Under Florida’s Collateral Source Rule, defendants are limited significantly from presenting evidence of payments received by plaintiffs from other sources. Without being able to credit those payments to the defense, this will potentially result in a windfall to plaintiffs. The application of the law has become progressively more complicated over time, with different evidence and setoff rules applying to different types of payments. Where Medicare or Medicaid payments are involved, for instance, courts have held that a jury may hear only the net amount of the medical bills after insurance adjustments. However, where private health insurance is involved, courts have held that the jury may hear the total amount of the bills, although the defense is likely entitled to a post-verdict reduction or setoff. Personal injury protection coverage (PIP) is treated differently in most contexts.
The Second District Court of Appeal of Florida recently addressed collateral source setoffs pertaining to settlement proceeds received from the plaintiff’s uninsured motorist insurer. In Ellison v. Willoughby, 46 Fla. L. Weekly D1361a (Fla. 2d DCA, June 11, 2021), the district court considered the question of whether settlement proceeds from the plaintiff’s uninsured motorist insurer constituted a payment from a “collateral source” within the meaning of section 768.76(2)(a)(2), Florida Statutes.
The court held that, consistent with the statute, the crediting of payments made under the plaintiff’s underinsured motorist policy turned on whether “a subrogation or reimbursement right exists.” An uninsured/underinsured motorist insurer has a potential subrogation claim for the amount of uninsured motorist benefits paid as a result of the insured’s injuries. See Metro. Cas. Ins. Co. v. Tepper, 2 SO 3d 209, 214 (Fla. 2009). Accordingly, if the settlement payments are subject to subrogation, they will not be viewed as collateral sources. The court further reasoned that: “[t]he cautious insured should not be penalized for obtaining UM insurance and, by the same token, it would be unfair for the tortfeasor to benefit by the insured's payment of the UM insurance premium or by the UM insurer's statutorily mandated payments on behalf of the tortfeasor.” Citing/quoting Economy Fire & Casualty Co. v. Obenland, 629 So. 2d 265, 267 (Fla. 2d DCA 1993).
Since the applicability of the Collateral Source Rule and §768.76 is a significant and recurring concern for Florida litigants, Callahan and Fusco will continue to monitor court decisions on this issue.