This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).




Timothy Berg, et al.,



Jasper Development Corp.

of Waconia d/b/a Jasper Homes,


Roland Reinke

d/b/a Reinke Construction,


Gordon Lund,


Filed April 15, 1997


Klaphake, Judge

Carver County District Court

File No. C4-93-1212

Sally M. Spector, Mitchell R. Spector, Joseph T. Herbulock, Abrams & Spector, P.A., 6750 France Avenue South, 126 Southdale Office Centre, Minneapolis, MN 55435-1900 (for Appellant)

Gay B. Urness, Joslin & Urness, P.A., Post Office Box 26280, Minneapolis, MN 55426 (for Respondent Jasper Development)

Lawrence Skoglund, Gina M. Stanaway, Erstad & Riemer, P.A., 3800 West 80th Street, 1000 Northland Plaza, Minneapolis, MN 55431 (for Respondent Reinke)

John E. Varpness, Gislason, Martin & Varpness, P.A., 7600 Parklawn Avenue South, Suite 444, Minneapolis, MN 55435 (for Respondent Lund)

Considered and decided by Randall, Presiding Judge, Klaphake, Judge, and Willis, Judge.



Appellant Timothy Berg, an injured worker, challenges the trial court's reduction of his tort damages award by amounts he received in workers' compensation benefits. Respondents, third-party tortfeasors Jasper Development Corporation of Waconia and Reinke Construction, filed a notice of review and challenge the court's failure to reduce further the future loss of earnings award and its assessment of prejudgment interest on the award for past pain, suffering, and emotional distress. Because the trial court's reduction of damages and prejudgment interest award were supported by the evidence and consistent with the law, we affirm.


The issues in this case involve the application of statutes to essentially undisputed facts. This court therefore need not give deference to the trial court's decision. See Krutsch v. Walter H. Collin GmBh, 495 N.W.2d 208, 214 (Minn. App. 1993), review denied (Minn. Mar. 22, 1993).


Appellant argues that the trial court erred as a matter of law in reducing his $605,000 tort damages award by amounts he received in workers' compensation benefits. Prior to trial, respondents entered into a reverse-Naig settlement with the workers' compensation carrier for appellant's employer. In that settlement, the carrier agreed to extinguish its subrogation interest for $100,000. Appellant claims that separation of workers' compensation benefits from other tort damages, as outlined in Tyroll v. Private Label Chems., Inc., 505 N.W.2d 54 (Minn. 1993), is inappropriate in this reverse-Naig context and that there should be no set-off in the jury award for amounts he received as workers' compensation benefits. We disagree.

It is well settled that an injured worker may not receive tort damages that are duplicative of benefits received as workers' compensation. The Minnesota Supreme Court has recognized that these damages are separate:

[W]hen either the employee or the compensation carrier settles their own claim, the employee's third-party tort action has been effectively separated into one claim for damages recoverable under workers' compensation and another claim for those damages not recoverable under workers' compensation.

Folstad v. Eder, 467 N.W.2d 608, 612 (Minn. 1991).[1]

The action taken by the trial court here was consistent with Folstad and Tyroll. In Tyroll, the supreme court included the following damages in recoverable workers' compensation benefits: "past and future wage loss, loss of earning capacity, and similar items of damages." Id., 505 N.W.2d at 60. The amount of benefits both "paid and payable" is to be agreed upon by the parties or, if not, is to be determined by a judge after a hearing "[p]rior to trial of the jury issues." Id. at 61.

As agreed by the parties, the court held a Tyroll hearing posttrial to determine whether certain items of tort damages duplicated the workers' compensation benefits. The court ordered the following reductions in appellant's tort damages award:



Lost past wages $ 60,000 $40,332.11 $ 19,667.89

Past pain & suffering $200,000 No reduction $200,000.00

Past disability $100,000 $ 6,575.31 $ 93,424.69

Future loss of earnings $ 50,000 $40,174.72 $ 9,825.38

Future pain & suffering $ 50,000 No reduction $50,000.00

Future disability $ 70,000 $16,704.69 $53,295.31

Loss of consortium $ 75,000 No reduction $75,000.00

The trial court's calculations reflect that it allowed reductions only for nonspeculative future damages, available in accordance with the workers' compensation statute. Therefore, we observe no error in the trial court's reduction of appellant's future damages.[2]

Nor do we observe error in the court's refusal to apply the collateral source statute in this reverse-Naig context. Under the collateral source rule, a plaintiff's award may be reduced by the amount of collateral sources "paid" or "available" to a plaintiff, "except those for which a subrogation right has been asserted." Minn. Stat. § 548.36, subd. 2(1) (1994). In Folstad, the supreme court declined to apply the collateral source statute because the subrogation claim settled prior to trial. The verdict, however, did include an award for medical expenses, an item normally covered in a workers' compensation subrogation claim. The court prevented a double recovery by "simply ignor[ing]" or declining to award the portion of the medical expenses that had been paid out prior to trial. Folstad, 467 N.W.2d at 614.


In their notice of review, respondents challenge the trial court's refusal to reduce further the future wage loss award because of the availability of temporary partial disability wage loss benefits estimated payable after retraining. Respondents claim that they introduced evidence that the amount of this benefit would be $9,107 and insist that the future wage loss award should be further reduced by this amount, leaving a net award of $718.28. Respondents further claim that because appellant provided no evidence that he could return to his pre-injury earnings level immediately after retraining, he will receive temporary partial disability wage loss benefits, and these benefits should reduce his damages award. See Minn. Stat. § 176.102, subd. 11(b) (1994) (employee entitled to receive 90-day compensation following retraining depending on whether employee is employed or not and, if employed, whether employee's wages are greater or lesser than pre-injury wages). The trial court specifically found respondents' calculations to be "too speculative to consider for the purposes of reducing [appellant's] jury award by amounts paid and/or payable to him under workers' compensation." We agree. The evidence was speculative and therefore not based upon benefits "paid or payable" to appellant. See Tyroll, 505 N.W.2d at 61.


Finally, respondents contend that appellant is not entitled to prejudgment interest on his award for past pain, suffering, and emotional distress. Minn. Stat. § 549.09, subd. 1(b) (1994) provides for prejudgment interest on "pecuniary damages." In interpreting this language the supreme court has stated that the statute allows

pre-verdict interest irrespective of a defendant's ability to ascertain the amount of damages for which he might be held liable or to stop the running of interest. Since such "interest" cannot be calculated until the amount on which interest is allowed has been fixed by verdict, it is apparent that pre-verdict interest is not conventional interest on a sum of money. Rather, it is an element of damages awarded to provide full compensation by converting time-of-demand (either by written settlement offer or commencement of action) damages into time-of-verdict damages.

Lienhard v. State, 431 N.W.2d 861, 865 (Minn. 1988) (citations omitted). This court has held that a trial court "erred in denying [prejudgment] interest on damages for past pain, disability, and emotional distress." Skifstrom v. City of Coon Rapids, 524 N.W.2d 294, 297 (Minn. App. 1994); see Cox v. Crown CoCo, Inc., 544 N.W.2d 490, 500-01 (Minn. App. 1996) (trial court did not err in awarding prejudgment interest for emotional distress and lost wages). Respondents rely on older and foreign jurisdiction's case law in urging this court to interpret the "pecuniary damages" language to exclude damages for past pain, suffering, and emotional distress. Relying on the clear holdings of the most recent cases on this point, we conclude that appellant is entitled to prejudgment interest on his award for past pain, suffering, and emotional distress.


[ ]1 Normally, the statutory formula set forth in Minn. Stat. § 176.061, subd. 6 (1994) determines the amounts a compensation carrier may be reimbursed from the tortfeasor on its subrogation claim. Subdivision six "does not apply if the compensation carrier settles any time prior to the commencement of trial." Folstad, 467 N.W.2d at 613 (rationale for not applying subdivision six formula to pretrial settlement is that compensation carrier should not incur attorney fees when it does not proceed to trial). Thus, the subdivision six formula does not apply here because of the reverse-Naig context: there are no duplicative attorney fees when the carrier settles its subrogation claim prior to trial. The parties do not dispute this point.

[ ]2Although under Tyroll the evidentiary hearing should have been held pretrial, we observe no error in holding the hearing posttrial where the parties so agree.