The Fifth Circuit Court of Appeals recently clarified the application of the collateral source rule in maritime injury cases brought under the Longshore and Harbor Workers’ Compensation Act (LHWCA). In DePerrodil v. Bozovic Marine, Inc., the question before the Fifth Circuit Court was whether plaintiffs in maritime injury lawsuits are allowed to recover the total amount billed by health care providers for medical expenses or merely the amount paid by the insurer.
What is the Collateral Source Rule?
The collateral source rule is a legal doctrine that prevents any reduction in the defendant’s (i.e. tortfeasor) liability because of benefits received by the plaintiff from independent sources (i.e. collateral source). For example, health insurance payments to cover the plaintiff’s medical bills do not reduce the amount of damages owed by the defendant.
Texas Courts have said that the collateral source rule reflects a public policy position “that a benefit that is directed to the injured party should not be shifted so as to become a windfall for the tortfeasor.” In other words, defendants should not be able to reduce their liability just because the plaintiff maintained health insurance or received some other benefit from a collateral source.
The Impact of the Fifth Circuit’s Decision in DePerrodil v. Bozovic Marine, Inc
The case arose after plaintiff, Robert dePerrodil, was injured while aboard a vessel owned and operated by defendant, Bozovic Marine, Inc. (Bozovic). The plaintiff was being transported to his work site on an offshore platform when the vessel encountered rough seas and he fell and injured his back.
Under the LHWCA, employers must carry workers’ compensation insurance to cover the medical costs for work-related injuries. Accordingly, Plaintiff’s employer, Petroleum Engineers Inc. (PEI), carried worker’s compensation for him. When dePerrodil was injured, his insurer paid $57,385.50 to cover his medical expenses and the remaining portion was written-off. Robert dePerrodil then brought an LHWCA claim against Bozovic for the injuries he sustained on the job and the trial court awarded him $984,395.52 in damages.
Of the $984,395.52 in total damages, the trial court awarded $186,080.30 for dePerrodil’s medical expenses. Because the trial court held that the collateral source rule did not allow for any reduction in the amount of medical expenses owed by Bozovic, dePerrodil was allowed to recover the entire amount billed for medical expenses instead of the $57,385.50 that was actually paid by the insurer.
On appeal, the Fifth Circuit Court reversed the trial court’s ruling with respect to the medical expenses portion of the damages awarded. The Fifth Circuit held that the proper measure of damages was $57,385.50, the amount the insurer actually paid for dePerrodil’s medical expenses, not the amount billed by the health care provider. In the maritime law context, the Court concluded that LHWCA medical expense payments are collateral to a third-party tortfeasor only to the extent paid, not billed.
This decision will have significant implications on the amount of compensation a plaintiff may recover on an LHWCA claim because the amount of medical expenses paid by insurers is often far less than the amount billed.
How Our Houston Maritime Injury Attorneys Can Help
If you have experienced an injury while working as a longshoreman or harbor worker, contact the Houston maritime injury lawyers at The Krist Law Firm, P.C for help. Our knowledgeable team of attorneys has more than four decades of experience handling maritime accident cases, including claims under the Longshore and Harbor Workers’ Compensation Act.
We are committed to helping Texas residents injured in the Gulf of Mexico, at ports of call in several Gulf Coast states, and in shipping terminals off the coast of Texas obtain the compensation they deserve. We will fight to obtain the maximum possible compensation in your case and our successful track record in maritime injury cases includes one of the largest published recoveries in Texas for a single plaintiff.
Contact our Houston maritime injury lawyers at (281) 283-8500 today for a free case evaluation.