ILNews

Court: Collateral source rule applies in railroad award

Michael W. Hoskins
January 1, 2007
Keywords
Back to TopCommentsE-mailPrintBookmark and Share
Contributions from a railroad company to a federal disability fund cannot be used to reduce the amount of a plaintiff's recovery, the Indiana Court of Appeals affirmed today.

In a 30-page decision in CSX Transportation Inc. v. Robert D. Gardner, No. 49A02-0610-CV-917, the court affirmed a trial judge's decision to not allow the railroad company to use its $35,000 annual contributions to a disability and retirement fund to lower the jury-imposed amount of $605,500 in damages for Gardner's injuries.

He was working as a locomotive engineer in May 2003 when he was thrown from the train, injuring his neck, back, and right knee, which impacted his ability to work. He began receiving the $35,000 annual annuity at the end of that year through the Railroad Retirement Act fund. He also filed a complaint against CSX under the Federal Employers' Liability Act alleging negligence and won the jury award.

CSX argued it's entitled to setoff because it is being required to pay twice for Gardner's lost wages, while Gardner argued his disability annuity comes from a "collateral source" and shouldn't be regarded as payment from the railroad company.

In denying the request for setoff, Marion Superior Judge Gerald Zore cited the Supreme Court of the United States decision of Eichel v. New York Cent. R.R. Co., 375 U.S. 253 (1963) as controlling. That ruling held benefits under such a retirement or disability system like the RRA are not directly attributable to the contributions of the employer and can't be considered in mitigation of the damages caused by an employer.

Questions before the appellate judges were whether the RRA disability annuities are from a collateral source, and whether that amount, to the extent that CSX paid taxes to the fund based on Gardner's employment, should be setoff from the jury's FELA award.

The appellate judges looked at an array of caselaw from other states and federal jurisdictions, as well as Congressional intent, in deciding against the railroad company.

"We conclude that the fact that CSX contributed to the RRA Fund because of statutory requirement, and not as a voluntary attempt to insulate itself from liability for its negligence, weighs in favor of concluding that payments Gardner receives from the RRA Fund are from a collateral source," Judge Margret Robb wrote for the panel, which also included Judges Cale Bradford and Nancy Vaidik

The court also considered Congressional action in this area in not addressing setoff because of the RRA, saying, "that gives rise to the inference that Congress is satisfied with the courts' decisions disallowing setoff."

"We recognize that as a result of the trial court disallowing setoff, Gardner has been made more than whole," she wrote. "This situation is common under the collateral source rule, and CSX's argument that such overcompensation is unjust is not persuasive. The solution to overcompensation is not to reduce a negligent employer's liability."
ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. "So we broke with England for the right to "off" our preborn progeny at will, and allow the processing plant doing the dirty deeds (dirt cheap) to profit on the marketing of those "products of conception." I was completely maleducated on our nation's founding, it would seem. (But I know the ACLU is hard at work to remedy that, too.)" Well, you know, we're just following in the footsteps of our founders who raped women, raped slaves, raped children, maimed immigrants, sold children, stole property, broke promises, broke apart families, killed natives... You know, good God fearing down home Christian folk! :/

  2. Who gives a rats behind about all the fluffy ranking nonsense. What students having to pay off debt need to know is that all schools aren't created equal and students from many schools don't have a snowball's chance of getting a decent paying job straight out of law school. Their lowly ranked lawschool won't tell them that though. When schools start honestly (accurately) reporting *those numbers, things will get interesting real quick, and the looks on student's faces will be priceless!

  3. Whilst it may be true that Judges and Justices enjoy such freedom of time and effort, it certainly does not hold true for the average working person. To say that one must 1) take a day or a half day off work every 3 months, 2) gather a list of information including recent photographs, and 3) set up a time that is convenient for the local sheriff or other such office to complete the registry is more than a bit near-sighted. This may be procedural, and hence, in the near-sighted minds of the court, not 'punishment,' but it is in fact 'punishment.' The local sheriffs probably feel a little punished too by the overwork. Registries serve to punish the offender whilst simultaneously providing the public at large with a false sense of security. The false sense of security is dangerous to the public who may not exercise due diligence by thinking there are no offenders in their locale. In fact, the registry only informs them of those who have been convicted.

  4. Unfortunately, the court doesn't understand the difference between ebidta and adjusted ebidta as they clearly got the ruling wrong based on their misunderstanding

  5. A common refrain in the comments on this website comes from people who cannot locate attorneys willing put justice over retainers. At the same time the judiciary threatens to make pro bono work mandatory, seemingly noting the same concern. But what happens to attorneys who have the chumptzah to threatened the legal status quo in Indiana? Ask Gary Welch, ask Paul Ogden, ask me. Speak truth to power, suffer horrendously accordingly. No wonder Hoosier attorneys who want to keep in good graces merely chase the dollars ... the powers that be have no concerns as to those who are ever for sale to the highest bidder ... for those even willing to compromise for $$$ never allow either justice or constitutionality to cause them to stand up to injustice or unconstitutionality. And the bad apples in the Hoosier barrel, like this one, just keep rotting.

ADVERTISEMENT