Gallagher v. PLCB

• Citation: 883 A.2d 550,584 Pa. 362
• Parties: John GALLAGHER v. PENNSYLVANIA LIQUOR CONTROL BOARD, World Transportation, Inc., Envoy Warehouse, Inc. and Trans Freight Systems, Inc. Appeal of Trans Freight Systems, Inc.
• Decision Date: 28 September 2005
• Court: United States State Supreme Court of Pennsylvania

883 A.2d 550

584 Pa. 362

John GALLAGHER v. PENNSYLVANIA LIQUOR CONTROL BOARD, World Transportation, Inc., Envoy Warehouse, Inc. and Trans Freight Systems, Inc.

Appeal of Trans Freight Systems, Inc.

Supreme Court of Pennsylvania.

Argued March 9, 2005.

Decided September 28, 2005.

Joel P. Fishbein, Louis Evan Bricklin, Moira Clare Duggan, Philadelphia, for Trans Freight Systems, Inc.

Dean F. Murtagh, Kim R. Plouffe, Philadelphia, for John Gallagher.

Before: CAPPY, C.J., and CASTILLE, NIGRO, NEWMAN, SAYLOR, EAKIN and BAER, JJ.

OPINION

Justice SAYLOR.

Appeal was allowed to consider whether a trial court presiding over a civil negligence case erred in refusing to bifurcate trial to avoid exposing jurors to information from which it could be inferred that the plaintiff may have received some compensation for his injuries from a collateral source.

In November of 1999, while working as an inventory picker in a warehouse operated by the Pennsylvania Liquor Control Board (the "PLCB"), Appellee, John Gallagher, fell through an opening in an elevated walkway. He later commenced a negligence action against the PLCB; World Transportation, Inc., a logistical company that provided distribution and warehousing support to the PLCB; Appellant, Trans Freight Systems, Inc., which was also involved in the warehouse operations and which was World Transportation's parent corporation; and others. Among other injuries, Appellee claimed to have suffered a disabling brain injury.

World Transportation and Appellant each asserted that it was Appellee's employer, and therefore, was immune from civil suit in the courts of law under the employer-immunity provisions of the Pennsylvania Workers' Compensation Act, 77 P.S. §§ 1-1041, 2501-2626. See 77 P.S. § 481. Appellee made a pre-trial request pursuant to Pennsylvania Rule of Civil Procedure 213(b), styled as a motion in limine, to have the question of which entity was his employer and the remaining trial issues bifurcated and otherwise to prohibit the mention of workers' compensation during the proposed, separate general liability and damages proceedings. Appellant acknowledged that the collateral source rule precludes references to other sources of recovery that are deemed irrelevant at trial, in order to avoid the possibility that an improper inference by jurors of a double recovery on the plaintiff's part might diminish due and proper damages which would otherwise be assessed against the tortfeasor. See, e.g., Lobalzo v. Varoli, 409 Pa. 15, 21, 185 A.2d 557, 561(1962)

. Appellant contended, however, that such collateral source information is admissible for limited purposes where it has specific relevance to a liability issue in a civil case. In this regard, Appellant posited that its payment of workers' compensation premiums on Appellee's behalf tended to show that it was, in fact, Appellee's employer, and thus, not a proper party to the action. The trial court agreed with Appellant's position on this point and denied relief on the motion, but with the proviso that the "parties may mention workers' compensation only to show that premiums were paid on behalf of plaintiff." See Reproduced Record ("R.R."), at 286a; accord R.R., at 291a (reflecting the trial court's admonishment to counsel that "any mention of a collateral source would be barred, any payments").

Despite the trial court's ruling, in his opening statement, Appellant's counsel made specific reference to Appellee's receipt of workers' compensation benefits, as follows:

[H]ow will we show you that Trans Freight Systems was in fact the employer under the law of John Gallagher?... Workers compensation benefits. How did Mr. Gallagher receive workers compensation benefits after this incident occurred? Trans Freight Systems paid the workers compensation benefits.

R.R., at 308a-309a. Appellee's counsel did not assert a contemporaneous objection; however, after the jury retired for the day, the trial judge spoke with counsel and criticized the remark of Appellant's counsel as a violation of his ruling, as follows:

The Court: ... [T]here was a comment in [Appellant's counsel's] opening regarding workers' comp benefits. My ruling was only that your client or anybody could mention that they paid premiums on his behalf. It had nothing to do with him getting benefits. If you misunderstood —

[Appellant's Counsel]: I did. I apologize, Your Honor.

The Court: He was carried on the books as an employee and they made payments for premiums. But that is it.

[Appellant's Counsel]: Okay. I apologize, Your Honor, if I misunderstood your ruling.

See R.R., at 322a-323a.

Prior to the resumption of the trial the next day, Appellee's counsel expressed continuing concern regarding the effect of the opening remarks, and the trial court indicated its own discomfort in light of the recent decision of the Superior Court in Nigra v. Walsh, 797 A.2d 353 (Pa.Super.2002) (awarding a new trial on the basis that a defendant/motorist violated the collateral source rule by suggesting to the jury that the plaintiff/passenger was receiving federal disability benefits, and because it was impossible to determine the effect of such violation on the verdict). For this reason, the court granted Appellee's request to bar any and all references to workers' compensation, including premium payments. See R.R., at 337a-338a (reflecting the trial court's indication "I am very happy to just eliminate any issue with respect to the premiums, with respect to the benefits[;] [y]ou will have to prove employment another way"). The court subsequently stated to the jurors:

Folks, I forgot to mention before we started. In one of the opening statements yesterday, there was some mention of workers comp benefits. Please disregard that. That has no place in this case and should not in any way be considered by you in your deciding this case.

R.R., at 410a-411a.

Nonetheless, the subject of workers' compensation resurfaced during the cross-examination of Appellee's father, who was asked by Appellant's counsel about his son having "had several prior workers' compensation or work related injuries." R.R., at 425a. Appellee's counsel objected and moved for a mistrial in an interchange that proceeded as follows:

[Appellee's Counsel]: Motion for [a mistrial], Your Honor, reluctantly. Even if we didn't have the issues in this case that we have related to employment, in the limited rulings you made about allowing information about workers compensation premiums.

The Court: That's changed.

[Appellee's Counsel]: I understand that. We're still, I think, entitled to a [mistrial].

My recollection is on Monday after opening you once again said or you said, defense counsel not to mention workers compensation benefits. That was not the scope of your ruling. We now have workers compensation coming in again, and it was phrased as other or additional, I forgot which words preceded workers compensation claims. I reluctantly, believe me, very reluctantly, I move for a [mistrial].

[Appellant's Counsel]: Your Honor, the question was, it was immediately rephrased. It was a prior work related injury.

The Court: No. No. That's not what you said. You used the term workers compensation.

[Appellant's Counsel]: Your Honor, that was done —

The Court: Was this another mistake?

[Appellant's Counsel]: Your Honor, that was done in error. I indicated immediately, I rephrased it to say work related injury. I don't think this is an indication that a [mistrial] is appropriate. Clearly, it was immediately rephrased and it was in no way altering the facts of this case. And to address the issue of a [mistrial] is really, I think, not appropriate at this juncture.

The Court: Your comment was not appropriate. You have to watch what you're saying.

R.R., at 428a-429a, 456a-57a; see also R.R., at 425 (reflecting counsel's initial objection). The trial court denied the mistrial motion.

Later in the trial, apparently acting sua sponte, the trial court reconsidered its ruling barring the admission of evidence of workers' compensation premium payments made by Appellant. See R.R., at 415a. At this juncture, the court indicated:

I think I was too hasty in precluding mention of the payment of premiums. So I am going to reverse myself on that. But it's only the payment of premiums.

[Appellant's Counsel]: Correct, Your Honor.

The Court: I just think that is an element that has to be part of the evidence in this case. My original ruling was that it could come in. I think I overreacted on that. I will let that in.

R.R., at 455a-456a. The court thus permitted Appellant's former vice president of operations to testify that Appellant had in fact paid the workers' compensation premiums for employees at the PLCB warehouse facility. See R.R., at 571a. On Appellee's request, the trial court instructed the jurors:

Folks, I do want to remind you that you have heard the term workers compensation. That has nothing to do with any damage which may or may not be awarded by you in this case. You are to put that out of your mind. It is being introduced only on the issue of who employed Mr. Gallagher.

R.R., at 571a.

After the close of the evidence, World Transportation moved for a directed verdict on the employer-immunity ground. Counsel for Appellant and Appellee ultimately agreed that the trial court had the authority to decide the issue, see R.R., at 626a, and the court ruled that World Transportation was, and Appellant was not, Appellee's employer. See R.R., at 641a-642a.¹ The remaining issues were submitted to the jury, which returned a verdict for Appellee in the amount of $150,000, finding that Appellant and the PLCB each bore 40 percent responsibility for the causal negligence, and allocating 20 percent of the responsibility to Appellee.

Appellee filed post-trial motions,² asserting, inter alia, that the trial court erred in failing to bifurcate adjudication of the employer identification question and the other trial issues, failing to grant...