This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A03-2037

 

Colleen Bisson,

Respondent,

 

vs.

 

The Estate of Leonard William Dean

by and through the Personal Representative

Scott Eller,

defendant and third-party plaintiff,

Appellant,

 

vs.

 

Rhonda Eastlund,

Third-Party Defendant.

 

Filed July 20, 2004

Affirmed as modified

Klaphake, Judge

 

Hennepin County District Court

File No. PI 00-5333

 

Gary L. Manka, Brian A. Thompson, Katz, Manka, Teplinsky, Due & Sobol, Ltd., 225 South Sixth Street, Suite 4150, Minneapolis, MN  55402 (for respondent)

 

James P. Ashley, 7401 Metro Boulevard, Suite 510, Edina, MN  55439 (for appellant)

 

            Considered and decided by Klaphake, Presiding Judge, Halbrooks, Judge, and Forsberg, Judge.*

U N P U B L I S H E D   O P I N I O N

KLAPHAKE, Judge

            This appeal is from a judgment and post-trial order for respondent Colleen Bisson in her negligence action against appellant, Estate of Leonard William Dean, and third-party defendant, Rhonda Eastlund, for injuries arising out of a multi-car accident.  Respondent settled her claim for uninsured motorist benefits with her insurer and, as part of the settlement, the insurer assigned respondent its subrogation rights. 

            Appellant argues that (1) the district court erred in failing to deduct the uninsured motorist settlement from the jury verdict under the collateral source statute; and (2) the district court erred in allowing respondent to substitute the estate as a party two years after the jury trial. 

            By notice of review, respondent argues that the district court incorrectly applied Minn. Stat. § 65B.51, subd. 1 (2002), by offsetting the jury verdict by amounts not paid by the no-fault insurer, and erred by not allowing an offset of the collateral source reduction by the amount paid by her to secure insurance coverage provided under Minn. Stat. § 548.36, subd. 2(2) (2002).  We affirm as modified.

D E C I S I O N

I.  Collateral Source

            Appellant argues that the district court erred in failing to reduce the amount of the jury award by the portion of respondent’s uninsured motorist insurance settlement paid by the insurer.  We disagree.  Minnesota’s collateral-source statute provides in pertinent part:

Subd. 2.  Motion.  In a civil action, whether based on contract or tort, when liability is admitted or is determined by the trier of fact, and when damages include an award to compensate the plaintiff for losses available to the date of the verdict by collateral sources, a party may file a motion within ten days of the date of entry of the verdict requesting determination of collateral sources. If the motion is filed, the parties shall submit written evidence of, and the court shall determine: 

(1) amounts of collateral sources that have been paid for the benefit of the plaintiff or are otherwise available to the plaintiff as a result of losses except those for which a subrogation right has been asserted; and

(2) amounts that have been paid, contributed, or forfeited by, or on behalf of, the plaintiff or members of the plaintiff’s immediate family for the two-year period immediately before the accrual of the action to secure the right to a collateral source benefit that the plaintiff is receiving as a result of losses.

 

Minn. Stat. § 548.36, subd. 2 (2002) (emphasis added).

            The settlement between respondent and her insurer states: “In further consideration of this settlement, [the insurer] hereby assigns to [respondent] any and all subrogation rights, claims and interests which [the insurer] may have against any person or corporation liable for the loss mentioned above.”  This assignment places the settlement squarely into the exception in the collateral source statute as “amounts of collateral sources that have been paid for the benefit of the plaintiff or are otherwise available to the plaintiff as a result of losses except those for which a subrogation right has been asserted.”  Minn. Stat. § 548.36, subd. 2(1) (emphasis added). 

            Next, appellant argues that respondent did not assert her subrogation right because she only provided a copy of the uninsured motorist settlement to appellant before trial, and did not send a notice or assert her subrogation rights in any of the amended complaints.  Respondent asserted her rights for the first time in a post-trial motion.  This court addressed this same issue in Buck v. Schneider, 413 N.W.2d 569, 571 (Minn. App. 1987), where we concluded that “[t]he statute does not require the subrogation right to be asserted in any particular manner.”  The district court did not err in finding respondent properly asserted her subrogation rights.

            Finally, appellant argues that respondent cannot be subrogated to her own rights because it violates the purpose of the collateral source rule.  The primary purpose of the collateral-source statute is to avoid double recovery by a plaintiff.  Imlay v. City of Lake Crystal, 453 N.W.2d 326, 331 (Minn. 1990).  In Buck, this court considered and rejected the argument that appellant makes here. 

While this argument has some superficial appeal, we believe it misses the point.  The real issue is whether subrogation rights that have been assigned back to the plaintiff should be excluded from the collateral source deduction, or whether such an assignment is ineffective.  To resolve this issue, we look at the purpose of the statute.

 

Buck, 413 N.W.2d at 571-72.  We concluded that the purpose of the statute is to prevent windfalls at the expense of defendants, and the apparent purpose of the exception is to “ensure that the amount of collateral sources deducted from the award is the amount to which the plaintiff is actually entitled, and does not include amount plaintiff must ultimately pay over to a subrogee.”  Id. at 572. 

            Appellant contends that respondent failed to provide any consideration; thus, her double recovery violates the purpose of the statute with the result being a windfall for respondent.  This argument ignores the inherent nature of negotiations in the settlement process, and the value given by both the insurer and the insured to the right of subrogation.  See id.  Presumably, respondent gave up a higher settlement in exchange for the right of subrogation.  Thus, respondent’s decision to accept the lower settlement from her insurer, while taking the chance of gaining a greater recovery from the jury, does not result in a windfall.

II.  Substitution of Parties

            Appellant argues that the case was tried without service on a proper defendant and without a motion for substitution of a proper party because Leonard William Dean passed away prior to trial and respondent failed to substitute his estate as a party in a timely manner. 

            Lack of personal jurisdiction is an affirmative defense that may be raised by motion or by pleading.  Minn. R. Civ. P. 12.02. The defense is waived if not raised by motion or pleading.  Minn. R. Civ. P. 12.08.  Appellant did not challenge personal jurisdiction when the underlying claim was filed, when the court entered its final judgment, or in a motion for a new trial.  This defense was raised for the first time in an October 2003 motion, almost two years after the conclusion of the trial.  “A party who takes or consents to any step in a proceeding which assumes that jurisdiction exists or continues has made a general appearance which subjects [it] to the jurisdiction of the court.”  Miss. Valley Dev. Corp. v. Colonial Enters., Inc., 300 Minn. 66, 72, 217 N.W.2d 760, 764 (1974) (quotation omitted).  By failing to raise the issue in a timely manner, appellant waived its objection to personal jurisdiction. 

            Appellant then argues that the district court erred in allowing respondent to substitute parties because almost two years had passed since the trial ended.  On October 28, 2003, appellant contested a motion to substitute the estate as a party.  The district court ordered that the Estate of Leonard William Dean, by and through its personal representative Scott Eller, be substituted for Leonard William Dean. 

            If a party dies and the claim is not extinguished or barred, the court may order substitution of the proper parties.  The motion for substitution may be made by the successors or representatives of the deceased party or by any party and, together with the notice of hearing, shall be served on the parties as provided in Rule 5 and upon persons not parties in the manner provided in Rule 4 for the service of process.

 

Minn. R. Civ. P. 25.01(a).  This rule does not limit the time within which the motion to substitute must be made.  Thus, the district court properly allowed the substitution after the trial.  See Witthuhn v. Durbahn, 279 Minn. 437, 439, 157 N.W.2d 360, 361 (1968). 

III.  No-Fault Deductions

            By notice of review, respondent challenges the district court’s offset of no-fault benefits paid to her by her own insurer.  This issue presents a question of law, which we review de novo.  See Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 393 (Minn. 1998).

            Respondent was paid a total of $17,078.64 by her insurer prior to trial and the jury awarded her $11,721.98.  The district court reduced the jury verdict to zero under Minn. Stat. § 65B.51, subd. 1, which states in relevant part:

With respect to a cause of action in negligence accruing as a result of injury arising out of the operation, ownership, maintenance, or use of a motor vehicle with respect to which security has been provided as required by sections 65B.41 to 65B.71, the court shall deduct from any recovery the value of basic or optional economic loss benefits paid or payable, or which would be payable but for any applicable deductible.

 

“Where the no-fault medical expense benefits paid to the victim of an automobile accident exceed those found reasonably necessary by the jury, the victim’s recovery should be reduced by only the amount found reasonable by the jury.”  Fahy v. Templin, 361 N.W.2d 158, 160 (Minn. App. 1985), review denied (Minn. Apr. 18, 1985). 

            Respondent argues that the district court erred by offsetting the amount of the jury verdict because it disregarded $2,792.34 in medical bills that her insurer did not pay.  No bills were submitted in explanation of the amount.  The district court noted that if respondent’s medical expenses were in fact $19,870.98, she should have submitted that evidence to the jury.  We agree.  The district court did not err by reducing respondent’s recovery under the terms of Minn. Stat. § 65B.51, subd. 1.

            Finally, citing Minn. Stat. § 548.36, subd. 2(2), in support of her position, respondent argues that she is entitled to a credit against the collateral source offset for the amount paid in premiums to secure her no-fault automobile insurance for two years preceding the cause of action, a total of $304.80.  Although the district court did not address this issue, we agree. 

            We look at the language of the statute[1] for the plain meaning of statutory text when it is clear and unambiguous.  Green Giant Co. v. Comm’r of Revenue, 534 N.W.2d 710, 712 (Minn. 1995).

            Under Minn. Stat. 548.36, the court shall determine:

(1) amounts of collateral sources that have been paid for the benefit of the plaintiff or are otherwise available to the plaintiff as a result of losses; and

(2) amounts that have been paid, contributed, or forfeited by, or on behalf of, the plaintiff or members of the plaintiff’s immediate family for the two-year period immediately before the accrual of the action to secure the right to a collateral source benefit that the plaintiff is receiving as a result of losses.

 

Id., subd. 2. 

            It is a fair reading of the statute that the “amounts that have been paid” by the plaintiff “to secure the right to a collateral source benefit” include insurance premiums paid for the past two years.  Thus, we modify the district court’s decision regarding the offset of the insurance premiums and increase respondent’s recovery by $304.80.

            Affirmed as modified.



* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

[1]  We have commented on the issue in the unpublished case, Engle v. Estate of Fischer, 2003 WL 174541 (Minn. App. Jan 28, 2003) (NO. C9-02-1088), review denied (Minn. Apr 15, 2003), but the issue has not been fully addressed.  In Engle, without addressing the merits, this court determined that the trial court properly denied the request on the ground that it was an improper motion for reconsideration and because it was based on evidence not contained in the record.