Smith v. Kinningham

2013 COA 103

James C. Smith and Dona Laurita, Plaintiffs-Appellees,

v.Alan W. Kinningham and Accelerated Network Solutions, Inc., Defendants-Appellants.

Court of Appeals No. 12CA0156 Court of Appeals No. 12CA0157

COLORADO COURT OF APPEALS

Announced July 3, 2013

City and County of Denver District Court No. 10CV2395

Honorable Michael A. Martinez, Judge

JUDGMENT AFFIRMED, ORDERS AFFIRMED IN PART

AND REVERSED IN PART, AND CASE REMANDED WITH DIRECTIONS

Division V

Opinion by JUDGE TERRY

Carparelli and Román, JJ., concur

The Paul Wilkinson Law Firm, LLC, Rebecca B. Albano, Denver, Colorado; The Fowler Law Firm, LLC, Timms R. Fowler, Fort Collins, Colorado, for Plaintiffs-Appellees

Jones, Waters, Geislinger & Seymour, LLC, Teresa W. Seymour, Jeffrey A. Garcia, Greenwood Village, Colorado, for Defendants-Appellants

¶1 Defendants, Alan W. Kinningham and Accelerated Network Solutions, Inc. (ANS), appeal the trial court's entry of judgment in favor of plaintiffs, James C. Smith and Dona Laurita. They also appeal several of the trial court's orders. ANS further appeals the trial court's order denying its motion to deem it a prevailing party and award costs and attorney fees. We affirm in part, reverse in part, and remand with directions.

¶2 As an issue of first impression, we consider the application of section 10-1-135(10)(a), C.R.S. 2012, which codified the pre-verdict evidentiary component of the collateral source rule, to evidence of Medicaid benefits paid on behalf of a plaintiff. We conclude that such evidence is inadmissible at trial under that statute. Also as an issue of first impression, we conclude that section 10-1- 135(10)(a) has abrogated the so-called "gratuitous government benefits" exception to the collateral source rule.

I. Background

¶3 Kinningham and Smith were involved in a car accident on a one-way street in Denver. Smith was stopped at a red light and Kinningham was stopped behind him. When the signal changed to green, they proceeded through the intersection. After they crossed the intersection, a driver in a third vehicle – not involved in this action – entered traffic driving the wrong way, and headed toward Smith. Smith braked suddenly to avoid hitting this third vehicle. Kinningham also braked, but was unable to stop in time and rear-ended Smith's car.

¶4 Kinningham was part owner of ANS. ANS was the insured under a policy of insurance on the car that Kinningham was driving, but ANS did not own the car.

¶5 Smith and his wife, Laurita, brought this action against Kinningham and ANS. At the close of plaintiffs' case-in-chief, the trial court granted ANS's motion for directed verdict on all claims against it. The jury returned a verdict in favor of plaintiffs and against Kinningham. The trial court denied Kinningham's motions for a mistrial and a new trial.

II. Discussion

¶6 Defendants raise numerous issues on appeal. In particular, they argue that the trial court erred when it (1) granted plaintiffs' motion in limine to exclude evidence of Medicaid benefits, and denied their C.R.C.P. 56(h) motion for a determination of a question of law on that issue; (2) refused to issue an instruction to the jury on the "sudden emergency" doctrine; (3) denied Kinningham's request for a hearing on the reasonableness of plaintiffs' costs; (4) denied ANS's motion to deem it a prevailing party and award it attorney fees and costs; (5) denied their motion for enlargement of time to designate a non-party at fault; (6) denied their motion for sanctions against plaintiffs; (7) permitted plaintiffs to introduce evidence of liability insurance; (8) admitted evidence of Kinningham's blood alcohol content; and (9) denied their motions for a mistrial and a new trial. While we disagree with the majority of these contentions, we agree that Kinningham was entitled to a hearing on plaintiffs' costs, and that ANS should have been awarded costs as a prevailing party.

A. Evidence of Collateral Source Benefits

¶7 We first consider, and reject, defendants' argument that the trial court erred in granting plaintiffs' pretrial motion to exclude evidence of Medicaid benefits that were paid on Smith's behalf for medical services he received.

1. Standard of Review

¶8 In their response to plaintiff's motion in limine and their C.R.C.P. 56(h) motion for a determination of law, defendants argued that certain evidence – namely, evidence of alleged Medicaid benefits paid on behalf of Smith and the amounts paid to or accepted by Smith's medical providers – was relevant and admissible as evidence of receipt of gratuitous government benefits. Contrary to plaintiffs' argument, by thus raising these issues in the trial court, defendants properly preserved them for appeal. See Vu v. Fouts, 924 P.2d 1129, 1131 (Colo. App. 1996) (to preserve for review an objection to the exclusion of evidence, a party must demonstrate the relevance and admissibility of the evidence); see alsoCRE 103(a)(2) ("Once the court makes a definitive ruling on the record admitting or excluding evidence, either at or before trial, a party need not renew an objection or offer of proof to preserve a claim of error for appeal.") (emphasis added); Silva v. Wilcox, 223 P.3d 127, 131 (Colo. App. 2009) (issue was sufficiently preserved for appeal in appellant's response to a pretrial motion in limine).

¶9 We review a trial court's evidentiary rulings, including pretrial rulings, for an abuse of discretion. Wal-Mart Stores, Inc. v. Crossgrove, 2012 CO 31, ¶7; Ehrlich Feedlot, Inc. v. Oldenburg, 140 P.3d 265, 272 (Colo. App. 2006). A court abuses its discretion when it rules based on an erroneous application of the law, or when its decision is manifestly arbitrary, unreasonable, or unfair. Haralampopoulos v. Kelly, ___ P.3d ___, ___ (Colo. App. No. 10CA0668, Oct. 13, 2011) (cert. granted Sept. 24, 2012); Vu, 924 P.2d at 1131.

¶10 Statutory interpretation is a question of law subject to de novo review. Sperry v. Field, 205 P.3d 365, 367 (Colo. 2009); Colo. State Bd. of Pharmacy v. Priem, 2012 COA 5, ¶16. When interpreting a statute, "we look first to the plain language of the statute, giving the language its commonly accepted and understood meaning." Smith v. Exec. Custom Homes, Inc., 230 P.3d 1186, 1189 (Colo. 2010) (citations omitted). "If a statute is clear and unambiguous on its face, then we need not look beyond the plain language, and we must apply the statute as written." Vigil v. Franklin, 103 P.3d 322, 327 (Colo. 2004) (citations omitted).

2. Analysis

¶11 Colorado's original common law collateral source rule had two distinct components. Under the pre-verdict evidentiary component, evidence of benefits received by a plaintiff from a collateral source – meaning a source independent of the tortfeasor – was to be excluded during trial. The post-verdict component barred a trial court from reducing a successful plaintiff's award on account of the plaintiff's receipt of a collateral source benefit. Wal-Mart Stores, ¶¶11-13.

¶12 Because the issue on appeal involves only whether the trial court erred in excluding evidence of Smith's alleged Medicaid benefits and amounts paid by Medicaid to his healthcare providers, and we are not being asked to determine whether plaintiffs' award should have been reduced post-verdict, we are concerned only with the pre-verdict evidentiary component of the rule, and we need not consider the post-verdict provisions of section 13-21-111.6, C.R.S. 2012.

a. Medicaid Benefits are Paid by a "Collateral Source"

¶13 "A collateral source is a person or company, wholly independent of an alleged tortfeasor, that compensates an injured party for that person's injuries." Smith v. Jeppsen, 2012 CO 32, ¶21; accord Carr v. Boyd, 123 Colo. 350, 356-57, 229 P.2d 659, 663 (1951) ("Benefits received by the plaintiff from a source other than the defendant and to which he has not contributed are not to be considered in assessing the damages.") (citation omitted).

¶14 Though Social Security disability benefits have already been determined to be collateral sources, no Colorado appellate decision has yet addressed whether evidence of Medicaid benefits must be excluded as coming from a collateral source. See Barnett v. Am. Family Mut. Ins. Co., 843 P.2d 1302, 1309-10 (Colo. 1993); see also Haralampopoulos, ___ P.3d at ___ (assuming, without deciding, that the collateral source rule applies to Medicare and Medicaid benefits); Green v. Denver & Rio Grande Western R.R. Co., 59 F.3d 1029, 1032 (10th Cir. 1995) ("Our cases have always treated payments from the public treasury, at least when funded by a tax scheme to which the injured party contributed, as from a collateral source."); Berg v. United States, 806 F.2d 978, 986 (10th Cir. 1986) (concluding that Medicare benefits are a collateral source, and thus the plaintiff's award should not be reduced pursuant to Colorado's collateral source rule).

¶15 Here, the alleged Medicaid benefits were paid on Smith's behalf, and fall squarely within the definition of a collateral source. Therefore, we reject defendants' argument that the trial court erred by not determining whether they were collateral source benefits before it excluded evidence of Medicaid payments at trial. See McLaughlin v. BNSF Ry. Co., 2012 COA 92, ¶¶57-58 (concluding that Railroad Retirement Act disability benefits were a collateral source, and rejecting the defendant's argument that its contributions to those benefits made them non-collateral (citing Eichel v. New York Cent. R.R. Co., 375 U.S. 253, 254 (1963))).

b. Evidence of Payment of Medicaid Benefits on Behalf of Plaintiff Was Inadmissible at Trial

¶16 The pre-verdict evidentiary component of the collateral source rule was codified in section 10-1-135(10)(a), and states, "The fact or amount of any collateral source payment or benefits shall not be admitted as evidence in any action against an alleged third-party tortfeasor." (Emphasis added.) See also Smith, 2012 CO 32, ¶¶13- 19 (section 10-1-135(10)(a) unambiguously codifies...