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In a very important ruling by the Louisiana Supreme Court, a tort defendant is no longer liable for any “actual charges” by medical providers above the amount paid by a Workers Compensation insurer pursuant to promulgated Workers Compensation fee schedule . In Simmons v. Cornerstone Investments, LLC, 2018-cc-0735 (La. 5/18/19), the court concluded:

“…the amount of medical expenses charged above the amount actually incurred is not a collateral source and its exclusion from the purview of the jury was proper.” See http://www.lasc.org/opinions/2019/18-0735.CC.OPN.pdf

The court conducted a detailed analysis of the development of the collateral source rule under applicable jurisprudence noting that the genesis of the collateral source rule:

“Under the collateral source rule, a tortfeasor may not benefit, and an injured plaintiff’s tort recovery may not be reduced, because of monies received by the plaintiff from sources independent of the tortfeasor’s procuration or contribution. Under this well-established doctrine, the payments received from the independent source are not deducted from the award the aggrieved party would otherwise receive from the wrongdoer.” See Louisiana Dept. of Transp. & Dev. v. Kansas City Southern Railway Co., 02-2349, p. 6 (La. 5/20/03), 846 So.2d 734, 739.

Essentially, the court asks two questions when assessing whether the collateral source rule should apply. First, does the claimed benefit arise from some payment, wage deduction or other contribution by the Plaintiff that would diminish the plaintiff’s patrimony? Second, will the goal of tort deterrence be promoted by allowing the windfall? In a series of cases culminating in the case at bar, the court has been limiting the application of the collateral source rule in a number of contexts.

The court in Bozeman v. State, 03-1016 (La. 7/2/04), 879 So.2d 692, found that the collateral source rule did not apply when Medicaid was the payor such that the defendant could not be responsible for any amounts above what Medicaid paid to the provider. The court reasoned that it would be “unconscionable” to require taxpayers to pay the bills and then let a plaintiff recover the full undiscounted medical expenses and “pocket the windfall.” The court continued by noting in “Cutsinger v. Redfern, 08-2607 (La. 5/22/09), 12 So.3d 945, this court found the collateral source rule did not apply to prevent the plaintiff’s uninsured motorist carrier from receiving a credit for workers’ compensation benefits paid by her employer, even though the plaintiff paid for the UM coverage herself.” In Hoffman v. 21st Century North American Ins. Co., 14-2279 (La. 10/2/15), 209 So.3d 702, the court held that the collateral source rule does not apply to attorney-negotiated medical discounts. The court also looked at the US 5^th Circuit in Deperrodil v. Bozovic Marine, Inc., 842 F.3d 353 (5th Cir. 2016), that the collateral source rule does not apply above any amounts actually paid by the employer in the context of the LHWCA.

In each of the instances outlined, the court noted that the patrimony of the plaintiff was not impacted by limiting recovery to the amount of medical bills actually paid. Moreover, the court noted that the goal of tort deterrence is not negatively impacted, and that allowing a plaintiff to recover a windfall in this context is tantamount to an award of punitive damages that are not recoverable absent statutory authority which is not present in this context. The Simmons decision now extends that same logic to cases where a Workers Compensation insurer has paid the medical benefits pursuant to the Louisiana Workers Compensation Law.

This ruling will have significant impact on the evaluation, settlement and trial of tort cases that have corresponding Workers Compensation claims.

Submitted by John P. Wolff, III (Partner)

Historically, Louisiana law provided that a professional rescuer injured in the performance of his or her duties “assumes the risk” of an injury and is not entitled to damages. See Worley v. Winston, 550 So.2d 694, 696 (La. App. 2 Cir.), writ denied, 551 So.2d 1342 (La. 1989). This is known as the Professional Rescuer’s Doctrine and applied as a defense to claims raised by firefighters, policeman, and others. The doctrine prevented recovery because the professional rescuer “assumed the risk” of injury. Recently, the Louisiana Supreme Court in Doe v. McKesson, 2021-00929 (La. 3/25/22) rejected the doctrine as a bar to suit by the professional rescuer.

In Doe, the Supreme Court of Louisiana accepted a certified question from the Fifth Circuit of the United States Court of Appeals as to the viability of the doctrine. In response, the Supreme Court held that the Professional Rescuer’s Doctrine has been abrogated in Louisiana both legislatively under La. C.C. art. 2323 and jurisprudentially in Murray v. Ramada Inns, Inc., 521 So.2d 1123, 1132 (La. 1988).

The Court cited La. C.C. art. 2323(A), which provides that the fault of “all persons […] shall be determined” in a civil action. Subsection (B) of the article provides this rule applies “to any claim for recovery of damages for injury, death, or loss asserted under any law or legal doctrine or theory of liability, regardless of the basis of liability.”

In Murray, the Supreme Court previously held that the doctrine of assumption of risk no longer had a place in Louisiana tort law following the adoption of comparative fault. Nevertheless, the Murray Court identified two exceptions:

• Cases “where the plaintiff, by oral or written agreement, expressly waives or releases a future right to recover damages from the defendant,” if “no public policy concerns would invalidate such a waiver, the plaintiff's right to recover damages may be barred on a release theory;” and

• “[I]n the sports spectator or amusement park cases (common law’s “implied primary” assumption of risk cases).”

Murray, 521 So.2d at 1134. (internal citations omitted).

The Doe court observed that Murray provided no exception relative to professional rescuers. The Court further observed that, while the legislature had enacted statutes that bar plaintiff recovery in other settings, no such statute had been passed to codify the Professional Rescuer’s Doctrine.

Although professional rescuers injured in the performance of their duties may still be found at fault, the is no longer an automatic bar to suit.

Sometimes in law, the facts of a case may threaten to eclipse the legal issue. However, Louisiana law instructs the fact finder to see through the facts, and their sometimes tragic nature, and apply the law as written. As Aristotle once wisely said, “The Law is reason free from passion.”

In Kazan, et. al. v. Red Lion Hotels Corporation, et. al., 2021-CC-01820 (La. 6/29/22), the Louisiana Supreme Court recently ruled on a case with tragic facts, and its ruling provides an example of Aristotle’s description of law in action. In Kazan, a female patron was in the parking lot of a motel when a male patron approached her and used Kazan’s vehicle to abduct her from the premises. The car was later found submerged in a lake, and Kazan’s body was recovered from the water. The family filed a tort suit against several parties, including the motel’s owner and its insurer, the Great Lakes Insurance Company SE.

Great Lakes filed a motion for summary judgment and asked to be dismissed on grounds that coverage for the event was excluded from its policy. Specifically, the insurer argued that bodily injury caused by an “assault,” “battery,” or “physical altercation” was excluded under the policy’s terms. Great Lakes further argued that the kidnapping and ultimate death of the patron was excluded under the policy as bodily injury caused by an assault, battery, or physical altercation. The Louisiana Supreme Court agreed and reversed the decision of the trial and appellate courts.

Under Louisiana law, “[a]n insurance policy is a contract between the parties and should be construed using the general rules for the interpretation of contracts.” Id. at p. 3. “When the words of an insurance policy are clear and explicit and do not lead to absurd consequences, courts must enforce the language as written.” Id. at p. 3. “Courts lack authority to alter the terms of an insurance policy under the guise of interpretation and should not create an ambiguity where none exists.” Id. at p. 3.

With these basic rules in mind, the Court carefully reviewed the wording of the exclusion in the Great Lakes policy which stated as follows: “This insurance does not apply to ‘bodily injury,’ ‘property damage,’ or ‘personal advertising injury’ arising out of an ‘assault,’ ‘battery,’ or ‘physical altercation.’” “Physical altercation” was defined in the policy as “a dispute between individual [sic] in which one or more persons sustain bodily injury arising out of the dispute.” Citing Merriam-Webster’s dictionary, the Court defined the term “dispute” as “verbal controversy” or “quarrel.”

Based upon the evidence in the case, the Court found the female patron was involved in a “dispute” with her male attacker, and ultimately sustained bodily injury as a result of the dispute. Therefore, the patron was injured in a physical altercation, as defined under the specific terms of the Policy, and coverage for the event was excluded under the policy’s terms.

The Court noted as follows: “The facts of this case are undoubtedly tragic. Nonetheless, absent a conflict with statutory provisions or public policy, insurers are entitled to limit their liability by imposing reasonable conditions upon the policy obligations they contractually assume. That is what Great Lakes did in the insurance policy at issue here.” Despite the tragic facts presented in the case, in so holding, it appears the court agreed with Aristotle’s belief that the Law is Reason Free from Passion.