This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
IN COURT OF APPEALS
Rothers Construction, Inc.,
Swift County District Court
File No. C399263
Amy J. Doll, Fluegel, Helseth, McLaughlin, Anderson & Brutlag, Chtd., 215 Atlantic Avenue, PO Box 527, Morris, MN 56267 (for appellant)
Gregory R. Anderson, Anderson, Larson, Hanson & Saunders, P.L.L.P., 331 SW 3rd Street, PO Box 130, Willmar, MN 56201 (for respondent)
Considered and decided by Lansing, Presiding Judge, Anderson, Judge, and Halbrooks, Judge.
Appellant Rick Kasuske was terminated from his position with respondent Rothers Construction, Inc., after he tested positive for drug use. Appellant filed a wrongful-termination suit, alleging that respondent discharged him following a positive drug test in violation of Minn. Stat. § 181.953 (2000). Prior to the conclusion of trial, appellant’s counsel moved for a mistrial based on violations of the trial court’s rulings on motions in limine and the admission of prejudicial evidence. The motion for mistrial was denied. The jury determined that respondent discharged appellant in violation of the statute but found that appellant did not suffer any damages. The trial court denied appellant’s motion for a new trial. Appellant contends that a new trial is warranted because respondent violated an in limine order by introducing prejudicial and irrelevant evidence, and that the trial court erred by permitting respondent to introduce evidence of the stipulation of settlement of a workers’ compensation claim. Because the introduction of the settlement agreement was improper and prejudicial, we reverse and remand for a new trial on damages.
Appellant Rick Kasuske was hired in May 1998, by respondent Rothers Construction, Inc., as the foreman for its grain-bin-building crew. Respondent is owned and operated by Jon and Sandy Rothers and their sons, Jason and James.
On September 28, 1998, appellant was injured on the job when he fell off some scaffolding. He was taken to Springfield Medical Center for evaluation and treatment. Believing that appellant was under the influence of drugs when the accident occurred, James Rothers requested that the medical center test appellant for substance abuse. Appellant did not consent to the test and was unaware of it until he received a letter of termination dated October 14, 1998, from Sandy Rothers. The letter stated that appellant’s termination was based on the medical report establishing the “mood altering substance” in his system.
Appellant applied for unemployment benefits in South Dakota, his resident state, but his claim was denied because of the positive drug test. Respondent’s workers’ compensation insurer also refused to pay benefits to appellant on the ground that appellant’s drug use was the cause of his accident.
Appellant brought a wrongful-termination action in district court, arguing that respondent violated Minn. Stat. §§ 181.951-.953 (2000), which regulates drug testing in the workplace. While his wrongful-termination suit was pending, appellant settled his workers’ compensation claim for $6,000. The 12-page settlement stipulation stated, among other provisions, that appellant agreed to a full, final, and complete settlement of any and all claims he may have against respondent and its insurer arising out of the Minnesota Workers’ Compensation Act, Minn. Stat. ch. 176 (2000), with the exception of any future medical expenses.
Prior to trial, appellant moved in limine to exclude all references to drug use. The trial court ruled that evidence of appellant’s drug use would be allowed only if appellant “opened the door” by rationalizing why he tested positive for drugs on the day of the accident, by testifying, for example, that he had been exposed to second-hand marijuana smoke.
Respondent’s theory of defense at trial was that appellant’s discharge was based on overall dissatisfaction with appellant’s job performance rather than the reason stated in Sandy Rothers’s letter. The Rothers family members testified that they were disappointed in appellant’s leadership abilities, which resulted in many mistakes being made and disagreements among crew members. Respondent estimated that appellant cost it $15,000 in additional labor and time costs. But because the building season was so short, respondent had earlier demoted appellant rather than firing him.
Appellant objected during trial when the trial court allowed respondent to introduce the workers’ compensation settlement stipulation into evidence. During cross-examination, James Rothers testified that he fired appellant immediately after the accident because it was a seasonal job and his injuries would have prevented him from working. As impeachment of James’s explanation of the firing, appellant’s counsel offered into evidence a form entitled “First Report of Injury,” on which James had noted that he had a “feeling drugs may be involved” in the accident, and so he had asked for a drug test. The form did not include any reference to a workers’ compensation settlement or any dollar amount. On redirect, respondent began asking James about the workers’ compensation award appellant later received. Appellant objected to this line of questioning, but respondent successfully argued that appellant had raised the “spectrum” of workers’ compensation issues. The trial court allowed respondent to admit the complete, unredacted settlement agreement into evidence.
The second subject of evidentiary rulings at issue concern appellant’s drug use. Appellant’s counsel avoided the subject on direct examination of appellant. During cross-examination, respondent’s counsel asked appellant twice why he was “surprised” that he failed the drug test. Over appellant’s counsel’s objections, the trial court ordered appellant to explain. The following exchange occurred:
Q: Why were you surprised that the result itself was positive?
A. Because I don’t – I didn’t know how I could test positive.
Q. How would you explain it?
A. Being around some of the neighbors * * * .
Q. In other words, did you experience marijuana smoke from someone else?
A. Could have been, yes.
The jury determined that appellant had been wrongly discharged because of a positive drug-test result, but found that the discharge was not the cause of his lost wages and awarded no damages.
Appellant made a motion for a new trial. The trial court denied appellant’s motion, finding his arguments too speculative and the jury’s verdict to be supported by the evidence. This appeal follows.
D E C I S I O N
We review an appeal from a denial of a motion for a new trial on an abuse of discretion standard. Appellant argues that the trial court’s evidentiary rulings in two areas caused the jury to be confused or to render a verdict that was the result of improper passion and prejudice. First, appellant argues that respondent violated the trial court’s in limine rulings by continually raising allegations about appellant’s drug use. We agree that respondent acted inappropriately and reject the argument that appellant “opened the door” to such allegations. Appellant was not attempting to rationalize the positive test result; rather, respondent forced the door open by repeatedly asking appellant why he was surprised by the positive drug-test result. Moreover, despite appellant’s sustained objections, respondent continued to raise the specter of drug use by eliciting subsequent hearsay testimony from the Rotherses about allegations of appellant’s drug use made by co‑workers.
We must then address whether appellant’s claim that these allegations prejudiced or confused the jury such that a new trial is warranted. “Entitlement to a new trial on the grounds of improper evidentiary rulings rests upon the complaining party’s ability to demonstrate prejudicial error.” Kroning v. State Farm Auto. Ins. Co., 567 N.W.2d 42, 46 (Minn. 1997) (quotation omitted). “When an objection is made and the trial court issues a curative instruction, a new trial is unnecessary unless the misconduct is extremely prejudicial.” Mueller v. Sigmond, 486 N.W.2d 841, 844 (Minn. App. 1992) (quotation omitted), review denied (Minn. Aug. 27, 1992). The jury did find respondent liable despite hearing the allegations. This demonstrates that appellant suffered no prejudice from this improper line of questioning.
Second, appellant argues that the trial court should not have allowed respondent to introduce testimony about the workers’ compensation settlement award because the collateral-source rule bars such evidence. Appellant further argues that if such evidence was to be considered at all, the court should have applied it only as an offset to any jury award for damages. We agree with appellant that the collateral-source rule barred evidence regarding the award.
Minn. Stat. § 548.36, subd. 1(1) (2000), defines collateral sources to include:
payments related to the injury or disability in question made to the plaintiff, or on the plaintiff’s behalf up to the date of the verdict, by or pursuant to * * * a federal, state, or local income disability or Workers’ Compensation Act; or other public program providing medical expenses, disability payments, or similar benefits * * * .
The purpose of the collateral-source statute is to limit the amount a plaintiff is legally entitled to recover from a tortfeasor. Western Nat’l Mut. Ins. Co. v. Casper, 549 N.W.2d 914, 917 (Minn. 1996). The statute bars juries from hearing evidence “of the existence of collateral sources or any future benefits which may or may not be payable to the plaintiff.” Minn. Stat. § 548.36, subd. 5 (2000).
Even if a type of payment does not fall under the statutory rule, the common-law collateral-source rule still applies. Smith v. American States Ins. Co., 586 N.W.2d 784, 786 (Minn. App. 1998). Under the common-law collateral-source rule,
if the plaintiff’s special damages * * * are paid for by some third person, either as a gift or on the basis of some contractual obligation, this circumstance does not bar the plaintiff from recovering this item from the defendant * * * .
Id. (quoting Beschnett v. Farmers Equitable Ins. Co., 275 Minn. 328, 332, 146 N.W.2d 861, 864 (1966)) (citation omitted).
Here, respondent not only elicited testimony from James Rothers as to the settlement amount, but was further permitted to introduce the entire, unredacted agreement. Although appellant’s award is a stipulation, it is still plainly within the statutory definition of a collateral source. See Minn. Stat. § 548.36, subd. 1(1) (including any payments made pursuant to the workers’ compensation act).
In addition, respondent reminded the jury in his closing argument that appellant had received this award:
Did the discharge on the basis of a positive drug test cause the plaintiff to lose wages?
Well, the fact of the matter is, it did not. If Rick Kasuske lost wages, how did he lose them? It was because he was hurt. No other reason.
* * * *
And the last thing you have to remember is this: Rick Kasuske had workers’ compensation. He received the benefit. He had an agreement.
That agreement was presented. And the agreement directed that he received $6,000.
Although respondent is entitled to present an alternate rationale to explain why appellant was terminated, i.e., because he was injured and, therefore, could not work, the workers’ compensation award is irrelevant to this claim. There is no way to rule out the possibility that the net effect of the evidence left the jury with the impression that appellant had been adequately compensated for both his injuries and for his wrongful termination. See Koehnle v. M.W. Ettinger, Inc., 353 N.W.2d 612, 614 (Minn. App. 1984) (“[I]t is error to admit evidence which shows that appellant received worker’s compensation which is not the basis of a lawsuit when the only purpose of introducing such evidence is to convey the information to the jury.”) (citing Guile v. Greenberg, 192 Minn. 548, 257 N.W. 649 (Minn. 1934)). We, therefore, reverse and remand for a new trial solely on the issue of damages.