Gaddisee Gemeda Bedasso, Appellant,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2018).

STATE OF MINNESOTA
IN COURT OF APPEALS
A18-1657

Gaddisee Gemeda Bedasso,
Appellant,

vs.

Anwar Yusuf Omar,
Respondent.

Filed July 1, 2019
Affirmed in part, reversed in part, and remanded
Ross, Judge

Hennepin County District Court
File No. 27-CV-17-2329

Nuro B. Dedefo, Columbia Heights, Minnesota (for appellant)

Raymond L. Tahnk-Johnson, Law Offices of Steven G. Piland, Overland Park, Kansas (for
respondent)

Considered and decided by Ross, Presiding Judge; Larkin, Judge; and Bratvold,
Judge.
U N P U B L I S H E D O P I N I O N
ROSS, Judge
After a jury calculated the amount of damages that Gaddisee Bedasso incurred for
injuries she suffered in a car collision caused by Anwar Omar, the district court deducted
from her award the compensation she had received from collateral sources and awarded
only part of her requested costs and disbursements. Because the district court correctly
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deducted collateral sources and properly denied Bedasso’s motion for her full costs and
disbursements, we affirm in part. But because the district court overlooked Bedasso’s
request for prejudgment interest, and Omar correctly concedes her entitlement to it, we
reverse in part and remand for the district court to order prejudgment interest.
FACTS
Anwar Omar lost control of his car in January 2016, causing a collision that injured
his passenger, Gaddisee Bedasso. Bedasso sued Omar for negligence, seeking damages for
her pain, distress, expenses, and lost income. Omar offered her $50,000 to settle the suit,
and Bedasso rejected the offer. The parties proceeded to trial.
A jury found Omar negligent and calculated the amount of Bedasso’s damages to
be $15,000 for past pain, disability, and emotional di stress, $35,859 for past healthcare
expenses, $7,692 for past lost income, $2,000 for future pain, disability, and emotional
distress, and $2,000 for future healthcare expenses, for a total amount of $62,551.
Bedasso’s health insurer immediately notified her that it was placing a $10,370.05
subrogation lien on her damages award.
Omar moved the district court to deduct from Bedasso’s award the amounts she had
received from collateral sources. Bedasso opposed the motion and also asserted her right
to prejudgment interest on the award. The district court granted Omar’s motion, deducting
collateral-source benefits from Bedasso’s damages award in the amount of $20,000 to
offset the amount she received in no-fault medical insurance benefits, $1,754.40 to offset
her no-fault personal- injury-protection wage-loss benefits, and $12,741.88 to offset
discounts and adjustments to her medical bill that her insurer had negotiated on her behalf.
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The district court also applied Minnesota Rule of Civil Procedure 68.03(b)(1) to determine
the amount of costs and disbursements to include in the judgment in light of the amount
and timing of Omar’s settlement offer. The district court did not address Bedasso’s claim
for prejudgment interest. It ultimately reduced her award from $62,551 to $21,606.75.
Bedasso appeals.
D E C I S I O N
Bedasso appeals from the judg ment, raising three issues. She argues first that the
district court improperly applied the collateral -source statute. She argues second that the
district court failed to calculate prejudgment interest and add it to her award. She argues
third that the district court erred by failing to award her all her costs and disbursements.
Only Bedasso’s prejudgment-interest argument identifies an error.
I
Bedasso argues unconvincingly that the district court misapplied the
collateral-source statute. We review de novo the district court’s application of that statute
to undisputed facts. Auers v. Progressive Direct Ins. Co., 878 N.W.2d 350, 354 (Minn.
App. 2016), review denied (Minn. July 19, 2016).
Bedasso argues that the district court should not have reduced her award by the
amount of payments she received from collateral sources because the award was subject to
her insurer’s $10,370.05 subrogation lien. The district court must reduce the plaintiff’s
damages award by the amount of payments she received from collateral sources to cover
her injuries, except those amounts subject to a subrogation lien. Minn. Stat. § 548.251,
subd. 3 (2018). Although no collateral -source deduction is made for the amount of the
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subrogation lien, the mere existence of a subrogation lien does not prevent collateral-source
deductions on other amounts. See Swanson v. Brewster, 784 N.W.2d 264, 266– 67, 282
(Minn. 2010); Auers, 878 N.W.2d at 355–57. Bedasso does not identify any portion of the
district court’s order indicating that it failed to exempt the subro gation lien from its
collateral-source deductions. And our review of the record informs us that the district court
did not include the amount of the subrogation lien in its collateral-source deductions. The
district court deducted $21,754.40 from the award because the parties stipulated that these
no-fault benefits were deductible collateral sources. The district court deducted $12,741.88
in discounts that Bedasso’s insur er negotiated with Bedasso’s healthcare providers.
Negotiated discounts are deductible collateral sources. Swanson, 784 N.W.2d at 282. And
because negotiated discounts are not amounts for which a subrogation right can be asserted,
they are included in the collateral-source deduction. Auers, 878 N.W.2d at 355– 56. This
total of $34,496.28 in collateral-source deductions means that the district court left
$28,054.72 of the award intact. Bedasso has not shown that any of the overall
collateral-source deduction included the $10,370.05 subrogation lien or explained why the
lien’s existence precludes a deduction of the collateral sources.
Bedasso similarly fails to persuade us that the district court erred by not excluding
from its collateral-source deduction the $5,632 in medical co-payments Bedasso incurred
and her $3,218.36 outstanding medical bill. She relies on Westendorf by Westendorf v.
Stasson, 330 N.W.2d 699 (Minn. 1983), for the proposition that she “has the right to deduct
[her co-pa yments] before [the] collateral source deduction applies.” No reading of
Westendorf, which neither explicitly nor implicitly involved the collateral-source statute,
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supports the proposition. The heart of Bedasso’s argument is that “the district [court] erred
by taking away the money [she] should [be able to use to] pay for outstanding co -pays.”
But the district court was bound to reduce the award according to the law, and this includes
the requirement to make collateral -source deductions except for payments made by a
plaintiff to secure the right to the collateral-source benefits in “the two- year period
immediately before the accrual of the action.” Minn. Stat. § 548.251, subds. 2(2) and 3
(2018). The district court correctly reasoned that Bedasso’s co-payments made after the
accrual of the action do not qualify. As for her argument that the district court erroneously
failed to consider the $3,218.36 outstanding medical bill when it made its collateral-source
deduction, the record reveals that the district court did consider the bill. It properly
reasoned that the bill did not qualify as an offset against the collateral-source deduction
because it does not constitute a contribution to secure a collateral-source benefit.
II
Bedasso contends that the district court erred by failing to award her prejudgment
interest. Because awards of prejudgment interest are governed by statute, we treat the
decision to grant an award as a legal question and review it de novo. See S.B. Foot Tanning
Co. v. Piotrowski, 554 N.W.2d 413, 420 (Minn. App. 1996), review denied (Minn. Dec.
17, 1996); see also Hogenson v. Hogenson, 852 N.W.2d 266, 272 (Minn. App. 2014).
Bedasso accurately observes that the district court did not address her claim for
prejudgment interest, and Omar concedes that Bedasso was entitled to that interest on the
amount of her award from the action’s commencement until his rule 68.03 settlement offer.
Minn. Stat. § 549.09, subd. 1(b) (2018). Despite his concession, Omar opposes Bedasso’s
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request that we remand the case for the district court to calculate her prejudgment interest,
contending that Bedasso forfeited the opportunity to challenge the omission by having
failed to provide the district court the information necessary to compute the interest.
Omar’s opposition is uncompelling.
That Bedasso asked for prejudgment interest without specifying the accurate data to
calculate it did not forfeit the request or prevent the district court from including it in its
order for judgment. The statute mandates the award of prejudgment interest, tasking the
court administrator with computing it. See Minn. Stat § 549.09, subd. 1(a)
(“[I]nterest . . . shall be computed by the court administrator . . . .”). The district court
omitted the interest award as an apparent oversight, not as the result of lacking necessary
data. The statute defines the source of determining the applicable interest rate, see id., subd.
1(c)(1)(i) (2018), the record establishes the various dates necessary for the calculation, and
the district court’s final determination of damages to be awarded supplies the final element.
The district court had the data it needed to award Bedasso the correct prejudgment interest,
albeit in an amount less than she requested. We agree with Omar that Bedasso is entitled
to prejudgment interest but disagree with his charge that she forfeited her right to obtain it.
We remand for the district court to order prejudgment interest.
III
Bedasso argues that the district court erred by failing to award her all her costs and
disbursements under Minnesota Rule of Civil Procedure 68. We review de novo a district
court’s legal determinations under that rule. Vandenheuvel v. Wagner, 690 N.W.2d 753,
754 (Minn. 2005). The district court properly applied the rule, whose terms establish the
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extent to which Bedasso is entitled to costs and disbursements in relation to Omar’s
settlement offer:
If the offeror is a defendant, and the defendant-offeror
prevails or the relief awarded to the plaintiff-offeree is less
favorable than the offer, the plaintiff -offeree must pay the
defendant-offeror’s costs and disbursements incurred in the
defense of the action after service of the offer, and the
plaintiff-offeree shall not recover its costs and disbursements
incurred after service of the offer . . . .

Minn. R. Civ. P. 68.03(b)(1). Given Bedasso’s lower-than-settlement-offer award, she is
not entitled to the costs and disbursements she incurred after receiving the offer. The
district court therefore correctly limited her award of costs and disbursements to the amount
she incurred before she received the offer.
Bedasso argues for a different result, relying on Borchert v. Maloney, 581 N.W.2d
838 (Minn. 1998). Th e argument fails. The Borchert court addressed and resolved an
apparent conflict between a statute, which entitled the plaintiff to all of her costs and
disbursements as the prevailing party, and rule 68 as it was then written, which entitled the
defendant, who had made a settlement offer greater than the plaintiff’s eventual recovery,
to all of his costs and disbursements. 581 N.W.2d at 839. The Borchert analysis addressed
a different issue and a differently worded rule. It has no bearing on our analysis.
Affirmed in part, reversed in part, and remanded.