## Facts

- Sharif Haji-Ali ran a red light in Minneapolis and collided with Sheelagh F. Russell’s vehicle, injuring Russell.
- Russell sued Haji-Ali for negligence, seeking damages greater than Haji-Ali’s $50,000 liability-policy limit.
- Russell had underinsured-motorist (UIM) coverage through her own insurer, which participated in the litigation (including intervention).
- Before trial, Russell settled her UIM claim for $50,000, releasing the insurer from further UIM liability.
- In connection with that UIM settlement, the insurer did not obtain subrogation rights against Haji-Ali.
- A jury later found Haji-Ali negligent and awarded Russell $102,974 in damages.
- After the verdict, Haji-Ali moved to reduce the judgment under Minnesota’s collateral-source statute, Minn. Stat. § 548.251, including a reduction for the $50,000 UIM payment.
- The district court reduced the verdict by certain no-fault benefits but refused to reduce it by the $50,000 UIM settlement, reasoning that the UIM payment was not a collateral source under the statute.
- Haji-Ali appealed.

## Issues

1. Whether, under Minn. Stat. § 548.251, a plaintiff’s pre-verdict UIM settlement payment is a collateral source that must be offset against the jury’s damages award.
2. If an offset applies, whether the reduction must account for the statute’s allowance for amounts the plaintiff paid to obtain the coverage (such as premiums).

## Decision

- The Minnesota Court of Appeals reversed the district court’s refusal to apply a collateral-source offset for the UIM settlement.
- The court held that UIM benefits are “automobile accident insurance” within the meaning of Minn. Stat. § 548.251 and therefore qualify as collateral-source payments.
- Because Russell received the $50,000 UIM payment before the verdict, it met the statute’s timing requirement for collateral-source reductions.
- The court remanded for recalculation of the judgment, including an offset for the $50,000 UIM payment, subject to any statutory credit tied to Russell’s cost of obtaining the coverage (e.g., premiums).

## Legal Principles

- Minn. Stat. § 548.251 requires a postverdict reduction of damages for certain collateral-source payments already paid to (or available for) the plaintiff before the verdict.
- The statute’s definition of “collateral sources” includes payments from “automobile accident insurance,” which covers first-party motor-vehicle coverages such as UIM benefits.
- Minnesota precedent treating uninsured-motorist (UM) benefits as collateral sources under the same statutory language supports treating UIM benefits the same way when the payment occurs before the verdict.
- The statute’s timing limitation matters: the collateral-source reduction applies only to amounts paid (or available) before the verdict.
- The statute also provides a method to avoid an improper benefit to the tortfeasor by allowing an offset tied to what the plaintiff paid to secure the collateral-source coverage (including premiums or other contributions).
- When the statutory language is clear, courts apply it as written; arguments about whether the result is fair or desirable are for the legislature, not judicial revision.

## Conclusion

Russell v. Haji-Ali holds that a $50,000 pretrial UIM settlement paid to an injured plaintiff is a collateral source under Minn. Stat. § 548.251 and must be deducted from the tort verdict, with the final reduction adjusted to reflect any credit the statute allows for the plaintiff’s premium or other coverage payments.


Russell v. Haji-Ali, 826 N.W.2d 216 (2013)