Cruz v. Groth: the exceptional collateral source rule remains exception-free in South Dakota.

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Cruz v. Groth: the exceptional collateral source rule remains exception-free in South Dakota.

I. INTRODUCTION

In the area of tort law, "the fastest way to a mistrial is to mention the word 'insurance' in front of the jury." (1) A plaintiff's insurance or collateral sources of income typically are not introduced to the jury because of the potential danger that the jury may reduce the damages award when it discovers that the plaintiff s damages have been partially or entirely covered by another source. (2) In south Dakota, the rule is well-settled that neither "[t]otal [n]or partial compensation received by an injured party from a collateral source" offset the damages recovered from the wrongdoer. (3)

In Cruz v. Groth, (4) the South Dakota Supreme Court was asked to make an exception to the collateral source rule. (5) If recognized, this exception would allow the defendant to introduce evidence of collateral sources in order to impeach the testimony of a party who volunteered false or misleading testimony about his or her financial circumstances. (6) The court declined to carve out an exception to the collateral source rule, finding that such an exception would all but destroy the collateral source rule in South Dakota. (7) Moreover, it determined that the plaintiff s testimony was not false or misleading in this case. (8) This note will examine the history of the collateral source rule (9) and its role in South Dakota law (10) in order to demonstrate that the court correctly reached the conclusion to keep the collateral source rule as close to its common law origins as possible. (11)

II. FACTS AND PROCEDURE

Terrance Groth was driving his boat on Lake Francis Case on September 26, 2005 when his boat collided with another boat. (12) Gerald Bachman, the owner of the other boat, was fishing with his son-in-law, Reynaldo Cruz, when the boats collided. (13) Because of the impact of the collision, Cruz fell onto his back and had to seek medical care the next day for lower back pain. (14) Cruz received an x-ray, which showed no serious injury, and he was told to return to the doctor if he did not feel better. (15) A little more than a month later, Cruz returned to the doctor with continuing lower back and neck pain. (16) He was diagnosed as having cervical and thoracic myalgia and arthralgia (17) and was prescribed medication for his pain. (18)

Cruz sued Groth in June of 2006 to recover monetary damages for his personal injuries. (19) Groth answered and admitted "that he was negligent and that his negligence was the proximate cause" of the boating accident but denied that the accident caused Cruz's injuries. (20) Prior to trial, plaintiff Cruz made a motion in limine to prevent defendant Groth from mentioning two things in front of the jury: (1) any Med Pay that was on the insurance policy for the boat owned by Bachman and available to Cruz, and (2) whether Cruz was insured personally or had access to insurance after the accident. (21) Groth countered and claimed that the insurance information should be admitted as evidence. (22) Groth intended to impeach Cruz's testimony to the effect that he did not seek further medical treatment despite continued pain because of his inability to pay. (23)

Groth argued that if he could question Cruz about collateral sources, then the evidence would show that there was Med Pay left on Bachman's boat that would have covered another $900 worth of treatment. (24) Groth also claimed that Cruz had health insurance through his job that would have helped cover the cost of additional treatment after the accident. (25) Eventually, Cruz admitted that there was Med Pay of $920 available to him but that there were also periods of time following the accident when Cruz did not have health insurance. (26) The trial court performed the balancing test required by S.D.C.L. section 19-12-3 (Rule 403), (27) and determined the probative value of the evidence was outweighed by its potentially prejudicial impact. (28) Thus, the trial court granted Cruz's motion in limine. (29) The court determined that if the insurance evidence were to be inserted it would be prejudicial because the jury would be distracted from the issue of damages. (30)

After the trial began, Cruz's attorney introduced the issue of Cruz's financial status in opening statements, saying the reason Cruz failed to seek medical treatment was because he was concerned about the cost of the medical bills while living "hand to mouth." (31) When Cruz's counsel asked him why he did not seek treatment when he was still in pain, Cruz responded that he did not want to miss work and just tried to get over the pain. (32) He claimed that he was trying to make it through the day without aggravating the injuries further, and he hoped the injury would go away. (33) When questioned on the decision not to seek further treatment after the last doctor's visit, Cruz reiterated that medical treatment was expensive, and it was not easy to go to a doctor without adequate financial reserves. (34) He also said the cost of his first two medi...

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