Brief of Illinois Trial Lawyers Association, amicus curiae
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1 No.: IN THE SUPREME COURT OF THE STATE OF ILLINOIS SHEILA M. WILLS, VS. INMAN FOSTER, JR. and CHARLENE FOSTER, Plaintiff-Petitioner,! Petition for Leave to Appeal from the Appellate court of Illinois, Fourth District NO There was heard on Appeal from the Circuit Court of the Seventh Judicial Circuit Sangamon County, Illinois Defendant-Respondents. ) Honorable Patrick E. Kelley Trial Judge Brief of Illinois Trial Lawyers Association, amicus curiae M. Tod Melton Ludens Potter Burch Melton & Calvo 409 North Cherry St. P.O. Box 360 Morrison, Illinois
2 No.: IN THE SUPREME COURT OF THE STATE OF ILLINOIS SHEILA M. WILLS, 1 1 Plaintiff-Petitioner, ) ) 1 VS. ) ) ) INMAN FOSTER, JR. and ) CHARLENE FOSTER, ) ) 1 Defendant-Respondents. ) 1 Petition for Leave to Appeal from the Appellate court of Illinois, Fourth District NO There was heard on Appeal from the Circuit Court of the Seventh Judicial Circuit Sangamon County, lllinois Honorable Patrick E. Kelley Trial Judge Brief of Illinois Trial Lawyers Association, amicus curiae M. Tod Melton Ludens Potter Burch Melton & Calvo 409 North Cherry St. P.O. Box 360 Morrison, Illinois
3 Points and Authorities This Court Should Abandon Peterson, and Adopt Section 920A of the Restatement (Second) of Torts. Section 920A of the Restatement (Second) of Torts Arthur vs. Catour, 216 Ill. 2d 72, 833 N.E. 2d 847, Dec ( ) , Skaggs vs. Junis, 27 Ill. App. 2d 25 1, 169 N.E. 2d 684 (2"d Dist. 1960)... 7, 10 Wove vs. Whz'pple, 1 12 Ill. App.2d 555, 25 1 N.E.2d 77 (3rd Dist. 1969) Fear vs. Smith, App. 3d 5 1, 539 N.E. 2d 1297, 132 Ill. Dec. 491 (5Ih Dist. 1989)... 7, 9 Pittsburgh, Cincinnati, and St. Louis Railway vs. Thompson, (I ) 6-7 Illinois Central Railroad vs. Prickett, 21 0 Ill. 140, 7 1 N.E. 435 (Ill. 1904)... 6 Peterson vs. Lou Bachrodt Chevrolet, d 353,392 N.E.2d 1, Dec. 444 (Ill. 1979) (distinguished) Even ifpeterson is Upheld, the Collateral Source Rule Should be Applied to Medicaid and Medicare Benefits. Arthur vs. Catour, 216 Ill. 2d 72, 833 N.E. 2d 847, 295 Ill. Dec. 641 (Ill. 2005) Peterson vs. Lou Bachrodt Chevrolet, 76 I11.2d 353, 392 N.E.2d 1, Dec. 444 ( ) (distinguished) Nickon vs. City of Princeton, '11. App. LEXIS 1137 (31~ Dist. 2007) The Defendant is not Entitled to a Remittitur. Pittsburgh, Cincinnati, and St. Louis Railway vs. Thompson, 56 Ill. 138 (Ill. 1870) Page 2
4 Saunders vs. Schultz, d 301, 170 N.E. 2d 163 (Ill. 1960) Brumley vs. Federal Barge Lines, 78 Ill. App. 3d 799,396 N.E. 2d 1 333, 33 Ill. Dec. 609 (Sth Dist. 1979) Boden vs. Crawford, 196 Ill. App. 3d 7 1,552 N.E. 2d 1287, Dec. 546 (4' Dist. 1990) Arthur vs. Catour, 216 Ill. 2d 72, 833 N.E. 2d 847, 295 Ill. Dec. 641 (Ill. 2005) Page 3
5 Introduction The Illinois Trial Lawyers Association submits this amicus curiae brief in support of the plaintiff Sheila M. Wills. In light of the fact that an affirmation of the Fourth District's holding would severely limit the rights of all Medicare and Medicaid patients in Illinois, this court's decision has far reaching implications for personal injury litigation. This amicus brief is intended to offer a larger perspective and to address historical and public policy considerations that may not be mentioned by the parties in their own briefs. Page 4
6 Facts The Illinois Trial Lawyers Association hereby incorporates by reference the Statement of Facts set forth in the brief of the plaintiff, Sheila M. Wills. Page 5
7 Argument This Court Should Abandon Peterson, and Adopt Section 920A of the Restatement (Second) of Torts. At the core of the collateral source rule is the following public policy: A tortfeasor cannot, by virtue of his wrongdoing, raise his victim's rights as a shield against his own liability. Contrary to this public policy, the lower court has opined that a tortfeasor may, in effect, hijack the rights of the plaintiff - - but only if the plaintiff is old enough, poor enough, or disabled enough to qualify for public health benefits. This court first addressed the collateral source rule more than 135 years ago in the case of Pittsburgh, Cincinnati, and St. Louis Railway vs. Thompson, 56 Ill. 138 (Ill. 1870). Notably, that first decision, like the present case, concerned itself not with the evidentiary aspect of the collateral source rule, but rather with the question of whether the defendant was entitled to a remittitur for the amount paid by the collateral source. This court held: If such sum was paid, it was not pro tanto discharged from the railway company. The primary liability was on this company , 143. Shortly after the turn of the twentieth century, this court recognized, in Illinois Central Railroad vs. Pricktt, 210 Ill. 140, 71 N.E. 435 ( ), that there is also an evidentiary aspect of the collateral source rule. As recently as 2005, this court reiterated that the collateral Source rule has both substantive and evidentiary components. Arthur vs. Catour, d 72, 833N.E. 2d 847,295 Ill. Dec. 641 (Ill. 2005). Page 6
8 In Arthur, both the majority opinion and the dissent cited to Section 920A of the Restatement (Second) of Torts. As such, Section 920A of the Restatement is both relevant and authoritative. The pertinent section reads: Payments made to or benefits conferred on the injured party from other sources are not credited against the tortfeasor's liability, although they cover all or a part of the harm for which the tortfeasor is liable. Restatement (Second) of Torts, Section 920A. Comment c to Section 920A of the Restatement defines the scope of the rule. Comment c provides that the collateral source rule applies to the following types of benefits: (1) insurance policies; (2) employment benefits; (3) gratuities; and (4) social legislation benefits. With the exception of gratuitous benefits, Illinois common law has traditionally mirrored the Restatement. Pittsburgh, Cincinnati, and St. Louis Railway vs. Thompson, (Ill. 1870) (insurance benefits); Arthur vs. Catour, 216 Ill. 2d 72, 833 N.E. 2d 847, 295 Ill. Dec. 641 (Ill. 2005) (insurance benefits); Skaggs vs. Junis, 27 Ill. App. 2d 251, 169 N.E. 2d 684 (2nd Dist. 1960) (government benefits); Fear vs. Smith, 184 Ill. App. 3d 51, 539 N.E. 2d 1297, 132 Ill. Dec. 491 (5'h Dist. 1989) (employment benefits). There are, however, conflicting authorities in the State of Illinois as to whether gratuitous payments are covered by the collateral source rule. The issue was first raised in lllinois in WoIfe vs. Whipple, 112 Ill. App.2d 555,251 N.E.2d 77 (3rd Dist. 1969), wherein it Page 7
9 appeared, from plaintiffs tax returns, that his employer gratuitously paid his full salary while he was unable to work. The Third District, on these facts, stated: The reasonable rule is that gratuitous payments... would not preclude a recovery for loss of time on the theory that the wrongdoer can have no concern with the transaction between employer and employee and the amount so paid is not to be regarded...( as) compensation for lost time, but rather a gratuity given by one to the other out of relations of friendship or sympathy between them. 112 Ill. App.2d 255; 266. Ten years later, however, in Peterson vs. Lou Bachrodt Chevrolet, d 353, 392 N.E.2d l, Dec. 444 (Ill. 1979), this court, without mentioning the Wove case, stated: An individual is not entitled to recover for the value of services that he has obtained without expense, obligation, or liability... (The collateral source rule) is usually justified on the basis that the wrongdoer should not benefit from the expenditures made by the injured party in procuring the insurance coverage. (Citations omitted.) In a situation in which the injured party incurs no expense, obligation, or liability, we see no justification for applying the rule. We refuse to join those courts which, without consideration of the facts of each case, blindly adhere to the collateral source rule, permitting the plaintiff to exceed compensatory limits in the interest of insuring an impact upon the defendant d 353; Page 8
10 Interestingly, the Peterson case was decided the same year as the copyright date on Section 920A of the Restatement (Second) of Torts. Perhaps being unaware of Section 920A, the Peterson court adopted comment a to Section 903 of the Restatement, while apparently failing to recognize that comment c to Section 920A of the Restatement was directly on point. In fact, the Peterson opinion makes no reference to Section 920A, whatsoever. Yet another ten years later, the Fifth District decided Fear vs. Smith, 184 Ill. App. 3d 51, 539 1V.E. 2d 1297, 132 Ill. Dec. 491 (51h Dist. 1989), which cited the Wove case, while ignoring the Peterson decision. In the Fear decision, the Fifth District overtly embraced the concept that "gratuitous payments" fall within the collateral source rule: Under the collateral source rule, evidence that plaintiff received payments while disabled due to an accident, in the form of workman's compensation or disability insurance payments or gratuitous payments from the employer are not admissible in a civil suit by the plaintiff for damages (citation omitted), and the receipt of said payment should not preclude plaintiff fiom recovery of lost wages (citation omitted) App. 3d 51 ; 59. (Emphasis added.) Unless there is a meaningful difference between gratuitous medical benefits and gratuitous employment benefits, the language of the Fear decision is irreconcilable with this court's decision in the Peterson. Thus, by 1989, substantial doubt had already been Page 9
11 created as to whether the holding of Peterson was good law. The Third District, Fifth District and Restatement all took one position with regard to gratuitous payments; the Peterson case (albeit from the highest court in the State) took another position. In the face of this conflict, this court recently addressed the treatment of preferred provider insurance discounts in Arthur vs. Catour, 216 Ill. 2d 72,833 N.E. 2d 847,295 Ill. Dec. 641 (Ill. 2005). This court held, in Arthur, that the collateral source rule applied to both the portion of the benefit which came in form of payment of medical bills and to the portion of the benefit which arose from a preferred provider discount. The court below draws an artificial distinction between preferred provider insurance discounts, and government benefit discounts. Until the case at bar, the courts of this state have followed the rule that government benefits are collateral source material. For example, in Skaggs vs. Junis, App. 2d 251, 169 N.E. 2d 684 (2nd Dist. 1960), the Second District opined: In addition, the trial court refused to admit into evidence certain paid and unpaid medical bills incurred by the plaintiff. These bills, which were tendered by the plaintiff and which the court refused to admit, totaled in the aggregate $5, It appears that certain of the medical bills and expenses of the plaintiff were paid by the plaintiffs parents and certain ones by the Illinois Public Aid Commission. The basis of the refusal to admit these bills apparently was that these bills were not paid by the minor, Page 10
12 but by others, and therefore the minor should not be permitted to recover upon them.... We believe that the failure to... permit the introduction into evidence of paid medical bills, as well as unpaid medical bills which were shown to be fair, reasonable, and necessary to the treatment of the plaintiff, constituted reversible error. 27 Ill. App. 2d 251 ; With the exception of Peterson, the courts of this state have generally fallen in line with Section 920A of the Restatement (Second) of Torts. The lower court in the present case begged the issue, when it stated, "Because the Arthur court did not specifically oven-ule Peterson, we must continue to follow Peterson." It is unknown to the author of this brief whether this court intended, in Arthur, to overturn Peterson, sub silentio. What is clear, however, is that the Peterson decision appears to be out of line with Section 920A of the Restatement (Second) of Torts, and out of line with both prior and subsequent case law. Unless this court overturns Peterson outright, in favor of Section 920A of the Restatement, litigants will forever be arguing over exactly which collateral source benefits fall within the ambit of the rule. Even ifpeterson is Upheld, the Collateral Source Rule Should be Applied to Medicaid and Medicare Benefis. Even if this court opts to uphold the Peterson decision, this court should nevertheless hold that Medicaid and Medicare benefits fall within the scope of the collateral source rule. Peterson is readily distinguishable. Page 11
13 In the Peterson case, the plaintiffs medical treatment was not only unpaid, but was rendered completely free of charge. That is, there was not only no amount paid for the medical services, but there was also no amount billed. The present case is more analogous to Arthur vs. Catour, wherein one amount was billed by the provider, but a lesser amount was paid. In fact, the only distinction between Arthur and the case at bar is that the Arthur case involved private insurance, where the present case involves government benefits. The Third District has recently stated, in the case of Nickon vs. City of Princeton, App. LEXIS 1137 (3rd Dist. 2007), that Peterson is limited to the very specific instance where charitable medical services are provided without generating a bill. The Third District held that Peterson defines a single, narrow exception to the collateral source rule: With a great degree of foresight and long before Arthur, our supreme court carved a single exception to the collateral source rule... This exception dicates collateral sources should not include services provided by charitable providers without charge, i. e., without generating an initial bill... The exception developed by the court in Peterson, does not apply in our case since the medical provider clearly billed for the services in expectation of payment, unlike the Shriner hospital in Peterson. We refiain fiom applying the decision in Arthur to expand the reach of Page 12
14 Peterson to services initially billed, but subsequently discounted for a third party payor. Nickon vs. City oflrinceton, App. LEXIS 1137 (3rd Dist. 2007). According to the United States Department of Health and Human Services website, over 1.4 million Illinois residents are recipients of Medicare Parts A andlor B. According to the Illinois Department of Healthcare and Family Services website, over 2.3 million Illinois residents rely upon Medicaid for their health care needs. In other words, approximately one quarter of Illinois residents are recipients of public health benefits. As the baby boomer generation ages, it is anticipated that the number of Medicare recipients will nearly double over the next 25 years. In Arthur vs. Catour, this court concluded that prefened provider insurance discounts constitute collateral source benefits. That is, the court recognized that a tortfeasor does not, by virtue of his wrongdoing, prevent his victim from receiving full recovery of his medical benefits. A decision by this court to limit the ruling in Arthur to preferred provider discounts, while applying a different rule to Medicare and Medicaid recipients, would deprive millions of poor, elderly and disabled Illinois residents fiom having the same legal rights as those who are healthy enough or wealthy enough to afford private insurance. This would, indeed, be an unfortunate and unjustifiable result. Page 13
15 The Defendant is not Entitled to a Remittitur. While the District Court in the present case completely removed Medicare and Medicaid recipients from the protections of the collateral source rule, the Circuit Court appears to have taken a somewhat different approach. To be specific, the trial court upheld the evidentiary aspect of the collateral source rule while denying the plaintiff of the substantive aspect of the collateral source rule. As has been previously noted, supra, the collateral source rule originated in Illinois as a substantive rule of damages. Pittsburgh, Cincinnati, and St. Louis Railway vs. Thompson, 56 Ill. 138 (1' ). Our appellate courts have long followed that rule. Saunders vs. Schultz, d 30 1, 170 N.E. 2d 163 (Ill. 1960); Brumley vs. Federal Barge Lines, 78 Ill. App. 3d 799,396 N.E. 2d 1333, 33 Ill. Dec. 609 (51h Dist. 1979); Boden vs. Crawford, 196 Ill. App. 3d 71, 552 N.E. 2d 1287, 142 Ill. Dec. 546 (4Ih Dist. 1990). This court reaffirmed both the substantive and evidentiary components of the collateral source rule in the Arthur decision: The dual nature of the collateral source rule is evident: The traditional approach is to treat '?he collateral source rule" as having substantive and evidentiary components. The substantive. component is a rule of damages. This component bars a defendant from reducing the plaintiffs compensatory award by the amount the plaintiff received from the collateral source. The evidentiary component bars Page 14
16 admission of evidence of the existence of the collateral source or the receipt of benefits. The concern here is the trier of fact may use that evidence improperly to deny the plaintiff fi.111 recover to which he is entitled. 216 Ill. 2d 72 at (citing J. Fischer, Understanding Remedies, Section 12(a), 1999.) Obviously, the trial court misapprehended the dual nature of the rule. Unless this court intends to overturn more than 135 years of established case law, both aspects of the collateral source rule must be enforced. Page 15
17 Conclusion The Illinois Trial Lawyers Association respectfully requests that this court take into consideration the points made in this brief. Specifically, this friend of the court requests that the bench consider the enormous public policy impact of the decision and further requests that this court clarify the law by explicitly overturning the Peterson decision. Respectfully submitted, Illinois Trial Lawyers Association, amicus curiae M. Tod Melton Ludens Potter 409 N. Cherry St., Morrison, Illinois Telephone: Facsimile: Page 16
18 Certificate of Compliance I, M. Tod Melton, certify that this brief conforms to the requirements of Rules 34 1 (a) and (b). The length of this brief, excluding the appendix, is 16 pages. Dated: NOV. 05, Illinois Tri M. Tod Melton 409 N. Cherry St., P.O. Box 360 Morrison, Illinois Page 17
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