construed to include petroleum); Mitchell v. University of Montana (1989), 240 Mont. 261, 264-65, 783 P.2d 1337, 1339-40 (concluding that term local governmental entity did not include board of regents); In re Marriage of Jones (1987), 226 Mont. 14, 736 P.2d 94 (concluding that statute specifically addressing venue for marriage dissolution controlled other more general venue provisions). ¶ 117 Turning our attention back to the statute at issue, the subparts in their entirety under § 27-1-307(1), MCA, are as follows: (a) for medical expenses and disability payments under the federal Social Security Act, any federal, state, or local income disability act, or any other public program; (b) under any health, sickness, or income disability insurance or automobile accident insurance that provides health benefits or income disability coverage, and any other similar insurance benefits available to the plaintiff, except life insurance; (c) under any contract or agreement of any person, group, organization, partnership, or corporation to provide, pay for, or reimburse the costs of hospital, medical, dental, or other health care services, except gifts or gratuitous contributions or assistance; (d) any contractual or voluntary wage continuation plan provided by an employer or other system intended to provide wages during a period of disability; and (e) any other source, except the assets of the plaintiff or of the plaintiff's immediate family if the plaintiff is obligated to repay a member of the plaintiff's immediate family. ¶ 118 The District Court determined, under a plain-meaning analysis, that the Social Security survivor benefits received by Schuff and her children were neither a medical expense nor a disability payment under subpart (a) and therefore were not identified under the statute as a collateral source that must be deducted from Schuff's wrongful death recovery pursuant to § 27-1-308, MCA. We agree. ¶ 119 Social Security benefits, as a potential collateral source under subsection (1) of § 27-1-307, MCA, are specifically addressed under subpart (a), which requires that to be deemed a collateral source, the payment received by the plaintiff must be for medical expenses and disability payments. Among the named sources of these medical expenses and disability payments is the federal Social Security Act. The subpart also, more generally, identifies any other federal, state, or local income disability act, or any other public program as a source for these two kinds of payments. ¶ 120 First, Klemens does not argue that the collateral statute is, as a whole or in part, ambiguous. Therefore, we need not turn to legislative history for guidance; rather, the legislative intent of § 27-1-307, MCA, must be gleaned from the plain meaning of the language as set forth by the Legislature in the statute. See Smart v. Montana Historical Soc. (1996), 277 Mont. 89, 94-95, 918 P.2d 670, 674 (citations omitted). Thus, because the issue of ambiguity was not raised, our task pursuant to § 1-2-101, MCA, does not include speculation concerning whether a particular term or provision was a product of oversight or poor draftsmanship. See generally Wentz v. Montana Power Co. (1996), 280 Mont. 14, 20, 928 P.2d 237, 241; American Linen Supply Co. v. Department of Revenue (1980), 189 Mont. 542, 545, 617 P.2d 131, 133. ¶ 121 Under a plain-meaning interpretation of § 27-1-307(1)(a), MCA, Schuff and her children are not receiving disability benefits from Social Security because either she or her husband are disabled, and therefore unable to work. See 42 U.S.C. § 423. Rather, she and her children are receiving survivor benefits, due to the sudden and tragic loss of her husband's life, which are identified under an entirely different section of the Social Security Act, and funded by an entirely different source. See 42 U.S.C. § 402. See generally Mathews v. de Castro (1976), 429 U.S. 181, 185-86, 97 S.Ct. 431, 434, 50 L.Ed.2d 389; Smith v. Board of Trustees (1996), 122 N.C.App. 631, 471 S.E.2d 121, 123. The same analysis obviously applies to the statute's reference to medical expenses. Again, as written, subpart (a) identifies two distinct kinds of Social Security payments that must be deducted from a plaintiff's judgment, both of which by definition do not include Schuff's receipt of Social Security payments for survivor benefits. ¶ 122 In the context of § 27-1-307, MCA, entitled Definitions, if the Legislature had truly wished to characterize any and all kinds of Social Security payments as a collateral source, rather than just the two specific kinds, it could have easily said so-and, under our rules, plainly chose to remain silent. Therefore, because the Legislature specifically included these terms, a court should properly exclude all other kinds of Social Security as collateral sources in construing the statute as a whole-i.e., the expression of these specific kinds of Social Security payments in subpart (1)(a) excludes other types of Social Security payments not mentioned ( expressio unius est exclusio alterius. ) ¶ 123 Klemens argues that any distinction that might be drawn between disability and survivorship benefits is irrelevant for purposes of MCA § 27-1-307(1)(a) and that the reference to the more general term any other public program under subpart (a) was obviously intended to include Schuff's Social Security survivor benefits. Klemens has failed, however, to cite any authority that supports such an approach to statutory construction. Moreover, as we have already noted, general words will be construed according to more specific and particular preceding words ( ejusdem generis. ) Accordingly, the general phrase any other public program is construedand limitedby the more specific reference to medical expenses and disability payments. ¶ 124 The application of the foregoing rules to our interpretation of § 27-1-307(1)(a), MCA, also applies to Klemens' contention that subpart (e) under § 27-1-307, MCA, should be construed to include all other unnamed kinds of Social Security benefits. We find little merit in this argument as well. ¶ 125 Subpart (e) provides that in addition to the specific kinds of sources identified in subparts (a) through (d), any other source except the assets of the plaintiff' should qualify as a collateral source deduction. According to Klemens, subpart (e) should include the other sourcethe payment of Social Security survivor benefits. This interpretation would effectively repeal subpart (a) as to Social Security payments or render that subpart meaningless surplusage. Such an interpretation invokes yet another rule of statutory construction: The legislature does not perform useless acts. See American Linen Supply Co., 189 Mont. at 545, 617 P.2d at 133. Hence, if we were to rule that the general language of part (1) and subpart (1)(e) controls the specific language of (1)(a) through (d), contrary to our well-settled rules of statutory construction and our case law, we would upset the very legislative scheme that the Legislature chose to enact by its enumeration of these specific kinds of collateral source payments. ¶ 126 Again, if the Legislature had truly wished that a collateral source be any other possible source except the assets of the plaintiff, then it could have easily said soand simply could have omitted the carefully detailed subparts (a) through (d). Accordingly, we hold that the plain meaning of any other source under subpart (e) means just what it says: any source other than those identified and addressed in subparts (a) through (d), which would obviously exclude Social Security, under subpart (a). ¶ 127 We conclude, therefore, that the District Court did not err when it determined that Schuff's Social Security benefits were not a collateral source identified under § 27-1-307, MCA, and should not be deducted from the jury award. ¶ 128 In summary, we hold that the District Court did not err when it determined that Schuff's receipt of workers' compensation death benefits and Social Security survivor benefits were not collateral sources that could be deducted from the jury verdict award. We further hold that the District Court erred, however, when it concluded that Schuff's receipt of $203,000 in workers' compensation medical and funeral expense payments was a collateral source that could be deducted from the jury verdict award.