ILNews

Court: Collateral source rule applies in railroad award

Michael W. Hoskins
January 1, 2007
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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."
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  1. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

  2. Justice has finally been served. So glad that Dr. Ley can finally sleep peacefully at night knowing the truth has finally come to the surface.

  3. While this right is guaranteed by our Constitution, it has in recent years been hampered by insurance companies, i.e.; the practice of the plaintiff's own insurance company intervening in an action and filing a lien against any proceeds paid to their insured. In essence, causing an additional financial hurdle for a plaintiff to overcome at trial in terms of overall award. In a very real sense an injured party in exercise of their right to trial by jury may be the only party in a cause that would end up with zero compensation.

  4. Why in the world would someone need a person to correct a transcript when a realtime court reporter could provide them with a transcript (rough draft) immediately?

  5. This article proved very enlightening. Right ahead of sitting the LSAT for the first time, I felt a sense of relief that a score of 141 was admitted to an Indiana Law School and did well under unique circumstances. While my GPA is currently 3.91 I fear standardized testing and hope that I too will get a good enough grade for acceptance here at home. Thanks so much for this informative post.

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