Edward W. Blake v. Delaware and Hudson Railway Company
484 F.2d 204
2d Cir.
1973
Check Treatment

*1 July 5, LUMBARD, Decided FRIENDLY Before THOMSEN,* Judges, Dis Rehearing Denied Oct. Judge. trict Judge:

THOMSEN, District appeal Defendant’s case in an FELA * Maryland, sitting by designation. Of the District *2 respect questions rule, regulation, to Contract, or three with raises “§ damages. exempting device liabili- from ty; set-off argues the that 1. Defendant “Any rule, regulation, contract, or permitted to not have been whatsoever, purpose in- device or the damages of as an element consider any tent of which shall be to enable paid by $1,477.86 on account defendant exempt common carrier itself from to expenses, plaintiff’s but medical any liability chapter, by this created paid Insur- defendant Travelers to Provided, to shall that extent be void: Policy Company Group GA under ance any brought That action policy, 23,000. main- That issued any such common or carrier under agreement pursuant be- tained an any provisions of the virtue including many defend- tween railroads may chapter, such common carrier set bargaining repre- ant, and the collective any off therein sum it has contributed employees, their covers sentatives any paid insurance, or relief bene- hospital expenses in- and medical of the fit, indemnity may or been that have including employees, plaintiff, and sured injured paid employee or to the dependents. of their person entitled thereto on account paid by policy Premiums are injury or for said ac- death which coverage railroads, not the several but brought.” tion was injuries rail- limited to which Bangor In & Aroostook R. Co. v. FELA; liable it road would be under Jones, 1929), de- charges extends to all health care fendant asked be directed employee. by or for curred an insured any to deduct from insurance policy Article VII of contains damages plaintiff be following provision: citing recover, found to entitled to be § provided under this Ar- “All benefits of5 the FELA. The said: court payable of the ticle are to or on behalf is no in the “There evidence case Employee, provided benefits money defendant contributed expenses Employ- paid an on based procurement insur- of the toward (or person organization other or er or money, If it it had contributed ance. obligated Employer an be which shall had the the fact and could have shown paid may pay) Insurer be deducted, not entitled it was sum but Employer person or or- or other insurance of the to have amount ganization.” ” * * * 36 F.2d at deducted. was In this case defendant railroad bar, did not defendant the case obligated pay plaintiff’s not premium portion it prove the bills; voluntarily elected and medical applicable plaintiff, which was pay $1,592.08 thereof, received but pre- on not a credit based seek $1,477.86 by way of reimbursement paid. mium policy. group It the insurer claims, now as it in the district did decisions number more recent A court, rule collateral source was have considered whether permit applicable applied in FELA rule should $1,477.86 clude for dam- in his claim in other cases Act and Jones ages. g., See, governed by Ei federal e. law. Co., relating R.R. York Issues of dam- chel v. New Central the measure ages governed by in FELA 11 L.Ed.2d 307 actions are 84 S.Ct. law, Steamship federal as are under the Jones Hartnett v. Reiss cases Act, adopted 1011, 1016, which n. 3 certain sections Haughton Blackships, FELA, 1970); Inc., including 45 U.S.C. § Gypsum 1972); which reads: 462 F.2d (D.Minn.1971), and cases cited Carrier, Handelsman, Inc. v. Minnesota therein.” Hall case, in Hall was an FELA (D.Minn.1971). federal decisions Other pol- group collateral source the same was gov- rule in cases have discussed 23,000 icy involved in the instant GA including law, un- actions erned state Relying Price, case. on United States v. *3 Act and der the Federal Tort Claims Judge supra, follows, Neville reasoned as maritime Klein v. United death cases. Haughton: passages quoted in in two (2 1964); “ States, Cir. 339 F.2d * * * bargain- The collective Vindeggen A/S, Cunningham Rederiet v. ing employee contract between that United Cir. group and the defendant Railroad in- Price, v. 288 F.2d States term, cludes, re- an a as economic generally 1961). groups of cases Both quirement employer pay pre- the deny pay- apply the rule to credit directly insurer, much miums to the by a defendant in circum- ments made employer direction as an at the analogous in the case at stances to those employee money his deduct Re- Thomas Humble Oil & bar. Cf. v. wages directly them forward 1970). fining Co., 420 F.2d 793 employee’s creditor or bank sav- of the Second also Restatement Law See is, ings plan. policy short, This in a Draft March —Torts-—-Tentative No. fringe given part in considera- benefit Comment, p. 30, 1973, et 920A and § employee’s It is tion for the services. seq. gratuity in no sense a mere nor an ar- Haughton In the case of v. recent rangement by company which the has Inc., supra, Blackships, court said the indemnify voluntarily undertaken 790): F.2d at against possible itself liabilities “ * ** considering appli- jured employees In under the FELA. the also See benefits ployee rule even source the Price, mined supplies titled to funds than cability of the collateral off However, “Application of the collateral source compensation basic the depends though from an of the employer-tortfeasor such mitigate be collateral or received, principle Annot., upon less funds, is also true funds the character of the independent received damages by upon employer-tortfeasor 75 A.L.R.2d Gypsum United (4th may the source of independent, source by applied be deter- is not en- States Carrier, the setting source. 1961). rule, em- is fit ployer, and medical F.2d at In court concludes that where the insur- collateral source rule thereunder come for services ance gard insured “On the basis of the “ premiums paid Haughton effect maintained [*] F.Supp. policy [*] such a liability may part [*] by 791. is one of coverage upon at the Fifth make claim without policy by employee. or rendered, is benefits prohibits general employer part employee’s a foregoing, quoted in fringe * * received added: set-off and is bene- em- the the ”* policy Handelsman, Inc. “The considerations (9th 1962). apparent. collateral source are On 534-535 The mere hand, employer-tortfeasor employer-tortfeasor who fact one an indemnify money payment voluntarily (by contributed undertakes premiums, liability by payment contributions, etc.) into to the itself purpose, not be fund from which the benefits derive a fund for that may penalized permitting a does not establish fund that such source, recovery a his benefits not be Hall v. Min- double collateral Ry. nesota his full measure the fund well as hand, damages. where which were railroad and not other On the pay- by him, shockingly unjust. employer-tortfeasor me makes indirectly rule, directly fund which has or into ment reason, increasing criticism, independent come under see Re- for an established employ- payment statement of Torts 2d 920A at 169 or where such (Tent. nature Draft March er considered No. should be compen- apply “payments fringe deferred made under or benefit policy employer en- an sation, should not be insurance which is maintained setting defendant, whether made under a off titled to benefit responsi- provision regard mitigation liability of his or without income liability, medical-payments bility as under a tortfeasor.” aas clause.” Id. at None the cases truly except point cited Hall v. Haughton, Hall and both Minnesota Transfer F. *4 claimed credit. denied the railroad was Supp. (D.Minn.1971); 92 that decision in accord with Those decisions are us, not I find its bind and reason- opinions cited Court above. of this unpersuasive. ing judge properly allowed The district What constrains me to nevertheless $1,477.86 item. to consider governed concur here are is we not objects at- because an 2. Defendant by federal common law statute. but physician use his tending allowed to was 45 the railroad is en- Under U.S.C. 55§ during of the course *5 Plaintiff-Appellee, object re- I district court’s also defense counsel’s charge, fusal Phillip PAQUET, Jr. Louis jury any quest, that award Defendant-Appellant. subject make would be No. 72-2855. increasingly becoming come It is taxes. Appeals, United States Court of try jury apparent to those who Fifth Circuit. question time, I do from time to Sept. any judgment dimin- will be of whether fre- which is taxes is a matter ished given weight jury great quently delib- ver- does affect

erations. Since it regarding dict, it is a matter quite informed. seems It be

probable, example, this case judgment —which generous light plain- overly injuries only

tiff’s five months loss earnings very likely due to one —was jurors feeling, or more of the erroneous-

ly, judgment consider- would be ably diminished time taxes. It is holding this court to re-examine its

McWeeney York, v. New N.H. & H. R.R. Cir.), denied, (2d

364 U.S. 5 L.Ed.2d 93

(1960), require

structed about incidents of a the tax request when made judge

trial to do so. Third recently giving required of an nature, upon request,

instruction notes records and only premiums, not titled to set off laying proper testimony, a his without bought. premiums This what was therefor, his claims that foundation and recognized Bangor ago long as & thereby. thwarted cross-examination was Jones, Aroostook 36 886 R. Co. v. F.2d any of reversible error We no find (1 1929). If the railroads Cir. wish rulings. avoid the harsh result reached objection final 3. Defendant’s court, accomplish they district can this judge is the district refused by specific provision in the collective charge award to agreement. bargaining See Thomas v. free of tax. would be income Refining Humble Co., Oil F.2d & 420 judge give required The was not such (4 1970). 793 Cir. of Short charge McWeeney a v. this case. remedy Congress is for would do —which York, Co., F. New N.H. & Hart. R. 282 repeal still better outmoded cert, den., (2 2d Cir. 35-39 plan FELA and a liberal of substitute 364 5 U.S. 81 L.Ed.2d 93 compensation, workmen’s as it did Petition Marina Mercante longshoremen 1927 for and harbor work- Nicaraguense, A., S. ers, Friendly, 33 U.S.C. 901-50. See §§ 1966).1 Federal A Jurisdiction: General View appealed judgment from (1973). 129-30 Affirmed. Judge (dissent- LUMBARD, Circuit FRIENDLY, ing) HENRY J. : Judge (concurring): agree Judge Friendly I with Permitting recover hospital Blake to recovery Blake’s bills which bills, hospital of his railroad bulk instance had been in the first subject years 1965) ; States, 1. In dis recent been v. United 269 O’Connor opinions, Floyd 1959) ; in a number of with cussed v. F.2d 579 conclusions, divergent Industries, and in a number Fruit 144 136 A. Conn. notes, (1957) ; with law review articles and 2d 918 Plant v. Simmons Com- pany, ; F.Supp. (D.Md.1970) various recommendations. addition to 321 735 opinion, Note, Computation the cases cited in the text of this and the Income-Taxes Airlines, Inc., Earnings Wrongful see Cox Northwest of Lost Future 1967) ; Injury Cases, Death United States and Personal Sommers, Md.L.Rev. 177. Refining Oil & v. Humble in Domeracki Blake is shock- not the railroad (3rd however, de Cir), agree, unjust. ingly cannot I L. nied, 92 S.Ct. entitled to is nevertheless that Blake way in one This is Ed.2d 165 5 of Section these amounts. cover properly do some can our courts never was F.E.L.A., 45 U.S.C. § thing escalating without verdicts as the curb apply situations tended to subtracting a fair iota from one Minnesota present one, Hall v. see damages just recovery suffered. (D.Minn.1971), and the I reverse reasons would For these interpreted a to bar rule should not order a new trial. hospital off the railroad set recovery permit paid by To bills it. plain- would be allow amounts these extent, recovery and, to that tiff double employee encouragement provide to an in order bills to incur needless gain a result windfall. Such public contrary clearly to be me judg- permit a policy. We the means to be ment of a federal court America, UNITED STATES injustice. accomplishing such an