                                                                                        May 13 2015


                                          OP 14-0786
                                                                                     Case Number: OP 14-0786

               IN THE SUPREME COURT OF THE STATE OF MONTANA

                                          2015 MT 130
                                       _________________

SHARON MEEK, as Personal Representative of
the ESTATE OF JUDY J. MEEK, Deceased,

           Plaintiff and Petitioner,
                                                                OPINION
      v.
                                                                  AND
                                                                 ORDER
MONTANA EIGHTH JUDICIAL DISTRICT
COURT, CASCADE COUNTY, THE HONORABLE
JON A. OLDENBURG, Presiding Judge,

           Respondent.
                                       _________________


¶1     This matter comes before the Court on a Petition for Writ of Supervisory Control

filed by Petitioner Sharon Meek, as personal representative of the Estate of Judy J. Meek,

arising from Cascade County Cause No. BDV-12-0657, Meek v. Bennett Motors, et al.

This Court adopted a briefing schedule and conducted oral argument on March 11, 2015.

Jeffrey G. Winter argued for Petitioner, Cathy Lewis argued for Respondent, and Anders

Blewett argued for Amicus Curiae Montana Trial Lawyers Association. The matter

having been submitted for decision, we grant the petition and exercise supervisory

control.

¶2     The issue is whether the District Court properly granted a defense motion in

limine to restrict the medical damages evidence admissible at trial, and granted summary

judgment against Meek on that issue.
                                    BACKGROUND

¶3     Judy Meek passed away on January 23, 2012, after a fall at a business premises on

November 2, 2011. Sharon Meek, as personal representative of Judy’s Estate (Meek),

brought this action against the business where the fall happened, seeking damages for

survival and wrongful death.

¶4     In the period between the fall and Judy’s death, Judy’s medical providers billed

$197,154.93 for her care. Judy was covered by Medicare and had supplemental coverage

through Blue Cross/Blue Shield. Medicare and BCBS together paid a total of $70,711.26

to Judy’s medical providers. The District Court concluded that despite the billing from

the medical providers, Judy had “no exposure or obligation to pay any charges beyond

those actually paid pursuant to the Medicare rules and the insurance policy with Blue

Cross/Blue Shield.”

¶5     The issue in the present case arises from the District Court’s decision on a pre-trial

motion filed by one of the defendants, Pierce’s Dodge City. The motion sought to limit

Meek’s medical expense recovery to the amounts paid to the providers by Medicare and

BCBS, and to prevent Meek from presenting evidence to the jury as to the amounts

actually billed by the medical providers. After briefing, the District Court concluded that

while there was a split of authority nationally, the legal issue has been decided in

Montana, citing this Court’s decisions in Conway v. Benefis Health System, 2013 MT 73,

369 Mont. 309, 297 P.3d 1200 and Newbury v. State Farm, 2008 MT 156, 343 Mont.

279, 184 P.3d 1021.



                                             2
¶6     The District Court determined that since Meek had no liability exposure to the

medical care providers in excess of the amount paid by Medicare and BCBS, the only

medical expense evidence that she could present to the jury were the amounts that had

been paid to the providers. The District Court concluded that the amount actually billed

by the providers was not representative of the reasonable value of the medical services

provided to Judy and that the amount billed by the health care providers was inadmissible

because it “is irrelevant” to any issue or to damages in the case.

¶7     The District Court granted the motion in limine to limit medical damage evidence,

and granted summary judgment against Meek on that issue. Meek seeks supervisory

control over that order.

                               STANDARD OF REVIEW

¶8     This Court exercises supervisory control in appropriate cases pursuant to Article

VII, Section 2(2) of the Montana Constitution and Rule 17(a), M. R. App. P. Supervisory

control is appropriate where the district court is proceeding upon a mistake of law which,

if not corrected, would cause significant injustice for which appeal is an inadequate

remedy. Inter-Fluve v. Eighteenth Judicial District Court, 2005 MT 103, ¶ 17, 327

Mont. 14, 112 P.3d 258.

¶9     A motion in limine can seek to prevent or limit the introduction of evidence at

trial, and the authority to grant or deny the motion rests in the inherent power of the

district court to admit or exclude evidence so as to ensure a fair trial.        Hulse v.

Department of Justice, 1998 MT 108, ¶ 15, 289 Mont. 1, 961 P.2d 75. Where a decision

on a motion in limine involves the exercise of discretion, this Court will not overturn the

                                              3
district court absent an abuse of discretion. State v. Weldele, 2003 MT 117, ¶ 41, 315

Mont. 452, 69 P.3d 1162. Where a decision on a motion in limine involves a conclusion

of law or interpretation of statute, we review to determine whether the result is correct.

State v. Peterson, 2011 MT 22, ¶ 8, 359 Mont. 200, 247 P.3d 731.

¶10    This Court reviews a district court’s decision on summary judgment to determine

whether it is correct, using the same criteria under Rule 56, M. R. Civ. P. Pilgeram v.

GreenPoint Mortgage, 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839.

                                     DISCUSSION

¶11    We do not address Meek’s claim regarding the damages she may recover for

medical expenses because that is an issue that can be adequately addressed on appeal if

necessary. The only issue we address in this pretrial proceeding is whether the District

Court properly limited the evidence that is admissible at trial regarding medical expenses.

¶12    The parties agree that Meek is entitled to damages “representing the reasonable

value of the medical expenses for medical services obtained by Judy Meek.” This is

consistent with Montana law, which requires that in all cases damages must be

reasonable, and that no party has a right to unconscionable and grossly oppressive

damages that are contrary to substantial justice. Section 27-1-302, MCA; Tidyman’s

Management Services v. Davis, 2014 MT 205, ¶ 40, 376 Mont. 80, 330 P.3d 1139.

¶13    The District Court concluded and the respondents argue that amounts billed by

health care providers are “not a reliable or accurate indicator of the reasonable value of

the services” because they are unreasonably inflated and few patients ever actually pay

the billed amount. Respondents argue that the amount the providers actually receive

                                             4
from insurers or other benefit programs is a “far better indicator of the reasonable value

of a provider’s services.” Further, they argue that allowing Meek to present evidence of

medical bills in excess of what has been actually paid could lead to a windfall recovery.

¶14    The ultimate issue is whether Meek’s medical bills are admissible at trial or

whether, as the District Court held, they are irrelevant and inadmissible. All relevant

evidence is admissible, except when otherwise provided.          Rule 402, M. R. Evid.

Relevant evidence is evidence that has “any tendency to make the existence of any fact

that is of consequence to the determination of the action more probable or less probable

than it would be without the evidence.” Rule 401, M. R. Evid.; Alexander v. Bozeman

Motors, Inc., 2012 MT 301, ¶¶ 41-42, 367 Mont. 401, 291 P.3d 1120. Therefore,

evidence should not be excluded simply because there may be contrary evidence or

because it may be subject to impeachment. Although the District Court ruled that the

amount of expenses billed is irrelevant when there is no claim for future medical

expenses, medical bills received by a tort victim can be relevant evidence of issues such

as the nature and severity of the injuries, and of the medical procedures and treatments

that were required.    Chapman v. Mazda Motor of Am., 7 F. Supp. 2d 1123, 1125

(D. Mont. 1998).

¶15    The respondents’ factual arguments regarding the nature and reliability of medical

billings therefore do not provide adequate grounds for a pre-trial order excluding the

evidence of the amounts billed by Meek’s medical providers. If supported by competent

evidence at trial, these arguments could provide matters of impeachment, and could affect

the weight the jury might give to the evidence. Without more, however, these factual

                                             5
contentions do not justify exclusion of the evidence. The District Court’s pretrial ruling

to exclude all medical bills and grant summary judgment was not justified here, where

Meek presented the affidavit of her primary physician that affirmed that the medical

services represented in the billings were reasonably necessary to her care. The affidavit

also affirmed that the amounts billed were reasonable, were the usual and customary rates

for such treatment, and that they represented the reasonable value of the treatment.

¶16    Ultimately, there is a factual dispute in the case over the nature of the bills

presented by the medical providers and whether they represent a reasonable measure of

the value of the services provided. The reasonableness of the medical bills as a measure

of damages is a matter to be determined by the jury. Burley v. Burlington Northern, 2012

MT 28, ¶ 91, 364 Mont. 77, 273 P.3d 825. The existence of genuine issues of material

fact precludes summary judgment. Redies v. Attorney Liability Prot. Soc., 2007 MT 9,

¶ 26, 335 Mont. 233, 150 P.3d 930. This does not end the inquiry in this case, however,

since the District Court also issued an order in limine, limiting the medical expense

evidence that would be admissible at trial.

¶17    The District Court’s order admitting only evidence of amounts the insurers paid to

Meek’s health care providers violates § 27-1-308, MCA. That statute, referred to as the

collateral source rule, requires that a jury determine its award “without consideration of

any collateral source.”    Section 27-1-308(3), MCA (emphasis added).            A collateral

source, generally, is “a payment for something that is later included in a tort award and

that is made to or for the benefit of a plaintiff or is otherwise available to the plaintiff.”

Section 27-1-307(1), MCA. The statute provides, however, that in a separate post-trial

                                              6
proceeding the district court must reduce a jury’s verdict in a personal injury case “by

any amount paid or payable from a collateral source that does not have a subrogation

right.” Section 27-1-308(3), MCA.

¶18   The District Court ruled that the “amount of the write-down” (the medical billings

not covered by Medicare or BCBS) was not a benefit or was not otherwise “available” to

Meek and therefore did not meet the definition of a collateral source under the statute.

However, the payments made by Medicare to satisfy the providers’ billings are clearly a

collateral source. The District Court’s order in this case, and now the Dissent, would not

only require that these collateral source payments be considered by the jury, but would

also make the collateral source payment conclusively determinative of Meek’s medical

damages. This is a clear violation of § 27-1-308(3), MCA. The statute prohibits the jury

from considering any collateral sources and evidence of collateral source payments is not

admissible on the issue of a personal injury claimant’s medical expenses.

¶19   Respondents contend that allowing Meek to present evidence of the medical bills

from her providers could result in a “windfall” recovery. This contention is addressed by

§ 27-1-308(1) and (3), MCA, which provides that after a jury verdict in favor of the

plaintiff, the district court must hold a hearing and determine whether there were any

collateral source payments to account for. If so, the recovery must be reduced by the

amount paid or payable from a collateral source.

¶20   Contrary to the District Court’s conclusions, the issues in this case were not

decided in Newbury and Conway.         Both of those cases involved contract disputes

between insureds and insurers over application of insurance policy language, and neither

                                            7
case involved the admissibility of evidence in a personal injury action against a

tortfeasor. Most significantly, neither case involved application of the collateral source

statute, § 27-1-308, MCA. Neither case resolves the issues raised in the present case.1

¶21    The parties have devoted considerable argument to identifying the majority and

minority national rules on whether a tort claimant is limited to introducing evidence of

medical expenses paid by third parties. See, e.g., Bynum v. Magno, 101 P.3d 1149 (Haw.

2004). We do not decide the present case through application of national trends, but

through application of the Montana Rules of Evidence and the Montana collateral source

statute, § 27-1-308, MCA.

¶22    We reiterate that Montana law requires that damages be reasonable, § 27-1-302,

MCA, and Tidyman’s, ¶ 40, and that it is up to the jury to determine what is reasonable

under the circumstances, Burley, ¶ 91. This statutory requirement of reasonable damages

must be construed along with the collateral source statute, § 27-1-308, MCA, so as to

give effect to both. Section 1-2-101, MCA; Hanson v. Edwards, 2000 MT 221, ¶ 19, 301

Mont. 185, 7 P.3d 419. Therefore, if at trial Meek introduces evidence of Judy Meek’s

medical bills the defendants may contest the reasonableness of those bills as a measure of

damages. If so, evidence of the amount that Medicare pays to other health care providers

for the same or similar service could be relevant to that issue, as long as there is no

evidence or argument that Judy Meek was covered by Medicare or other insurance, or

that Medicare or an insurer paid any part of her medical expenses. Those matters may be

1
  Likewise, Harris v. Billings Clinic, 2013 MT 207, 371 Mont. 133, 305 P.3d 852, cited in the
Dissent, neither involves issues in a direct action against a tortfeasor or application of
§ 27-1-308, MCA.

                                             8
considered only by the District Court and only after a verdict, as provided in

§ 27-1-308(3), MCA.

¶23   Therefore,

¶24   IT IS ORDERED that the Petition for Writ of Supervisory Control is GRANTED.

¶25   IT IS FURTHER ORDERED that the District Court order on Pierce’s Dodge

City’s motions in limine and summary judgment against Meek, as discussed above, are

VACATED and this matter is remanded for further proceedings consistent with this

Opinion and Order.

¶26   The Clerk of this Court is directed to provide copies of the Opinion and Order to

counsel of record in Cascade County Cause No. BDV 12-0657, counsel for Amicus

Curiae Montana Trial Lawyers Association and Montana Defense Trial Lawyers, and to

the Honorable Jon A. Oldenburg, presiding District Judge.

      DATED this 13th day of May, 2015.



                                               /S/ MIKE McGRATH


We Concur:

/S/ MICHAEL E WHEAT
/S/ PATRICIA COTTER
/S/ BETH BAKER
/S/ JAMES JEREMIAH SHEA
/S/ JIM RICE




                                           9
Justice Laurie McKinnon, dissenting.

¶27    I dissent. The Court’s decision is inconsistent with Montana’s statutes defining

damages, §§ 27-1-201, -202, MCA, and with our precedent, specifically Newbury v. State

Farm Fire & Casualty Insurance, 2008 MT 156, 343 Mont. 279, 184 P.3d 1021, Conway

v. Benefis Health System, 2013 MT 73, 369 Mont. 309, 297 P.3d 1200, and Harris v. St.

Vincent Healthcare, 2013 MT 207, 371 Mont. 133, 305 P.3d 852. The Court allows a

person injured by another person’s tortious conduct to recover more than the actual

amount she paid or for which she incurred liability for past medical care and expenses.

In my opinion, sums beyond that actually expended are not damages. Fundamental

principles of compensatory damages in tort actions compel the conclusion that a plaintiff

may recover no more than her actual loss. Additionally, the collateral source rule is a

rule of evidence that prevents a jury from knowing that the plaintiff has received payment

from a source not associated with the tortfeasor; it therefore has no relevance in

establishing the appropriate measure for determining the reasonableness of damages. The

Court fails to observe this distinction.

¶28    In these proceedings, which do not include a claim for future medical expenses,

there is no question about the appropriate measure of recovery: the Estate is entitled to

recover the reasonable value of medical care and services reasonably required and

attributable to the tort.   “Damages must in all cases be reasonable, and where an

obligation of any kind appears to create a right to unconscionable and grossly oppressive

damages contrary to substantial justice, no more than reasonable damages can be

recovered.” Section 27-1-302, MCA. Accordingly, a plaintiff may recover as economic

                                           10
damages no more than the reasonable value of the medical services received. The focus

on “reasonable value” in § 27-1-302, MCA, is therefore a limitation on recovery, not an

expansion of recovery beyond a plaintiff’s actual loss or liability. The question here

involves the application of that measure; that is, whether the “reasonable value” measure

of damages means that a plaintiff may recover sums beyond that actually expended.

¶29    In tort actions, damages are normally awarded for the purpose of compensating the

plaintiff for the injury suffered, restoring her as nearly as possible to her former position

or giving her some pecuniary equivalent.          In Montana, compensatory damages are

awarded to “redress the concrete loss that a plaintiff has suffered by reason of a

defendant’s wrongful conduct.” Seltzer v. Morton, 2007 MT 62, ¶ 148, 336 Mont. 225,

154 P.3d 561. The law of torts “works to ensure that an award of damages restores an

injured party as near as possible to the party’s pre-tort position—no better, no worse.”

Lampi v. Speed, 2011 MT 231, ¶ 21, 362 Mont. 122, 261 P.3d 1000 (citing Sunburst Sch.

Dist. No. 2 v. Texaco, Inc., 2007 MT 183, ¶ 32, 338 Mont. 259, 165 P.3d 1079). We

stated in Sunburst that an “‘injured party is to be made as nearly whole as possible—but

not to realize a profit. Compensatory damages are designed to compensate the injured

party for actual loss or injury—no more, no less.’”         Sunburst, ¶ 40 (quoting Burk

Ranches v. State, 242 Mont. 300, 307, 790 P.2d 443, 447 (1990)). Therefore, damages in

a tort action “attempt[] primarily to put an injured person in a position as nearly as

possible equivalent to his position prior to the tort.” Restatement (Second) of Torts § 901

cmt. a (1979). Moreover, in “determining the measure of compensation, indemnity or

restitution, the law of torts ordinarily does not measure its recovery as do the rules based

                                             11
upon unjust enrichment, on the benefit received by the defendant. This first purpose of

tort law leads to compensatory damages.” Restatement (Second) of Torts § 901 cmt. a.

¶30    Section 911 of the Restatement (Second) of Torts provides guidance for the

measure of “reasonable value.” While the measure of recovery for the costs of services

rendered by a third party is ordinarily the reasonable value of those services, “[i]f . . . the

injured person paid less than the exchange rate, he can recover no more than the amount

paid, except when the low rate was intended as a gift to him.” Restatement (Second) of

Torts § 911 cmt. h. Section 911 articulates a rule, applicable to recovery of tort damages

generally, which establishes that the “reasonable value” of services rendered is the

exchange rate, and if a person has paid less, she can recover no more than the amount

paid. Thus, a personal injury plaintiff may recover the lesser of (1) the amount paid or

incurred for medical services, or (2) the reasonable value of the services.

¶31    This rule is likewise consistent with our statutes which allow compensation for the

“detriment” proximately caused by the tortious conduct.            Section 27-1-317, MCA,

provides for recovery of damages measured by “the amount which will compensate for

all the detriment proximately caused” by the tort. “Detriment” is defined as “a loss or

harm suffered in person or property.” Section 27-1-201, MCA (emphasis added). The

right to recover compensatory damages is defined by the “detriment” that a person

suffers. Section 27-1-202, MCA. While the measure of damages for pain and suffering,

emotional disturbances, and even future medical expenses necessarily must be left to the

discretion of the jury, the measure of damages for past medical expenses must be the



                                              12
amount that was expended for the service, limited only by what was reasonably

attributable to the tortious conduct.

¶32    Newbury, Conway, and Harris also establish that the reasonable value of medical

expenses is limited to what was actually incurred. In Newbury, we determined that

       while it was reasonable for Newbury to expect that his State Farm policies
       would pay his medical expenses (up to the policy limits of $10,000.00)
       once the State Fund had paid all it was required to pay, it was not
       reasonable for Newbury to expect to receive funds in excess of his medical
       expenses.

Newbury, ¶ 38. This Court, in Newbury, recognized that medical payments benefits are

payable only for medical expenses, and when a plaintiff received full payment of his

medical expenses and owed nothing more to his healthcare providers, a windfall would

result if the plaintiff were to receive additional money in excess of his total medical

expenses. Newbury, ¶¶ 39, 47. In Conway, we stated:

       Here, the record shows that Benefis accepted Kemper’s payment of
       $1,866.29 as payment in full for the actual cost of Conway’s medical
       treatment that resulted from the accident. Conway does not owe Benefis
       any remaining amount. Even though all of Conway’s medical expenses
       have been paid, he still seeks to pocket $1,203.55 in medical payments
       coverage benefits, representing the difference between Kemper’s payment
       to Benefis and the TRICARE reimbursement rate. We disagree. Conway
       is no more entitled to pocket excess medical payments here than he would
       be under the circumstances in Newbury, or any other situation in which all
       of his medical expenses are paid by his insurer under its medical payments
       coverage.

Conway, ¶ 35.

¶33    We again explained in Harris that an injured party was not entitled to receive the

difference in payment between the actual cost of medical treatment and the amount that

the physician billed. Harris, ¶¶ 16-17. I concurred in Harris, noting that the plaintiffs

                                           13
had not suffered any “detriment or legally cognizable damages necessary to support their

claim.” Harris, ¶ 36 (McKinnon, J., concurring). Accordingly, it is my opinion that the

decision reached today by the Court is inconsistent, indeed irreconcilable, with the

foregoing precedent.

¶34    In these proceedings, Judy Meek did not incur liability for her providers’ full bills

because at the time the charges were incurred, her providers had already agreed to accept

a certain amount from both Medicare and Blue Cross/Blue Shield in exchange for their

services. Having never incurred the full bill, the Estate cannot recover it in damages for

economic loss. As a result of paying her premiums, Judy Meek obtained the benefit of

medical services at a reduced rate. She would have paid these premiums and received the

benefit of reduced rates regardless of any tortious conduct. Therefore, there is no need to

determine the reasonable value of the services where, as here, the exact amount of

expenses has been established by contract and has been satisfied.

¶35    Finally, the Court fails to appreciate the distinction between an evidentiary rule

and an appropriate measure of reasonable value. The collateral source rule is a rule of

evidence which prevents admission of evidence showing that the plaintiff has received

payments from sources independent of the tortfeasor. The rule is premised upon the idea

that there is minimal probative value in considering the actions of an unrelated third party

when assessing the conduct of the tortfeasor and determining compensatory damages. In

contrast, it would be very prejudicial to the plaintiff if a jury were to learn that the

plaintiff has already been compensated. The collateral source rule also has a substantive

aspect apart from its evidentiary basis. Based upon numerous policy considerations, the

                                            14
collateral source rule serves to protect payments conferred on the injured party from other

sources unconnected to the tortfeasor from being credited against the tortfeasor’s liability.

Despite the Court’s conclusion to the contrary, Opinion, ¶ 18, a district court can apply a

correct measure for reasonable value—the exchange rate—while still adhering to the

collateral source rule that prevents the jury from knowing that the plaintiff has been

otherwise compensated. A jury does not need to hear the source of the payment, or that a

bill has been satisfied; all a jury need hear is the amount of the plaintiff’s past expense.

The rule enunciated by the Court today would prove much more problematic for a district

court to navigate.

¶36    Accordingly, I do not agree that medical bills, other than the amount actually paid

and received, are “relevant evidence of issues such as the nature and severity of the

injuries, and of medical procedures and treatments that were required.” Opinion, ¶ 14.

These issues may be established through the testimony of treating physicians and health

care providers and not by the admission of bills for amounts over and above what was

received and accepted by Judy Meek’s medical providers. The desire to present higher

bills in order to gain a larger recovery for other types of damages should not override

fundamental principles of compensatory damages, our precedent, and Montana’s statutes.

The evidence is simply not admissible for such a purpose and is not relevant, absent a

claim for future medical expenses. Here, the amounts disallowed will not assist in

developing a foundation for a life care plan or possible future medical procedures and

needs. See Willink v. Boyne USA, Inc., No. CV 12-74-BU-DLC, 2013 U.S. Dist. LEXIS

152566, at *6-7 (D. Mont. Oct. 23, 2013).

                                             15
¶37   For the foregoing reasons, I dissent from the Court’s decision.



                                                /S/ LAURIE McKINNON




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