Limitations on collateral source evidence in personal injury litigation has been helpful in ensuring plaintiffs receive the compensation to which they are entitled.
The collateral source rule is a long-standing legal principle in personal injury law holding that compensation received by plaintiff via a secondary source (i.e., health insurance, workers’ compensation benefits, disability benefits, etc.) is not relevant to the liability of defendant. In other words, it would not be fair for a defendant to pay less in damages to a client who has health insurance than to one who doesn’t. Therefore, evidence of the client’s health insurance – unless otherwise relevant – probably won’t be allowed consideration.
Still, precedent in Florida courts, set by the 1984 case of Florida Physician’s Insurance Reciprocal v. Stanley did allow limited admission of evidence that pertained to free or low-cost collateral source benefits. This generally included things like Medicare and Medicaid benefits, which the court held were relevant to the issue of plaintiff’s future expenses. Even if plaintiffs don’t have Medicaid, most will receive Medicare at some point in their lives. That could mean it’s a factor in determining long-term medical expenses.
But now, the Florida Supreme Court in the recent case of Joerg v. State Farm Mutual Automobile Insurance Co. has further narrowed this exception. The supreme court justices decided that all defendants will be precluded from presentation of evidence pertaining to benefits a plaintiff might receive from future legislation (i.e., Medicare and Medicaid).
In Joerg, according to court records, plaintiff is a developmentally disabled adult who has never worked and has lived his entire life with his parents. For his disability, plaintiff receives reimbursement from Medicare to cover his medical bills.
One day in 2007, plaintiff was in a bicycle accident in which he was struck by a vehicle. He filed a negligence action against the vehicle driver, as well as plaintiff’s own auto insurance company, from which he sought uninsured motorist benefits. Before trial, plaintiff withdrew the action against the other driver and proceeded solely against his own insurer for UIM benefits.
His lawyer filed a motion to exclude any collateral source benefits to which plaintiff was entitled, and that included discounted benefits under both Medicaid and Medicare. Trial court did initially grant this request, but only as it pertained to previous medical bills. Plaintiff moved for reconsideration, and trial court vacated the previous ruling and held the insurer was allowed to introduce evidence of future medical bills for certain treatments or services that would be available to all citizens regardless of wealth or status, but precluded the insurer from introducing any evidence of future Medicaid or Medicare benefits.
After a four-day trial, jurors decided the case in favor of plaintiff, awarding $1.5 million in damages. That included $470,000 for future medical expenses.
Insurer appealed. While the Second District Court of Appeals affirmed on all other issues, except the admissibility of plaintiff’s Medicare benefits. The court ruled these benefits were free and unearned and thus shouldn’t have been excluded under the collateral source rule. The award for future damages was reversed and the case remanded for further proceedings.
Florida Supreme Court accepted review and concluded future benefits through Medicare were both a liability and uncertain, due to the right of reimbursement retained by the program. These payments are not necessarily free and thus not admissible in court. Plus, such a ruling doesn’t result in windfalls for plaintiffs because the government retains a right to reimbursement. Finally, calculating damage awards based on benefits plaintiff has not yet and might never receive is “absolutely speculative.” Even where very specific benefits exist, there are often waiting lists and the very existence and funding of these public programs relies on legislative action – which is no predictable matter. Thus, it should not be used to limit plaintiff damages.
If you have been a victim of a traffic accident, call Chalik & Chalik at (954) 476-1000 or 1 (800) 873-9040.
Joerg v. State Farm Mutual Automobile Insurance Co. , Oct. 15, 2015, Florida Supreme Court
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