Court Opinion

ID: 9548167
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:58:38.658947+00
Date Added: 2024-06-11T15:18:33.686884
License: Public Domain

BURKE, Justice,
joined by MOORE, Justice, dissenting in part.
I dissent from that part of the court’s opinion holding that the trial court erred in permitting Providence Washington to be joined as an involuntary plaintiff, and in permitting the jury to learn of Tolan’s agreement with Providence Washington. Otherwise, I concur.
I
Strict adherence to the evidentiary aspect of the collateral source rule was abandoned in Truckweld Equipment Co. v. Swenson Trucking & Excavating, 649 P.2d 234 (Alaska 1982). In Truckweld we held that an insurance company holding a subrogated interest is subject to compulsory joinder, as a real party in interest, under Alaska Civil Rule 17(b). Once the insurance company is joined, the jury must be told, at least in general terms, why the insurance company is a party. The critical issue, then, is whether Providence Washington was properly joined as an involuntary plaintiff.
Even though Providence Washington’s interest was based on its payment of workers’ compensation benefits, I would hold the joinder in this case proper, because Tolan entered into a contractual arrangement with Providence Washington, which altered the statutory distribution of any proceeds of his third party action. Under these circumstances, joinder of the partial subrogee was appropriate under Truckweld and, in my judgment, not prohibited by our holding in Exxon Corp. v. Alvey, 690 P.2d 733 (Alaska 1984).
II
I disagree also with the court’s holding that the trial court erred in admitting into evidence the agreement between Providence Washington and Tolan.1 The opera*1273tive provisions of this agreement, which was recorded in a letter sent by Providence Washington’s attorney to Tolan’s attorney, are:
1. [It is agreed by both Providence Washington and Mr. Tolan that you and I will share 40% of any recovery, whether those fees come from the carriers or Mr. Tolan’s portion.]
2. It is agreed that Providence Washington will advance all costs of the litigation. These costs will be returned to them off the top of any recovery.
3. It is agreed that any expenses incurred by Mr. Tolan as a result of this litigation will be reimbursed by the carrier as a cost of the litigation.
4. The carrier will receive 40% of any recovery until it has received 60% [100% minus our 40%] of their Workmen’s Compensation lien.
5. It is agreed that Mr. Tolan will receive 20% of any recovery from the first dollar.
6. Once Providence Washington has received all of its entitlement under this formula, Mr. Tolan will receive the balance, subject to our attorney fees.2
The agreement was not introduced in order to mitigate ERA’S liability for damages. Instead, ERA sought to introduce the agreement during cross-examination of Tolan in order to impeach his credibility. ERA had already introduced considerable evidence which indicated that prior to signing this agreement on April 21, 1980, Tolan had never indicated to anyone that the helicopter carrier was at fault for the accident. He filed suit only after being urged to do so by Glenn Smith, a representative of Providence Washington. After April 21, the litigation was commenced, and in later depositions Tolan repeatedly blamed the helicopter company and pilot for his injuries. ERA alleged the litigation agreement accounted for Tolan’s change of attitude.
My colleagues reject ERA’S argument, because “on direct examination, Tolan testified that nobody had ever asked him who he thought was at fault for the accident.” From this, they apparently conclude that the agreement provided no reason to suspect Tolan’s trial testimony concerning the cause of the accident. I disagree. Whether or not Tolan was specifically asked who was at fault, there were numerous instances where it would have been reasonable to expect him to assign some blame to ERA, if he believed there was any reason to do so. His persistent failure to make any such claim, until the agreement was signed, could reflect on his credibility at trial in the eyes of reasonable jurors.3
Under the agreement, Tolan received a risk-free opportunity for recovery against ERA, with a guaranteed portion of any recovery. Absent the agreement, Tolan would have had to bear, the risk of loss himself, and would not have received any recovery until Providence Washington had received the amounts it had paid. AS 23.-30.015(b). ERA contended that informing the jury of Tolan’s heightened financial *1274interest m a claim against ERA as a result of the agreement would help the jury to determine the degree of credibility to attach to Tolan’s statements made after the agreement was entered into. In the context of this case, I agree with ERA’s contention and the trial court’s finding that the litigation agreement was relevant on the issue of Tolan’s credibility. In my judgment, the post-accident agreement, that altered the statutory compensation scheme between the injured worker and the insurance company, had considerable probative value on this issue.4
It is also evident that before allowing reference to the agreement, the trial court carefully weighed the probative value of such evidence against the agreement’s potential prejudice to Tolan’s case. All references to attorney’s fees contained in the agreement were stricken, and the trial court gave limiting instructions aimed at minimizing the prejudicial impact of the evidence on the jury’s determination of damages.5 Under the circumstances of this case, I believe that the trial court did not abuse its discretion.
I would affirm the judgment of the superior court.
Justice MOORE has authorized me to state that he joins in my dissent.

. Although other evidence of workers’ compensation was admitted at trial, much of this was not objected to at the time of its admission, nor in appellants’ statement of points on appeal or in their briefs. Accordingly, any objection to *1273admission of other evidence regarding workers’ compensation was waived. Alaska R.Evid. 103; Alaska R.App.P. 210(e).

. The attorney’s fee arrangement appearing in brackets in paragraphs 1 and 4, was not referred to before the jury and was deleted when the exhibit went to the jury.

. On the evening of the alleged accident Tolan went to the camp medic complaining of a back strain. Tolan reported that he had slipped off a pontoon while climbing out of a helicopter. On the accident injury report he completed that evening, Tolan specifically indicated that the accident was not the result of an unsafe condition or an unsafe act.
Shortly thereafter, Tolan discussed the accident with his supervisor, Andrew Potts. On October 6, 1978, Potts completed an employer’s notice of injury form, based on information provided by Tolan. Potts indicated on the form that the accident was not caused by anyone other than Tolan, and that the accident was not caused by the failure of a machine or product.
On October 24, 1978, Tolan was interviewed by Carrie Davis, a claims representative for Providence Washington Insurance Company, the workers’ compensation insurer for Tolan's émployer. Based on Tolan’s description of the accident, Ms. Davis concluded that there was "no third party involved” for subrogation purposes. Ms. Davis’ supervisor, Ernie Dean, reviewed and concurred with Davis’ determination that there was no third party liability.

. See generally, 2 J. Wigmore, Evidence §§ 278, 282a (3d ed. 1940). See also Commercial Credit Plan, Inc. v. Beebe, 123 Vt. 317, 187 A.2d 502 (1963) (trial court erred in refusing to allow plaintiff to inquire whether defendant’s witnesses had agreed to share legal expenses of defendants).

. See Gildersleeve Logging v. Northern Timber Corp., 670 P.2d 372, 382 (Alaska 1983) (limiting instructions cured whatever prejudice may have been caused by admission of insurance).