State Farm Mut. Auto. Ins. Co. v. Lennartson

872 N.W.2d 524

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant,

v.Angela Mary LENNARTSON, Respondent,Katie Foss, Respondent.

Nos. A14–0132

A14–0224.

Supreme Court of Minnesota.

Dec. 16, 2015.

Suzanne Wolbeck Kvas, Lutter, Gilbert & Kvas, LLC, Eagan, Minnesota, for appellant.

D. Patrick McCullough, Ashley Bonine, McCullough & Associates, P.A., Saint Paul, Minnesota, for respondents.

James S. Ballentine, Schwebel, Goetz & Sieben, P.A., Minneapolis, Minnesota, for amicus curiae Minnesota Association for Justice.

OPINION

WRIGHT, Justice.

The two cases before us in this consolidated appeal involve a dispute over the obligation of an insurer to pay no-fault medical-expense or income-loss benefits after the same expenses or losses were recovered in a tort action. We consider two questions: (1) whether the Minnesota No–Fault Automobile Insurance Act (No–Fault Act), Minn.Stat. §§ 65B.41 –.71 (2014), bars an insured from recovering no-fault benefits for medical expenses already recovered as damages in a negligence action; and (2) whether collateral estoppel bars an insured from seeking medical-expense or income-loss benefits in no-fault arbitration when the insured has previously recovered damages for the same expenses or losses in a negligence action. With respect to the first question, we conclude that the plain language of the No–Fault Act does not bar an insured from recovering no-fault benefits for medical expenses previously recovered in a negligence action. Moreover, there is no legal basis to look beyond the plain meaning of the statutory text and import such a bar into the No–Fault Act. With respect to the second question, we conclude that collateral estoppel does not bar an insured from seeking medical-expense or income-loss benefits in no-fault arbitration after recovering the same expenses or losses as damages in a negligence action. Therefore, we affirm the decision of the court of appeals that neither the No–Fault Act nor collateral estoppel barred the arbitrators' awards of no-fault benefits to respondents.

I.

Respondents Angela Lennartson and Katie Foss were involved in separate car accidents and recovered damages in their respective negligence actions. Subsequent to their recovery of damages, each was awarded no-fault benefits from their insurer, appellant State Farm Mutual Automobile Insurance Company, in arbitration proceedings under the Minnesota No–Fault Insurance Act (No–Fault Act), Minn.Stat. §§ 65B.41 –.71. We address below the relevant facts of each case.

Lennartson was injured in a car accident in August 2008. She obtained medical treatment for her injuries and sought no-fault benefits from her insurer, State Farm, for the resulting medical expenses. When the accident occurred, Lennartson was covered by her parents' State Farm insurance policy, which had a no-fault medical coverage limit of $40,000. State Farm discontinued Lennartson's no-fault benefits in January 2010, after the results of Lennartson's independent medical examination. By that time, State Farm had paid Lennartson $11,671 in no-fault medical-expense benefits.

Lennartson next sued the driver of the other vehicle for negligence, claiming $23,910 in past medical expenses. In November 2012, a jury awarded Lennartson, in addition to other relief, the entire amount of damages that she sought for past medical expenses. The district court deducted the no-fault benefits State Farm had already paid to Lennartson, as required by Minn.Stat. § 65B.51, subd. 1.

Lennartson subsequently petitioned for no-fault arbitration, seeking reimbursement for the same medical expenses that the jury had awarded in the negligence action. The arbitrator awarded Lennartson $11,790 in past medical expenses plus interest. State Farm moved to vacate the award on two grounds. First, State Farm argued that Lennartson obtained a double recovery, which contravenes the public policy of the No–Fault Act. Second, State Farm maintained that collateral estoppel barred the arbitration. The district court granted State Farm's motion to vacate Lennartson's arbitration award, concluding that both the express public policy purpose of the No–Fault Act and collateral estoppel bar an award of benefits in a no-fault arbitration based on the same medical expenses previously awarded as damages in a negligence action.

Katie Foss was injured in a car accident in November 2009. She obtained medical treatment for her injuries and sought no-fault benefits from her insurer, State Farm. The medical coverage limit for Foss's State Farm policy was $50,000 and the income-loss limit was $20,000. State Farm discontinued Foss's no-fault benefits in June 2012, after the results of Foss's independent medical examination. By that time, State Farm had paid Foss $39,667 in no-fault medical-expense benefits.

In October 2011, prior to State Farm's discontinuation of her no-fault benefits, Foss brought an action in negligence against the other driver involved in the collision. Foss claimed $46,641 in past medical expenses and $7,574 in past income loss. In January 2013, the jury awarded Foss $19,760 in past medical expenses, but did not award damages for past income loss.

Following the conclusion of her lawsuit, Foss petitioned for no-fault arbitration, seeking no-fault benefits for the past medical expenses and income loss that she had not recovered in the negligence action. The arbitrator awarded Foss $8,284 in no-fault benefits for past medical expenses and $3,783 for wage loss. State Farm moved to vacate the arbitration award, arguing that collateral estoppel barred the no-fault arbitration. The district court denied State Farm's motion, concluding that collateral estoppel did not preclude Foss from arbitrating her claim for no-fault benefits for medical expenses and wage loss that she had claimed but had not recovered in her negligence action.

Lennartson appealed the district court's decision against her, and State Farm appealed the district court's decision in favor of Foss. The cases were consolidated on appeal. The court of appeals affirmed the decision in favor of Foss and reversed the decision against Lennartson. State Farm Mut. Auto. Ins. Co. v. Lennartson, 857 N.W.2d 713, 725 (Minn.App.2014). The court of appeals concluded that the No–Fault Act does not preclude an insured from obtaining no-fault benefits for the same economic loss for which damages were previously awarded in a negligence action. Id. at 721. The court of appeals also concluded that collateral estoppel does not bar an insured who brings a negligence action from later seeking benefits for the same economic loss in no-fault arbitration. Id. at 722. We granted State Farm's petition for review.

II.

We first address whether the No–Fault Act bars an insured from seeking no-fault benefits for a loss that has been previously recovered in a negligence action. This issue is raised only in Lennartson's case.¹

The No–Fault Act mandates benefits for "basic economic loss" from injuries "arising out of the maintenance or use of a motor vehicle." Minn.Stat. § 65B.44, subd. 1(a). The No–Fault Act has several purposes, including "to relieve the severe economic distress of uncompensated victims of automobile accidents within this state," "to encourage appropriate medical and rehabilitation treatment of the automobile accident victim" by ensuring "prompt payment" of benefits for basic economic loss, and "to provide offsets to avoid duplicate recovery." Minn.Stat. § 65B.42(1), (3), (5).

In this appeal, State Farm renews the two primary arguments it raised below, that (1) Lennartson's no-fault award should be vacated because Lennartson no longer had a "loss" within the meaning of the No–Fault Act after recovering damages in negligence for all of her claimed past medical expenses, and (2) Lennartson's double recovery is contrary to the purpose of the No–Fault Act. Both arguments present questions of statutory interpretation, which we review de novo. Staab v. Diocese of St. Cloud, 853 N.W.2d 713, 716 (Minn.2014). The goal of statutory interpretation is to effectuate the intent of the Legislature. Minn.Stat. § 645.16 (2014) ; Brayton v. Pawlenty, 781 N.W.2d 357, 363 (Minn.2010). When the Legislature's intent is clear from the unambiguous language of a statute, we interpret the statute according to its plain meaning. State v. Rick, 835 N.W.2d 478, 482 (Minn.2013). But if a statute is susceptible to more than one reasonable interpretation, the statute is ambiguous and we may consider other factors to ascertain the Legislature's intent. Lietz v. N. States Power Co., 718 N.W.2d 865, 870 (Minn.2006). "[J]udicial construction of a statute becomes part of the statute as though written therein." Caldas v. Affordable Granite & Stone, Inc., 820 N.W.2d 826, 836 (Minn.2012).

A.

We first address whether Lennartson had a medical-expense "loss" entitling her to no-fault benefits after recovering all of her claimed past medical expenses in the negligence action. The No–Fault Act requires that no-fault insurance provide "reimbursement for all loss suffered through injury arising out of the maintenance or use of a motor vehicle." Minn.Stat. § 65B.44, subd. 1(a). The No–Fault Act defines "loss" as "economic detriment resulting from the accident causing injury, consisting only of" six statutorily defined categories, including "medical expense." Minn.Stat. § 65B.43, subd. 7.

State Farm argues that Lennartson does not have a reimbursable "loss" within the meaning of section 65B.43, subdivision 7, because after recovering all of her claimed past medical expenses in the negligence action, "Lennartson does not meet the threshold requirement of ‘economic detriment.’ " We recently clarified, however, that a claimant need not independently prove "economic detriment" in order to have a reimbursable "loss" under the No–Fault Act. Schroeder v. W. Nat'l Mut. Ins. Co., 865 N.W.2d 66, 68–69 (Minn.2015). Rather, "if an injured person suffers a loss—in other words, if he or she satisfies the...