Walking Drivers: A “Sudden” Defense to Rear-end Liability

In a very important ruling by the Louisiana Supreme Court, a tort defendant is no longer liable for any “actual charges” by medical providers above the amount paid by a Workers Compensation insurer pursuant to promulgated Workers Compensation fee schedule . In Simmons v. Cornerstone Investments, LLC, 2018-cc-0735 (La. 5/18/19), the court concluded:

“…the amount of medical expenses charged above the amount actually incurred is not a collateral source and its exclusion from the purview of the jury was proper.” See http://www.lasc.org/opinions/2019/18-0735.CC.OPN.pdf

The court conducted a detailed analysis of the development of the collateral source rule under applicable jurisprudence noting that the genesis of the collateral source rule:

“Under the collateral source rule, a tortfeasor may not benefit, and an injured plaintiff’s tort recovery may not be reduced, because of monies received by the plaintiff from sources independent of the tortfeasor’s procuration or contribution. Under this well-established doctrine, the payments received from the independent source are not deducted from the award the aggrieved party would otherwise receive from the wrongdoer.” See Louisiana Dept. of Transp. & Dev. v. Kansas City Southern Railway Co., 02-2349, p. 6 (La. 5/20/03), 846 So.2d 734, 739.

Essentially, the court asks two questions when assessing whether the collateral source rule should apply. First, does the claimed benefit arise from some payment, wage deduction or other contribution by the Plaintiff that would diminish the plaintiff’s patrimony? Second, will the goal of tort deterrence be promoted by allowing the windfall? In a series of cases culminating in the case at bar, the court has been limiting the application of the collateral source rule in a number of contexts.

The court in Bozeman v. State, 03-1016 (La. 7/2/04), 879 So.2d 692, found that the collateral source rule did not apply when Medicaid was the payor such that the defendant could not be responsible for any amounts above what Medicaid paid to the provider. The court reasoned that it would be “unconscionable” to require taxpayers to pay the bills and then let a plaintiff recover the full undiscounted medical expenses and “pocket the windfall.” The court continued by noting in “Cutsinger v. Redfern, 08-2607 (La. 5/22/09), 12 So.3d 945, this court found the collateral source rule did not apply to prevent the plaintiff’s uninsured motorist carrier from receiving a credit for workers’ compensation benefits paid by her employer, even though the plaintiff paid for the UM coverage herself.” In Hoffman v. 21st Century North American Ins. Co., 14-2279 (La. 10/2/15), 209 So.3d 702, the court held that the collateral source rule does not apply to attorney-negotiated medical discounts. The court also looked at the US 5^th Circuit in Deperrodil v. Bozovic Marine, Inc., 842 F.3d 353 (5th Cir. 2016), that the collateral source rule does not apply above any amounts actually paid by the employer in the context of the LHWCA.

In each of the instances outlined, the court noted that the patrimony of the plaintiff was not impacted by limiting recovery to the amount of medical bills actually paid. Moreover, the court noted that the goal of tort deterrence is not negatively impacted, and that allowing a plaintiff to recover a windfall in this context is tantamount to an award of punitive damages that are not recoverable absent statutory authority which is not present in this context. The Simmons decision now extends that same logic to cases where a Workers Compensation insurer has paid the medical benefits pursuant to the Louisiana Workers Compensation Law.

This ruling will have significant impact on the evaluation, settlement and trial of tort cases that have corresponding Workers Compensation claims.

Submitted by John P. Wolff, III (Partner)

The United States Attorney for the Eastern District of Louisiana recently announced that two defendants, Doniesha Gibson and Erica Lee, had been sentenced for crimes related to staging automobile collisions with tractor-trailers. The sentences were announced as part of a criminal investigations known as "Operation Sideswipe." The years-long operation has produced multiple pleas and convictions, including a guilty plea from an involved attorney last year.

Gibson admitted that she was a passenger in a staged accident that occurred on October 15, 2015. A co-defendant intentionally drove the vehicle she occupied into a bus on the interstate. Gibson retained an attorney and filed a suit for damages. Claims related to this accident later settled for $667,500.00

Lee also admitted to filing a suit to claim injuries after the driver of the vehicle she occupied intentionally crashed into a tractor trailer on September 6, 2017. The claims for this suit settled for $30,000.00

United States District Judge Sarah S. Vance sentenced Gibson to 17 months incarceration plus 3 years of supervised release and ordered Gibson to pay restitution in the amount of the settlement. Lee was sentenced to serve 3 years of probation and 100 hours of community service. She was also ordered to pay restitution.

While “Operation Sideswipe” did not involve the typical claimants, it reminds of the need for vigilance in assessing accident claims.

**If you’re reading this article while driving, stop reading or driving - your choice**

Distracted driving is dangerous and can lead to an accident. Everyone knows this now. But one factor that appears to have gone unnoticed by the public at large is that distracted driving not only results in more automobile accidents, but often causes accidents which are more severe. The reasons why are becoming clear to insurance carriers who write automobile liability policies.

In a January 2017 "earnings call," Travelers Insurance observed that it was detecting a higher percentage of car crashes at higher speeds. Simple physics shows that higher speeds bring higher forces, and increase the risks involved. Research has shown that sending or reading a text takes your eyes off of the road an average of 5 seconds. If correct, at 55 mph, you will travel 403 feet while not looking at the road. Often times, a driver, even if they cannot avoid an accident, can do something to minimize the consequences, such as braking or taking a better angle to protect the driver or the passengers.

The fact that an insurance company is able to detect an increase in the severity of accidents, in an age where cars are safer than ever before, is something we should all consider.

Brian Butler is a partner with Keogh Cox. With over 30 years of experience, Brian has handled all types of defense matters. In recent years, his practice has been focused on cases involving complex cases with serious injuries and damages, which has led to extensive work with experts in complex cases, fire cases, and cases involving extensive forensic investigation. In his free time, Brian enjoys traveling with his wife.