Kroning v. State Farm Automobile Insurance Co.

567 N.W.2d 42, 1997 Minn. LEXIS 559, 1997 WL 426108

• Court: Supreme Court of Minnesota
• Decided: July 31, 1997
• Docket: CX-95-2097
• Status: Published

Opinions

OPINION

BLATZ, Justice.

• This appeal arises out of an. action for uninsured motorist benefits brought against appellants/defendants State Farm Automobile Insurance Company and State Farm Fire and Casualty Company (State Farm) by respondents/plaintiffs Ronald and Theogene Kroning (Kronings), as a result of a one-vehicle accident in which Mr. Kroning suffered severe physical injuries. At trial, after Mrs. Kroning testified, State Farm asserted that her testimony implied that the Kronings were financially destitute. Therefore, State Farm argued it was entitled to introduce evidence of collateral source payments¹ received by the Kronings to rebut the implication of destitution and to attack Mrs. Kron-ing’s credibility. The trial court agreed with State Farm, concluding that Mrs. Kroning’s testimony had opened the door to the admission of such evidence pursuant to Bartosch v. Lewison, 413 N.W.2d 530, 533 (Minn.App. 1987) (“The affirmative volunteering by [the plaintiff] of financial destitution caused by the accident justified the trial court’s opening the door for cross-examination for the narrow purpose of testing the credibility of [the plaintiffs] assertion.”).

The jury found that no uninsured vehicle was involved in Mr. Kroning’s accident and, as a result, the trial court ordered judgment for State Farm. The court of appeals reversed and remanded for a new trial based on its conclusion that the trial court committed reversible error by permitting State Farm to introduce evidence of collateral source payments received by the Kronings and that the error was compounded by the trial court’s instructions to the jury regarding the nature and effect of Mrs. Kroning’s testimony. Kroning v. State Farm Auto. Ins. Co., 549 N.W.2d 106, 110-11 (Minn.App.1996). We affirm in part and reverse in part.

On November 29, 1991, Mr. Kroning was involved in a serious traffic accident while driving a semi-tractor trailer truck (semi) loaded with frozen meat. At the time of the accident, Mr. Kroning was driving west on Highway 74 near Chatfield, Minnesota. A mixture of snow and rain was falling, and temperatures were near freezing. According to Mr. Kroning, he was approaching a hill when a small red car passed him from behind in a no-passing zone. After the car went by, it pulled in between Mr. Kroning’s semi and a white ear in front of him. Mr. Kroning stated that the red car’s brake lights came on, which caused him to apply his brakes. When he did so, his brakes locked, the semi went out of control, collided with a rock wall, and came to rest across both lanes of the highway. Neither the red nor the white car traveling ahead of Mr. Kroning stopped, and there were no known witnesses to the accident. Mr. Kroning was “very foggy” in the hours after the accident, and it was not until a month or two later that he began to understand what had happened.

Mrs. Kroning and her daughter testified that, at the hospital on the day of the accident, Mr. Kroning told them that a red car caused the accident. The accident report, prepared by the State Patrol shortly after the accident, however, indicated that Mr. Kroning could not remember how the accident occurred and contained no mention of a red car.

As a result of the accident, Mr. Kroning suffered severe injuries, including a broken neck, and has been unable to work. During his direct examination, Mr. Kroning testified about his wages before and after the accident. He talked about how the couple was draining their retirement fund because he had not been able to work. He explained: “[Ijnstead of starting your retirement at 65 and having it bigger at that time, I started it at 57, and so it has been depleting since then.”

After Mr. Kroning testified, his wife took the stand. Mrs. Kroning’s testimony was emotional and marked by tears, and she was offered time by the court to compose herself. In response to various questions, Mrs. Kron-ing, like her husband, offered testimony of financial problems. Mrs. Kroning testified that prior to the accident, her husband “was a hard worker. He provided for us. He saw to all our needs.” She also testified that she “relied on [him] for everything” and that her husband “always made sure that [she] got taken care of.” In response to a question regarding a change in her husband’s outlook, Mrs. Kroning testified that prior to his accident, they had looked forward to their retirement years with plans to “enjoy” themselves and travel. Now, she did not “foresee any of that.”

State Farm argued to the trial court that it was entitled to introduce evidence of collateral source payments received by the Kronings because Mrs. Kroning’s testimony was highly prejudicial and conveyed to the jury that the accident had such a severe financial impact that the Kronings were “in dire financial straights [sic].” The trial court agreed and allowed State Farm to introduce evidence of collateral source payments received by the Kronings. In allowing the collateral source evidence, the trial court instructed the jury:

I am going to permit questions on this issue [collateral source payments] for the very limited purpose * * * limited solely to the question of how it may bear upon her credibility or believability as a witness. * * * It’s not to prove the third-party source, not to prove the amounts, solely as to whether you are going to believe her on this or any other subject.

In response to the Kronings’ objection to that instruction, the trial court further instructed the jury:

On direct examination this witness [Mrs. Kroning] testified with respect to the future and her husband and her and their financial affairs. He [sic] is now being asked questions on that issue, their financial affairs in the future. Whether you want to call it social security or work comp, is immaterial. I am allowing that testimony to go in for one purpose only. That purpose is as it attacks her credibility. She starts out with her direct testimony that they are looking forward to the future with no income in sight. It now develops that there may be some other income in sight, not what it is, not for whom it is, but it has an effect upon her creditability [sic] or her believability by you.

Based on this second instruction, the Kron-ings moved for a mistrial, claiming that the instruction “completely poisoned the jury.” That motion was denied.

The jury, while finding that the Kronings were damaged in the amount of $498,908, also found that the red car, which the Kron-ings claimed triggered the accident, did not exist. As a result, the trial court ordered judgment for State Farm because the Kron-ings failed to establish an essential element for entitlement to uninsured motorist benefits. The Kronings moved for judgment notwithstanding the verdict or, in the alternative, a new trial. Both motions were denied. In their appeal to the court of appeals, the Kronings argued that the trial court erred in admitting evidence of collateral source payments received by the Kronings because Mrs. Kroning’s testimony did not open the door for the admission of such evidence and that the trial court’s jury instructions with respect to the admission of the collateral source evidence were improper and prejudicial. The court of appeals agreed with the Kronings and reversed.

The admission of “evidence rests within the broad discretion of the trial court and its ruling will not be disturbed unless it is based on an erroneous view of the law or constitutes an abuse of discretion.” Uselman v. Uselman, 464 N.W.2d 130, 138 (Minn.1990). “Entitlement to a new trial on the grounds of improper evidentiary rulings rests upon the complaining party’s ability to demonstrate prejudicial error.” Id. In the absence of some indication that the trial court exercised its discretion arbitrarily, capriciously, or contrary to legal usage, the appellate court is bound by the result. Plunkett v. Lampert, 231 Minn. 484, 492, 43 N.W.2d 489, 494 (1950).

In 1986, the legislature enacted Minn.Stat. § 548.36, subd. 5, which specifically provides that “[t]he jury shall not be informed of the existence of collateral sources [of income] or any future benefits which may or may not be payable to the plaintiff.” While this statute sets forth a general rule barring collateral source evidence, the Minnesota Rules of Evidence allow impeachment of a witness. See Minn. R. Evid. 607. In Bartosch v. Lewison, the court of appeals recognized this exception and held that cross-examination on collateral source evidence for the limited purpose of-testing credibility is permissible when a plaintiff volunteers evidence of financial destitution as a result of a tortfeasor’s actions. 413 N.W.2d 530, 533 (Minn.App.1987).

In Bartosch, Mrs. Bartosch testified that her husband, who was severely disabled, was dependent on her for support and that she could no longer work because of the accident, thereby conveying an impression that she and her husband were financially destitute. Id. The trial court permitted cross-examination on collateral benefits. The court of appeals affirmed, noting that “the collateral sources rule should not be used as a shield” and holding that the affirmative volunteering by Mrs. Bartosch of financial destitution justified the trial court’s decision to permit cross-examination on collateral benefits. Id.

We believe that the Bartosch decision was correct. We therefore hold that when a plaintiff, through either the use of misleading statements or outright false statements, falsely conveys to the jury that he or she is destitute or in dire financial straits, the admission of evidence of collateral source payments received by the plaintiff is permitted. We note that when a party “offers evidence that certain conditions exist, he cannot complain that the court permits his evidence to be rebutted.” Wright v. Engelbert, 193 Minn. 509, 512-13, 259 N.W. 75, 77 (1935) (citation and internal quotation marks omitted). The question that remains to be answered is whether the court of appeals properly applied Bartosch to the facts of this case.

Both Mr. and Mrs. Kroning offered evidence of financial problems. Mr. Kroning first complained about the draining of the family retirement fund because he could no longer work. Then came Mrs. Kroning’s intensely emotional testimony.² She told of how, since the accident, her husband provided none of the household services and could no longer provide for the family.

The trial court was in the best position to determine whether Mrs. Kroning’s words, coupled with her tears and other nonverbal cues, gave the jury the impression the couple was suffering financial destitution because of her husband’s accident. See Maxfield v. Maxfield, 452 N.W.2d 219, 226 (Minn.1990) (noting that the trial court is in the best position to judge credibility of witnesses). In deciding whether impeachment evidence is necessitated by evidence already admitted into trial, it is the trial court’s responsibility to exercise its discretion wisely and, in doing so, to further serve the truth-seeking process and to serve the ends of justice. The majority recognizes that a trial is more than a dry transcript and concludes that when the record is taken as a whole, sufficient evidence exists to support the trial court’s ruling regarding the admission of impeachment evidence. We therefore hold that the trial court did not abuse its discretion by permitting cross-examination of Mrs. Kroning on collateral source benefits. This court’s affirmance is not an evisceration of the collateral source rule as stated in the dissent. Rather, it is a clear recognition that a trial court judge is more capable of evaluating the impact of a witness’s testimony than a reviewing tribunal. As human experience has taught us, words alone rarely communicate the entire message.

Further, we believe that the dissent strikes an imbalance between the collateral source rule and Minnesota Rules of Evidence 607, essentially according a plaintiffs testimony in a civil case a level of protection not even accorded a defendant’s testimony in criminal trials. The collateral source statute does not trump the Minnesota Rules of Evidence allowing impeachment. In this case, albeit civil, the dissent chooses to second guess the trial court’s conclusion that Mrs. Kroning, building on her husband’s testimony, had communicated to the jury a false impression of their financial condition.³ While a trial court’s discretion is not unbridled, the exercise of it is more of an art than a science. In this case, a different trial court may have reached a different decision, but this is not the standard upon which a trial court’s decision is reviewed. The issue is whether the trial court exercised its discretion arbitrarily or capriciously. See Plunkett, 231 Minn, at 492, 43 N.W.2d at 494. Clearly, the record here lends sufficient support to the trial court’s decision to allow cross-examination on collateral source benefits.

We next turn our attention to the Kronings’ claim that the trial court committed prejudicial error when it instructed the jury on two occasions as to the reasons why the collateral source payment evidence was being admitted. See supra, 45-46. The Kronings challenge both of the trial court’s instructions. The court of appeals concluded that the instructions invited the jury not to trust any of Mrs. Kroning’s testimony, that the instructions were suggestive, and that they encouraged prejudice toward the Kron-ings in the minds of the jurors. Kroning, 549 N.W.2d at 111.

A trial court must not invade the province of the jury by making comments, insinuations, or suggestions indicative of the court’s view of the integrity or credibility of witnesses. State v. Garden, 267 Minn. 97, 113, 125 N.W.2d 591, 601 (1963). “The influence of the trial judge on the jury is necessarily and properly of great weight and [the] lightest word or intimation is received with deference, and may prove controlling.” State v. Shetsky, 229 Minn. 566, 569-70, 40 N.W.2d 337, 339 (1949) (internal quotation marks omitted) (quoting Quercia v. United States, 289 U.S. 466, 470, 53 S.Ct. 698, 699, 77 L.Ed. 1321 (1933) (stating that it is prejudicial error for the trial court to comment unfavorably on a witness)). When the key issue at trial is the credibility of a witness, the trial court must exercise care to maintain its neutrality in instructing the jury. When the trial court interjects its own beliefs with regard to credibility, the likely effect upon the average juror is that the “witness [is] thoroughly discredited, and any value that [the ■witness’s] testimony might otherwise have had [is] greatly impaired, if not wholly destroyed * * *.” Id. at 571, 40 N.W.2d at 340 (quoting State v. Hanson, 173 Minn. 158, 161, 217 N.W. 146, 147 (1927) (stating that to' preserve the integrity of a jury trial, the credibility of witnesses should be left entirely to the jury)).

A trial court’s statement upon a pivotal fact, which might have an important bearing on the jury’s evaluation of the evidence, is grounds for a new trial. Cf. Adelmann v. Elk River Lumber Co., 242 Minn. 388, 392, 65 N.W.2d 661, 665 (1954); Larkin v. City of Minneapolis, 112 Minn. 311, 315, 127 N.W. 1129, 1130 (1910). Before a new trial may be ordered on such grounds, it must be shown that the improper instructions resulted in prejudice. United States v. Carter, 528 F.2d 844, 851 (8th Cir.1975). In determining whether the trial court’s improper instructions resulted in prejudice, we must construe the instructions as a whole from the standpoint of the total impact on the jury. Lindstrom v. Yellow Taxi Co., 298 Minn. 224, 229, 214 N.W.2d 672, 676 (1974).

A pivotal question to be resolved in this case was the existence of the red car that the Kronings claim caused the accident. Mrs. Kroning’s testimony, particularly her testimony with respect to the red car, was key to answering this question. Anything casting doubt on her credibility had great potential to sway the jury, and while it was proper for State Farm to attack her credibility, it was improper for the court to do so. The instructions, as given, were such that they could only have had the effect of discrediting Mrs. Kroning and impairing the value of her testimony. Thus, we conclude that the Kronings were prejudiced by the instructions.

Because we hold that the trial court did not abuse its discretion by permitting the introduction of collateral source payment evidence and that the jury instructions related to that evidence, viewed in their entirety, were prejudicial, we affirm the court of appeals in part and reverse in part. The case is remanded for a new trial.

Affirmed in part and reversed in part.

1 . Collateral source payments are defined as:

Subdivision 1. Definition. For purposes of this section, "collateral sources” means payments related to the injury or disability in question made to the plaintiff, or on the plaintiff's behalf up to the date of the verdict, by or pursuant to:

(1) a federal, state, or local income disability or workers' compensation act; or other public program providing medical expenses, disability payments, or similar benefits;

Minn.Stat. § 548.36 (1996).

2 . When State Farm moved to allow cross-examination of Mrs. Kroning on collateral sources, State Farm’s counsel noted that:

[Mrs. Kroning] was crying consistently on the stand. Counsel was very gentle with her * * * her counsel * * * he didn't ask her questions that I thought would be that disturbing and yet she was in constant tears for over an hour on the stand. And I want the record to reflect that, because it goes to what I’m going to be moving the court to be allowed to do.

This statement was not refuted or corrected by opposing counsel or the trial court.

3 . In determining the propriety of impeachment on collateral source benefits, our analysis does not turn solely on the truthfulness or falsity of individual statements made by a witness. Rather, the key is whether the witness's testimony, in its entirety, conveyed a false impression of financial destitution. We note that in Bartosch, Mrs. Bartosch was reciting facts when she testified that her husband, who suffered from heart disease, was severely disabled and dependent on her for support. 413 N.W.2d at 533. In fact, Mr. Bartosch died sometime prior to the time of the appeal. Id.