                                                                                       02/28/2018
               IN THE COURT OF APPEALS OF TENNESSEE
                           AT NASHVILLE
                               October 3, 2017 Session

  IN RE ESTATE OF SYLVIA MARLENE TOLBERT ET AL. v. STATE OF
                          TENNESSEE

                Appeal from the Tennessee Claims Commission
     No. T20140069, T20140070     Robert N. Hibbett, Claims Commissioner
                    ___________________________________

                          No. M2017-00862-COA-R3-CV
                      ___________________________________


Claimants asserted monetary claims against the State of Tennessee for personal injuries
and property damage resulting from an automobile accident with a state employee. The
Tennessee Claims Commission found the State liable and awarded compensatory
damages. On appeal, the State argues that the Claims Commission erred in awarding
damages for medical expenses based on the claimants’ unadjusted medical bills. Upon
review, we conclude that the collateral source rule precludes introduction of evidence of
insurance adjustments to claimants’ medical bills. Accordingly, we affirm.

     Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Tennessee Claims
                             Commission Affirmed

W. NEAL MCBRAYER, J., delivered the opinion of the court, in which RICHARD H.
DINKINS and KENNY ARMSTRONG, JJ., joined.

Herbert H. Slatery III, Attorney General and Reporter; Andrée S. Blumstein, Solicitor
General; and Dawn Jordan, Senior Deputy Attorney General, for the appellant, State of
Tennessee.

Phillip L. Davidson, Brentwood, Tennessee, for the appellees, Sylvia Marlene Tolbert
and Alvin Wayne Tindell.
                                       OPINION

                                            I.

       The relevant facts are undisputed. On June 27, 2013, an employee of the
Tennessee Emergency Management Agency, while driving a state-owned vehicle,
collided with the vehicle occupied by Alvin Tindell and Sylvia Tolbert, causing personal
injuries and property damage. Both Mr. Tindell and Ms. Tolbert filed claims against the
State of Tennessee seeking compensation under the Tennessee Claims Commission Act.
See Tenn. Code Ann. § 9-8-307(a)(1)(A) (Supp. 2017).

      Before trial, the claimants filed a motion in limine to exclude any evidence of
amounts paid for their medical expenses by collateral sources. In response, the State
argued that the amounts deducted from the claimants’ medical bills as insurance
adjustments were not precluded by the collateral source rule. Although the Claims
Commission allowed the State to introduce evidence of the adjustments, the Commission
withheld ruling on whether it would consider such evidence in awarding damages.

        At trial, the claimants produced their unadjusted medical bills as evidence of the
medical expenses they incurred as a result of the accident. Ms. Tolbert presented medical
bills totaling $11,118.78 while Mr. Tindell’s medical bills were $250,044.90. The
claimants also submitted expert medical testimony that their medical bills were
reasonable and necessary. The State, in turn, introduced two exhibits showing that, after
insurance adjustments, the claimants’ medical bills were reduced to $6,644.36 and
$58,492.92, respectively.

       The Claims Commission ruled that the State was liable for the accident and
awarded damages based on the unadjusted medical bills. The Commission held that the
collateral source rule precluded consideration of the adjusted medical bills and the State
had failed to rebut the claimants’ evidence that their unadjusted medical bills were
reasonable and necessary. This appeal followed.

                                           II.

        The sole issue on appeal is the proper measure of damages for medical expenses
under the Tennessee Claims Commission Act. This issue presents a question of law,
which we review de novo with no presumption of correctness. Beacon4, LLC v. I & L
Invs., LLC, 514 S.W.3d 153, 169 (Tenn. Ct. App. 2016), perm. app. denied, (Tenn. Dec.
15, 2016).



                                            2
                                                   A.

        The State contends, as it did before the Claims Commission, that the collateral
source rule does not apply to the amounts deducted as adjustments on the claimants’
medical bills based on their insurance because these amounts were never paid by any
source. In Tennessee, the collateral source rule has long prohibited “reduction of a
plaintiff’s recovery [in a personal injury action] by [payments or] benefits from sources
unrelated to the tortfeasor.” See Dedmon v. Steelman, 535 S.W.3d 431, 443 (Tenn.
2017). And any evidence of payments or benefits from a collateral source is inadmissible
at trial. Id. at 444. Those portions of a plaintiff’s medical bills that are written-off or
forgiven by a source other than the tortfeasor constitute a benefit to the plaintiff which is
covered by the collateral source rule. Fye v. Kennedy, 991 S.W.2d 754, 763-64 (Tenn.
Ct. App. 1998).

        The adjusted amounts at issue here are no different. See Dedmon, 535 S.W.3d at
467. As our supreme court has recently explained, in personal injury actions in
Tennessee, the collateral source rule precludes defendants from “submitting evidence of
discounted rates for medical services accepted by medical providers as a result of [the
plaintiff’s] insurance.” Id. While defendants may submit other competent proof to rebut
the plaintiff’s evidence that the unadjusted medical bills are reasonable, that proof cannot
“contravene the collateral source rule.” Id.1

                                                   B.

        In the wake of the Dedmon decision, the State argues that the collateral source
rule, which arises from common law, has been statutorily abrogated in personal injury
actions under the Tennessee Claims Commission Act. See Tenn. Code Ann. § 9-8-
307(d); Dedmon, 535 S.W.3d at 440. “Tennessee is a common law state, and so much of
the common law as has not been abrogated or repealed by statute is in full force and
effect.” Powell v. Hartford Acc. & Indem. Co., 398 S.W.2d 727, 730 (Tenn. 1966). As
noted by our supreme court, Tennessee has partially abrogated the collateral source rule
in two limited circumstances: health care liability actions and workers’ compensation
cases. Dedmon, 535 S.W.3d at 445-46.

       The General Assembly “unquestionably has the constitutional and legislative
authority to change the common law” through its statutory enactments. Heirs of Ellis v.
Estate of Ellis, 71 S.W.3d 705, 712 (Tenn. 2002). But the mere existence of a statute is
not enough. Cellco P’ship v. Shelby Cnty., 172 S.W.3d 574, 591 n.7 (Tenn. Ct. App.

        1
          To the extent that the State asks this Court to make an exception to the collateral source rule
based on West v. Shelby Cnty. Health Corp., 459 S.W.3d 33, 44-45 (Tenn. 2014), we decline to do so.
Our supreme court expressly limited the interpretation of “reasonable charges” in the West decision to
cases arising under the Hospital Lien Act. Dedmon, 535 S.W.3d at 467.
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2005). We construe statutes in derogation of common law strictly. Davenport v.
Chrysler Credit Corp., 818 S.W.2d 23, 28 (Tenn. Ct. App. 1991). “Statutes do not alter
the common law any further than they expressly declare or necessarily require.” Id.
Without a clear indication in the statute, we will not presume that the General Assembly
intended to change the common law. See Shore v. Maple Lane Farms, LLC, 411 S.W.3d
405, 423 (Tenn. 2013).

    The State’s abrogation argument relies exclusively on subsection (d) of the Claims
Commission Act, which provides, in relevant part:

      The state will be liable for actual damages only. No award shall be made
      unless the facts found by the commission would entitle the claimant to a
      judgment in an action at law if the state had been a private individual. The
      state will not be liable for punitive damages and the costs of litigation other
      than court costs. . . .

Tenn. Code Ann. § 9-8-307(d). According to the State, the General Assembly chose to
use the term “actual damages” rather than “compensatory damages” thereby limiting the
recovery of a claimant in a personal injury action against the State to actual amounts paid
for medical expenses.

       Although “actual damages” is not defined in the Claims Commission Act,
Tennessee courts have generally equated “actual damages” with “compensatory
damages.” See, e.g., Whittington v. Grand Valley Lakes, Inc., 547 S.W.2d 241, 243
(Tenn. 1977) (discussing “general rule in this jurisdiction that actual or compensatory
damages must be found as a predicate for the recovery of punitive damages”); Emerson v.
Garner, 732 S.W.2d 613, 614-15 (Tenn. Ct. App. 1987) (referring to “actual or
compensatory damages”); Caccamisi v. Thurmond, 282 S.W.2d 633, 645-46 (Tenn. Ct.
App. 1954) (holding jury verdict, which “allowed a recovery of $5,000 actual or
compensatory damages, and $5,000 punitive damages” was excessive); see also
Damages, Black’s Law Dictionary (10th ed. 2014) (treating “actual damages” and
“compensatory damages” as synonymous terms). And when our courts have been called
upon to interpret the term “actual damages” in other statutes, they have construed it to
mean “compensatory damages.” See Robinson v. Fulliton, 140 S.W.3d 312, 317 (Tenn.
Ct. App. 2003) (treating the award of actual damages under the Wiretapping and
Electronic Surveillance Act of 1994 as compensatory damages); Gifford v. Premier Mfg.
Corp., No. 18, 1989 WL 85752, at *6 (Tenn. Ct. App. Aug. 1, 1989) (holding that “actual
damages and compensatory damages are synonymous, and that the legislature’s use of
the term actual damages indicated its intent that a plaintiff under [the Human Rights Act]
is entitled to recover all items of damages normally included in the definition of
compensatory damages”); Taff v. Media Gen. Broad. Servs., Inc., No. 32, 1986 WL
12240, at *5 (Tenn. Ct. App. Nov. 3, 1986) (construing “actual damages” in Tennessee
Human Rights Act as synonymous with “compensatory damages”).
                                             4
       Given these precedents, we find the State’s contention that the General Assembly
intended for “actual damages” to mean “actual amount paid” rather than “compensatory
damages” unpersuasive. When a statute contains a term with a well-recognized common
law meaning, we will apply the common law meaning unless a different meaning is
apparent from the context or general purpose of the statute. See Lively v. Am. Zinc Co.,
191 S.W. 975, 978 (Tenn. 1917); see also Taylor v. State, No. 02A01-91090BC-00182,
1991 WL 268357, at *2-3 (Tenn. Ct. App. Dec. 18, 1991) (stating that when the General
Assembly enacted the Claims Commission Act it was well aware of the established
meaning of the term “damages” as “the pecuniary consequences which the law imposes
for the breach of some duty or the violation of some right.”) (quoting 22 AM. JUR. 2D,
Damages § 1 (1988)).2 Nothing in the Claims Commission Act indicates that the General
Assembly intended to deviate from the well-recognized common law meaning of “actual
damages.” Thus, the language used in subsection (d) falls far short of the clear
expression of legislative intent necessary to abrogate the collateral source rule.

       Our conclusion is buttressed by a comparison of the language used in subsection
(d) to the language the General Assembly used to abrogate the collateral source rule in
health care liability actions. See Tenn. Code Ann. § 29-26-119 (2012). There, the
General Assembly expressly limited recoverable damages to:

       actual economic losses suffered by the claimant by reason of the personal
       injury, including, but not limited to, cost of reasonable and necessary
       medical care, rehabilitation services, and custodial care, loss of services and
       loss of earned income, but only to the extent that such costs are not paid or
       payable and such losses are not replaced, or indemnified in whole or in
       part, by insurance provided by an employer either governmental or private,
       by social security benefits, service benefit programs, unemployment
       benefits, or any other source except the assets of the claimant or of the
       members of the claimant’s immediate family and insurance purchased in
       whole or in part, privately and individually.

Id. If the General Assembly had intended to limit the State’s liability under the Claims
Commission Act to “actual amounts paid,” it could have said so. Without a clear
expression of legislative intent, we cannot presume that the General Assembly intended
to abrogate the collateral source rule in personal injury actions before the Claims
Commission. See Shore, 411 S.W.3d at 423. We conclude that the collateral source rule
precluded consideration of the amounts deducted as adjustments to the claimant’s
medical bills based on their insurance. See Dedmon, 535 S.W.3d at 467.

       2
       The issue in Taylor was whether the monetary cap on “damages” in subsection (e) of the Claims
Commission Act prevented the Claims Commission from awarding post-judgment interest. Taylor, 1991
WL 268357, at *1.
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                                    III.

    For the foregoing reasons, we affirm the decision of the Tennessee Claims
Commission.




                                           _________________________________
                                           W. NEAL MCBRAYER, JUDGE




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