Collateral Source Rule Does Not Apply Where Insurance Company Has The Right To Subrogate Even If Subrogation Not Actually Claimed
DAFYDD HOFFMAN, ET AL., Plaintiffs, ANDREW MARIANO,Plaintiff - Appellant, v. HALCOT SHIPPING CORP., ET AL., Defendants, HALCOTSHIPPING CORP.; ZODIAC MARITIME AGENCIES, LTD., Defendants-Appellees.
No. 03-30301
UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
93 Fed. Appx. 658; 2004 U.S. App. LEXIS 6241
April 1, 2004, Filed
PROCEDURAL POSTURE: Appellant boat operator sued appellee shipping company to recover for injuries sustained in an accident involving the shipping company's oceangoing tanker. The United States District Court for the Eastern District of Louisiana found the shipping company at fault, but reduced the award in half due to the employer's fault and denied recovery of medical expenses that were paid under the employer's health plan. The boat operator sought review.
OVERVIEW: At the time of the incident only one other boat operator and one deck hand were working for the employer's water taxi service. The boat operator was injured when he attempted to untie a vessel by himself in response to an emergency call. On appeal, the court reversed the 50 percent reduction of the award based on the employer's fault. A vessel owner did not owe a duty to maintain a standby crew for all of its available vessels. However, the court upheld the district court's refusal to permit the boat operator to recover medical expenses already paid by his employer's insurer. Although the collateral source rule prohibited reduction of a tort recovery by the amount of such benefits, there was an exception where an insurer had the right to subrogate against the tortfeasor who injured the plaintiff. This exception applied even if the subrogated party did not appear to assert its subrogation rights. The shipping company introduced evidence of the subrogation right by introducing the plan summary. Thus, the subrogation exception to the collateral source rule was properly applied to prevent the boat operator from recovering medical expenses paid by his employer's insurer.
OUTCOME: The court affirmed that part of the district court's judgment denying the boat operator recovery of medical expenses paid by his employer's insurer. The court reversed the district court's judgment insofar as it reduced the boat operator's recovery based on his employer's fault. The court vacated this part of the judgment and remanded the case for entry of judgment reflecting this change.
