Court Opinion

ID: 9483744
Source: CourtListenerOpinion
Date Created: 2023-08-05 09:30:32.934707+00
Date Added: 2024-06-11T17:49:49.133261
License: Public Domain

LAY, Senior Circuit Judge,
dissenting.
I must respectfully dissent.
Under the Federal Tort Claims Act, the statutory requirement is that “the United States shall be liable ... in the same manner and to the same extent as a private individual under like circumstances.” 28 U.S.C. § 2674 (emphasis added).
Assuming the United States, under Indiana law, comes “as close as possible” to a “qualified provider,” a proposition which in itself I find to be extremely dubious,1 there exists an even more compelling *1146reason to reach a different result in the present case. The VA disability benefits received and to be received by the plaintiffs are clearly not “advance payments” under Indiana law. See Indiana Code § 16-9.5-2-4. That is not to say a plaintiff suing the United States may receive both his disability benefits and tort damages (a double payment) from the government for the same injury. Brooks v. United States, 337 U.S. 49, 69 S.Ct. 918, 93 L.Ed. 1200 (1949). Under federal law he must reduce any damages against the government by the amount of disability benefits received. This is because of federal law and not state law. See Smith v. United States, 587 F.2d 1013 (3d Cir.1978); Feeley v. United States, 337 F.2d 924 (3d Cir.1964). This simply means that the disability benefits should be deducted from the total damages found to exist by reason of the liability of the government.
The issue here, however, is whether the plaintiffs must deduct the disability benefits from the overall damages or whether the plaintiffs are required to deduct those benefits from the “judgment” (with the artificial cap of $500,000) as an “advance payment” under Indiana law. In my opinion, the former approach is required. Federal law does not require a pro tanto deduction to be made from the $500,000 cap; more importantly, Indiana law does not require a private party, in like circumstances, to make a pro tanto deduction from the $500,000 cap. Under the FTCA, the government should be treated the same as a private party in like circumstances. Thus, if plaintiffs recover $900,000 and the disability payments are $300,000, the cap, if applicable, should be applied to the remaining $600,000.
I would agree the deduction must come from the artificial cap of $500,000 if VA disability benefits were advance payments or even analogous to advance payments received by a private party under Indiana law. The statute clearly says the “judgment” shall be reduced to the extent of the advance payment. Ind.Code § 16-9.5-2-4. But in applying the statutory law, a court must read the Indiana statutes in their entirety. This the majority fails to do. Ind.Code § 16-9.5-2-4 relating to advance payments must be read in conjunction with the Indiana collateral source statute as well as with other statutes relating to advance payments as they are applied to private parties in like circumstances with the government. When read together, Indiana law is clear that disability benefits are not analogous to advance payments.
Under Indiana law, disability benefits received by a plaintiff are deemed a collateral source not otherwise admissible into evidence.2 The record demonstrates, as the district court found, that the disability benefits received by the Carters do not depend on the United States’ liability to them. However, an advance payment under the Indiana Act protects only those private parties who have paid against their tort liability. This is demonstrated by the plain *1147meaning of IncLCode § 16-9.5-2-4 when read in conjunction with the meaning of “advance payment” under Ind.Code §§ 34-3-2.5-13 and 34-3-2.5-2.4 Thus, the disability benefits received by the Carters are not analogous to advance payments.
Under Chapter 34, the disability payments are considered collateral source payments, which are not admissible as evidence. See Ind.Code § 34-4-36-2(l)(C). There is no evidence that the Indiana state legislature intended disability payments to be one thing under Chapter 34 and another under Chapter 16. Yet this is the result the majority reaches. The government argues that the situation involving disability benefits and offsets against the United States was not contemplated by Chapter 16. This misses the point. The issue is whether the government is in like circumstances to a private party who under Indiana law need not offset his disability benefits against the judgment. Clearly it is.
In the present case, it is federal law, not Indiana law, that requires plaintiffs to offset their disability payments against the total damages incurred. See Brooks v. United States, 337 U.S. 49, 69 S.Ct. 918, 93 L.Ed. 1200 (1949). The FTCA requires us to look at how private parties are treated in like circumstances. Here, the Carters are in like circumstances to a private party in Indiana who is not required to offset his pension as an advance payment under Ind. Code § 16-9.5-2-4 by deducting it from the final judgment entered. Thus, if the equal footing status declared by 28 U.S.C. § 2674 means anything, plaintiffs should be entitled to offset their pension benefits against the total damages incurred and not against file artificial cap of the judgment set by the Indiana statute.

. It is indeed a stretch of logic to hold that the United States is more like the medical provider who pays a surcharge premium and qualifies for the malpractice cap under Indiana law than the private provider who does not do so.
The fallacious syllogism used by the majority to reach this conclusion is as follows: (A) Financially responsible private medical providers in Indiana have limited tort liability; (B) the United States Government is a financially responsible medical provider; (C) Therefore, the government is entitled to limited tort liability under Indiana law. The majority’s major premise is inaccurate. There are private medical providers in Indiana who are financially responsible who have chosen not to become qualified for limited tort liability.
The government concedes that the private provider, who qualifies under the Act, has limited liability only up to $100,000. It is a state pool which funds the excess up to $400,000, but the government argues that since the United States cannot contribute to the fund, limiting its liability only to $100,000 under the FTCA would produce inequitable results. Therefore, the government is willing to pay up to the $500,000 cap. However, if equity is to determine which rule is to be applied, then we should consider a *1146solvent United States adhering to the general policy of tort law to provide full compensatory damages to tortfeasor victims. Rehabilitation expense alone for malpractice victims who suffer serious injuries can easily exceed $500,000. I respectfully submit today’s holding to provide an artificial cap of limited damages in VA hospitals unwittingly subjects hospitalized veterans to the role of unfortunate victims of an industry wide insurance effort to unfairly limit compensatory damages to malpractice patients. If this is the law, Congress should change it.

. Ind.Code § 34-4-36-2 reads as follows: Admissible evidence, — In a personal injury or wrongful death action the court shall allow the admission into evidence of:
(1)Proof of collateral source payments, other than:
(A) Payments of life insurance or other death benefits;
(B) Insurance benefits for which the plaintiff or members of the plaintiffs family have paid for directly; or
(C) Payments made by the state or the United States, or any agency, instrumentality, or subdivision thereof, that have been made before trial to a plaintiff as compensation for the loss or injury for which the action is brought;
(2) Proof of the amount of money that the plaintiff is required to repay, including worker’s compensation benefits, as a result of the collateral benefits received; and
(3) Proof of the cost to the plaintiff or to members of the plaintiff’s family of collateral benefits received by the plaintiff or the plaintiffs family.

. Ind.Code § 34-3-2.5-1 reads: Advance payments in personal injury and property damage cases. — In any action brought to recover damages for personal injuries, wrongful death or property damage[,] no payment made by the defendant or the defendant’s insurance company to or for the plaintiff or any other person, hereinafter called an ‘‘advance payment,” shall be construed as an admission of liability by any person. Except as provided in section 2 [34-3-2.5-2] of this chapter, evidence of such payment shall not be admissible during the trial for any purpose by either plaintiff or defendant: Provided further, That this chapter shall not apply to actions in which there is more than one defendant.

. Ind.Code § 34-3-2.5-2 reads: Evidence of advance payment — Reduction of award. — If in such action it is determined that plaintiff is entitled to recover, defendant may introduce evidence of any advance payment made, and the court shall reduce the award to the plaintiff to the extent that said award includes an amount paid by any such advance payment.