Appeal by defendant from judgment entered 9 March 1999 and
order entered 21 April 1999 by Judge Ronald L. Stephens in
Cumberland County Superior Court. Heard in the Court of Appeals 19
May 2000.
Boose and Gurnee, by Michael C. Boose, for plaintiff-appellee.
Anderson, Johnson, Lawrence, Butler & Bock, L.L.P., by StevenC. Lawrence and Robert A. Hasty, Jr., for defen
dant-appellant.
EDMUNDS, Judge.
Defendant Alfred Sebile appeals jury verdicts in favor of
plaintiffs Jarrett and Susan Kaminsky. We find no error.
Jarrett is the son of Susan and Randall Kaminsky, both of whom
were active-duty military personnel with the United States Army at
the time of the incident leading to this action. Defendant, a
friend of Jarrett's father, was clearing land to build a house and
farm, and Jarrett's father asked his son, who was then fourteen
years old, if he would like to help. On 7 September 1993, while
working with defendant at a hydraulic log-splitting machine,
Jarrett's little finger on his left hand became trapped and was
severed below the bottom joint. Jarrett received treatment first
at Womack Army Hospital, then at Duke Medical Center.
Pursuant to 10 U.S.C.A. § 1072 (1998), Jarrett's injuries were
covered by the Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS), because Jarrett was a dependent of members of
the armed services. Accordingly, CHAMPUS paid most of the medical
expenses resulting from Jarrett's injury.
Susan originally filed an action against defendant both
individually and as the guardian ad litem of Jarrett, but later
dismissed the case without prejudice. Thereafter, on 5 September
1996, the United States brought an action against defendant under
the Federal Medical Care Recovery Act (FMCRA), 42 U.S.C.A. §§ 2651-2653 (1994 & Supp. 2000), to recover the “reasonable
value of []
care and treatment” furnished to Jarrett. On 18 April 1997, the
United States dismissed its claims against defendant with
prejudice. The case at bar was filed on 5 June 1997 by Jarrett,
who had then reached the age of majority, and Susan. Plaintiffs
sought to recover for personal injuries and medical expenses.
When the case was called for trial on 8 February 1999,
defendant filed and argued a motion in limine to preclude any
evidence of medical bills incurred for the treatment and care of
Jarrett. Defendant cited 10 U.S.C.A. §§ 1095 (1998, amended 1999),
2651 (1994, amended 1996) for the proposition that only the United
States Government “incurred” medical expenses. Defendant also
argued that the United States' dismissal with prejudice of its
claim against defendant was res judicata as to any claim brought by
Susan. The trial court denied defendant's motion. The jury found in favor of plaintiffs and awarded Jarrett
$35,000 in damages for personal injuries and Susan $29,000 in
damages for medical expenses. The trial court entered judgment on
9 March 1999. On 15 March 1999, defendant filed a Motion for
Judgment Notwithstanding the Verdict and Alternative Motion for New
Trial, which was denied by the trial court on 21 April 1999.
Defendant appeals.
I.
[1]Defendant assigns error to the trial court's denial of his
motion
in limine to exclude the medical bills for Jarrett's
treatment. However, our appellate courts repeatedly have held that
motions
in limine are not appealable.
See, e.g.,
State v. Hayes,
350 N.C. 79, 511 S.E.2d 302 (1999);
Southern Furn. Hardware v.
Branch Banking and Trust, 136 N.C. App. 695, 526 S.E.2d 197 (2000);
Heatherly v. Industrial Health Council, 130 N.C. App. 616, 504
S.E.2d 102 (1998);
T&T Development Co. v. Southern Nat. Bank of
S.C., 125 N.C. App. 600, 481 S.E.2d 347 (1997). This assignment of
error is overruled.
II.
[2]Defendant's remaining assignments of error relate to the
trial court's denial of his motion for judgment notwithstanding the
verdict (JNOV).
See N.C. Gen. Stat. § 1A-1, Rule 50 (1999). He
argues, first, that the federal government had the exclusive right
to recover from defendant, and second, that the United States'
previous action and dismissal with prejudice is
res judicata as to
Susan's present claim. We will address these contentions
seriatim. In ruling on a motion for JNOV, “the
[non-movants'] evidence
must be taken as true and all the evidence must be viewed in the
light most favorable to [them], giving [them] the benefit of every
reasonable inference which may be legitimately drawn therefrom,
with conflicts, contradictions, and inconsistencies being resolved
in the [non-movants'] favor.”
Bryant v. Thalhimer Bros., Inc., 113
N.C. App. 1, 6, 437 S.E.2d 519, 522 (1993) (citation omitted). Our
review of a denial of a motion for JNOV is “whether the evidence
viewed in the light most favorable to [the non-movants] is
sufficient to support the jury verdict.”
Suggs v. Norris, 88 N.C.
App. 539, 543, 364 S.E.2d 159, 162 (1988) (citation omitted).
The FMCRA controls the nature of the United States' right to
recover from a tortfeasor the reasonable value of the care and
treatment furnished to an injured person. Section 2651 reads in
pertinent part:
(a) Conditions; exceptions; persons liable;
amount of recovery; subrogation;
assignment
In any case in which the United States is
authorized or required by law to furnish
hospital, medical, surgical, or dental care
and treatment . . . to a person who is injured
. . . after the effective date of this Act,
under circumstances creating a tort liability
upon some third person . . . to pay damages
therefor, the United States shall have a right
to recover from said third person the
reasonable value of the care and treatment so
furnished or to be furnished and shall, as to
this right be subrogated to any right or claim
that the injured or diseased person, his
guardian, personal representative, estate,
dependents, or survivors has against such
third person to the extent of the reasonable
value of the care and treatment so furnished
or to be furnished. . . .
(b) Enforcement procedure; intervention;
joinder of parties; State or Federal
court proceedings
The United States may, to enforce such
right, (1) intervene or join in any action or
proceeding brought by the injured or diseased
person, his guardian, personal representative,
estate, dependents, or survivors, against the
third person who is liable for the injury or
disease; or (2) if such action or proceeding
is not commenced within six months after the
first day in which care and treatment is
furnished by the United States in connection
with the injury or disease involved, institute
and prosecute legal proceedings against the
third person who is liable for the injury or
disease, in a State or Federal court, either
alone . . . or in conjunction with the injured
or diseased person, his guardian, personal
representative, estate, dependents, or
survivors.
42 U.S.C.A. § 2651(a), (b) (1994). Additionally, the Act provides:
(b) Settlement, release and waiver of claims
. . . [T]he head of the department or
agency of the United States concerned may
(1) compromise, or settle and execute a
release of, any claim which the United States
has by virtue of the right established by
section 2651 of this title; or (2) waive any
such claim, in whole or in part, for the
convenience of the Government, or if he
determines that collection would result in
undue hardship upon the person who suffered
the injury . . . resulting in care or
treatment . . . .
(c) Damages recoverable for personal injury
unaffected
No action taken by the United States in
connection with the rights afforded under this
legislation shall operate to deny to the
injured person the recovery for that portion
of his damage not covered hereunder.
Id. § 2652(b), (c) (1994). The issue before us, calling for an
interpretation of the Act, is one of first impression for the
appellate courts of this state.
The cardinal principle of statutory construction is to ensure
accomplishment of the legislative intent.
See L.C. Williams Oil
Co. v. NAFCO Capital Corp., 130 N.C. App. 286, 289, 502 S.E.2d 415,
417 (1998). Accordingly, we must consider “'the language of the
statute or ordinance, the spirit of the act and what the act seeks
to accomplish.'”
Hayes v. Fowler, 123 N.C. App. 400, 404-05, 473
S.E.2d 442, 445 (1996) (citation omitted). “When the language of
a statute is clear and without ambiguity, 'there is no room for
judicial construction,' and the statute must be given effect in
accordance with its plain and definite meaning.”
Avco Financial
Services v. Isbell, 67 N.C. App. 341, 343, 312 S.E.2d 707, 708
(1984) (quoting
Williams v. Williams, 299 N.C. 174, 180, 261 S.E.2d
849, 854 (1980)). However, if a literal reading of the statutory
language “yields absurd results . . . or contravenes clearly
expressed legislative intent, 'the reason and purpose of the law
shall control and the strict letter thereof shall be disregarded.'”
Id. (quoting
State v. Barksdale, 181 N.C. 621, 625, 107 S.E. 505,
507 (1921)).
In the case at bar, we are asked to interpret the FMCRA to
determine whether an individual plaintiff may bring an action to
recover medical expenses paid through CHAMPUS, or whether that
right belongs exclusively to the United States. Because the act
requiring interpretation is a federal act and thus is applicablethroughout the nation, we begin with a review of other
jurisdictions. The majority of jurisdictions that have considered
the issue permit a similarly-situated individual plaintiff to
assert a claim for medical expenses against a tortfeasor.
See,
e.g.,
Dempsey by and through Dempsey v. U.S., 32 F.3d 1490 (11th
Cir. 1994);
Mays v. United States, 806 F.2d 976 (10th Cir. 1986);
Kornegay v. U.S., 929 F. Supp. 219 (E.D. Va. 1996);
MacDonald v.
U.S., 900 F. Supp. 483 (M.D. Ga. 1995);
Lozada for and on behalf of
Lozada v. U.S., 140 F.R.D. 404 (D. Neb. 1991);
1st of America Bank,
Mid-Michigan, N.A. v. U.S., 752 F. Supp. 764 (E.D. Mich. 1990);
Kennedy v. U.S., 750 F. Supp. 206 (W.D. La. 1990);
Guyote v.
Mississippi Valley Gas Co., 715 F. Supp. 778 (S.D. Miss. 1989);
Transit Homes, Inc. v. Bellamy, 671 S.W.2d 153 (Ark. 1984),
overruled on other grounds by Peters v. Pierce, 858 S.W.2d 680
(Ark. 1993);
Whitaker v. Talbot, 177 S.E.2d 381 (Ga. App. 1970);
Piquette v. Stevens, 739 A.2d 905 (Md. Ct. Spec. App. 1999),
cert.
granted, 745 A.2d 436 (Md. 2000);
Arvin v. Patterson, 427 S.W.2d
643 (Tex. Civ. App. 1968).
But see McCotter v. Smithfield Packing
Co., Inc., 868 F. Supp. 160, 163 (E.D. Va. 1994) (“Under the
Federal Medical Care Recovery Act, the claim for medical damages
suffered as the result of a tortious act and provided by the United
States belongs solely to the United States.”).
We agree with the majority rule that the individual
plaintiff's right exists regardless of the United States' right to
pursue an action to recover from the tortfeasor. The statute
states in section 2651(a) that the United States has “
a right torecover” as opposed to “
the right to recover,&
#148; indicating that the
right of the United States is not exclusive. In addition, because
the plain language of the FMCRA (a) allows for waiver by the United
States of its claim for recovery and (b) specifically protects the
rights of injured plaintiffs to recover “that portion of his damage
not covered hereunder,” it follows that the injured plaintiff has
a cause of action for medical expenses against the tortfeasor.
Accordingly, we hold that defendant's contention that the United
States had the
exclusive right to pursue recovery for medical
expenses is without merit.
[3]This holding does not necessarily mean, however, that
recovery by both the United States and the injured plaintiff is
permitted. Continuing our review of other jurisdictions, we
observe that while courts have allowed an individual plaintiff to
bring an action, the amount he or she may recover has been guided
largely by the state's collateral source doctrine. In the case at
bar, defendant contends that application of North Carolina's
collateral source rule precludes Susan's recovery of the medical
expenses paid through CHAMPUS. Although the specific language of
the collateral source rule varies from state to state, the gist of
these rules is to “exclude[] evidence of payments made to the
plaintiff by sources other than the defendant when this evidence is
offered for the purpose of diminishing the defendant tortfeasor's
liability to the injured plaintiff.”
Badgett v. Davis, 104 N.C.
App. 760, 764, 411 S.E.2d 200, 203 (1991). The policy behind the
rule is to prevent a tortfeasor from “reduc[ing] his own liabilityfor damages by the amount of compensation the injured party
receives from an independent source.”
Fisher v. Thompson, 50 N.C.
App. 724, 731, 275 S.E.2d 507, 513 (1981).
Our survey of other jurisdictions indicates a generally
consistent pattern that when a plaintiff brings an action under the
Federal Tort Claims Act (FTCA),
see 10 U.S.C.A. §§ 2731-1736
(1998), against the United States, which already has paid the
medical expenses of the injured plaintiff, CHAMPUS benefits will
not fall within the collateral source rule. Consequently, in such
a case, the damages that the plaintiff may recover will be offset
by the amount paid by the government.
See, e.g.,
Dempsey, 32 F.3d
1490;
Mays, 806 F.2d 976;
Kornegay, 929 F. Supp. 219;
MacDonald,
900 F. Supp. 483;
Lozada, 140 F.R.D. 404;
1st of America Bank, 752
F. Supp. 764;
Kennedy, 750 F. Supp. 206. However, when the
tortfeasor is other than the United States, we find less
uniformity. One court has interpreted the FMCRA to say that an
injured plaintiff's entire claim for medical expenses is subrogated
to the government, thus precluding the plaintiff from recovering
from the defendant.
See Smith v. Foucha, 172 So. 2d 318, 322 (La.
App. 1965). However, the more common approach has been to apply
the collateral source rule, thus allowing the individual plaintiff
full recovery of medical expenses when the United States either
does not assert or abandons its right under the FMCRA.
See, e.g.,
Guyote, 715 F. Supp. 778 (holding that action was controlled by
Mississippi's collateral source rule, which precluded tortfeasor
from having damages reduced by amount paid by United States);
Bellamy, 671 S.W.2d 153 (allowing plaintiff to recover damages for
future medical expenses where, although Veterans' Administration
had intervened pursuant to the FMCRA for cost of both past and
future medical expenses, it had abandoned its claim for future
medical services before trial and was only awarded costs of past
medical services on its subrogation claim);
Whitaker, 177 S.E.2d
381 (allowing plaintiff to recover medical expenses when government
had not acted within the three-year statute of limitations in order
to prevent tortfeasor from obtaining a windfall);
Piquette, 739
A.2d 905 (stating that, pursuant to collateral source doctrine, an
injured party may have a claim for medical expenses when the United
States does not assert its right under the Act);
Arvin, 427 S.W.2d
643 (holding that plaintiff could recover where government had not
pursued its remedies against defendant).
But see Commercial Union
Ins. Co. v. U.S., 999 F.2d 581, 588 (D.C. Cir. 1993) (stating that
“an agency's decision not to sue is not the equivalent of an
express waiver” under section 2652(b)).
We believe that the majority rule, which allows a plaintiff to
recover only when the government
fails to assert or abandons its
right of recovery under the FMCRA, is the better rule. The FMCRA
was enacted to protect the government's interests by permitting the
United States to recover payments made as a result of a
tortfeasor's acts. Accordingly, rights under the FMCRA exist for
the United States to assert; they may not be asserted defensively
to allow a windfall for a tortfeasor. As the
Guyote court stated:
[T]he focus of the Act is the government's
right of recovery; it does not address orpurport to affect the injured party's right
other than to allow the government to require
assignment of that right. Whatever rights of
recovery an injured party may have under state
law remain intact under the Act.
715 F. Supp. at 780. Additionally, if the government abandons its
right or fails to assert it, there is no risk of double liability
for the defendant.
Furthermore, the majority rule comports with North Carolina's
collateral source rule. The Supreme Court decision in
Cates v.
Wilson, 321 N.C. 1, 361 S.E.2d 734 (1987), is the leading authority
on the collateral source doctrine. In deciding whether Medicaid
payments should fall within the rule, the Court stated:
In
Young v. R.R., 266 N.C. 458, 466, 146
S.E.2d 441, 446 (1966), this Court explained
the collateral source rule. According to this
rule a plaintiff's recovery may not be reduced
because a source collateral to the defendant,
such as “a beneficial society,” the
plaintiff's family or employer, or an
insurance company, paid the plaintiff's
expenses. Rather, an injured plaintiff is
entitled to recovery “'. . . [sic] for
reasonable medical, hospital, or nursing
services rendered him, whether these are
rendered him gratuitously or paid for by his
employer.'”
The instant case presents the issue of
whether the collateral source rule embraces
gratuitous government benefits. . . .
With regard to Medicaid payments already
received we find our
Young decision
persuasive. In
Young we held that receipt of
insurance proceeds should not reduce a
plaintiff's recovery. Medicaid is a form of
insurance paid for by taxes collected from
society in general. “The Medicaid program is
social legislation; it is the equivalent of
health insurance for the needy; and, just as
any other insurance form, it is an acceptable
collateral source.”
Id. at 5-6, 361 S.E.2d at 737-38 (internal citations omitted). The
Court went on to find justification for the application of the rule
in the fact that “North Carolina law entitles the state to full
reimbursement for any Medicaid payments made on a plaintiff's
behalf in the event the plaintiff recovers an award for damages.”
Id. at 6, 361 S.E.2d at 738. The statute to which the Court
referred is N.C. Gen. Stat. § 108A-57 (Supp. 1985), which provided
in pertinent part:
[T]he State, or the county providing medical
assistance benefits, shall be subrogated to
all rights of recovery, contractual or
otherwise, of the beneficiary of such
assistance, or of his personal representative,
his heirs, or the administrator or executor of
his estate . . . .
The
Cates Court went on to say:
Our decisions establish the principle that
evidence of a collateral benefit is improper
when the plaintiff will not receive a double
recovery.
See Spivey v. Wilcox Co., 264 N.C.
387, 390, 141 S.E.2d 808, 811-12 (1965).
Because Medicaid provides for a right of
subrogation in the state to recover sums paid
to plaintiffs, we find that the principle
enunciated in
Spivey applies in the instant
case as well.
321 N.C. at 6-7, 361 S.E.2d at 738.
Applying the
Cates analysis to the case
sub judice, the FMCRA,
like section 108A-57(a), provides for a right of subrogation by the
United States. Although the government here abandoned its right to
recovery under the FMCRA, the existence of the right permits a
sufficient analogy between Medicaid benefits and CHAMPUS coverage.
Under
Cates, if a plaintiff recovers for the past Medicaid payments
he or she received and the state fails to seek reimbursement, theplaintiff would not then be required to return the money to the
defendant-tortfeasor. Similarly, defendant here should not receive
a windfall because the government abandoned its right under the
FMCRA. Accordingly, plaintiff Susan properly sought to recover for
the medical expenses of Jarrett and, because the United States
abandoned its right to recover under the FMCRA, the collateral
source rule applies to permit full recovery. This assignment of
error is overruled.
[4]Finally, defendant contends his motion for JNOV should
have been granted on the grounds of
res judicata. He argues that
the United States' prior case and dismissal with prejudice now
precludes Susan from asserting a claim for medical expenses.
“Under the doctrine of
res judicata, or claim preclusion, 'a
final judgment on the merits in a prior action will prevent a
second suit based on the same cause of action between the same
parties or those in privity with them.'”
State ex rel. Tucker v.
Frinzi, 344 N.C. 411, 413, 474 S.E.2d 127, 128 (1996) (quoting
Thomas M. McInnis & Assoc. v. Hall, 318 N.C. 421, 428, 349 S.E.2d
552, 556 (1986)). For the doctrine to apply to now preclude
Susan's claim, defendant must show “'that the previous suit
resulted in a final judgment on the merits, that the same cause of
action is involved, and that both [the party asserting
res judicata
and the party against whom
res judicata is asserted] were either
parties or stand in privity with parties.'”
Id. (alteration in
original) (quoting
Hall, 318 N.C. at 429, 349 S.E.2d at 557).
Defendant has failed in this showing; there is no privity betweenSusan and the United States. In general, “privity” requires that
Susan and the government be “'so identified in interest'” as to
“'represent[] the same legal right.'”
Id. (citations omitted).
Privity is not established by the mere presence of a similar
interest in a claim, nor by the fact that the previous adjudication
may affect the subsequent party's liability.
See id. Furthermore,
because Susan had no control over the previous litigation and
nothing in the record indicates that Susan's interests were legally
represented in the previous trial, there can be no privity.
See
County of Rutherford ex rel. Hedrick v. Whitener, 100 N.C. App. 70,
76, 394 S.E.2d 263, 266 (1990). This assignment of error is
overruled.
No error.
Chief Judge EAGLES and Judge LEWIS concur.
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