Oregon Case Update: Court of Appeals Upholds Partial Satisfaction of Judgment for PIP Benefits
From the desk of Smith Freed Eberhard: Oregon statutes prevent an injured party from double recovery – receiving payments from its PIP insurer and the negligent party’s insurer that together are more than the injured party’s proven damages. But in cases where the verdict form does not allow the jury to determine whether the damages award includes losses that are subject to PIP benefits, will the court reduce the jury’s award by the amount of reimbursed PIP benefits? Read on to find out.
Claims Pointer: In this case arising out of a motor vehicle accident, the plaintiff received PIP benefits from his insurer. Subsequently, the defendant’s insurer reimbursed the plaintiff’s insurer for the PIP benefits. Following the jury verdict, the trial court reduced the damages award by the amount of reimbursed PIP benefits. The Oregon Court of Appeals held that when the plaintiff’s verdict form does not let the jury determine whether the damages to be awarded include PIP benefits, the court must reduce the damages by the amount of PIP benefits reimbursed.
Cooksley v. Lofland, 288 Or App 103 (2017)
Panayiota Cooksley (“Plaintiff”) and Lauree Lofland (“Defendant”) were involved in a motor vehicle accident. Following the accident, Plaintiff’s insurer provided her with $15,000 in personal injury-protection (“PIP”) benefits. Afterwards, Defendant’s insurer reimbursed Plaintiff’s insurer for the $15,000 in PIP benefits. At trial, the jury awarded Plaintiff $50,000 in economic damages and $50,000 in noneconomic damages. Defendant asked the trial court for a partial satisfaction of the judgment for $15,000, equal to the amount of reimbursed PIP benefits. The court agreed and reduced the judgment by $15,000. Plaintiff appealed.
On appeal, Plaintiff disputed the trial court’s decision to partially satisfy the judgment. Plaintiff argued that the statute allowing partial satisfaction was not applicable because it was the Defendant who was responsible for the nonsegregated verdict form that “created the ambiguity in determining whether damages awarded overlapped with PIP benefits.” Defendant contended that it was not responsible for the verdict form because the trial court adopted its own verdict form.
The court first looked to ORS 31.555(2), which allows for partial satisfaction of the judgment. ORS 31.555(2) states that:
If a judgment is entered against a party who is insured under a policy of liability insurance against such judgment and in favor of a party who has received benefits that have been the basis for a reimbursement payment by such insurer under ORS 742.534, the amount of the judgment shall be reduced by reason of such benefits.
The court explained that the reasoning behind the statute was to “prevent the injured party from receiving payments from the PIP insurer and the negligent party’s insurer that together would be greater than the injured party’s proven damages.” In other words, the statute was enacted to prevent plaintiffs from receiving “double recovery.”
Whether a court is required to reduce the judgment by the amount of reimbursed PIP benefits turns on whether the verdict form demonstrates that the jury “did or did not include an adjustment of PIP benefits.” If the verdict form submitted by a plaintiff does not allow the jury to consider whether the award includes losses that are subject to PIP benefits, the court must reduce the damages award by the amount of PIP benefits (emphasis added). On the other hand, if the court is certain that the jury’s verdict did not award damages for injuries that were subject to PIP benefits, the court will not reduce the judgment by the amount of PIP benefits.
With those rules in mind, the court turned to the case at hand. The court did not agree with Plaintiff’s argument that ORS 31.555 is not applicable because Defendant was responsible for the ambiguous verdict form. The court looked at the verdict form that Plaintiff had offered, which was ultimately not used, and found that Plaintiff’s form was also ambiguous. Specifically, Plaintiff’s verdict form did not include separate sections under the damages award, which would allow the jury to consider the $15,000 PIP reimbursement given to Plaintiff separately. Because neither Plaintiff’s verdict form nor the verdict form actually used indicated whether the jury considered PIP reimbursement in awarding damages, the Court of Appeals upheld the trial court’s decision to partially satisfy the judgment.
This case serves as a reminder of the importance of a jury verdict form that has segregated damages, which separately considers reimbursed PIP benefits. In York v. Paakkonen, 259 Or App 276 (2013), the defendant’s verdict form was adopted by the court. The form was unsegregated, with no separate allocation for damages subject reimbursed PIP benefits. The Court of Appeals held that the defendant was not entitled to a partial satisfaction because it was defendant’s verdict form that caused the ambiguity. It follows that if defendants are responsible for the jury verdict, they should be careful to include segregated damages that allow the jury to consider whether the award includes damages for injuries subject to PIP benefits.
View full opinion at: http://www.publications.ojd.state.or.us/docs/A161658.pdf
Case updates are intended to inform our clients and others about legal matters of current interest. They are not intended as legal advice. Readers should not act upon the information contained in this article without seeking professional counsel.
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