Damages - Personal Injury Category Archives — Page 5 of 6 — Day on Torts Published by Day on Torts — Tennessee Personal Injury Attorney

August 1, 2007

Collateral Source Rule Bars Evidence Of Amount Paid By Health Insurer

The Wisconsin Supreme Court has ruled that a plaintiff is entitled to prove the full amount of medical charges, despite the fact that plaintiff’s insurer actually paid a less amount. The lesser amount cannot be used to prove that it is the "reasonable" value of the services.

This is how the Court expressed its holding: " the collateral source rule prohibits parties in a personal injury action from introducing evidence of the amount actually paid by the injured person’s health insurance company, a collateral source, for medical treatment rendered to prove the reasonable value of the medical treatment."

The majority opinion is 37-pages long, but here is a brief statement of the reason for the Court’s holding: "Although an injured person may experience double recovery when the collateral source rule is applied, one recovery from the collateral source and a second recovery from the tortfeasor, the purpose of the collateral source rule is not to provide the injured person with a windfall, but rather to prevent the tortfeasor from escaping liability because a collateral source has compensated the injured person. The injured person, not the tortfeasor, benefits from the collateral source." [Footnotes omitted.]

May 3, 2007

Loss of Services of a Homemaker

by The Law Offices of John Day, P.C.

This report published by Rueters says that if "the typical stay-at-home mother in the United States were paid for her work as a housekeeper, cook and psychologist among other roles, she would earn $138,095 a year."

Is this data that can be reasonably relied upon by an economist in a death or personal injury case?

April 13, 2007

Kentucky Opens Door to Loss of Earning Capacity Claims

by The Law Offices of John Day, P.C.

The Kentucky Supreme Court has ruled that a "plaintiff need only prove with reasonable probability that the injury is permanent in order to obtain an instruction on permanent impairment of earning power."

In Reece v. Nationwide Mutual Insurance Company, 2005-SC-000079-DG (Ken. S. C. March 22, 2007) Reece was hurt in an automobile accident. Two doctors testified that she suffered a permanent injury in the incident. The issue before the court was

"whether the evidence submitted by Reece in this case was sufficient to warrant an instruction on permanent impairment of earning power, or whether Reece was required to present specific evidence, presumably in the form of an expert, of how her earning power was permanently impaired by the injury. Reece argues that no specific evidence of permanent impairment of earning power is required, only proof that the injury is permanent which she presented through the testimony of Dr. Thurman and Dr. Raque. Nationwide contends that the Court of Appeals correctly set out the standard which would require specific evidence of permanent impairment of earning power in the present case . We hold that evidence of permanent injury alone is sufficient for an instruction on permanent impairment of earning power, and that the jury can through their common knowledge and experience make the determination if there has been a permanent impairment of earning power, the extent of such impairment, and the amount of damages for such impairment."

February 14, 2007

Amount Paid – Not Just Amount Charged – for Medical Care is Admissible

by The Law Offices of John Day, P.C.

The Ohio Supreme Court has ruled that "both an original medical bill rendered and the amount accepted as full payment are admissible to prove the reasonableness and necessity of charges rendered for medical and hospital care."

The Court went on to say that "[t]he jury may decide that the reasonable value of medical care is the amount originally billed, the amount the medical provider accepted as payment, or some amount in between. Any difference between the original amount of a medical bill and the amount accepted as the bill’s full payment is not a “benefit” under the collateral-source rule because it is not a payment, but both the original bill and the amount accepted are evidence relevant to the reasonable value of medical expenses."

It should be noted that Ohio has a statute that modifies the traditional collateral source rule.

November 14, 2006

Minor Can Recover Medical Expenses

by The Law Offices of John Day, P.C.

The Tennessee Court of Appeals has ruled that a minor can sue to recover medical expenses paid to treat injuries received by the minor as a result of the negligence of another. Although most of us (at least those of us who represent plaintiffs) have thought this was probably the law, it is nice to see an opinion from this century addressing the issue directly.

Here is the entire section of the opinion on the subject that addresses this important issue:

"As a final matter, Defendant contends that the trial court erred in admitting evidence of
Plaintiff’s pre-majority medical expenses since a minor does not having standing to assert a claim for expenses incurred on his behalf and Mrs. Craig was not a party to the suit. Tennessee Code Annotated section 20-1-105 provides that a claim for medical expenses incurred by a minor during his or her minority does not belong to the minor, but rather to the minor’s parents. See also Burke v. Ellis, 58 S.W. 855, 857 (Tenn.1900). However, in Smith v. King, No. Civ.A. 958, 1984 WL 586817, at *2 (Tenn.Ct.App. Sept. 21, 1984), the court addressed a substantially similar issue and determined that a minor plaintiff may maintain his or her own cause of action for medical expenses and include the amount of medical expenses incurred on behalf of the minor as an element of his or her damages.

November 8, 2006

New Tennessee Subrogation Case

by The Law Offices of John Day, P.C.

The Tennessee Supreme Court issued an opinion yesterday in the Abbott v. Blount County, Tennessee case.

In an opinion by now retired Justice Al Birch, the Court made it crystal clear that an insurance company could not require a plaintiff to get approval of plaintiff’s health insurance company before settling a personal injury suit. The Court said that it is "clear that the made-whole doctrine applies regardless of the language found in the insurance contract. Contract terms that require the consent of the insurer would allow the insurer to withhold consent from any settlement that does not make the insured whole and thereby compel the insured to seek a larger award at trial. We disapproved of allowing insurers to contract away the right to be made whole in York, and we do so again today. Finally, we note that the lack of an insurer’s consent does not make an insured more likely to receive a double recovery."

The Court said that there was a genuine issue of material fact about whether the plaintiffs were made whole.

August 25, 2006

Taxability of Damages

by The Law Offices of John Day, P.C.

Damage paid for personal injury claims are not taxable, right? Wrong. Damages paid for personal injury claims "“on account of personal physical injuries or physical sickness” are not taxable. 26 U.S.C. § 104(a)(2). Damages paid for purely emotional injuries are taxable, at least in the opinion of the IRS.

Now, along comes Murphy v. Internal Revenue Service, No. 05-5139 (D.C. Cir. August 22, 2006). Murphy received "damages for emotional distress and loss of reputation she was awarded in an adminstrative action she brought against her former employer." She was asked to, and did, pay taxes on the award, and then sued to get her tax payments back. She tried to argue that the payments fell within the exclusion of § 104(a)(2), but that failed. However, the Court held that "§ 104(a)(2) is unconstitutional as applied to her award because compensation for a non-physical personal injury is not income under the Sixteenth Amendment if, as here, it is unrelated to lost wages or earnings."

The Court said "it is clear from the record that the damages were awarded to make Murphy emotionally and reputationally “whole” and not to compensate her for lost wages or taxable earnings of any kind. The emotional well-being and good reputation she enjoyed before they were diminished by her former employer were not taxable as income. Under this analysis, therefore, the compensation she received in lieu of what she lost cannot be considered income and, hence, it would appear the Sixteenth Amendment does not empower the Congress to tax her award." It went on to say that "every indication is that damages received solely in compensation for a personal injury are not income within the meaning of that term in the Sixteenth Amendment. First, as compensation for the loss of a personal attribute, such as wellbeing or a good reputation, the damages are not received in lieu of income. Second, the framers of the Sixteenth Amendment would not have understood compensation for a personal injury — including a nonphysical injury — to be income. Therefore, we hold § 104(a)(2) unconstitutional insofar as it permits the taxation of an award of damages for mental distress and loss of reputation."

July 24, 2006

Loss of Consortium Claimed for Same-Sex Couple

by The Law Offices of John Day, P.C.

You knew it would happen sooner or later. A same-sex couple in Connecticut has filed a loss of consortium claim in a medical malpractice lawsuit.

Connecticut has a civil union statute that gives same-sex couples the same rights as heterosexual married couples. Given the state of the law in Tennessee it is my opinion that such a claim could not be filed here.

USSC Decide ERISA Subrogation Case

by The Law Offices of John Day, P.C.

The SCOTUS has decided the Sereboff v. Mid Atlantic Medical Services, Inc. case – the long awaited case that was to tell us about an ERISA plan’s right to seek reimbursement of medical payments from a tort recovery.

The Court held that the payments were recoverable.

The case was decided on May 15, 2006. The case number is 05-260.

May 9, 2006

USSC Rules on Medicaid Subrogation Case

by The Law Offices of John Day, P.C.

The USSC has ruled that a state may not enforce its Medicaid lien out of money paid to the plaintiff for losses other than medical expenses. The case is Arkansas Department of Health and Human Services v. Ahlborn, No. 04-1506 (decided May 1, 2006).

Arkansas had a statute that permitted it to have its Medicaid subrogation interest paid out of a tort recovery by the plaintiff. Arkansas took the position that it was paid “off the top,” without regard to whether the money was paid for medical bills or some other compensable loss. That statute was held to be in violation of federal law.

The USSC addressed the issue of the parties potentially setting up an artifical allocation of settlement monies for medical expenses fopr the purposes of defeating Medicaid subrogation. The Court said “[e]ven in the absence of such a post-settlement agreement [about what portion of the settlement proceeds should be allocated to medical expenses], though, the risk that parties to a tort suit will allocate away the State’s interest can be avoided either by obtaining the State’s advance agreement to an allocation or, if necessary, by submitting the matter to a court for decision. For just as there are risks in underestimating the value of readily calculable damages in settlement negotiations, so also is there a countervailing concern that a rule of absolute priority might preclude settlement in a large number of cases, and be unfair to the recipient in others.”