§47.36 Special Damages Issues

The Case : Nance by Nance v. Westside Hosp., 750 S.W.2d 740 (Tenn. 1988).

The Basic Facts: Plaintiff filed medical malpractice action and issue arose concerning the recoverability of certain damages.

The Bottom Line:

• "One of the defenses asserted by defendants was that T.C.A. § 29-26-119, a section of the Medical Malpractice Review Board and Claims Act of 1975, eliminated as damages that may be awarded against health care providers, sums paid or payable to victims of medical malpractice from sources identified therein.^FN1 Defendants insisted that the statute applied to benefits paid or payable under the worker's compensation act and imposed a ban upon any recovery of such benefits by Nance or Stauffer.

  FN1 T.C.A. § 29-26-119. Damages.-In a malpractice action in which liability is admitted or established, the damages awarded may include (in addition to other elements of damages authorized by law) actual economic losses suffered by the claimant by reason of the personal injury, including, but not limited to cost of reasonable and necessary medical care, loss of services and loss of earned income, but only to the extent that such costs are not paid or payable and such losses are not replaced, or indemnified in whole or in part, by insurance provided by an employer either governmental or private, by social security benefits, service benefit programs, unemployment benefits, or any other source except the assets of claimants or the members of claimant's immediate family and insurance purchased in whole or in part, privately or individually."

  750 S.W.2d at 741.
• "The statute we are to construe presents a classic example for the application of that rule. We have the general words 'or any other source' following the special words, 'insurance provided by an employer either governmental or private, by social security benefits, service benefit programs, unemployment benefits.' The issue before us is whether the general words include worker's compensation benefits. The answer depends upon whether worker's compensation benefits are within the same classification of benefits as those specifically named in the statutes." Id. at 743.
• "We think it is clear that the classification into which the specifically listed benefit in [Tenn. Code Ann. § 29-26-119] falls is that of 'collateral source benefits.' It is also clear that when an employee is injured by a third party tort feasor while in the scope of his employment, the worker's compensation benefits he receives fall within the scope of the collateral source rule. The fact that the employer has subrogation rights in the event of recovery from a third party tort feasor does not remove worker's compensation benefits from inclusion within the scope of the phrase 'any other source' under a proper application of the doctrine of ejusdem generis." Id.
• "However, we think the Legislature intended to exclude worker's compensation benefits from the scope of [Tenn. Code Ann. § 29-26-119] by the inclusion of the modifying phrase 'and such losses are not replaced, or indemnified.' In order to mitigate the damages, the statute requires that the benefit be paid or payable and also indemnify or replace the tort victim's losses. That phrase avoids a double recovery by tort victims and also removes from the statute any collateral source that has subrogation rights. Where benefits carry a right of subrogation and a legal obligation on the part of the tort victim to repay the collateral source, the tort victim's losses have not been replaced or indemnified." Id.
• "It follows that worker's compensation benefits are not included within the scope of Tenn. Code Ann. § 29-26-119, Nance's recovery against defendants cannot be reduced by the sums received, or to be received from Stauffer, and Stauffer may proceed to enforce its subrogation lien in the event of plaintiff's recovery." Id. at 744.

Other Sources of Note: Richardson v. Miller , 44 S.W.3d 1 (Tenn. Ct. App. 2000) (Nance applied in case involving private insurer with subrogation/reimbursement rights); Hughlett v. Shelby County Health Care Corp., 940 S.W.2d 571 (Tenn. Ct. App. 1996) (Nance followed in case involving benefits paid by Medicaid).

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