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. Hello currently just withdrew from laporte county drug court and now I have lost the woman I love which also was in drugcourt and was put in jail without a,lawyer presentfor her own safety according to the judge and they told her she could have a hearing in two weeks and now going on 30days and still in jail no court date and her public defender talks like he,s bout to just sell her up the river.

  2. I just wanted to point out that Congressman Jim Sensenbrenner, Senator Feinstein, former Senate majority leader Bill Frist, and former attorney general John Ashcroft are responsible for this rubbish. We need to keep a eye on these corrupt, arrogant, and incompetent fools.

  3. Well I guess our politicians have decided to give these idiot federal prosecutors unlimited power. Now if I guy bounces a fifty-dollar check, the U.S. attorney can intentionally wait for twenty-five years or so and have the check swabbed for DNA and file charges. These power hungry federal prosecutors now have unlimited power to mess with people. we can thank Wisconsin's Jim Sensenbrenner and Diane Feinstein, John Achcroft and Bill Frist for this one. Way to go, idiots.

  4. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  5. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

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