Wills v. Foster

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Wills v. Foster

State: Illinois

Docket No: 104538 Rel

Case Date: 06/19/2008

Preview:Docket No. 104538.

IN THE SUPREME COURT OF THE STATE OF ILLINOIS

SHEILA M. WILLS, Appellant, v. INMAN E. FOSTER, JR., Appellee. Opinion filed June 19, 2008.

CHIEF JUSTICE THOMAS delivered the judgment of the court, with opinion. Justices Freeman, Fitzgerald, Kilbride, Garman, Karmeier, and Burke concurred in the judgment and opinion.

OPINION In this personal injury case, the jury's damages award included the full amount of plaintiff's billed medical expenses. At issue is whether the trial court erred in reducing the jury's award of medical expenses to the amount actually paid by Medicaid and Medicare in full settlement of the bills. In addressing this issue, we will answer questions about the operation of the collateral source rule that were not resolved in Arthur v. Catour, 216 Ill. 2d 72 (2005). BACKGROUND Plaintiff, Sheila M. Wills, filed a second amended complaint against defendant, Inman E. Foster, Jr., seeking to recover for injuries she sustained in an automobile accident. Plaintiff's medical bills

arising out of the accident totaled $80,163.47. However, the amount actually paid by Medicaid and Medicare on plaintiff's behalf, in full settlement of the bills, was $19,005.50. Defendant moved in limine to limit plaintiff to introducing into evidence only the paid amounts of the bills. Plaintiff moved in limine to prevent defendant from introducing any evidence, or making any argument, that plaintiff's bills had been paid by Medicaid and/or Medicare. The trial court granted plaintiff's motion and denied defendant's motion. Defendant stipulated to the amount of plaintiff's medical bills, and they were entered into evidence. The jury awarded plaintiff the full amount of her medical bills, plus $7,500 for pain and suffering. Defendant filed a posttrial motion, asking the trial court to reduce the amount of the jury's award for medical expenses from $80,163.77 to $19,005.50. The trial court granted defendant's motion and reduced plaintiff's medical expenses award to the amount paid by Medicare and Medicaid. The court stated in its order that, "In the event plaintiff's medical providers seek to recover from plaintiff the difference between the amount paid by the Illinois Department of Public Aid or Medicare, plaintiff may within one year from the date of this order petition the court for a revision of this order." Plaintiff appealed, and the Appellate Court, Fourth District, affirmed. 372 Ill. App. 3d 670. Plaintiff argued on appeal that the trial court's order violated the collateral source rule and was contrary to this court's decision in Arthur v. Catour, 216 Ill. 2d 72 (2005). In Arthur, this court held that the plaintiff could submit the entire amount of her billed medical expenses to the jury and was not limited to presenting the amount that her private insurance company actually paid to her health-care providers. The Fourth District distinguished Arthur because that case involved a private insurance company rather than Medicaid and Medicare. 372 Ill. App. 3d at 674-75. Focusing on Arthur's explanation that the justification for the collateral source rule is that " `the wrongdoer should not benefit from the expenditures made by the injured party or take advantage of contracts or other relations that may exist between the injured party and third persons' " (see Arthur, 216 Ill. 2d at 79, quoting Wilson v. The Hoffman Group, Inc., 131 Ill. 2d 308, 320 (1989)), the Fourth District concluded that this reasoning would not apply to a plaintiff who was not required to bargain for her benefits but received them free of charge because of her status. 372 -2-

Ill. App. 3d at 672-73. The court found that the more directly applicable case was Peterson v. Lou Bachrodt Chevrolet Co., 76 Ill. 2d 353 (1979), which, the Fourth District noted, had not been explicitly overruled in Arthur. In Peterson, this court held that the plaintiff could not recover the value of free medical services provided by Shriners' Hospital for Crippled Children because the policies underlying the collateral source rule did not apply when the plaintiff incurred no expense, obligation, or liability in receiving the services for which compensation is later sought. The Fourth District held that this reasoning would apply equally to a plaintiff whose bills were satisfied by Medicare and Medicaid. 372 Ill. App. 3d at 674-75. Justice Cook dissented, arguing that Peterson was limited to situations in which a person receives gratuitous medical services. According to Justice Cook, the majority decision conferred a benefit on tortfeasors who injure a poor or elderly person and questioned an outcome that would hold torfeastors fully responsible for a plaintiff's medical expenses only in situations in which the plaintiff can afford private insurance. Justice Cook believed that this court in Arthur was moving away from any further limits on the collateral source rule, and that the majority had improperly extended Peterson's rationale to Medicare and Medicaid recipients. 372 Ill. App. 3d at 676-77 (Cook, J., dissenting). We allowed plaintiff's petition for leave to appeal. 210 Ill. 2d R. 315(a). Shortly after we allowed leave to appeal, the Appellate Court, Third District, filed an opinion rejecting the Fourth District's analysis in this case. See Nickon v. City of Princeton, 376 Ill. App. 3d 1095 (2007). In Nickon, the plaintiff introduced into evidence medical bills totaling $119,723.11, and the trial court prohibited the defendant from producing evidence that Medicare paid a reduced amount of $34,888.61 as payment in full for the bills. The jury returned a verdict for the plaintiff, and its award included $119,000 in medical expenses. The trial court denied the defendant's posttrial request for a set-off or a reduction of the award to the amount paid by Medicare. On appeal, the defendant argued both that the jury should have been allowed to consider that the health-care provider accepted $34,888.61 from Medicare as payment in full for the bill and that the trial court should have reduced the jury's award to the amount paid by Medicare. The Third District rejected both arguments. -3-

On the evidentiary question, the Third District held that allowing the plaintiff to submit the amount initially billed by her providers was consistent with Arthur.1 Nickon, 376 Ill. App. 3d at 1098-1100. On the damages question, the Third District held that the defendant was not entitled to a set-off or a reduction of the award to the amount paid by Medicare. The court distinguished Peterson on the basis that no bill was generated in that case. According to the Third District, Peterson applies only to services given free of charge. The Third District did not believe that the collateral source rule should be affected by the relationship between the injured party and the agency paying the medical bills. Nickon, 376 Ill. App. 3d at 1101-02. The Third District acknowledged that its holding conflicted with the Fourth District's analysis in this case and stated that it believed that this court would soon provide further guidance on the issue. Nickon, 376 Ill. App. 3d at 1101 n.1. ANALYSIS 1. Standard of Review The issues in this case involve how the collateral source rule applies in cases in which the plaintiff's medical bills are paid by Medicaid and/or Medicare at a discounted rate. The facts are undisputed, and the parties ask us to determine the correctness of the trial court's application of the law to the undisputed facts. Accordingly, our review proceeds de novo. Arthur, 116 Ill. 2d at 78. 2. The Collateral Source Rule " `Under the collateral source rule, benefits received by the injured party from a source wholly independent of, and collateral to, the tortfeasor will not diminish damages otherwise recoverable from the tortfeasor.' " Arthur, 216 Ill. 2d at 78, quoting Wilson, 131 Ill. 2d
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The Third District oversimplified this court's holding in Arthur as "simply give the jury the initial bill and move on with the evidence." Nickon, 376 Ill. App. 3d at 1100. Arthur actually held that, if the full amount of the bill has not been paid, the plaintiff must make a prima facie case that the billed amount was reasonable before the bill may be admitted into evidence. Arthur, 216 Ill. 2d at 82.

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at 320. As set forth in section 920A(2) of the Restatement (Second) of Torts (Restatement (Second) of Torts

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