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In re Estate of McMullen8/2/2001
io Court of Claims. The Court of Claims found OSUH liable and entered judgment in favor of the survivors in the amount of $250,000, subject to the right of set-off under R.C. 3345.40(B)(2) for collateral benefits. The case was then transferred to the Lawrence County Probate Court for allocation of the $250,000 judgment award among the survivors, taking into account the collateral benefit reduction.
The Lawrence County Probate Court divided the award among four beneficiaries, which included the deceased's mother, husband, and two children. The court allocated $245,000 to the deceased's mother; and divided the remaining $5,000 among the deceased's husband and two children. The probate court determined that deceased's mother did not receive any collateral benefits, therefore set off did not apply to her award. However, since the appellant's husband and two children did receive collateral benefits, their $5,000 collective award was reduced to zero. The case was transferred back to the Court of Claims, which adopted the probate court findings and rendered final judgment for the executor in the amount of $245,000.
OSUH appealed the Court of Claims decision to the Tenth District Court of Appeals challenging, among other things, the Court of Claim's referral of the allocation of damages to the Lawrence County Probate Court. OSUH also contested the Court of Claims authority to adopt the decision of the Probate Court after it had allocated the damages and applied the setoffs. See McMullen v. Ohio State Univ. Hosp. (Sept. 22, 1998), Franklin App. Nos. 97API10-1301 and 97API10-1324, unreported. The Tenth District sustained appellant's assignment of error and remanded to the Court of Claims with instructions to enter a revised judgment award, which calculated and deducted the collateral benefit reduction for each beneficiary before transfer to the Lawrence County Probate Court. Id. The Tenth District reasoned that the statutory setoff rights conferred an entitlement that must be litigated in the Court of Claims and that the Lawrence County Probate Court did not have jurisdiction to, in affect, modify a judgment award from the Court of Claims.
However, the Supreme Court of Ohio reversed the Court of Appeals, see McMullen v. Ohio State Univ. Hosp. (2000), 88 Ohio St.3d 332. The Supreme Court agreed with the Tenth District that the Court of Claims had original jurisdiction to determine the deduction of collateral source benefits under R.C. 3345.40(B)(2). However, the Supreme Court found that the Court of Claims could only exercise its jurisdiction to determine the set-off for collateral benefits after the probate court had allocated the aggregate award among the beneficiaries under R.C. 2125.03(A)(1). As a matter of due process, the Supreme Court pointed out that applying setoffs before distribution could arbitrarily reduce one beneficiary's award by another beneficiary's collateral benefits since the probate court can allocate the award differently than the Court of Claims. Id. at 343. See, also, Sorrell v. Thevenir (1994), 69 Ohio St.3d 415; and Buchman v. Wayne Trace Local School Dist. Bd. of Edn. (1995), 73 Ohio St.3d 260 (both cited in McMullen). The Court made it clear that it would be improper to allow one party's recovery to be reduced by another person's collateral benefits. McMullen at 343. The Court also stated that reduction of collateral source benefits before distribution would cause the setoff statute to operate contrary to its presumed goal, which is to eliminate or prevent double recovery. Id. at 344. The Supreme Court remanded the case to the Court of Claims, which transferred the matter to the Lawrence County Probate Court.
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