Ina M. OVERTON, Appellee, v. UNITED STATES of America, Appellant.
No. 79-1847
United States Court of Appeals, Eighth Circuit.
April 21, 1980.
619 F.2d 1299
Submitted Jan. 17, 1980.
Another memorandum was prepared by Bentley for his file on June 9 that summarizes the initial, June 5, meeting with Womack. It substantiates Womack‘s testimony by stating that Womack was told at the first meeting that he had “placed this office in an embarrassing position because it would appear that we [the prosecutor‘s office] sanctioned the charges [against the sheriff].” It also says that Womack was told Munson would like him to take a leave of absence until the lawsuit was settled before Womack was questioned as to the veracity of, and his personal knowledge of, the allegations of physical abuse.
Munson‘s expression of anxiety over the lawsuit and desire to have Womack leave is significant, because no adverse action was taken against Womack until after he refused, on June 9, to leave voluntarily. The district court stated at the close of trial that it credited the testimony of defense witness Bentley. However, it apparently failed to consider also Bentley‘s earlier, written account of the events, which had been admitted in evidence. Bearing in mind the district court‘s credibility determination, we must nevertheless include these memoranda in our review of the entire record. They show predisposition to have Womack leave and failure on June 26 to record for the file, or mention to Womack, that his denial of his earlier admission was a motivating reason for discharge. This must be considered together with the irrelevancy of the investigation to any permissible or proffered reason for discharge, the timing of events, and testimony by both Munson and Bentley that Womack was otherwise a satisfactory employee. We are left with the firm and definite impression that the admission-denial rationale was a pretext to legitimatize the discharge. The record makes clear the real reason for discharge: Womack‘s lawsuit against the sheriff.
Conclusion.
The judgment is reversed and the cause remanded for findings and a determination on Womack‘s request for back pay, as he no longer requests reinstatement. Absent extraordinary circumstances, back pay is awarded to fashion the most complete relief possible for proscribed discrimination. Albemarle Paper Co. v. Moody, 422 U.S. 405, 421, 95 S.Ct. 2362, 2373, 45 L.Ed.2d 280 (1975); Wells v. Meyer‘s Bakery, 561 F.2d 1268, 1272 (8th Cir. 1977). Absence of bad faith is not a sufficient reason to deny back pay. Albemarle, 422 U.S. at 422, 95 S.Ct. at 2373. We also note a prevailing plaintiff in a title VII action ordinarily receives attorney fees. Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 417, 98 S.Ct. 694, 698, 54 L.Ed.2d 648 (1978). Plaintiff‘s counsel is awarded attorney fees on appeal in the sum of $1,500.00.
Jeffrey Axelrad, Civ. Div., Torts Branch, Dept. of Justice, Washington, D. C., for appellant; Alice Daniel, Acting Asst. Atty. Gen., Eloise E. Davies, Marleigh Dover Lang, Mary L. McElroy, W. Russell Welsh, Washington, D. C., and Ronald S. Reed, U. S. Atty., Kansas City, Mo., on brief.
Lyman Field, Field, Gentry, Benjamin & Robertson, Kansas City, Mo., for appellee.
Before LAY, Chief Judge,* STEPHENSON, Circuit Judge, and THOMAS,** Senior District Judge.
The appellee, Ina M. Overton, sued the United States for injuries resulting from a swine flu vaccination.1 The government conceded liability but disputed the amount of damages. After a non-jury trial, the district court2 awarded plaintiff $106,500 in general damages and $7,139.23 in special damages. The government appeals on two grounds: (1) the court clearly erred in setting the amount of the award; (2) the court should have reduced the award to take account of plaintiff‘s Medicare benefits. We affirm the district court‘s assessment of damages but reverse its decision not to deduct the money plaintiff received under Medicare.
I. Factual Background.
The district court recounted the evidence as follows:
The plaintiff‘s evidence clearly established that at the time she received her Swine Flu shot (October 26, 1976) she was a resident of the John Knox Retirement Village, which is located near Kansas City Missouri. She was 77 years of age and very active, both physically and mentally. She had lived a very active life and continued her activities by participating in the numerous social activities at the village, and, in fact, was chairman of several committees which planned and arranged these activities.
Approximately 20 days after receiving the flu shot, she started suffering the symptoms of the disease [Guillain-Barre Syndrome, a form of infectious neuronitis]. Her first symptoms were partial paralysis of her hands and feet and the disease progressed by the paralysis extending upward in both her arms and legs. She was first placed in the medical center of the John Knox Village and on November 22 admitted to St. Luke‘s Hospital in Kansas City, Missouri. Her condition was very critical for about one month and then recovery and improvement commenced about Christmas Day. She required extensive nursing care, flotation pad, heel pads, bunny boots for her foot drop bilaterally, catheter care and rectal and colon care. She developed considerable perianal pruritis and pain, had numerous impactions and became depressed because of the severity of her illness. She was dismissed from the hospital on January 14, 1977 and returned to the medical center at John Knox Village. At that time she was able to stand with assistance and walk a few steps with two persons helping her. After a lengthy convalescence at the medical center, she
was able to return to her room at the John Knox Village, but the evidence showed that she continued until the date of trial to suffer severe disabilities as a direct result of her illness. She is now able to walk short distances with the aid of a crabfoot cane, but is very unsteady due to weakness in her legs and supports herself by pressing against a wall whenever possible. She is unable to attend or participate in the numerous social activities which she enjoyed previously, and spends a great deal of her time in her bed in her room. Prior to her illness, she had had a slight tremor in her hands, but since her hospitalization, there has been substantial aggravation of this, particularly in her right hand, which has severely impaired her ability to write or even feed herself. Her doctor (who had treated her for a number of years) testified that these disabilities were directly and proximately caused by the illness. He further testified, and all the evidence established, that she has, as a result of her illness, a markedly reduced physical ability and endurance and a greatly impaired energy and strength potential. Undoubtedly, her ability to enjoy the type of activity in which she engaged before her illness has been terminated and she is unable to participate to any degree in the outside activities which she enjoyed before her illness. The defendant‘s [neurosurgeon] who examined the plaintiff added the fact that because of her impaired balance and the weakening of her legs she has a continual risk of falling, which at her age could result in fractured bones, which could be not only disabling but life threatening. The Court could continue with a much more detailed account of the change in plaintiff‘s life style, but, to summarize the evidence in this case, the Court finds that Mrs. Overton had lived a very active life and had a great capacity for making friends and enjoying her associations with other people. She is undoubtedly a woman who, in old-fashioned terms, has a great deal of spunk and grit. Her ability to enjoy even the simplest pleasures is greatly impaired. For example, she can only enjoy the company of her friends when they drop by her room for a visit. Her present disabilities are unquestionably permanent. To evaluate what she has lost in monetary terms is most difficult.
It was on this basis that the court awarded general damages of $106,500.
II. Whether Damage Award Was Clearly Erroneous.
The government‘s first point on appeal is that the court‘s award is “clearly erroneous” under
As examples of maladies ignored or misinterpreted by the court, the government cites the plaintiff‘s thyroid problems, her markedly diminished hearing, her partial blindness, the fracture of her shoulder in 1975, the arthritis in her knees, and the nervous tremor in her hands. With the exception of the tremor (which grew worse, the court indicated, as a result of the swine flu shot), the court did not mention these maladies in assessing plaintiff‘s loss.
Our own review of the record convinces us that the amount of the award was based on no error of law or clearly erroneous finding of fact. The court properly compared the plaintiff‘s condition immediately before her illness with her condition thereafter and made sufficiently detailed subsidiary findings to support his ultimate conclusions. The evidence is uncontroverted that, prior to her swine flu injection, plaintiff enjoyed an active life style, her maladies notwithstanding.3 During and af-
The government also contends that, however we view the evidence of causation, the amount of the damage award is excessive. Although the amount of damages entered in a non-jury case is a finding of fact and therefore subject to the “clearly erroneous” standard of review set forth in
excessiveness of a verdict is basically, and should be, a matter for the trial court which has had the benefit of hearing the testimony and of observing the demeanor of the witnesses and which knows the community and its standards; that this is a responsibility which, for better working of the judicial process and for other seemingly obvious reasons, is best placed upon its shoulders; and that we shall continue to consider review, as we have said before, not routinely and in every case, but only in those rare situations where we are pressed to conclude that there is “plain injustice” or a “monstrous” or “shocking” result.
Solomon Dehydrating Co. v. Guyton, 294 F.2d 439, 447-48 (8th Cir.), cert. denied, 368 U.S. 929, 82 S.Ct. 366, 7 L.Ed.2d 192 (1961). Accord, Hysell v. Iowa Public Service Co., 534 F.2d 775 (8th Cir. 1976) (Solomon standard applies in a non-jury as well as a jury case).
The district court arrived at its figure of $106,500 in general damages by awarding plaintiff $1,000 a month for the thirty months from her illness and hospital-
III. Whether Collateral Source Rule Should Apply.
The government‘s second point on appeal is that the district court erred in awarding $7,139.23 in special damages to cover plaintiff‘s stipulated medical expenses without deducting the $5,582.88 already paid on plaintiff‘s behalf through Medicare. Absent this deduction, contends the government, plaintiff will have a double recovery of some of her medical expenses or, perhaps more accurately, a recovery for a nonexistent loss. Plaintiff responds that any deduction would have been unwarranted because the Medicare program was a “collateral source” under Missouri law.5 The government rejoins that the source of plaintiff‘s damages payment and the source of her Medicare payment were in fact not collateral but the same: the revenue of the United States treasury.
Medicare, a federal program designed to ensure that the aged receive adequate medical care, was enacted as a Social Security Act amendment in 1965, see
Because the present case is deemed to have been brought under the Federal Tort Claims Act (FTCA), see note 1 supra, the issue presented here is whether the district court erred in concluding that the Medicare benefits of a noncontributing recipient should be considered collateral to his FTCA damage award. Although no case has addressed this narrow question, several cases have considered whether plaintiffs receiving other forms of governmental benefits can claim them as collateral payments in an FTCA action.7 The district court followed the most recent of these cases, Smith v. United States, 587 F.2d 1013 (3d Cir. 1978), which held that “where state law recognizes the ‘collateral source’ doctrine, Social Security benefits should not be deducted from a recovery under the Federal Tort Claims Act.” Id. at 1016.
This broad holding in Smith would justify the district court‘s decision not to deduct the money plaintiff had already received through Medicare. In our view, however, the philosophy underlying Missouri‘s collateral source rule does not warrant a holding so broad. Our analysis of the rule leads us to conclude that it is essential in a case like this that the plaintiff show he has contributed to the fund he claims as a col-
The collateral source rule is an exception to the general rule that damages in tort should be compensatory only. The rule permits recovery against a wrongdoer for the full amount of damages even though the plaintiff is also compensated from a different source (such as an insurance company) which is “wholly independent” of the wrongdoer and whose payment is therefore collateral to his. Iseminger v. Holden, 544 S.W.2d 550, 552 (Mo.1976).
Missouri courts have articulated two rationales for the collateral source rule. One is that the wrongdoer does not deserve to benefit from the fortuity that the plaintiff has received or will receive compensation from a source wholly independent of the wrongdoer.
The philosophy underlying the Collateral Source Rule seems to be that either the injured party or the tort feasor is going to receive a windfall, if a part of the pecuniary loss is paid for by an outside source and that it is more just that the windfall should inure to the benefit of the injured party than that it should accrue to the tort feasor. This conclusion seems to be based on substantial justice. This reasoning, however, does not apply in a situation where the collateral source is the defendant himself. Under those circumstances no one gets a windfall and if a recovery were allowed * * * the result would be that the plaintiff would receive a double recovery and that the defendant would be mulcted twice for the same item of damages. Hamilton v. Slover, 440 S.W.2d 947, 958 (Mo.1969) (quoting Adams v. Turner, 238 F.Supp. 643, 644-45 (D.D.C.1965)).
A further rationale stemming from this notion of “substantial justice” is that the plaintiff deserves any additional compensation he may receive because he has “contracted” for it, because it is in the nature of insurance. “[O]ne can justify a double recovery where the original source was supplied by the plaintiff, himself, out of resources that would otherwise have been available to him for other purposes * * *” Smith v. United States, supra, 587 F.2d at 1015 (quoting Feeley v. United States, 337 F.2d 924, 928 (3d Cir. 1964)).8
Both rationales are evident in Kickham v. Carter, 335 S.W.2d 83 (Mo.1960):
It is our view that plaintiff was entitled to recover reasonable hospital expenses incurred as a result of injuries resulting from the negligence of defendant even though such expenses were actually paid by the Blue Cross organization in response to its contract with plaintiff * * *. Upon principle there would appear to be no logical reason for defendant to receive the benefit of hospitalization payments (in the nature of insurance) made by an organization such as Blue Cross to which plaintiff had no doubt made contributions
in accordance with a membership agreement. Id. at 90.9
A plaintiff may invoke the collateral source rule, then, either when the payment in question came from a source wholly independent of the liable party or when the plaintiff may be said to have contracted for the prospect of a “double recovery.” For example, if plaintiff is compensated for his loss by a magnanimous friend, wholly independent of the liable party, the first rationale applies: the liable party is not entitled to any set-off even though the plaintiff can not be said to have contracted for a windfall. To take another example, if plaintiff happens to be wronged by the same insurance company that has insured against plaintiff‘s loss, the second rationale applies: the plaintiff is entitled to a “double recovery” even though the liable party (the insurance company) and the collateral source (the policy issued by the company) cannot be said to be wholly separate.
The Missouri Supreme Court found neither rationale implicated in Hamilton v. Slover, supra, 440 S.W.2d at 957-58, a case analogous to the one presented here. In Hamilton, a passenger in an automobile sued the driver for injuries occasioned by the driver‘s negligence. The court held it was proper to deduct from the damage award the $500 in medical payments that plaintiff had already received from the driver‘s insurance company.10 The insurance company was not a collateral source because it was not wholly independent of the liable party, who had created the $500 fund by his purchase of insurance and payment of premiums. Nor was this a case where plaintiff attempted to justify a double recovery by claiming that he had contributed toward the fund in question.
In the present case, as in Hamilton, neither rationale of the collateral source rule is present.11 The original payment (from Medicare‘s Part A trust fund) is not wholly independent of the liable party‘s payment (from general revenues of the federal treasury); and there is no warrant to believe the plaintiff has contributed toward the source of the original payment. Although the proximate source of plaintiff‘s benefits, the Federal Hospital Insurance Trust Fund, is a bookkeeping entity conceptually collateral to the unfunded general revenues out of which FTCA damage awards are made, the trust fund consists of appropriations from those general revenues,
This result is consistent with the results of the other FTCA cases involving the collateral payment of governmental benefits. In Smith v. United States, supra, the principal case cited by the district court and by plaintiff on appeal, the Third Circuit held that a plaintiff‘s social security survivor‘s benefits were collateral to, and thus not deductible from, an FTCA damage award. The Smith court differentiated “unfunded general revenues of the United States [from which FTCA damage awards are made] and those [revenues] which come from ‘a special fund supplied in part by the beneficiary or a relative upon whom the beneficiary is dependent.‘” 587 F.2d at 1015-16 (quoting United States v. Hayashi, 282 F.2d 599, 603 (9th Cir. 1960)). The distinction underlying both Smith and Hayashi, the case on which the Smith court relied, can be stated as either (1) a distinction between a special fund (in that instance, the Federal Old-Age and Survivors’ Insurance Trust Fund) and governmental funds generally, or (2) a distinction between those proceeds that are in the nature of insurance to the plaintiff and those proceeds that are not. In our view the first distinction is unsound, although some courts have purported to rely on it, because it makes recovery depend on bookkeeping conventions and because it ignores the substantial governmental involvement in the creation and administration of social security programs. It is an artificial distinction that invokes no notion of “substantial justice” to support a possible double recovery by plaintiff. It is the second distinction that best explains Smith and Hayashi. Absent some statute to the contrary, plaintiffs receiving governmental benefits should receive their FTCA awards free of any set-off for those benefits if there is a showing or a presumption that they or one on whom they were dependent paid a special levy or fee to make the benefits possible.13 Absent a special payment by plaintiff, the government should not be forced to compensate plaintiff twice, once with money funneled through a special compensation scheme, and again with expenditures from general revenues.
Other FTCA cases involving payment of collateral governmental benefits are in substantial accord. Benefits received by an FTCA plaintiff under the Civil Service Retirement Act and National Service
Because we decide plaintiff may not recover for the medical expenses already paid on her behalf through Medicare, we need not address the government‘s argument that, regardless of whether the collateral source rule applies, money received from Medicare must be deducted from the FTCA damage award in order to comply with the mandate of
We conclude that the $5,582.88 plaintiff received in Medicare benefits must be deducted from plaintiff‘s total award of $113,639.23, which we otherwise affirm as not clearly erroneous.
LAY, Chief Judge, concurring and dissenting.
I respectfully dissent from that portion of the majority opinion which finds that plaintiff‘s Medicare benefits should have been deducted from her damage award. I would affirm the district court‘s judgment.
When an outside source pays part of a compensable loss, the question is whether the injured party or the tortfeasor should receive the windfall. Hamilton v. Slover, 440 S.W.2d 947, 958 (Mo.1969). The answer under Missouri law is based on substantial justice. Id. The more equitable practice, when the source is collateral to the defendant, is to allow the victim double recovery rather than benefit the wrongdoer. In tacitly approving Smith v. United States, 587 F.2d 1013 (3rd Cir. 1978), we have endorsed the rule of substantial justice when a government social insurance benefit program is the source, even though it is not a collateral source in a federal tort claim case. We have decided, incorrectly I believe, not to follow this rule where a recipient receives insurance benefits, but has not contributed to the program through social security taxes.
The rationale adopted by the majority is that Medicare payments create a situation analogous to that in cases involving private insurance coverage.1 When a private insurance company makes a payment pursuant to a contract with the plaintiff, a tortfeasor cannot deduct it from its damage payment. In the context of government benefits, this can never strictly be the case, because benefits are granted on the basis of statutory eligibility requirements, not by contract. Generally, if one is 65 and is entitled to monthly cash benefits under section 202 of the Social Security Act, (i. e., the requisite quarters of coverage are present), one is automatically entitled to Medicare Part A hospital insurance benefits.
Mrs. Overton was 65 years old or older in 1968. Apparently, she was not entitled to monthly cash benefits under section 202 of the Social Security Act when the Medicare legislation was passed and could not at that point accumulate the requisite quarters of coverage. Therefore, she did not meet the general eligibility criterion for Medicare hospital insurance. However, the government enacted a special transitional entitlement provision under which individuals such as Mrs. Overton would also be entitled to hospital insurance.
Under these circumstances, Mrs. Overton should not be treated differently than other recipients vis a vis the government in its present role as tortfeasor. Because the collateral source rule, particularly when applied in this context, is primarily a rule of substantial justice, I would not follow the analogy to private insurance so completely as to allow the government to use Mrs. Overton‘s benefits to mitigate its damage payment. Since Congress has given her the same status as any other Medicare recipient, we should not judicially change it.
* The Honorable Donald P. Lay became Chief Judge of the Eighth Circuit on January 1, 1980.
** The Honorable Daniel H. Thomas, Senior United States District Judge for the Southern District of Alabama, sitting by designation.