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COLLINS v. KING3/20/1996
This appeal comes after a jury awarded plaintiff damages for personal injuries that were reduced by the court by the amount she had received in disability income payments. We reverse and remand for entry of an additur to the judgment amount.
I. Factual and Procedural Background
Plaintiff, Leanna Collins, worked for Home Shopping Network (HSN) as a packer. She was injured in a car accident, sued defendants for negligence, and obtained a jury verdict awarding damages. While off work, she received disability payments of $5,055.56 from HSN. No subrogation rights attached to these payments. The trial court instructed the jury and reduced plaintiff's judgment after the verdict by the amount of disability income payments. This was based on the court's belief that our comparative fault act, Iowa Code chapter 668, and specifically Iowa Code section 668.14 (1991), commanded this result.
Section 668.14(1) states:
In an action brought pursuant to this chapter seeking damages for personal injury , the court shall permit evidence and argument as to the previous payment or future right of payment of actual economic losses incurred or to be incurred as a result of the personal injury for necessary medical care, rehabilitation services, and custodial care except to the extent that the previous payment or future right of payment is pursuant to a state or federal program or from assets of the claimant or the members of the claimant's immediate family.
The words of this section to be construed are "previous payment or future right of payment of actual economic losses incurred or to be incurred as a result of the personal injury for necessary medical care, rehabilitation services, and custodial care. . . ." The trial court held that "disability payments" are embraced by the language "medical care, rehabilitation services and custodial care."
In support of this interpretation the court and defendants believe that the legislature by enacting section 668.14 intended a virtual abrogation or at least a broad scale limitation of the collateral source rule for unintended torts. That rule of common law states that a plaintiff's recovery of damages against a tort defendant are not reduced by sums the plaintiff has received or will receive from another source (a collateral source). See Groesbeck v. Napier, 275 N.W.2d 388, 391-92 (Iowa 1979); Rigby v. Eastman, 217 N.W.2d 604, 609 (Iowa 1974); 22 Am.Jur.2d Damages § 566 (1988). The disability income payments here are from a collateral source, i.e. HSN.
One effect of the common law collateral source rule is that in cases where the plaintiff receives collateral benefits which are not paid subject to a right of subrogation in the payor, and also is compensated for the same injuries from a tort suit against the defendant, the plaintiff receives duplicate damages to the extent that the collateral benefits and tort recovery overlap. This is commonly known as "double dipping" and is thought by [545 NW2d Page 312]
tort defendants to unfairly overcompensate the plaintiff. Claire F. Carlson, Fairness in Litigation or Equity for All, 36 Drake L.Rev. 713, 719 (1987). The counterargument is that to allow collateral benefits to reduce the tort recovery would relieve the defendant of the consequences of tortious conduct. Clark v. Berry Seed Co., 225 Iowa 262, 271, 280 N.W. 505, 510 (1938). As between the plaintiff and the tortfeasor, the common law deems it more just that the plaintiff profit from collateral benefits. See id.; 22 Am.Jur.2d Damages § 566 (1988).
In construing the statute the trial court reasoned "I can't conceive of any reason why an employer would pay sick pay or disability e
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