Herlihy Moving & Storage Inc. v. Adecco U.S. Inc.
| Decision Date | 02 March 2011 |
| Docket Number | Case No. 2:09–cv–931. |
| Citation | 772 F.Supp.2d 898 |
| Court | U.S. District Court — Southern District of Ohio |
| Parties | HERLIHY MOVING & STORAGE, INC., et al., Plaintiffs,v.ADECCO USA, INC., Defendant. |
OPINION TEXT STARTS HERE
William B. Benson, Alicia E. Zambelli, Mark C. Melko, Wiles, Boyle, Burkholder & Bringardner Co., LPA, Columbus, OH, for Plaintiffs.James M. Stone, Vincent J. Tersigni, Nicole M. Monachino, Jackson Lewis LLP, Cleveland, OH, for Defendant.
This matter is before the Court on Plaintiffs' Brief on the Set–Off Issue (ECF No. 42) and Defendant's Memorandum in Opposition to Plaintiffs' Brief on Setoff Issue (ECF No. 43). For the reasons that follow, the Court concludes that Defendant is entitled to a setoff in the amount Plaintiffs received from third party settlements.
Plaintiffs filed this action claiming that Defendant was liable to them for approximately $203,000 that was stolen from them by an employee, Shannon Nickison, who was provided to them by Defendant, a temporary employee placement service. Defendant filed a motion for summary judgment and this Court denied that motion with regard to Plaintiffs' claim that Defendant breached an oral contract that required it to conduct a background check on Nickison. That claim was tried to a jury on January 3, 2011 through January 5, 2011. Plaintiffs argued that Defendant's breach of the oral contract proximately caused Plaintiffs a $203,000 loss. The jury found in favor of Plaintiffs and determined that Plaintiffs proved that Defendant's breached an oral contract to conduct a background check on Nickison and that the breach proximately caused Plaintiffs to incur damages in the amount of $65,533.02.
Prior to the start of the trial, Plaintiffs requested that the Court prohibit the introduction of any evidence related to payments Plaintiffs received from other sources to compensate them for the loss of the money Nickison stole. There was then and is now no dispute as to the amount Plaintiffs received in settlement from the financial institution that accepted the fraudulent checks from Nickison and from Plaintiffs' insurance company.1 Plaintiffs also received a judgment against Nickison and her husband for the entire $203,000 loss. Nickison's husband appealed the judgment as it related to him and the Ohio Tenth District Court of Appeals affirmed the judgment against him. He has paid approximately $16,000 of the judgment. Defendant argued that the collateral source payment evidence should be presented to the jury. Over that objection, this Court granted Plaintiffs' request and prohibited evidence of any other payments made to Plaintiffs related to the Nickison theft. The Court indicated that if the jury returned a verdict in favor of Plaintiffs it would determine the amount of setoff post-trial.
The parties now disagree as to whether the jury award to Plaintiffs should be offset by the amount of the third party payments. It is undisputed that the amount Plaintiffs have actually received from third parties is greater than the amount the jury awarded to Plaintiffs. Thus, if the Court permits a setoff, even of only the amount Plaintiffs have actually received and not the amount Plaintiffs have the potential to receive from the wage garnishment of Nickison's husband, Defendant will owe nothing to Plaintiffs. The Court permitted Plaintiffs to file a brief on the issue and for Defendant to file a response to that brief.
The parties agree that the basis for granting a defendant a setoff in the amount of damages it owes is the notion that a plaintiff should not receive more than one recovery for the same damages. See Celmer v. Rodgers, 2005 Ohio 7055, No.2004–T–0083, 2005 WL 3610479, 2005 Ohio App. LEXIS 6336 (Ohio Ct.App. Dec. 29, 2005) The parties also agree that where no potential for double recovery by the plaintiff has been demonstrated, setoff should not be permitted. See Howard v. Seidler, 116 Ohio App.3d 800, 689 N.E.2d 572 (1996). Finally, Defendant does not dispute Plaintiffs' assertion that “the defendant who seeks to take advantage of this [setoff] credit bears the burden of proving the amount of credit to which he is entitled.” (ECF No. 42 at 3) ( Goodrich Corp. v. Commercial Union Ins. Co., 2008 Ohio 3200, Nos. 23585 and 23586, 2008 WL 2581579, 2008 Ohio App. LEXIS 2716 (Ohio Ct.App. June 30, 2008), which stated: “It has been held in other jurisdictions that, ‘because [settlement] credit is in the nature of an affirmative defense on the issue of damages, the defendant who seeks to take advantage of this credit bears the burden of proving the amount of credit to which he is entitled.’ ”) (citations omitted).
Aside from the law related to setoff, Defendant also argues that the setoff issue “requires an analysis of the collateral source rule ... under which a plaintiff's recovery from sources other than the wrongdoer are deemed irrelevant on the issue of damages.” (ECF No. 43 at 2.) Defendant, however, is mistaken with regard to this issue. The collateral source doctrine, unlike the law related to setoff, actually allows more than one recovery for the same loss. See State ex rel. Stacy v. Batavia Local Sch. Dist. Bd. of Educ., 105 Ohio St.3d 476, 829 N.E.2d 298, 307 (2005) (). Therefore, the collateral source doctrine, even if it were applicable to a contract action, has no application to here. See e.g., Seidler, Celmer, and Goodrich, supra ().
Plaintiffs argue that the jury award should not be offset by amounts Plaintiffs have received from third parties because Defendant cannot prove that there is a potential for Plaintiffs to receive a double recovery for the same damages. Plaintiffs' argument is not well taken.
Ohio courts generally find it inappropriate to allow a setoff in situations where evidence of a plaintiff's third party payments was admitted into evidence for the jury's consideration. See e.g., Jordan v. Westfield Insurance Co., 2008 Ohio 1542, 2008 WL 852070, at *9, 2008 Ohio App. LEXIS 1354, at *24–25 (Ohio Ct.App. March 20, 2008) (). However, in cases like the instant action where a jury has not received evidence of collateral payments, the jury obviously could not have deducted those payments from its damage award. Therefore, Ohio courts generally require the trial judge to make a post-verdict setoff based on the plaintiff's collateral recovery. See e.g., Roberts v. State Farm Mutual Auto. Ins. Co., 2003 Ohio 5398, 155 Ohio App.3d 535, 802 N.E.2d 157 (Ohio App. 2nd Dist.2003) (); Kirby v. Barletto, 2009 Ohio 5090, 2009 WL 3087311, at *5–6, 2009 Ohio App. LEXIS 4280, at *15–16 (Ohio Ct.App. Sept. 17, 2009) ()
Plaintiffs argue that, in the instant action the offset issue should not be determined by whether or not evidence of the collateral payments were submitted to the jury. Instead, Plaintiffs cite the Court to three cases to support their position that Defendant should not receive an offset even though the collateral payment evidence was not submitted to the jury: Vosgerichian v. Mancini Shah & Assoc., Nos. 68931 and 68943, 1996 WL 86684, 1996 Ohio App. LEXIS 788 (Ohio Ct.App. Feb. 29, 1996); Goodrich, 2008 WL 2581579, 2008 Ohio App. LEXIS 2716, and Quantum Capital Ventures, LLC v. Evans, 2004 Ohio 3173, No. CA2003–03–032, 2004 WL 1373215, 2004 Ohio App. LEXIS 2876 (Ohio Ct.App. June 21, 2004). Plaintiffs argue that in each of these cases the defendants failed to show that the collateral monies received by the plaintiffs were for the same loss as the jury award. Therefore, in those cases there was no potential for double recovery and the defendant was not entitled to an offset. Plaintiffs contend that this case presents the same situation; that is, because the jury did not indicate what specific damages were included in its damage award Defendant cannot show that the jury award was for the same loss as were the collateral monies Plaintiffs received. This Court, however, finds these cases distinguishable in material ways.
In Vosgerichian, the jury heard evidence related to the fault of three defendants. Before the end of the trial, however, two of the defendants were released, one on directed verdict and one because of settlement. The jury was specifically instructed to determine damages solely caused by the remaining defendant and the jury instructions were carefully crafted to prevent jury confusion and avoid the problem of double compensation for the same loss. Unlike the situation in Vosgerichian, in the case sub judice the jury had no information that there were other parties that could have been held responsible for any loss related to Nickison's theft. Plaintiffs put forth evidence that it was Defendant's breach of the parties' contract that caused the entire $203,000 loss and asked the jury to award them $203,000 from Defendant.
In Goodrich, the plaintiff sued several of its excess...
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...recovery in cases where settlement agreements have been entered into by co-defendants."); See also Herlihy Moving & Storage, Inc. v. Adecco USA, Inc. , 772 F.Supp.2d 898, 899 (S.D. Ohio 2011) ("the basis for granting a defendant a setoff in the amount of damages it owes is the notion that a......