Collateral Source Rule
In Hosier v. Dulgar, Kimberly Hosier (“Hosier”) filed a complaint against Melvin Dulgar (“Dulgar”) for injuries she sustained as a result of an automobile accident. Dulgar filed an Admission of Negligence and reserved the issue of causation and damages. Dulgar also request a setoff of $5,000 for medical payments made by Hosier’s insurance company, State Farm Mutual Automobile Insurance Company. A jury awarded Hosier $25,000 of which $9,508 was itemized for medical expenses. The court then reduced the award by $5,000.
The court reviewed whether a defendant can reduce a plaintiff’s compensatory award via a setoff. Plaintiff argued: (1) State Farm did not hold a right of subrogation against her; (2) because plaintiff’s medical payment benefits did not exceed $25,000, Section 2-1205.1 of the Code (735 ILCS 5/2-1205.1 (West 2010)) does not permit reduction of plaintiff’s recovery; and (3) because the March 2011 release between State Farm and defendant’s insurance company, United, was not properly authenticated, defendant did not carry his burden of proof for the setoff.
The court found State Farm, as a matter of common law, would not have a right of subrogation against Hosier because she is the insured party. State Farm, as insurer-subrogee, had a right of subrogation against Dulgar based upon Hosier’s insurance claim. As a substantive rule of damages, the collateral source rule ” bars a defendant from reducing the plaintiff’s compensatory award by the amount the plaintiff received from the collateral source.” The collateral source rule applies because plaintiff received outside benefits from State Farm, her automobile insurer. As a matter of common law, plaintiff may receive the full damages award-without regard to benefits paid by State Farm-unless a statutory modification, Section 2-1205 or Section 2-1205.1, applies.
Before addressing whether State Farm had right of re-coupment against Hosier, the court determined whether Section 2-1205.1 applies. According to its plain language, Section 2-1205.1 applies where: (1) Section 2-1205 does not apply; and (2) the “benefits provided for medical charges, hospital charges, or nursing or caretaking charges” exceed $25,000. Because Hosier’s action did not concern the negligence of a licensed hospital or physician, Section 2-1205 does not apply, and the court then looked at the $25,000 threshold. The evidence at trial showed Hosier’s medical expenses totaled $9,508. The jury awarded $9,508 for “[t]he reasonable expense of necessary medical care, treatment and services received.” Dulgar contended that he is entitled to a $5,000 setoff because his insurer paid plaintiff’s insurer for “Med Pay” benefits. Dulgar’s insurer paid plaintiff’s insurer $11,275.69 in settlement and not the full $15,969.61 requested by State Farm. This reflects approximately 70.6% of the requested payment. Dulgar claimed he is entitled to a setoff of 100% of the value of the medical payments, where his insurer only paid 70.6%. Dulgar, by his own admission, asserted that Hosier received $5,000 in benefits for medical charges, hospital charges, or nursing or caretaking charges, not an amount in excess of $25,000, as required by Section 2-1205.1.
Because Section 2-1205.1 is not applicable to the facts of the case, the common-law collateral source rule applies; and Hosier is permitted to recover the full measure of damages, without setoff, although she was also compensated by her automobile insurance.
Kimberly Hosier v. Melvin Dulgar, 2013 WL 1790903 (Ill.App. 4 Dist. 2013). (Filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1)).
