Court Opinion

ID: 9884575
Source: CourtListenerOpinion
Date Created: 2023-10-06 03:02:24.683969+00
Date Added: 2024-06-11T07:48:39.437395
License: Public Domain

PATIENCE DRAKE ROGGENSACK, J.
¶ 77. 0dissenting). Joseph Leitinger was injured during the course of his employment. His health care providers billed him $154,818.51 for the medical care he received. However, his insurer paid only $111,394.73 to settle the bills in full. No one has paid, or will ever pay, the $43,424.78 difference between the billed amount and *147the paid amount. It is beyond question that under the facts of this case Leitinger is entitled to a damage award that includes the reasonable value of the medical care he received. The question presented here is whether a circuit court must limit the evidence that a jury can hear as the jury determines the reasonable value of an injured party's medical care.
¶ 78. The majority opinion concludes that "the collateral source rule prohibits parties in a personal injury action from introducing evidence of the amount actually paid by the injured person's health insurance company, a collateral source, for medical treatment rendered to prove the reasonable value of the medical treatment." Majority op., ¶ 7. In so doing, (1) it provides damages to Leitinger that are no longer compensatory damages because they exceed the amount necessary to make him whole; (2) it causes the relevancy of evidence to turn on who pays for the medical care provided, rather than on the relationship of the evidence to the reasonable value of the medical care provided, i.e., a fact the jury must determine; and (3) it usurps the jury's fact-finding function by hiding relevant evidence from the jury while at the same time presenting it with misleading evidence that implies that the billed amount is the cost of the medical care provided. Because I conclude that the majority opinion extends the collateral source rule too far, I respectfully dissent.
I. BACKGROUND1
¶ 79. Leitinger was injured in a construction-related accident while employed by his own company, *148Services Unlimited. His insurance company paid $43,424.78 less than the amount billed to satisfy all of the charges for the medical care he received.
¶ 80. At trial, Acuity, who provided liability insurance to various defendants, did not stipulate that the amount that was billed is the reasonable value of the medical care provided, as the insurer had in Koffman v. Leichtfuss, 2001 WI 111, ¶ 7, 246 Wis. 2d 31, 630 N.W.2d 201. Acuity introduced the amount actually paid for Leitinger's medical care as evidence relevant to the jury's determination of the reasonable value of his medical care.2 The circuit court permitted expert testimony on the reasonable value of Leitinger's medical care, as well. The jury awarded $111,394.73, the amount actually paid for the medical care.
¶ 81. Leitinger appealed, and the court of appeals reversed, concluding that the collateral source rule prohibited presentation of evidence of the amount paid by Leitinger's insurance company. Leitinger v. Van Buren Mgmt., Inc., 2006 WI App 146, ¶ 1, 295 Wis. 2d 372, 720 N.W.2d 152. We granted Acuity's petition for review.
II. DISCUSSION
A. Standard of Review
¶ 82. A circuit court's decision to admit or deny admission of proffered evidence is a discretionary determination. State v. Cofield, 2000 WI App 196, ¶ 7, 238 Wis. 2d 467, 618 N.W.2d 214. However, we determine as *149a question of law whether the evidence that was admitted or excluded is relevant to a factual determination the jury must make. See Barrera v. State, 99 Wis. 2d 269, 279, 298 N.W.2d 820 (1980). In the case before us, the collateral source rule is implicated in the circuit court's evidentiary ruling. The scope of the collateral source rule is a question of law that we address independently of the decisions of other courts, but aided by their analyses. Ellsworth v. Schelbrock, 2000 WI 63, ¶ 6, 235 Wis. 2d 678, 611 N.W.2d 764.
B. Relevant Evidence
¶ 83. As a general principle, relevant evidence is admissible. State v. Eugenio, 219 Wis. 2d 391, 411, 579 N.W.2d 642 (1998). Wisconsin Stat. § 904.01 (2001-02)3 provides that "'[Relevant evidence' means evidence having 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." However, the admission of relevant evidence may be precluded by constitution, statute or court rule. Wis. Stat. § 904.02. The collateral source rule is a court-made rule. Cunnien v. Superior Iron Works Co., 175 Wis. 172, 188, 184 N.W. 767 (1921).
C. The Collateral Source Rule
¶ 84. The collateral source rule began as a substantive rule of damages wherein the amount due to an injured party could not be reduced by amounts paid to or on behalf of an injured party by a collateral source. Id. In Cunnien, we concluded that the lower court erred *150in reducing the amount of Cunnien's damages by the $1,500 that his employer had paid him as salary while he was unable to work due to his injuries. Id.
¶ 85. Under the collateral source rule, an injured plaintiff may seek as part of his damages the reasonable value of medical care provided, without a deduction for payments made for those services by collateral sources. Ellsworth, 235 Wis. 2d 678, ¶ 9. The collateral source rule "prevents payments made by the insure [r of the injured party] from inuring to the benefit of the defendant, and the insurer's subrogation rights prevent a double recovery on the part of the plaintiff." Koffman, 246 Wis. 2d 31, ¶ 40.
¶ 86. Over the years, the collateral source rule has taken on an evidentiary character, in addition to its being a substantive rule of damages. Id., ¶ 52. It has been used to prevent, or overrule, the admission of evidence of payments by a collateral source. Id.
¶ 87. In Koffman, the defendant stipulated4 that the amount billed by Koffman's medical care providers was reasonable. Id., ¶ 7. Therefore, we concluded that the admission of the amount actually paid to the medical care providers was "irrelevant" to determining the reasonable value of the medical care provided. Id., ¶ 53. Accordingly, we concluded that the amount paid was not admissible. Id.
¶ 88. While the collateral source rule is grounded in requiring a tortfeasor to pay all the damages that resulted from his tortious conduct and ensuring that he does not benefit from collateral payments made to *151compensate for injuries he caused, id., ¶ 29, it is also grounded in the collateral payer's rights of subrogation that keep a plaintiff from a double recovery for a single injury, id., ¶ 33. We explained in Koffman: "[I]f the [plaintiffs] insurer is barred from exercising its subro-gation rights, the plaintiffs recovery of the reasonable value of medical expenses would simply be reduced by the amounts paid on his behalf in order to prevent a double recovery." Id., ¶ 41.
¶ 89. Our explanation about preventing a double recovery for a single injury while employing the collateral source rule in Koffman is consistent with our earlier statements in Voge v. Anderson, 181 Wis. 2d 726, 732, 512 N.W.2d 749 (1994) and Lambert v. Wrensch, 135 Wis. 2d 105, 121, 399 N.W.2d 369 (1987), as we explained in Koffman. There, we reaffirmed that if the collateral payer is barred from pursuing a subrogation claim for its payment, the tortfeasor is entitled to a reduction in the judgment for that collateral payment. Koffman, 246 Wis. 2d 31, ¶ 39 (explaining that "[i]n Voge v. Anderson, we properly characterized Lambert as holding that 'where the [plaintiffs] insurer is barred from pursuing a claim [of subrogation], the tortfeasor is entitled to a reduction in judgment for the amount of that claim'"). Therefore, the collateral source rule does not always prevent a reduction in a plaintiffs award of damages for amounts paid by a collateral source, nor are such payments always inadmissible evidence. See also Hack v. State Farm Mut. Auto. Ins. Co., 37 Wis. 2d 1, 10, 154 N.W.2d 320 (1967) (concluding that evidence of a collateral source payment is admissible for purposes of impeachment).
¶ 90. The majority opinion asserts, contrary to Wisconsin law, that there are times when the collateral source rule permits double recoveries by an injured *152party. Majority op., ¶ 34 (stating that "an injured person may experience double recovery when the collateral source rule is applied, one recovery from the collateral source and a second recovery from the tort-feasor"). The majority opinion cites Dan B. Dobbs, Dobbs Law of Remedies: Damages, Equity, Restitution § 8.6 at 496 (2d ed. 1993) as support for its assertion, but Dobbs does not support the majority opinion. Rather, Dobbs explains that a plaintiff does not receive a double recovery because of the subrogation and reimbursement rights that are held by the collateral payers. Id. In Wisconsin, as we recently reaffirmed in Koffman, an injured party is not entitled to a double recovery for a single injury under the collateral source rule: "[I]f the insurer is barred from exercising its subrogation rights, the plaintiffs recovery of the reasonable value of medical expenses would simply be reduced by the amounts paid on his behalf in order to prevent a double recovery." Koffman, 246 Wis. 2d 31, ¶ 41.
¶ 91. Furthermore, as its name demonstrates, the collateral source rule applies to payments only if they are made by a "collateral" source. That is, the source of payment must be collateral to the tortfeasor. The majority opinion recognizes this legal principle. Majority op., ¶ 26.
¶ 92. Therefore, if the tortfeasor or the tortfeasor's insurer pays for the medical care provided to the injured party, their payments would not be governed by the collateral source rule because a payment from either the tortfeasor or his liability insurer would not be from a "collateral" source. Restatement (Second) Torts § 920A(2) (1977). Accordingly, the collateral source rule would not prevent the amount paid by a tortfeasor or by the tortfeasor's insurer for a plaintiffs medical care from being presented to the jury *153as evidence of the reasonable value of the medical care, even if a larger amount had been billed for the care than was paid for it.
D. Effects of the Majority Opinion
¶ 93. The jury awarded Leitinger $43,424.78 less than the amount he was billed for the medical care he received. No one has paid this $43,424.78 on his behalf. The collateral source rule, whether a substantive rule of damages or an evidentiary rule relating to what evidence is relevant to a determination of the reasonable value of medical care provided to an injured plaintiff, is grounded in two principles: (1) the collateral payments must not provide a double recovery for a single injury and (2) any collateral payments made to or on behalf of an injured plaintiff should not reduce the amount the tortfeasor will be required to pay to compensate for the injury he caused. Koffman, 246 Wis. 2d 31, ¶¶ 29, 41. The majority opinion cuts against both principles.
¶ 94. The first principle — not providing a double recovery for a single injury — is driven by the policy that an injured party is entitled to be made whole by compensatory damages, but not more than whole. White v. Benkowski, 37 Wis. 2d 285, 290, 155 N.W.2d 74 (1967). There are only two occasions under Wisconsin law for which an injured party receives damages that exceed damages sufficient to make him whole: first, when punitive damages are awarded to punish the wrongdoer, id., or second, when the legislature establishes a statutory right of recovery that exceeds a plaintiffs compensatory damages. See, e.g., Wis. Stat. § 133.18 (awarding treble damages for violations of Wisconsin antitrust laws). "The sole object of compensatory damages is to make the injured party whole for *154losses actually suffered; the plaintiff cannot be made more than whole, make a profit, or receive more than one recovery for the same harm." 22 Am Jur. 2d Damages § 28.
¶ 95. Here, the majority opinion employs the collateral source rule to provide damages that are greater than those that will make Leitinger whole; however, no punitive damages were awarded and no statute afforded a recovery in addition to compensatory damages. The majority opinion simply gives Leitinger a double recovery for part of the reasonable value of the medical care provided, contrary to established precedent. Koffman, 246 Wis. 2d 31, ¶ 41; Voge, 181 Wis. 2d at 732; Lambert, 135 Wis. 2d at 121.
¶ 96. In so doing, the majority opinion creates a new category of damages, without acknowledging what it is doing. It does so by unnecessarily expanding the evidentiary component of the collateral source rule to prohibit the jury from hearing what was actually paid to cover all of Leitinger's medical care bills while admitting evidence of what was billed, even though no one will ever pay that amount.
¶ 97. This new rule of evidence, which will be applied to cases where the plaintiffs insurance company pays the medical care bills, cannot be applied to preclude the admission of the same evidence of payment when a tortfeasor's insurer pays for the medical care. This is so because a payment from the tortfeasor's insurer is not a payment from a collateral source. Therefore, the majority opinion will produce inconsistent evidentiary rulings, where the admissibility of evidence will not depend on whether the evidence is actually relevant to the reasonable value of the medical care provided to an injured person, i.e., a fact that a jury must find, but rather, it will depend on who pays for the *155medical care. Facilitating such inconsistent evidentiary rulings should be a red flag to the majority opinion that it goes too far in its extension of the collateral source rule.
¶ 98. As I have explained above, Leitinger will never have to pay the amount billed, nor will anyone else. However, it does not follow that there is no cost to anyone for the $43,424.78 that Leitinger will collect. Liability insurance premiums will rise to cover this new wrinkle in damages that a liability insurer will be required to pay, even though a jury decided that these amounts are not needed to fully compensate the injured party. And query, if the amount billed is actually the reasonable value of the medical care provided, shouldn't it be paid to the persons who provided that care, as it is they who have not been fully compensated?
¶ 99. The majority opinion also implies throughout that the collateral source rule has been employed without exception any time there is a payment from a collateral source. However, our decisions in Koffman, Voge and Lambert show that is not correct. I recognize that in Koffman we said that "[w]here the plaintiffs health care providers settle the plaintiffs medical bills with the plaintiffs insurers at reduced rates, the collateral source rule dictates that the defendant-tortfeasor not receive the benefit of the written-off amounts." Koffman, 246 Wis. 2d 31, ¶ 30. However, we reached this conclusion after the defendants stipulated that the amount billed was the reasonable value of the medical services provided. Id., ¶ 7. Acuity made no such stipulation here.
¶ 100. Furthermore, the statement at ¶ 30 of Koffman that is quoted immediately above must be read in the context of the issue we now face, i.e., can the jury consider the amount paid — together with any other *156relevant evidence the parties care to present — as it decides the reasonable value of the medical care provided to Leitinger? With no stipulation from Acuity that the amount billed for the medical care is reasonable, there is nothing to support the conclusion that the amount billed is any more relevant to a determination of the reasonable value of the medical care provided than is the amount paid for that care. I favor letting the jury decide jury questions. As has been explained:
[C]oncealing relevant information from the jury does not further the legitimate purpose of the collateral source rule. ... It serves no principled purpose for courts to diminish the jury's role through a judge-made policy of concealment. Other rules of damages are imparted to the jury through instructions from the court; courts should treat the collateral source rule in the same way.
Joel K. Jacobsen, The Collateral Source Rule and the Role of the Jury, 70 Or. L. Rev. 523, 541 (1991).
¶ 101. There is an additional reason why the amount paid should not be excluded from evidence a jury can consider while the amount billed is admitted. It has been said that the amount billed for medical expenses has become a fictitious amount. See Jacobsen, supra; John Dewar Gleissner, Proving Medical Expenses: Time for a Change, 28 Am. J. Trial Advoc. 649 (2005); Robert Hernquist, Arthur v. Catour: An Examination of the Collateral Source Rule in Illinois, 38 Loy. U. Chi. L.J. 169 (2006).
If the higher stated medical bill, an amount that never was and never will be paid, is admitted without evidence of the lower reimbursement rate, the jury is basing their verdict on "mere speculation or conjecture." The difference between the stated bill and the paid charges ... is purely fictional as a true charge.
Gleissner, 28 Am. J. Trial Advoc. at 656.
*157III. CONCLUSION
¶ 102. Therefore, I conclude that the majority opinion extends the collateral source rule too far, and in so doing: (1) it provides damages to Leitinger that are no longer compensatory damages because they exceed the amount necessary to make him whole; (2) it causes the relevancy of evidence to turn on who pays for the medical care provided, rather than on the relationship of the evidence to the reasonable value of the medical care provided, i.e., a fact the jury must determine; and (3) it usurps the jury's fact-finding function by hiding relevant evidence from the jury while at the same time presenting it with misleading evidence that implies that the billed amount is the cost of the medical care provided. Accordingly, I respectfully dissent.
¶ 103. I am authorized to state that Justice DAVID T. PROSSER joins in this dissent.

 The factual and procedural backgrounds of this case are undisputed for purposes of this review.

 Leitinger objected to the admission of this evidence, but the circuit court agreed that the evidence was relevant to a question the jury was to decide. Therefore, the amount paid for Leitinger's medical care was before the jury.

 All subsequent references to the Wisconsin Statutes are to the 2001-02 version unless otherwise noted.

 This stipulation affected the reasoning in our decision because we did not explain why the collateral source rule, which had heretofore been applied to payments made on behalf of the injured party, could now be applied to non-payments.