NO. 07-07 -035 1-CV IN THE CO UR T OF APPEA LS FO R THE S EVEN TH D ISTRI CT O F TEXAS

AT AM AR ILLO PAN EL D MA RC H 5, 20 09

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___ GAIL IA T AT E, APP ELL ANT

V. MI GU EL H ER NA ND EZ, APP ELLEE

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______ FRO M T HE 99 DIS T RI CT COU RT OF L UB BO CKCOU NT Y; TH NO . 200 6- 533,790 ; H ON ORABLE BILL SOW DE R, JU DG E

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____ Before QUINN, C.J., and CAMPBELL and PIRT LE, JJ. Concurring Opinion I agree w ith the Court’s rendition of judgmen t tha t app ellee Miguel Hernand ez take nothi ng but find my sel f unabl e to joi n its opini on. I dis ag re e w it h the C our t’ s d is posi ti on of the f irst and s econd i ss ues pr esent ed by appel lan t G ail ia Tate. For the re asons ex pr ess ed, I w oul d s ust ain Tate’ s first is sue and notreach the s econd i ss ue. In its dispo sition of

Ta te’s f irst issue, the Court hold s thata discharge in ban kruptcy of l iab il ity for medic al ex pense s is a col lat eral benefit w it hin the col lat eral source rul e. Hen ce, throug h di sc harg e i n bank ru ptc y a de btor

may be re lie ved of li abi li ty

for medi cal2

expense s cause d by a tortfeaso r and in an action a gainst the tortfeaso r seek a recovery of the di sc harg ed ex pense s. I w oul d hold a di sc harg e i n bank ru ptc y of personal l iab il ity

for medic al ex pense s i s n ot a col lat er al benefit for appl ic ati on of the col lat eral source ru le.
Di sc uss ion
The one- sat is facti on r ule l imi ts a pla intiff “to but one s ati sfacti on for the i nju ri es susta ined byhim.” B r

a ds h a w v

. B a y lo r Univ., 1 2 6 Te x . 99, 84 S.W .2d 703 , 705 (1935 ); Cr own Li fe Ins. C o. v

. C asteel , 22 S.W .3d 3 78, 3 90 (Te x . 200 0). Th us allowi ng recov ery in a tor t ac ti on of a c ompensat or y damag e el ement pa id by a c oll ateral source, ind ependentof the d efendant, h as the a ppearance of a f o rb id d e n doubl e recov er y . But “i f pay ment i s w it hin the col lat eral source ru le, the pr inc ipl e forbi ddi ng more tha n one recovery for t he sa me loss is notapp licable.” Br own v. Am er

ic an Tr ansf er & S tor age C o., 601 S. W .2d 9 31, 9 36 ( Tex . 198 0) ; Trium ph Trucking , Inc., v. Sout hern Corpora t e Ins. Ma nager s, Inc ., 226 S.W .3d 466 , 471 (Tex.A p p.– Housto n [1stDist.] 2006 , pet . den ied). T he co llateral sou rce rule provi des: [T]he factthatan i nju re d person re cei v es from a c oll ateral source pay ments w hich m ay have som e ten den cy to mitigate the conse quence s of the injury w hic h he other

w is e w oul d hav e suff er ed maynot be ta ken int o c onsi derati on in ass ess ing the damag es or othe r re cov er

y to whic h t h e clai mant may be enti tl ed.
Tr ader s &Gene ra l Ins . C o. v

. R eed, 376 S.W .2d 591, 59 3 ( Tex .C iv .App. –Co rp us Chr is ti 1964, w ri t ref’d n. r. e.) ; accord Sweep v. Lear Je t C or p., 412 F .2d 4 57, 4 59 ( 5th C ir . 196 9) (a ppl y ing Tex as law ); City of F o rt W o rth v. Bar

low, 313 S. W .2d 9 06, 9 11The dual natu re of the c oll ateral source ru le maybe e x pla ine d: 1 T he s ubst ant iv e com pon entis a r ule of dam ages. Th is comp one nt ba rs a defendant from re duci ng the pla int iff’s c ompensat or y aw ard by the a mount the p lai nti ff

recei v ed from t he col lat eral source. The ev ide nti ar y co mponent bars a dmis si on of ev ide nce of the ex is tenc e of the col lat eral source or the receipt of benefits

. The conc er n here i s t hat t he tr ier of fact may

us e tha t evidence im prop erly

to den y the pla intif

f the f ull recovery t o w hich he is enti tl ed. Ar thur v. C atour

, 833 N.E .2d 847 , 852 (Ill. 200 5) ( quoti ng James M. Fi sc her , U ndersta ndi ng Remedi es § 12( a) ( 1999) ). 3 (Tex .C iv .App. –For

t W o rt h 1 958, w ri t ref’d n. r. e.) ( “[ n]o a batementof damag es on th e g ro und of par

ti al compens ati on c an proper ly be ma de w here the ev ide nce show s funds hav e been re cei v ed from a co ll ateral source, i ndependen t of the defendant” ). “ The col lat eral source ru le is both a ru le of ev ide nce and damag es. ” John son v. Dallas Cou nty, 1 195 S. W .3d 8 53, 8 55 ( Tex . Ap p.–D all as 2006, no pet .) ; Tay lor v. Am er ic an F abr itech, Inc ., 132 S. W .3d 6 13, 626 (Tex

. App.–H oust on [14th Di st. ] 2004, pet. deni ed)

. It s focal poi nt is “ w hether

a t ort v ic ti m has re cei v ed bene fits from a c oll ateral source that canno t be used to red uc e th e am ou nto f da ma g es o w ed b y a t or tfe as or .” Acua r v. Letour neau, 260 Va

. 180 , 531 S.E.2 d 31 6, 32 2 (Va. 2000 ). Unde rly ing the collate ral source rule is the equita ble noti on th at i f ther e must be a w ind fall “t he inj ur ed par ty is more jus tl y

enti tl ed to i t t han t he
w rongdoe r.” Sweep, 412 F .2d a t 459

. T he co llateral sou rce rule has histo rically b een a pplied t o situa tions in which a third par ty ac ts for th e benefitof the p lai nti ff

. S e e , e . g . , B r o wn, 6 0 1 S .W .2d a t 934 -3 6 (ins u ra n ce) ; Twi

n Cit y F ir e Ins ur ance Com

pany v. Gi

bson, 488 S. W .2d 5 65, 5 71 (Tex .C iv .App. –Amar il lo 1972, w ri t re f’d n.r .e.) (g ov er nment be nefits ); Bar low, 313 S. W .2dIl lus trati ng thi s p re ceptare c ases i n w hic h the tor tfeasor i s t he v ic ti m’s empl oy er 2 and has m a d e p a ym e n t s und er an em ployee be nef it plan. If th e be nef it plan is charact er iz ed a frin g e benefit of t he employ ee then it is cl ass ified a col lat eral source as to the e mploy er . Con v ersel y , i f the employ er purch ased the p lan pr imar il y for i ts protec ti on, then the p lan i s n ot a col lat er al source as to the employ er . Tay lor , 132 S. W .3d a t 626 & 626 n. 41. Cf

. Johnso n, 195 S. W .3d a t 855 -5 6 ( noti ng no a ll eg ati on th at empl oy er w as the tortf easo r fo r applicatio n of collateral sou rce rule).

4 at 91 1 (g ra tui tous healthc ar e serv ic es by Vetera ns Admin is trati on)

. See al so Res tatement (S econd ) of Torts § 920A, cmt. c (“ ru le thatcoll ateral benefits are notsu btract ed from t he plaint if f ’s recov eryapp lies to the followi ng ty pes o f ben ef its”: insurance policies,
em p lo yme n t b e n e f it s, grat u it ie s, an d so cia l le gisl a ti o n be n e f it s). In d e e d , “c o lla te ral source” speak s of an addi ti onal par ty

. But iti s n ot s o much the source of f unds but t he c haract er of the bene fits re cei v ed th at de ter mines the appl ic ati on of the col lat eral source ru le. LeeW ri ght, Inc . v. Hall

, 840 S. W .2d 5 72, 5 82 ( Tex .App. –Ho ust on [1 st Di st. ] 199 2, no w ri t) ( citi ng Phi ll ips v. Wester

n C o. of N. Am ., 953 F.2d 92 3, 92 9 (5th Cir. 199 2)). 2 Appl ic ati on of the col lat eral source ru le has his tor ic all y b enefitt ed th ose w it h foresi g ht t o ac q uire i nsurance in adv ance of inj ur y or at l easti n adv ance of tre atment. Br own, 601 S. W .2d a t 934 -3 5; Fi nger v. Sout her n R efr ige ra ti on Ser vs ., Inc ., 881 S. W .2d 8 9 0 , 8 93- 94 ( Tex .App. –Ho ust on [1 st Di st. ] 199 4, w ri t den ied ); Pa y n e v . Wy eth Phar m aceut ic als, Inc. , No. 2:0 8c v1 1 9 , 200 8 W L 48 907 60, at *3, 20 08 U.S. Dist. Lexi s 91849, at * 11, (E .D . Va . N ov ember 12, 2008)

. See gen erally 5 Jam es B. Sa les and J. Had ley Edg ar , Tex as Torts and Remedi es § 88. 01[1] ( 2008) ( w here c oll ateral source is an insurer, i t w ould be “particularly inap prop riate” for a tortf easo r to bene f it f rom th e v ictim’s foresi g ht in procur ing an ins urance pol icy to w hic h the tor

tfeasor w as not a par

ty ). Ev en gratu itous m edica l serv ices delivered beca use, for example , a pers o n i s a v ete ran areFrom a n t iquity i n this cou ntry the collateral sou rce rule has con cerne d be nef its, 3 suc h as i nsurance, ac q uired befor e the fact

. Of Eng li sh common l aw or ig in, the col lat eral source ru le en tered Amer ic an j ur is pr udenc e i n The Pr opel ler Monticel

lo v. Mo ll

is on, 58 U. S. ( 17 H ow .) 152, 15 L .Ed. 68 ( 1854)

. “Monticello,” a ste am ship, a nd “Northwestern,” a scho one r, collided on Lake Huron, c ausi ng “ Nor

thw est ern ” to s ink

w it h i ts carg o of sal t. M oll is on, t he owner of “Northw este rn,” w as insured , and h is insu rer co mp ensa ted h im in f ull for his loss. W hen Mollison sued the ste am ship, its owner raised as a defense t hat M oll is on had already been fully

co mpensate d. The Un it ed Stat es Supreme C our

t hel d tha t t he i nsurance cont ra ct w as “i n the natu re of a w ag er betw een thi rd par ti es, w it h w hic h the trespas ser has n o co n ce rn . The in surer

does not sta nd i n the rela ti on of a j oin t t re spas ser , s o tha t t he satisfaction accep ted f rom him shall be a release of othe rs.” Id . at155. The ter m “ col lat eral source” der iv es from l angua ge u se d i n Har din g v . T own of Towns end, 43 Vt. 536 [538] (1871) (“ The pol icy of ins urance is co ll ateral to t h e re me d y

a g a i n s tt h e d e fe n d a n t , a n d w a s p ro c u re d sol e l y b y t h e p l a i n t i ff and at his expense , and to the procurem ent of w hich the def end antw as in no w ay co ntr ibu tor

y ”)

. Bapti st Hea lt hcar e Sy s. v. Mi ller , 177 S .W .3d 6 76, 687 (Ky . 200 5). Har din g foun d a place in the e ar ly

dev elo pment of

the col lat eral source rul e in Tex as. See Texas & Pacific Ry. Co. v. Lev

i & Br o., 59 T ex. 674, 67 6 (188 3) ( quoti ng Har din g, 43 Vt . at538)

. 5 re ndered based on st atus at the t ime of tre atment. W alk er v. Long, 57 Va. C ir . 419 , 420 (V a. Ci r. C t

. 1 9 9 3 )

. T h e c o l l a t e r a l s o u r c e r u l e fu rt h e rs p u b l i cp o l i c i e s l i k e e n c o u r ag ing insuran ce coverage and allowing em ployee an d gov ernm ent a l b ene f its to reach their int ended b enefici ar ies in full. The ru le thus may be sai d to re w ard a pl ain ti ff ’s fores ig ht or
s t a t u s p ri o r t o i n j u ry. Payn e, 2008 W L 48907 60, a t * 4, 20 08 U .S. Di st. Lex is 91849, at 3 *12.
Bank ru ptc y

fits nei the r o f

t h e hist or ic al ci rc umstan ces . In ba nkr uptc y , t here i s n o thi rd par ty re nder ing a barg ain ed- for or g ra tui tous benefit

. Ol

iv er v. Her it age Mut. Ins . C o., 505 N .W .2d 4 52, 461 (W is . Ct. App. 1993)

. Accord Ol ar iu v. Ma rr

er o, 549 S. E.2d 121, 123 (G a. Ct. App. 2001) (“ [T]he ef fects of a bankr uptc y

do not cons ti tute a ‘ col lat eral source’A d is charg e i n bank ru ptc y “ operates as an i nju nct ion ag ain st the c ommencement 4 or co nti nuat io n o f

an acti on, t he empl oy ment of proces s, or an a ct, to col lec t, re cov er or of fset an y such de bt as a persona l li ability of the de bto r, w het her or notdischarge of such debt is w aiv ed... .” 11 U. S.C .A. § 524( a) (2 ) (W est2004)

. 6 at al l” ). R ather

bank ru ptc y

functi ons to “ re li ev e the hones t deb tor from t h e w eig ht of oppress iv e ind e b te dness and per mit him to s tar t afre sh free from the o bli g ati ons and respo nsibilities con sequen t upo n busin ess misfortun es.” W il li am s v . U nited St ates F ide lity & Gu ar . C o., 236 U.S. 549, 55 4-55 , 35 S. Ct. 289 , 290 , 59 L. Ed. 713 (1915 ) ( Ban kruptcy Act ). N or d o e s b a n kruptcy rew ard the pl ain ti ff ’s fores ig ht or fav or ed s tatus

. If itmay be sai d tha t t he fres h s tar t of a v olu ntar

y bank ru ptc y

di sc harg e renders a win d f a ll f o r the debtor by per manentl y

enj oin ing co ll ectio n of cer tai n c re dit or

cl aims , the w ind fall ex is ts

4 b e c a u s e o f

a n e xp re s s d e c is io n m a d e b y t h e d e b t o r a f t e r i n c u rr in g t h e d is c h a rg e d li a b il it y. See Payne, 2008 W L 48907 60, a t * 4, 20 08 U .S. Di st. Lex is 91849, at *11- 12.
As the W is cons in cour

t s tated i n Ol

iv er , the col lat eral source ru le proper ly appl ies in cas es w here “a ‘benefit ’ is bes tow ed by a ‘ thi rd par

ty ’ and t his thi rd par

ty benefitcreates the w indf all.” Ol

iv er , 505 N. W .2d at 461. The r ule , how ev er , proper ly has no a ppl ic ati on
w here a p lai nti ff

creates the w ind fall by obt a in ing a di sc harg e i n bank ru ptc y of medic al
ex pense s caus ed bythe inj ur y -p ro duci ng oc cur re nce. See i d.; see als o Pay

ne, 2 0 0 8 WL 4890760, at *5, 2008 U .S. Di st Lex is 91849, at *14.
Addi ti onal ly , recog niz ing di sc harg e i n bank ru ptc y as a col lat eral source benefit may act ual ly enc ourag e bank ru ptc y

by offer ing a po st- treatment means of dis charg ing personal li abi li ty for ex pense s w hil e lea v ing av ail abl e a potent ial full re cov er y of damag es. Oliver,7

505 N .W .2d a t 461 -6 2. Such a resul t c annot be fav or ed by publ icpol icy . Ol

ar iu, 549 S.E. 2d at123- 24.
For these reas ons, I w oul d f ind the col lat eral source rul e inappl ic abl e to the medic al expense s incurred by Hernan dez but discha rg ed in bankrup tcy. I w ould , the refore, sust ain Tate’s first is sue. I t w oul d be unnec ess ar y to re ach Tate’s remaini ng i ss ues. Tex . R . Ap p. P. 4 7.1.

Jam es T . Camp bell Justice