Legal Memorandum: Collateral Source Payments

Issue: When will the Minnesota courts allow inquiry into collateral source payments?

           The collateral-source statute clearly states, “[t]he jury shall not be informed of the existence of collateral sources or any future benefits which may or may not be payable to the plaintiff.”  Minn. Stat. § 548.36, subd. 5 (2000).  Only one exception has been carved out: if a plaintiff puts his or her financial condition in issue, he or she “opens the door” to cross-examination.  Kroning, 567 N.W.2d 42.  However, cross-examination under such circumstances is permitted only for impeachment purposes and only if the testimony was false or conveyed a false impression to the jury. “We 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.”  Id. at 46 (emphasis added).  

The court in Kroning was balancing the clear statement of policy set forth in § 548.36, subd. 5, and a party’s right to impeach a witness.  Id. at 46-47.  The balance between the two policies is delicate.  Compare id. at 46-47 (majority opinion) with id. at 49-50, 56-57 (Page, J., dissenting; Gardebring joining).  A trial court must respect that delicate balance.  In Kroning the plaintiff testified about his wages before and after the accident, including the fact that he and his wife had spent down their retirement savings.  Id. at 45.  His wife then took the stand and, with much […]