Collateral Source Rule not Applied to Plaintiff Seeking Credit for Payment Previously Made by his Insurer Acting on his Behalf
In Segovia v. Romero, Hector Romero (“Romero”) drove into the rear of Sylvia Segovia’s car, causing injuries to her and damage to her car. Her husband, Rodolfo Segovia, Sr. (“Segovia”), had an insurance policy with State Farm Mutual Automobile Insurance Company (“State Farm”). State Farm paid Segovia for damages under the policy. State Farm filed a subrogation action against Romero. It asserted that Segovia was the owner and/or driver of the car damaged by Romero in the collision; and as a result of Romero’s negligence, he suffered personal injuries, pain and suffering, lost wages, and incurred medical and car repair expenses which were covered under the policy. State Farm claimed that it had paid on Segovia’s behalf “various monies for [his] damages, losses and expenses and [Segovia] incurred a deductible, totaling the sum of $10,766.20.” State Farm argued that it was now the “bona fide subrogee to the amounts” it had paid on Segovia’s behalf and requested the court to award it a judgment of $10,766.20 plus costs against Romero. Romero had an insurance policy with American Heartland Insurance Company (“American Heartland”). American Heartland paid State Farm $5,383.10 to settle the subrogation action. In April 2011, State Farm “as Subrogee of [Segovia],” signed a release of all its subrogation claims arising or resulting from the September 2009 accident. It voluntarily dismissed its subrogation action. In April 2011, Segovia filed an action against Romero. She sought “in excess of $50,000” for her medical, surgical and nursing care costs, lost wages, and pain and disability. In her disclosure statement, plaintiff listed her economic damages as $4,560 incurred at Advocate Lutheran General Hospital but stated “investigation continues.” Romero seeks a setoff against any judgment in favor of Segovia.
The court reviewed whether a setoff is appropriate.
Here, Sylvia Segovia received the benefit of her husband Segovia’s insurance policy with State Farm, when State Farm paid for assorted medical and property damage expenses incurred as a result of the September 2009 accident. State Farm is not a party to Segovia’s action against Romero. It is a third party and a “source wholly independent of, and collateral to, Romero the tortfeasor.” Therefore, the collateral source rule would apply to any benefits State Farm conferred on Segovia. The rule would protect these collateral payments made to, or benefits conferred on, the plaintiff by State Farm by denying the defendant any corresponding setoff or credit. Such collateral benefits would not reduce defendant’s tort liability, even though they reduced plaintiff’s loss. Romero is not seeking setoff for the medical benefits State Farm conferred on Segovia. He is seeking a setoff of the amount his insurer American Heartland paid State Farm to settle State Farm’s subrogation action against him for the benefits State Farm asserted it conferred on Sylvia Segovia and/or her husband.
Under Illinois law, the collateral source rule protects collateral payments made to, or benefit conferred on, the plaintiff by denying the defendant any corresponding offset or credit. Such collateral benefits do not reduce the defendant’s tort liability, even though they reduce the plaintiff’s loss. The law does not differentiate between the nature of the benefits, so long as they did not come from the defendant or a person acting for him. Here, the benefit for which Romero is seeking a setoff did come from a defendant or a person acting for him. He is seeking credit for the payment previously made by his insurer, American Heartland, acting on his behalf. The collateral source rule, therefore, does not apply to those benefits.
Segovia v. Romero, 2014 IL App (1st) 122392.
