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Feeley v. United States

November 4, 1964


Author: Biggs

Before BIGGS, Chief Judge, and McLAUGHLIN and STALEY, Circuit Judges.

BIGGS, Chief Judge.

The plaintiff-appellant, Donald Feeley, a veteran of the United States armed forces, sustained severe physical injuries while engaged in overseas combat. These injuries culminated in a medical discharge for a mental disorder; psychoneurosis, anxiety reaction. This service-connected disability has resulted in Feeley's being rated as 50% permanently disabled by the Veterans' Administration, entitling him to disability benefits. Prior to July 7, 1960, Feeley frequently sought medical care for this condition, which he received free of charge from the Veterans' Administration.

The district court*fn1 found that on July 5, 1960, the plaintiff, while working for the City of Philadelphia, was injured in Philadelphia by a United States Post Office truck through the negligence of an employee of the United States Government. Feeley suffered injury to his right knee and leg and also an aggravation of his pre-existing service-connected psychoneurosis. In June of 1961, the plaintiff, while playing basketball, injured his right ankle. The evidence was in dispute as to whether or not this injury was the result of a weakened condition caused by the knee injury.

After these injuries, Feeley, realizing that his mental illness was worsening, sought further hospital and medical care from the Veterans' Administration, which he received free of charge.

The plaintiff then instituted this action under the Federal Tort Claims Act, 28 U.S.C. § 1346(b), to recover for the damages sustained by the negligence of the driver of the Post Office vehicle. The court below, sitting without a jury, found in favor of the plaintiff. Although the government does not contest the finding of negligence, it appeals from that part of the judgment which allowed the plaintiff, as a part of his damages, the reasonable value of the medical care furnished free by the Veterans' Administration and the award for future medical care. The appellant also claims that the trial court failed to make adequate findings of fact as required by Rule 52(a), Fed.R.Civ. Proc., 28 U.S.C., in respect to the amount of damages.


In awarding damages, the district court included an amount of $2055.20, which it calculated to be the reasonable value of the medical care which the plaintiff received from the Veterans' Administration Hospital. There is no doubt that Feeley did not pay for this service, has not incurred any future liability for it, and that the service was rendered free of charge under Title 28, U.S.C.A. Nonetheless, Feeley argues that the trial court properly awarded damages to him for this gratuitous service under the collateral source rule. While it is well established that a plaintiff's recovery under the ordinary negligence rule is limited to damages which will make him whole, the collateral source rule allows a plaintiff further recovery under certain circumstances even though he has suffered no loss. See Restatement, Torts § 920, Comment e . The collateral source rule may be described as "the judicial refusal to credit to the benefit of the wrongdoer money or services received in reparation of the injury caused which emanate from sources other than the wrongdoer."*fn2 Under the collateral source rule a "plaintiff who has been paid his salary or a pension during disability, or had his medical expenses paid by another, or out of the proceeds of an accident insurance policy, may still recover full damages for these items from a defendant who is liable for the injury. To this extent, plaintiff may get double payment on account of the same items. The defendant wrongdoer should not, it is said, get the benefit of payments that come to the plaintiff from a collateral source."*fn3 However, where the defendant has been the source of the payment, the damages, generally, cannot include the benefit conferred by the defendant*fn4 But in instances in which the United States is the payer-defendant, this general rule has sporadically succumbed to a proliferation of judicial decisions attempting to accommodate the collateral source rule to the unique position of the federal government with its many separate branches and agencies, each independent of the other*fn5

The case at bar arises under the Federal Tort Claims Act, 28 U.S.C.A. § 2674, which provides that, "The United States shall be liable, respecting the provisions of this title relating to tort claims, in the same manner and to the same extent as a private individual under like circumstances * * *." Under this provision, the applicable state law, not federal law controls, in the first instance*fn6, in determining the computation of damages. Richards v. United States, 369 U.S. 1, 82 S. Ct. 585, 7 L. Ed. 2d 492 (1962); Massachusetts Bonding & Ins. Co. v. United States, 352 U.S. 128, 77 S. Ct. 186 (1956); Hatahley v. United States, 351 U.S. 173, 76 S. Ct. 745, 100 L. Ed. 1065 (1956); Knecht v. United States, 242 F.2d 929 (3 Cir. 1957); Landon v. United States, 197 F.2d 128 (2 Cir. 1952); United States v. Gaidys, 194 F.2d 762 (10 Cir. 1952); Leon v. United States, 193 F.Supp. 8 (E.D.N.Y.1961). Thus, in the case at bar, the plaintiff must show that the governing state law, here Pennsylvania law, would apply the collateral source doctrine. More particularly, Feeley's case must rest upon a showing that Pennsylvania would not offset the free hospital care rendered by the Veterans' Administration from his damages. If Pennsylvania state law requires that in a suit against a private defendant the hospital and medical care conferred by the Veterans' Administration be deducted from the award, a fortiori there would have to be an appropriate reduction in the damages sought by Feeley in this case. Cf. United States v. Harue Hayashi, 282 F.2d 599 (9 Cir. 1960). We have endeavored to research the applicable state law and have concluded that Pennsylvania law would not allow recovery.

It is incorrect to analyze the ambit or boundaries of the collateral source rule in the context of a search for a single applicable rule. The application or non-application of the rule encompasses many different situations and each one must be analyzed separately*fn7 There are some basic considerations which must be kept in mind in deciding whether a plaintiff should be allowed to recover from both the defendant and the collateral source. In some circumstances, there may be no double recovery at all because the plaintiff may be legally obligated to repay his original source of reimbursement, under the doctrine of subrogation. At other times, one can justify a double recovery where the original source was supplied by the plaintiff, himself, out of resources that would otherwise have been available to him for other purposes, or where the source was the result of a gift to the plaintiff, in which there is an actual or presumed donative intent with no thought given by the donor to compensate the plaintiff. See 2 Harper & James, supra, note 3 at 1348.

With these basic principles in mind, we turn now to an examination of Pennsylvania state law. We can find no Pennsylvania case and plaintiff has cited none presenting the fact situation that we have hypothesized, a situation in which the plaintiff has received free government medical and hospital care and is seeking the value of these services as damages against a private defendant. We note, however, that the majority view would allow recovery in this situation. Rayfield v. Lawrence, 253 F.2d 209, 68 A.L.R.2d 868 (4 Cir. 1958); Hudson v. Lazarus, 95 U.S.App.D.C. 16, 217 F.2d 344 (1954); Sainsbury v. Pennsylvania Greyhound Lines, Inc., 183 F.2d 548, 21 A.L.R.2d 266 (4 Cir. 1950); Standard Oil Co. of California v. United States, 153 F.2d 958, 963-964 (9 Cir. 1946) (dictum), aff'd on other grounds, 332 U.S. 301, 67 S. Ct. 1604, 91 L. Ed. 2067 (1947); Chapman v. Brown, 198 F.Supp. 78 (D. Hawaii 1961); Burke v. Byrd, 188 F.Supp. 384 (N.D.Fla.1960); Gillis v. Farmers Union Oil Co., 186 F.Supp. 331 (D.N.Dak.1960); Fullilove v. United States Cas. Co., 129 So.2d 816, 832-833 (Ct.App.La.1961); Plank v. Summers, 203 Md. 552, 102 A.2d 262 (1954). Contra Evans v. Pennsylvania R. Co., 255 F.2d 205, 70 A.L.R.2d 158 (3 Cir. 1958); DiLeo v. Dolinsky, 129 Conn. 203, 27 A.2d 126 (1942).

Recent dictum by the Pennsylvania Supreme Court would seem to indicate that Pennsylvania law follows a broad collateral source rule. Thus, in Boudwin v. Yellow Cab Co., 410 Pa. 31, 32-33, 188 A.2d 259 (1963), it was stated that "The victim of a tort is entitled to receive from his tort-feasor the full amount he is entitled to, as the result of the latter's negligence, regardless of what the former receives from other sources. For instance, it would be entirely improper, in a personal injury case, for the defendant to show that the plaintiff was receiving benefits under an accident insurance policy, or that he was on a pension, or was obtaining assistance from the government as a war veteran or in any other capacity." Again, in Lobalzo v. Varoli, 409 Pa. 15, 17, 185 A.2d 557, 558 (1962), "A person who is injured through the fault of another is entitled to receive suitable damages from the wrongdoer regardless of payments received by the victim from sources other than the wrongdoer's pocketbook." In an earlier Pennsylvania case, Littman v. Bell Tel. Co., 315 Pa. 370, 381, 172 A. 687, 692 (1934), the Supreme Court stated "Insurance in behalf of the injured person, or any other compensation from a collateral source, cannot be set up by the wrongdoer in mitigation of damages." However, the cases do not support these broad contentions and, in fact, there are contrary statements indicating that Pennsylvania follows a purely compensatory scheme in awarding damages. See Goodhart v. Pennsylvania R. Co., 177 Pa. 1, 35 A. 191 (1896).

An analogous situation to the case at bar is the situation in which the injured plaintiff claims damages for lost wages, even though he has been paid his full wages by his employer*fn8 The collateral source problem arises because there has been no actual loss of wages thus presenting baldly the double recovery problem. This question was first before the Pennsylvania Supreme Court in Quigley v. Pennsylvania R. Co., 210 Pa. 162, 59 A. 958 (1904). In the cited case the trial court had instructed the jury that damages would not be diminished if it found that the wages were a gift by the employer. On appeal, this instruction was held to be error, but it is not clear whether the case adopted a broad rule against recovery, or whether the error was due to the particular facts of the case. In that case the plaintiff had continued to work, and this fact could have been vital in ruling out any donative intent or could have been deemed to have shown that the plaintiff was able to work and thus suffered no damages. However, the court alluded to the fact that the plaintiff was not able to fully perform his work and his salary was paid during a short period in which no services were performed. In addition, the case contains a rather ambiguous statement that "The error was in permitting the jury to compensate him for earnings he had actually received." 210 Pa. at 169, 59 A. at 961. This statement could easily support either interpretation under the facts of the case. However, in Rundle v. Slate Belt Elec. St. Ry. Co., 33 Pa.Super. 233 (1907), the Superior Court ruled that it was proper to instruct the jury that they might include lost wages as an item for recovery, because there was sufficient evidence to find that the employer's payment was a gratuity. Unfortunately, the court did not spell out the facts upon which the jury could have found a gratuitous payment. The Supreme Court seemed to reject Rundle in Pensak v. Peerless Oil Co., 311 Pa. 207, 166 A. 792 (1933), in which it held that since the plaintiff received his wages, he could not recover for lost wages. The court stated that plaintiff would not be heard to argue that the payment was a gift from his employer because such an argument would open the courts to possible fraud and misrepresentation. The case is, however, distinguishable, because the plaintiff was a part owner of the family business that had paid him his salary. In Schwoerer v. City of Philadelphia, 167 Pa.Super. 356, 74 A.2d 755 (1950), the Superior Court again held that the plaintiff could receive a double recovery where the salary payments were gifts by the employer. The Court went further and held that the donative intent was evidenced by the fact that the plaintiff performed no services for the employer. The Supreme Court, in Stevenson v. Pennsylvania Sports & Enterprises, Inc., 372 Pa. 157, 93 A.2d 236 (1952), expressly followed this ruling on the theory that the defendant should not be able to benefit from the employer's generosity. This case was followed, however, by Kite v. Jones, 389 Pa. 339, 132 A.2d 683 (1957), in which the Pennsylvania Supreme Court stated the rule to be, as announced in Stevenson, supra, that where the employer's payment is a gift the plaintiff is entitled to a double recovery. However, the same facts that led the court in Stevenson to conclude that the jury was justified in finding that the payments were a gift, the fact that the plaintiff performed no services for his employer, failed to persuade the majority in Kite that the jury's finding that there had been a gift should be affirmed. In Kite the court stressed the fact that the plaintiff was an executive of his company. In fact, he was the vice-president. Although there was apparently no inquiry into the size of the company, it is possible that when this decision is combined with the decision in Pensak, supra, one could conclude that where the employee is part of the management of the donor, Pennsylvania courts are more stringent in looking for a true donative intent. However, this analysis does not square Kite with Stevenson, because the plaintiff in Stevenson was a manager of the donor employer.

Kite did not prevent the court, in Layman v. Doernte, 405 Pa. 355, 175 A.2d 530 (1961), from declaring in broad dictum that where an injured plaintiff is carried on the payroll at the same rate of pay, but is unable to perform his regular duties because of injuries and can perform only light work, the full wage payments are ...

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