Summary
finding that pension benefits could not be used to offset an award under the collateral source rule
Summary of this case from Shepler v. Metro-N. Commuter R.R.Opinion
04 Civ. 9971 (LMM).
June 26, 2006
MEMORANDUM AND ORDER
1.
Plaintiff, at the time of the incident alleged in the complaint, was a Lieutenant in the New York City Police Department assigned to its Harbor Unit. While serving aboard a City vessel, plaintiff suffered injuries on August 5, 2003, and brings this action under the Jones Act, 46 U.S.C. § 688, and general maritime law to recover damages. As described by defendant, the New York City Police Pension Fund (the "Fund") determined that plaintiff became disabled as a result of the injuries and that he is to receive an accident disability pension (the "Pension") for life in the amount of three-quarters of his compensation on the date of his retirement, in or about October of 2004.
Defendant moves, in limine, (i) for an order permitting it "to present evidence at trial in mitigation of plaintiff's damages that, as a result of the accident alleged in the instant case, plaintiff is currently receiving an accident disability retirement pension from the New York City Police Pension Fund" (David Aff., Apr. 28, 2006, ¶ 1); and (ii) for an order precluding plaintiff's marine safety expert from offering opinions "with respect to the `level of slipperiness' of the ladder involved in plaintiff's accident." (Id. ¶ 8.)
Plaintiff moves, in limine, for orders (i) precluding defendant "from offering any evidence of plaintiff's receipt of accident disability retirement benefits;" and (ii) "prohibiting the defendant from seeking to offset any future lost earnings award by accident disability retirement benefits plaintiff is receiving or will receive in the future." (Pl.'s Mot. in Limine to Preclude Evidence, May 2, 2006, at 1.)
2.
Both motions implicate the collateral source rule. "According to this doctrine, which is an established exception to the general rule that damages in a negligence action must be compensatory, a wrongdoer is not permitted to reduce a plaintiff's recovery because of benefits which the latter may have received from another source." Cunningham v. Rederiet Vindeggen A/S, 333 F.2d 308, 316 (2d Cir. 1964) (footnote omitted).
The collateral source rule is a substantive rule of law that bars a tortfeasor from reducing the quantum of damages owed to a plaintiff by the amount of recovery the plaintiff receives from other sources of compensation that are independent of (or collateral to) the tortfeasor. Married to this substantive rule is an evidentiary rule that proscribes introduction of evidence of collateral benefits out of a concern that such evidence might prejudice the jury.Davis v. Odeco, Inc., 18 F.3d 1237, 1243 (5th Cir. 1994) (footnotes omitted). The evidentiary rule is considered below (§ 5).
Defendant seeks to offset all amounts paid and to be paid to plaintiff through the Pension against any past or future lost wages that plaintiff may recover. It argues that Blake v. Del. Hudson Ry. Co., 484 F.2d 204 (2d Cir. 1973), "precludes application of the collateral source rule to the [Pension] paid to plaintiff by the [Fund] because the pension is funded by the City and it is not a bargained-for term of employment." (David Reply Aff., May 22, 2006, ¶ 2.)
Blake is a case brought under the Federal Employers Liability Act ("FELA"). The FELA is applicable to Jones Act cases, like the one at hand, because the Jones Act incorporates the FELA. Folkestad v. Burlington Northern, Inc., 813 F.2d 1377, 1380 n. 3 (9th Cir. 1987).
The collateral source rule is a common-law doctrine found in the law of many states. Here, since the case is brought under the Jones Act and general maritime law, federal law governs the issue of the application of the collateral source rule.Blake, 484 F.2d at 205; A/H Battery Assocs. v. Gulf Craft, Inc., No. 93 Civ. 1915, 1998 WL 252105, at *1 (S.D.N.Y. May 18, 1998).
In New York, it has been substantially modified by Civil Practice Law and Rules § 4545.
The general rule in the federal courts is that the collateral source rule applies. Hartnett v. Reiss S.S. Co., 421 F.2d 1011, 1016 n. 3 (2d Cir.), cert. denied, 400 U.S. 852 (1970). "The collateral source rule is `plainly applicable in Jones Act negligence cases.'" Odeco, 18 F.3d at 1243 n. 20 (quotingPhillips v. W. Co. of N. Am., 953 F.2d 923, 930 (5th Cir. 1992)). The collateral source rule has been applied in this district in maritime cases, including cases brought against New York City. See Mason v. The City of New York, No. 01 Civ. 8870 (S.D.N.Y. Oct. 17, 2003) (order granting motion in limine) (copy annexed as Addendum 1 to Pl. Mem., May 2, 2006); Stanley v. Bertram-Trojan, Inc., 868 F. Supp. 541 (S.D.N.Y. 1994); andOlsen v. City of New York, No. 83 Civ. 0462, 1984 WL 1033 (S.D.N.Y. Oct. 18, 1984.)
3.
The parties are agreed that the following facts with respect to the Plan are not in dispute:
(1) pension benefits are made from monies appropriated by The City; (2) Section 470 of the New York Retirement Social Security Law appears to make the accident disability retirement benefit a prohibited term of bargaining until July 2007; (3) ordinary disability retirement benefits are payable for non-job-related disabilities and accident disability retirement benefits are payable for job-related disabilities; (4) ordinary disability retirement benefits are payable at different levels depending upon the police officer's number of years of service and accident disability benefits are payable regardless of the length of service; and (5) there is no language in the disability plans, applicable statutes or, Administrative Code sections allowing or mandating a set-off for a judgment received in a tort-based lawsuit.
(Pl.'s Letter Br., June 1, 2006, at 2-3; see Hr'g Tr., June 2, 2006, at 3-4.)
Defendant represents that the disability pension at issue is not the result of collective bargaining (Hr'g Tr., June 2, 2000, at 6-7), but has
actually been provided by free and voluntary enactment of the New York legislature and New York City Council and was enacted in its current form in 1937. And the New York legislature has actually provided statutory benefits to police officers who are injured in the line of duty since 1878. And the origin of the benefit in an era preceding collective bargaining between public employers and public employee unions clearly indicates that the benefit — that the benefit originated as a matter of moral obligation, that the legislature was determined to provide to the — the legislature was expressly the public's concern for the welfare of police officers injured in the line of duty.
4.
In Blake, the case defendant relies on, the district court did not allow the defendant to set off $1,477.86 that defendant had paid for plaintiff's medical expenses, but which had been repaid to the defendant by an insurer. The insurance policy in question was issued and maintained pursuant to an agreement between a number of railroads and their employees' unions and covered medical expenses of employees; the railroads paid the premiums for the insurance; and coverage was not limited to injuries for which the railroads would be liable under FELA. The defendant did not prove the amount of premium it had paid that was applicable to plaintiff, nor did it seek a credit based on any premium under 45 U.S.C. § 45. It argued that the collateral source rule did not apply to the $1,477.86 it had paid on account of the plaintiff's medical expenses. The Second Circuit affirmed the district court.Judge Thomsen (a visiting district judge sitting by designation) concluded that the district court was correct in not allowing the setoff. He found the circumstances of a number of cases (see 484 F.2d at 205-06) to be "analogous to those in the case at bar." Id. at 206. He quoted one of them, Haughton v. Blackships, Inc., 462 F.2d 788 (5th Cir. 1972), at some length. (See id. at 206-07.)
Judge Friendly, concurring, thought the result "shockingly unjust" and that the collateral source rule ought not to apply to payments made under an insurance policy maintained by a defendant (citing Restatement of Torts 2d § 920A at 169 (Tent. Draft No. 19, March 30, 1973)), but concluded that: "What constrains me nevertheless to concur is that here we are governed not by federal common law but by statute. Under 45 U.S.C. § 55 the railroad is entitled to set off only the premiums, not what the premiums bought." 484 F.2d at 207. Judge Friendly noted that, "[i]f the railroads wish to avoid the harsh result reached by the district court, they can accomplish this by specific provision in the collective bargaining agreement." Id. (citation omitted).
Judge Friendly's concurring opinion in Blake is discussed at some length in Folkestad, 813 F.2d at 1382-83. TheFolkestad Court said that "Judge Friendly in Blake was not suggesting that the amount of insurance benefits received can never be offset. His point was that if the employers wished the insurance to fulfill their liabilities under FELA, they should endeavor to negotiate a provision to that effect in the collective bargaining agreement." Id.
Judge Lumbard dissented, concluding that "the collateral source rule should not be interpreted to bar a setoff by the railroad of the hospital bills paid by it." 484 F.2d at 208.
Haughton, as quoted in Blake, states clearly that "the source of the funds may be determined to be collateral or independent, even though the employer-tortfeasor supplies such funds. Application of the collateral source rule depends less upon the source of funds than upon the character of the benefits received." 462 F.2d at 790 (citations omitted), quoted inBlake, 484 F.2d at 206. Subsequent Fifth Circuit case law clarifies Haughton. "Haughton requires us to ask whether a benefit paid for by the tortfeasor was intended to respond to potential future liability." Phillips, 953 F.2d at 932. "In determining whether a benefit plan that is wholly or partly funded by the tortfeasor is a collateral source, the ultimate inquiry remains whether the tortfeasor established the plan as a prophylactic measure against liability." Davis, 18 F.3d at 1244.
The Pension very clearly does not represent an effort on the part of defendant to provide indemnification for itself in the event of its liability to police officers injured in the line of duty. Rather, it reflects "the public's concern for the welfare of police officers injured in the line of duty." (Hr'g Tr., June 2, 2006, at 7.) "It's about taking care of your fallen solders." (Id. at 10.)
There has been no suggestion that the sort of pension plaintiff is receiving is not available to officers injured while on duty in circumstances in which defendant cannot be subjected to tort liability.
That four of the five factors of the so-called Allen test, considered individually, may favor defendant is not persuasive. "These factors must not . . . be applied woodenly: In determining whether a benefit plan that is wholly or partly funded by the tortfeasor is a collateral source, the ultimate inquiry remains whether the tortfeasor established the plan as a prophylactic measure against liability." Davis, 18 F.3d at 1244. In this case there is no evidence of any such intent.
See Allen v. Exxon Shipping Co., 639 F. Supp. 1545, 1548 (D. Me. 1986). The factors are set forth in Davis, 18 F.3d at 1244, and Phillips, 953 F.2d at 932.
No doubt the Pension can be described as "gratuitous" in the sense that it is funded entirely by defendant, but that does not affect, or overcome, the fact that there is no evidence that it was ever intended to function as an indemnity mechanism. Realistically, it is a "fringe benefit" even though not one resulting from collective bargaining. The fact that it is not the result of collective bargaining is, in the circumstances, not relevant.
The collateral source rule applies to the Pension, and defendant may not offset the Pension payments to plaintiff against any verdict in favor of plaintiff.
5.
The Court understands that defendant will not seek to offer evidence of the Pension for any other reason. (See Hr'g Tr., June 2, 2006, at 19-20.) Generally speaking, the presentation of such evidence before the jury is not allowed, Eichel v. N.Y. Cent. R.R. Co., 375 U.S. 253, 255 (1963) (per curiam), although "such evidence may be admissible if the plaintiff puts his financial status at issue." Santa Maria v. Metro-North Commuter R.R., 81 F.3d 265, 273 (2d Cir. 1996) (citation omitted).
6.
The Court has reviewed the amended report and the qualifications of plaintiff's expert, Mr. Twomey, and concludes that in the circumstances of this case he is competent to testify to the probability or not of the slipperiness of the ladder at issue, and its probable degree.
SO ORDERED.