Court Opinion

ID: 4711461
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:36:56.06063+00
Date Added: 2024-06-11T08:07:08.824213
License: Public Domain

Sanders, J.
(dissenting) — The majority holds evidence that an injured worker receives more in benefits today than he received in wages while working is inadmissible to rebut and/or impeach his testimony that his inability to return to work was caused by a “cognitive impairment.” By so holding the majority imposes a blanket rule excluding such evidence even where, as here, its probative value outweighs any prejudicial effect. I dissent because I am persuaded the majority’s rule hobbles the truth-finding function of the court and is inconsistent with the weight of authority that would allow such evidence. I therefore agree with the learned superior court judge and the unanimous panel of the Court of Appeals, each of whom found this evidence admissible.
The majority’s reasoning is straightforward: It asserts this evidence would be strictly excluded in a personal injury case and finds no reason to treat workers’ compensation cases differently. See Majority at 798-99. To support its result the majority relies on a Supreme Court case, Eichel v. New York Cent. R.R., 375 U.S. 253, 84 S. Ct. 316, 11 L. Ed. 2d 307 (1963). The majority’s analysis is flawed because this evidence would be admissible in a personal injury case, and Eichel is not inconsistent with the result urged here.

Admissible for other purposes

Under the collateral source rule, evidence showing an injured worker receives payments from collateral sources *806such as social security is indeed inadmissible to reduce the injured plaintiff’s damages. Ciminski v. SCI Corp., 90 Wn.2d 802, 804, 585 P.2d 1182 (1978). The policy behind the rule is that the wrongdoer should not benefit from collateral payments made by third parties to the person he has wronged. Id. Certainly the majority would be correct in its analysis and outcome if the evidence in question were offered to mitigate a damage award.
However, this evidence is offered for another purpose, and in Washington and nearly every other jurisdiction, evidence of collateral source benefits is admissible for other purposes, where relevant. See Alston v. Blythe, 88 Wn. App. 26, 40, 943 P.2d 692 (1997) (“Evidence showing payments from a collateral source is inadmissible to reduce a claimant’s damages. Such evidence may, however, be relevant for some other purpose.”) (citing Ciminski, 90 Wn.2d at 804 and Fleming v. Mulligan, 3 Wn. App. 951, 954, 478 P.2d 754 (1970)) (footnote omitted).5 For example in Fleming evidence of collateral payments was admissible for the limited purpose of testing plaintiffs accuracy concerning the time he was absent from work. In this respect, collateral source benefits evidence is similar to many other types of evidence which are inadmissible for one purpose yet admissible for another.6
Courts have long recognized that collateral source benefits evidence may be admissible to show the worker’s *807motivation for exaggerating injury and desiring not to return to work. The American Law Reports annotation discussing the precise point at issue in this case summarizes relevant case law: “[M]ost courts have recognized that, insofar as it tends to establish a motivation for inactivity unrelated to physical incapacity, evidence of a personal injury plaintiff’s receipt of collateral source benefits during the period of his alleged disability is relevant to the basic issue of the extent of his injuries.” William H. Danne, Jr., Annotation, Admissibility of Evidence that Injured Plaintiff Received Benefits from a Collateral Source, on Issue of Malingering or Motivation to Extend Period of Disability, 47 A.L.R.3d 234, 238 (1973).
Law review comments are in accord7 as are most courts. For example, in Corsetti v. Stone Co., 396 Mass. 1, 483 N.E.2d 793 (1985) the Supreme Judicial Court of Massachusetts held evidence that the injured worker was receiving more money in benefits than he did in wages while working was admissible for the purpose of showing motive not to work. Likewise, in Gurliacci v. Mayer, 218 Conn. 531, 555, 590 A.2d 914, 927 (1991), the Connecticut Supreme Court held evidence that the injured worker received more in benefits than he did in wages is admissible “for the limited purpose of showing that the plaintiffs absence from work was not the result of disability but that *808the plaintiff was a malingerer who was motivated by her financial situation to remain out of work.” In Nasser v. Auto Club Ins. Ass’n, 435 Mich. 33, 457 N.W.2d 637, 651 (1990), the Michigan high court similarly ruled “evidence of the collateral sources of insurance is offered [and is admissible] to prove malingering or exaggeration of injuries by plaintiff, rather than in mitigation of damages.” For other examples see Blacha v. Gagnon, 47 Mich. App. 168, 209 N.W.2d 292, 296 (1973) (“[E]vidence of receipt of benefits from a collateral source may be introduced to show the existence of a motive for remaining away from work.”); Kish v. Board of Educ., 76 N.Y.2d 379, 558 N.E.2d 1159, 1162, 559 N.Y.S.2d 687 (1990) (evidence of collateral benefits is inadmissible “unless it is centrally relevant to issues in substantial dispute bearing on the legitimacy of the claim of permanent disability—for example, plaintiff’s motivation for not working and defense claims of exaggeration or malingering.”); Burke Enter., Inc. v. Mitchell, 700 S.W.2d 789, 796, 57 A.L.R.4th 1167 (Ky. 1985) (“Nor is the tortfeasor entitled to introduce evidence at trial of such [collateral source disability] payments, except to corroborate other evidence, if there is any, that establishes malingering.”); Soucy v. Martin, 121 R.I. 651, 402 A.2d 1167, 1170 (1979) (“ ‘the collateral source rule should [not] be an absolute prohibition to the introduction of evidence that a plaintiff was paid by his employer during the period of alleged disability when such evidence is offered to show that plaintiff was not disabled . . . .’ ”) (quoting Bookbinder v. Rotondo, 109 R.I. 346, 285 A.2d 387, 393 (1972)); Hrnjak v. Graymar, Inc., 4 Cal. 3d 725, 484 P.2d 599, 605, 94 Cal. Rptr. 623, 47 A.L.R.3d 224 (1971) (evidence of collateral source benefits is admissible where the evidence carries “substantial probative value as proof that the plaintiff is a malingerer.”); Leizear v. Butler, 226 Md. 171, 172 A.2d 518, 520 (1961) (“[Testimony [of collateral source benefits] is admissible if there is evidence in the case of malingering or exaggeration of injury but is inadmissible if there is no such evidence or if the question is asked for the *809real purpose of mitigating the liability of the defendant.”). (Citations omitted.)
Washington previously joined the growing family of jurisdictions which allow this evidence. In Ladley v. Saint Paul Fire & Marine Ins. Co., 73 Wn.2d 928, 934, 442 P.2d 983 (1968), this court held evidence of collateral benefits was admissible to show an injured worker’s lack of motivation to return to work. The majority’s attempt to distinguish Ladley is unpersuasive. Cf. Majority at 802.

Distinguishing Eichel

In the place of Ladley, which decided the issue in this jurisdiction, the majority relies on Eichel v. New York Cent. R.R., 375 U.S. 253, 84 S. Ct. 316, 11 L. Ed. 2d 307 (1963) to support a rule of strict and absolute exclusion even where the evidence is relevant. Yet Eichel considered the situation where, on the issue of malingering, “there will generally be other evidence having more probative value and involving less likelihood of prejudice than the receipt of a disability pension.” Id. at 255. According to the court, Eichel “suffered a permanently disabling injury,” id. at 253, which I assume makes reference to a physical impairment capable of objective ascertainment beyond the subjective vagaries of psychological opinion. Here, however, Mr. Johnson’s claim ultimately rests upon the credibility which a mental health care professional and/or the jury attributes to his statements.
Even if we were to consider Eichel as a statement of a categorical rule, we need not follow it as most state courts have not. The lead annotation on the subject notes Eichel has been rejected as “[m]ost courts, however, have refused to adopt such an inflexible exclusionary rule and have instead chosen to regard the admissibility of collateral source benefits evidence for the purpose of establishing malingering, as being a matter at least to some extent within the discretion of the trial judge.” Danne, supra, at 239-40. For example, the Connecticut high court declined to follow the alleged inflexible rule in Eichel noting: “Eichel *810has been limited, however, to the federal statutory scheme of the Railroad Retirement Act.” Gurliacci, 590 A.2d at 929 n.23.8 Even federal courts limit Eichel to the peculiar statute there at issue. For example, in DeMedeiros v. Koehring Co. the First Circuit allowed evidence of collateral benefits to show worker’s motivation not to return to work and limited the applicability of Eichel, explaining: “[T]his circuit has refused to extend the holding in Eichel beyond its federal statutory context.” DeMedeiros v. Koehring Co., 709 F.2d 734, 741 (1st Cir. 1983).
As noted, Washington likewise rejected the Eichel approach as evidenced by Ladley, decided by this court five years after Eichel. Ladley, 73 Wn.2d at 934 (collateral benefits admissible to show motivation to return to work).

Probative value versus prejudicial effect

While evidence of collateral benefits is admissible for purposes other than to reduce damages, the trial court must, as with any other evidence, weigh its probative value versus its prejudicial effect under ER 403.9 See, e.g., Alston v. Blythe, 88 Wn. App. 26, 40, 943 P.2d 692 (1997) (“When such evidence [of collateral benefits] is inadmissible to reduce damages, yet relevant for a different, proper purpose, ER 403 applies, and the trial court must balance probative value (i.e., the effect of the evidence when used properly) against the danger of unfair prejudice (i.e., the effect of the evidence if used improperly).”).
The trial court must vigilantly conduct this ER 403 balancing act and should err on the side of exclusion, admitting such evidence only in clear cases. As the California *811court cautioned, because of the risk of prejudice collateral source benefit evidence “should be permitted only upon a persuasive showing that the evidence sought to be introduced is of substantial probative value.” Hrnjak v. Graymar, Inc., 4 Cal. 3d 725, 484 P.2d 599, 604, 94 Cal. Rptr. 623, 47 A.L.R.3d 224 (1971). See also Danne, supra, at 238 (Ordinarily “the trial judge should exclude such evidence, or admit it only warily.”). However, if the trial court vigilantly maintains high standards for admission of such evidence, the inflexible exclusionary rule created by the majority is rendered unnecessary and serves only to hobble the fact finder by excluding evidence that should be admitted in those rare cases where relevance clearly outweighs prejudice.
Thus, we should inquire into probative value and prejudicial effect. Generally, collateral benefits will not be relevant to determine whether a given worker is injured. Accordingly evidence of collateral benefits is, in most cases, inadmissible to show malingering. But this case is the exception which should prove the rule.
Here the central issue was whether Johnson, the injured worker, was totally or partially disabled. He had already been designated as partially disabled. He sought reclassification on the grounds he was totally disabled due to a previously undisclosed “cognitive impairment” in addition to his physical injury, and as a result of this “cognitive impairment” he could not return to work. Weyerhaeuser defended by attempting to show that the injured worker’s failure to return to work was driven, not by any “cognitive impairment,” but rather by a cognitive predisposition not to work, i.e., malingering. Weyerhaeuser introduced much expert testimony that Johnson was indeed a malingerer and the majority today confirms that admission of such evidence was proper. Majority at 803. Indeed, Weyerhaeuser even offered Johnson a desk job which he refused. The evidence that Johnson is receiving more in benefits than he was receiving in wages while working is directly relevant to establish a motive not to work. Given the weakness of hu*812man nature such would seem self-evident to the informed observer. But without the critical evidence of total benefits received versus Johnson’s wages, Weyerhaeuser’s very credible defense is robbed of its reason because it lacks the essential, and highly relevant, factual predicate.
On the flip side the court must consider prejudicial effect. Ordinarily, evidence of collateral benefits will be highly prejudicial because the jury may naturally offset the amount of damages awarded against the collateral benefits received. However here, as the majority notes, the jury does not decide the amount of damages because this is a worker’s compensation case (rather than a personal injury one) and thus this danger is considerably lessened.
We must therefore ask whether the trial court abused its discretion under ER 403 by admitting the evidence. I think not. As the New York high court opined, evidence of collateral benefits “should be precluded unless it is centrally relevant to issues in substantial dispute bearing on the legitimacy of the claim of permanent disability—for example, plaintiffs motivation for not working and defense claims of exaggeration or malingering.” Kish v. Board of Educ., 76 N.Y.2d 379, 558 N.E.2d 1159, 1162, 559 N.Y.S.2d 687 (1990).
The superior court and the Court of Appeals were correct to recognize the evidence in question is subject to ER 403 balancing and were also correct when reading the scale. Yet the majority today imposes an artificial rule of total exclusion, the result of which, in this case and possibly others, is exclusion of evidence relevant and necessary to enable the fact finder to determine whether the injured worker is truly incapacitated or whether his unwillingness to return to work is the result of malingering.

Also admissible for impeachment

While the evidence of collateral benefits is admissible in this case to show motive, it is also admissible for the separate purpose of impeachment. As the majority acknowledges, use of such evidence is proper to impeach the witness if the witness first testifies inconsistently. See Majority *813at 804 (“Injured parties may, however, waive the protections of the collateral source rule by opening the door to evidence of collateral benefits.”).10
Johnson voluntarily took the stand and testified that after the injury he had “just barely enough money to five on or get by,” Appeal Board Record (ABR) at 64 (Sept. 7, 1990), and that “we don’t have as much money as we used to for buying things,” ABR at 65 (Sept. 7, 1990). Introduction of evidence that Johnson is receiving more money now than he did when he was working is excellent impeachment evidence. As the Third Circuit held, “the collateral benefit rule cannot be made a springboard from which a plaintiff may go forward with affirmative evidence ... of financial need and then seek immunity from cross-examination regarding it.” Gladden v. P. Henderson & Co., 385 F.2d 480, 484 (3d Cir. 1967), cert. denied, 390 U.S. 1013, 88 S. Ct. 1262, 20 L. Ed. 2d 162 (1968). Yet the majority allows just that today.
For these reasons I dissent.
Durham, C.J., concurs with Sanders, J.

See, e.g., Evans v. Wilson, 279 Ark. 224, 650 S.W.2d 569, 570 (1983) (“There are unquestionably situations in which proof of a plaintiffs collateral income may be admissible for a particular purpose. We mention four such purposes: One, to rebut the plaintiffs testimony that he was compelled by financial necessity to return to work prematurely or to forego additional medical care. Two, to show that the plaintiff had attributed his condition to some other cause, such as sickness. Three, to impeach the plaintiffs testimony that he had paid his medical expenses himself. And four, to show that the plaintiff had actually continued to work instead of being out of work, as he claimed.” (citations omitted)).

“The unquestioned inadmissibility of collateral source benefits evidence when offered for the purpose of directly reducing recoverable damages, and its generally conceded relevancy upon the question of malingering, seem to place it within the broad category of evidence competent for one purpose but not for another.” William H. Danne, Jr., Annotation, Admissibility of Evidence that Injured Plaintiff Received Benefits from a Collateral Source, on Issue of Malingering or Motivation to Extend Period of Disability, 47 A.L.R.3d 234, 239 (1973).

See Richard C. Witzel, Jr., Note, The Collateral Source Rule and State-Provided Special Education and Therapy, 75 Wash. U. L.Q. 697, 700 n.17 (1997):
The evidentiary component of the collateral source rule only precludes a [defendant] from offering evidence of collateral source benefits to mitigate the amount of damages the plaintiff suffered. The collateral source rule does not preclude the defendant from offering evidence that the plaintiff received collateral source benefits when this evidence is offered for purposes other than to mitigate the amount of damages the plaintiff suffered. For example . . . where the plaintiff is seeking damages for lost wages and there is evidence that the plaintiff has been malingering in (i.e., not returning to work because of payments from collateral sources such as unemployment compensation and social security benefits), evidence of the collateral payments is admissible.
See also Daena A Goldsmith, Comment, A Survey of the Collateral Source Rule: The Effects of Tort Reform and Impact on Multistate Litigation, 53 J. A® L. & Com. 799, 826 (1988) (Collateral source evidence may be admissible “to show that the plaintiff is malingering.”).

See also Kish v. Board of Educ., 76 N.Y.2d 379, 558 N.E.2d 1159, 1162 n.2, 559 N.Y.S.2d 687 (1990) (limiting Eichel); Hrnjak v. Graymar, Inc., 4 Cal. 3d 725, 484 P.2d 599, 605, 94 Cal. Rptr. 623, 47 A.L.R.3d 224 (1971) (declining to follow Eichel).

ER 403 provides, “Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.”

See also Macias v. Ramos, 917 S.W.2d 371, 374 (Tex. App. 1996) (collateral source benefits evidence is admissible “for impeachment purposes when a witness gives testimony inconsistent with the receipt of benefits. [J.R. Beadel & Co. v.] De La Garza, 690 S.W.2d [71,] 74 [(Tex. Ct. App. 1985)]. For example, in Castro [v. U.S. Natural Resources, Inc., 880 S.W.2d 62 (Tex. Ct. App. 1994)], we held that the fact that worker’s compensation benefits were received could be utilized to impeach testimony that Castro was concerned about paying his bills. Castro, 880 S.W.2d at 67. Similarly, in Mundy v. Shippers, Inc., 783 S.W.2d 743 (Tex.App. Houston [14th Dist.] Í990, writ denied), the court determined that testimony regarding inability to pay bills warranted the introduction of evidence regarding the receipt of collateral source benefits. Mundy, 783 S.W.2d at 745. Again, in Barrera v. E.I. DuPont De Nemours & Co., Inc., 653 F.2d 915 (5th Cir. 1981), the court held evidence of collateral benefits admissible where plaintiff had testified that he did not even have ‘a penny in [his] pocket.’ Barrera, 653 F.2d at 920-21.”).