Opinion ID: 1975202
Heading Depth: 1
Heading Rank: 7

Heading: costs for requested admissions

Text: Salazar's final assignment of error alleges that the district court abused its discretion by failing to assess costs against the County pursuant to rule 37(c), which states: If a party fails to admit the genuineness of any document or the truth of any matter as requested under Rule 36, and if the party requesting the admissions thereafter proves the genuineness of the document or the truth of the matter, he or she may, within 30 days of so proving, apply to the court for an order requiring the other party to pay him or her the reasonable expenses incurred in making that proof, including reasonable attorney fees. The court shall make the order unless it finds that: (1) The request was held objectionable pursuant to Rule 36(a), or (2) The admission sought was of no substantial importance, or (3) The party failing to admit had reasonable ground to believe that he or she might prevail on the matter, or (4) There was other good reason for the failure to admit. Prior to trial, Salazar requested 28 admissions from the County, asking it to admit that the medical charges incurred by him arising out of the accident were necessary, fair, and reasonable. In response, the County admitted that the services were necessary, but denied that the amounts billed were fair and reasonable. In order to prove that the bills were fair and reasonable, Salazar deposed some of the medical providers and presented that evidence at trial. At trial, the County put forth its rationale for denying that Salazar's medical expenses were fair and reasonable. It contended that the proper measure of compensatory damages was limited to the rate of Medicaid reimbursements or reduced pay agreements, and not to the amount actually provided by the medical provider. The district court considered this issue to be a matter of first impression, but ultimately concluded that compensatory damages depend on the fair and reasonable value of services needed and should not be limited to the amount actually paid to the provider. The district court determined that limiting damages for medical care to amounts received rather than to the value of such medical services would violate Nebraska's collateral source rule. After trial, pursuant to rule 37(c), Salazar filed a motion to assess the County for the reasonable expenses incurred to prove that the medical expenses were fair and reasonable. The expense incurred totaled $5,822.67. Salazar argued that the issue presented was not a matter of first impression because the rule for compensatory damages in Nebraska has always been fair and reasonable value. Salazar argued that the collateral source rule would tend to indicate that Medicaid prices are generally irrelevant. He also argued that prices were irrelevant in his case regardless of the substantive law because Medicaid reimbursements and reduced pay agreements did not exist in his case. The district court overruled Salazar's motion. The court based its decision on rule 37(c)(3). The court determined that the County had good reason to deny the fairness and reasonableness of the medical expenses because a minority of jurisdictions treats the amount received as the fair and reasonable expense as opposed to the actual value charged. A hearing on a motion for expenses pursuant to rule 37(c) is a legal proceeding entirely separate from the underlying proceedings concerning the merits of the case. Kaminski v. Bass, 252 Neb. 760, 567 N.W.2d 118 (1997). The appellate court reviewing a decision on a motion for expenses is to concern itself solely with the evidence established and produced at that hearing. Id. The determination of an appropriate sanction under rule 37 rests within the discretion of the trial court and will not be disturbed on appeal absent an abuse of discretion. Id. Once the party making a motion for sanctions proves the truth of the matter previously denied and that reasonable expenses were incurred in doing so, the burden then shifts to the nonmoving party to prove, by a preponderance of the evidence, one of the four exceptions enumerated in the discovery rule. Id. Applying the foregoing principles of law to the instant case, we conclude that the district court erred in overruling Salazar's motion to assess expenses. As noted previously, rule 37(c) states that a district court shall award expenses incurred in proving a statement previously denied unless one of four exceptions are proved. At the hearing on his motion to assess expenses, Salazar introduced exhibits 555 through 557. The exhibits established that in response to Salazar's request for admissions, the County denied that the medical expenses were fair and reasonable. The evidence also established that Salazar incurred expenses in proving that the expenses were fair and reasonable. The burden then shifted to the County to prove one of the four enumerated exceptions in rule 37(c). The County did not offer any specific evidence at the hearing except to ask the Court to take [judicial] notice of its own files. The district court finally asked: Essentially, what I'm understanding, both counsel are asking me to take into consideration all the evidence that we've received previously in this case in either support or opposition to this motion? Both parties responded affirmatively. Nevertheless, we conclude that the County failed to meet its burden. To ask the court to take judicial notice of its file without specific reference to any evidence necessary to prove one of the four exceptions is not sufficient to meet the nonmoving party's burden. Such evidence fails to provide the court direction either at the original hearing or on appellate review. Because the County failed to meet its burden, the district court was required to award expenses to Salazar pursuant to rule 37(c), thereby making the court's overruling of Salazar's motion an abuse of discretion.