MR. BROWN DODGES A BULLET
Injury claimants recently held their noses and breathed a sigh of relief after the Dallas Court of Appeals refused to allow Irving Holdings, Inc. to completely thrown Herman Brown under the bus. The issue in the case was which statute to apply first after a jury verdict--the comparative fault statue or the limitation on recovery statute. The court of appeals held the trial court properly applied the comparative fault statute first.
When a person is involved in a car wreck, there are two aspects of Texas law that can create problems in recovering damages. Texas is a comparative fault state. That means a person cannot recover damages for the percentage of fault the jury assigns to him. So if a jury finds the injury victim to be 10% at fault, the jury's verdict is reduced by 10%. For the sake of accuracy, it should be noted that an injury victim cannot recover any damages at all if the jury finds him to be 51% or more at fault. In other words, if a jury finds the injured person to be 51% at fault and also finds his damages to me $1 million, the injured person recovers nothing.
The second aspect of Texas law that is an issue in many cases, is the idiotic limitation on recovery statute enacted by the Texas Legislature in 2003, in Texas Civil Practice & Remedies Code § 41.0105. The law is so poorly written that no one really knows what it means. For the most part, Texas courts have ignored the legislative history that clearly indicates it was meant to apply to medical malpractice lawsuits. Judge Gisela Triana-Doyle has recently published an excellent article discussing this statute. Click here to read it.
The insurance industry and some right-wing activist courts assert the statute means that when an injured person has health insurance that pays a negotiated reduced amount for medical services, the amount paid by the health insurance company is the maximum amount the injured person can recover for medical bills.
That reading of the statute completely ignores the well-established Texas common law "Collateral Source Doctrine," which says the wrong-doer cannot benefit from the fact that he injured a person responsible enough to have health insurance. After all, why should the injured person pay health insurance premiums out of pocket for years and then get penalized for it when another person causes him an injury. It makes no sense. Furthermore, the legislative history clearly states it is not to affect the Collateral Source Rule!
In other words, the insurance industry says that when a person, like Mr. Brown, is injured by a negligent driver, the auto insurance company gets to benefit from Mr. Brown's own health insurance. He had $89,000 in medical charges. That was undisputed. His health insurance company had a negotiated reduced reimbursement rate with the medical providers which allowed them to pay off the total charges for about $45,000.
The facts in the Irving Holdings case were that Mr. Brown was in a car wreck with a taxi cab driver that worked for Irving Holdings, Inc. The jury found both drivers equally at fault, and they found Mr. Brown incurred $89,000 in medical bills for his injuries in the wreck. The trial court applied the Texas comparative fault statute in Texas Civil Practice & Remedies Code § 33.012(a), and reduced Mr. Brown's jury award of $89,000 by his share of fault--in this case 50%. The trial court then compared the reduced jury verdict for medical bills ($45,000) to the amount his health insurance company actually paid, which coincidentally was also $45,000. Since the amount of the reduced judgment did not exceed the amount actually paid, the trial correctly entered judgment for Mr. Browns medical bills in the amount of $45,000.
Irving Holdings, Inc. could not bear to pay the amount of damages for which it was found responsible, so they delayed and increased the cost to everyone involved by appealing the trial court's judgment. Irving Holdings asserted the ridiculous argument that the trial court should have reduced the jury's award down to the amount actually paid ($45,000) and then applied the comparative fault statute and reduced that amount by 50%!
It is unfortunate that injury victims are further victimized by the insurance industry when the jury awards money damages for compensation. The Dallas Court of Appeals made the right decision, but the case highlights the importance of the Texas Legislature acting to repeal that draconian and anti-consumer stateute. The insurance industry has been in the driver's seat too long and the damage they have caused can only be measured in human suffering.
