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Arambula v. Wells6/8/1999
Charity begins at home. And there it should stay, assuming the donor so intended. To promote the charitable impulse, we apply the collateral source rule to gratuitous payments (including moneys to cover lost wages) by family or friends to assist tort victims through difficult times.
I.
In June 1996, Michael Arambula was injured in a rear-end automobile accident caused by Phyllis Wells. Arambula was employed as a field supervisor in a family-owned company in which his brother owned 70 percent of the stock, his parents owned 15 percent, and he owned 15 percent. Despite missing work because of his injuries, he continued to receive his $2,800 weekly salary. He testified his brother "wished" to be reimbursed, but he had not promised to do so.
Arambula sued Wells for negligence. His claim for damages included loss of earnings during the period of his disability. His wife, Diane Arambula, sued for loss of consortium.
Wells admitted fault, and the case went to trial on causation and damages alone. Arambula contended he sustained a severe brain injury as a result of the accident. Wells denied this.
At the start of trial, Wells moved in limine to exclude all evidence and testimony regarding Arambula's lost wages claim of approximately $50,000. Her attorney, relying on dicta in a footnote in Helfend v. Southern Cal. Rapid Transit Dist. (1970) 2 Cal.3d 1, 6, fn. 5, argued, "Plaintiff is not receiving payment by means of disability insurance, pension or from utilizing sick time or vacation time. Further, plaintiff has failed to provide any documentation or demand that the monies received from his employer will be required to be reimbursed."
The Judge agreed. Based on Helfend, he instructed the jury not to award damages for lost earnings "because his employer paid for the time he was off without any requirement to do so and there was no agreement by plaintiff to refund same."
The jury awarded $54,334 to Arambula, but nothing to his wife. Both appeal.
II.
Under the collateral source rule, plaintiffs in personal injury actions can still recover full damages even though they already have received compensation for their injuries from such "collateral sources" as medical insurance. (Pacific Gas & Electric Co. v. Superior Court (1994) 28 Cal.App.4th 174, 176.) The idea is that tortfeasors should not recover a windfall from the thrift and foresight of persons who have actually or constructively secured insurance, pension or disability benefits to provide for themselves and their families. A contrary rule, it is feared, would misallocate liability for tort-caused losses and discourage people from obtaining benefits from independent collateral sources. (Helfend v. Southern Cal. Rapid Transit Dist., supra, 2 Cal.3d at pp. 13-14.)
Helfend is the leading case. The court rejected defense efforts to introduce evidence that about 80 percent of an injured motorist's medical bills had been paid by his Blue Cross insurance carrier. Applying a benefit-of-the-bargain rationale, the Supreme Court allowed the motorist to receive the advantage of his investment of "years of insurance premiums to assure his medical care." It stated " he tortfeasor should not garner the benefits of his victim's providence." (Id. at pp. 9-10.)
Helfend on its face says nothing about gratuitous wage payments. Wells, however, cited Helfend to convince the trial court to limit the collateral source rule to situations where plaintiffs incurred an expense, obligation or liability in obtaining the services for which they seek compensation. According to Wells, Helfend is "replete with indications that the Californ
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