July 18, 2019

Colorado Court of Appeals: Collateral Source Statute Does Not Abrogate the Common Law Rule Prohibiting Evidence of Collateral Sources

The Colorado Court of Appeals issued its opinion in Crossgrove v. Wal-Mart Stores, Inc. on June 25, 2010.

Personal Injuries—Collateral Source Rule.

In this personal injury case, plaintiff appealed the judgment for damages entered on a jury verdict against defendant Wal-Mart Stores, Inc. (Wal-Mart). The judgment was vacated in part and the case was remanded.

Plaintiff was struck on the head by a manually operated overhead garage door while delivering cookies to a Wal-Mart store. Based on a negligence theory, he sued Wal-Mart for injuries, claiming in pertinent part more than $240,000 in billed medical expenses. The trial court allowed Wal-Mart to present evidence to the jury that plaintiff’s medical providers accepted $40,000 in full satisfaction of his medical bills. Plaintiff also testified to the full amount ($242,293.86) billed by his providers, as well as his loss of income ($101,520). The jury returned a verdict for plaintiff, awarding him a total of $50,000 for economic losses and an additional $27,375 in noneconomic damages. The jury also determined plaintiff was 20 percent at fault. The court thereafter reduced the award by the 20 percent, plus the $40,000 paid by third parties.

On appeal, Wal-Mart contended that the collateral source rule is not implicated by presentation of the discounted amount paid in satisfaction of plaintiff’s medical bills, as long as the source of payment is unidentified. Colorado’s common law collateral source rule is not limited to protecting the cash amounts paid to providers for services rendered. Evidence of the amount paid by third-party payors and, conversely, the amount discounted (or written off) from the billed amount due under a contract between the third-party payor and the provider, is inadmissible under the common law collateral source rule even to show the reasonable value of services rendered, because these payments and discounts constitute collateral sources. Further, the collateral source statute does not abrogate the common law rule prohibiting evidence of collateral sources at trial as it applies only after the verdict is received from the fact finder. Therefore, the trial court erroneously admitted collateral source evidence. The judgment was vacated as to the amount of damages, and the case was remanded for a new trial on the issue of damages, after which the trial court shall adjust the verdict in accordance with the collateral source statute.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on June 25, 2010, can be found here.

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