Hrnjak v. Graymar, Inc.

• Decision Date: 05 May 1971
• Citation: 94 Cal.Rptr. 623,484 P.2d 599,4 Cal.3d 725
• Court: California Supreme Court
• Parties: , 484 P.2d 599, 47 A.L.R.3d 224 Bozidar HRNJAK, Plaintiff and Appellant, v. GRAYMAR, INCORPORATED et al., Defendants and Respondents. L.A. 29796.

Page 623

94 Cal.Rptr. 623

4 Cal.3d 725, 484 P.2d 599, 47 A.L.R.3d 224

Bozidar HRNJAK, Plaintiff and Appellant, v. GRAYMAR, INCORPORATED et al., Defendants and Respondents.

L.A. 29796.

Supreme Court of California,

In Bank.

May 5, 1971.

Milan Moacanin, Hollywood, for plaintiff and appellant.

Robert E. Cartwright, San Francisco, Edward I. Pollock, Theodore A. Horn, Los Angeles, Marvin E. Lewis, San Francisco, William H. Lally, Sacramento, Thomas T. Anderson, Indio, Joseph W. Cotchett, San Mateo, and Leonard Sacks, Pico Rivere, as amici curiae on behalf of plaintiff and appellant.

Hagenbaugh, Murphy & Davies, John Davies, Spray, Gould & Bowers, John J. Costanzo and Henry F. Walker, Los Angeles, for defendants and respondents.

MOSK, Justice.

Plaintiff appeals from a judgment rendered on a verdict in his favor in the amount of $6,100 in an action for personal injuries against defendants. We consider under what circumstances a defendant in a tort action may introduce evidence of plaintiff's receipt of collateral source benefits for the purpose of establishing that plaintiff had a motive for feigning injury and refusing to resume gainful occupation.

On April 12, 1965, plaintiff's car was struck from behind by a brakeless General Motors truck owned by Graymar, Inc. Plaintiff, a 30-year-old carpenter, was in the process of stopping behind a line of traffic on the Santa Ana Freeway and was traveling about five miles per hour at the time of impact. Defendant Graymar's truck was proceeding at a speed of 50 miles per hour when the driver, about 120 feet away from plaintiff's automobile, applied the brakes and attempted to stop. The brakes were inoperative and the truck, slowed only by the compression of the engine, careened into the rear of plaintiff's vehicle. Plaintiff's automobile was propelled forward into a preceding car and then was struck a second time by defendant's truck. Plaintiff's 1963 Chevrolet was a total loss and the truck was severely damaged. Plaintiff was removed from the scene by ambulance.

Defendants, Graymar and General Motors Corporation, conceded their liability for the collision, and the only litigated issues involved the nature and extent of the injuries sustained by plaintiff as a proximate result of the collision and the damages to which he was entitled. These matters were sharply contested and the evidence offered by plaintiff and defendants was in irreconcilable conflict.

Plaintiff's testimony and the medical evidence produced on his behalf indicated that the impact of the collision threw him forward and to the right and caused him to lose consciousness temporarily; he suffered a severe sprain to his back in the area of the lumbar spine and a cerebral concussion; because of these injuries, he experienced considerable pain in his lower back and radiating pain in his lower abdomen as well as dizziness and nausea; his symptoms prevented him from engaging in his occupation as a carpenter and cabinetmaker during the three and a half years between the accident and the trial and necessitated his finding a new vocation which would involve less driving, lifting, bending, and standing at heights than carpentry requires; at the time of the trial, plaintiff was in the process of acquiring training as a typewriter repairman from the State Department of Rehabilitation, at which occupation his earnings would be a maximum of $125 per seek compared to earnings of about $200 per week as a carpenter; he would be required to wear a sacro-lumbar back support for life, even in his new work; and his out-of-pocket medical expenses as a result of the accident amounted to more than $6,000.

Defendants presented evidence tending to prove that plaintiff was not badly shaken after the accident and had spent the 10 minutes before the ambulance arrived in directing traffic; there was never any objective manifestation of injury to plaintiff's back or any other part of his body as a result of the accident, and his complaints of back pain might be attributable to a previous minor automobile collision on March 17, 1965, or to an unrelated prostate infection; his complaints of pain in the lower abdomen were not attributable to his back sprain but rather were caused by a congenital kidney defect or by his prostate gland problems; and a considerable portion of the out-of-pocket medical expenses constituted payments for medical care unrelated to the accident, including expenditures to discover his kidney and prostate gland abnormalities. Defendants also attempted to cast doubt on plaintiff's earning capacity as a carpenter and emphasized his inability to produce conclusive records of his earnings during the years before the accident.

In his complaint, plaintiff sought $100,000 in damages for medical expenses, lost earnings during the three and a half years since the accident, future diminution of earnings in his new occupation, and pain and suffering. The jury awarded him damages in the amount of $6,100, and he appeals contending that the admission of evidence of collateral source receipts was prejudicial error.

On the first day of the trial, after plaintiff had concluded his testimony on direct examination and was being cross-examined by defense counsel, before any medical testimony had been produced, defendants attempted to develop that plaintiff had received payments from two collateral sources as a result of the collision with Graymar's truck. After plaintiff's objection, counsel retired to chambers where defendants offered to prove that plaintiff had received $2,000 in a lump sum under the medical payments section of his Automobile Club liability policy and $6,303 from a disability insurance policy carried with Pennsylvania Life Insurance Company. The disability benefits were paid at the rate of $200 per month for two and a half years after the accident and $600 per month prorated for the days plaintiff was actually hospitalized. Defendants assertedly offered this evidence not for the purpose of mitigating damages in the amount of the collateral benefits but to indicate plaintiff's motive in 'not returning to work, the fact that he didn't have to return to work.' Defendants' theory was that these collateral receipts made it financially beneficial to plaintiff to feign injury and to maintain the appearance of disability.

After argument, the trial judge ruled the evidence was admissible, relying upon the rationale he discerned in Garfield v. Russell (1967) 251 Cal.App.2d 275, 59 Cal.Rptr. 379, that evidence of a plaintiff being wholly or partially compensated for medical expenses is relevant to his motives in seeking medical help and his credibility as a witness.

On the basis of the foregoing ruling, defense counsel were allowed to question plaintiff regarding his insurance receipts, subject to the following cautionary admonition given to the jury by the court: '(T)he defendant is going to be allowed to inquire of this witness into certain insurance payments which he received during the years, 1965 to 1967. * * * (T)his evidence is relevant only to show the motive of a party in seeking medical help and his credibility as a witness. The defendants are not entitled to have any reimbursement received by the Plaintiff deducted from the total amount of damages, if any, which the jury might, otherwise, award.' Also, the jury was later instructed that the insurance payments were 'not to be deducted by you in arriving at the amount of damages * * *.' Said payments are to be considered by you for the limited purpose of determining plaintiff's motive in seeking medical help and his credibility as a witness.'

Plaintiff contends the trial court's ruling onstituted an abuse of its discretion under Evidence Code, section 352 ¹ in light of our recent rulings in Helfend v. Southern California Rapid Transit District (1970) 2 Cal.3d 1, 84 Cal.Rptr. 173, 465 P.2d 61 and Acosta v. Southern California Rapid Transit District (1970) 2 Cal.3d 19, 84 Cal.Rptr. 184, 465 P.2d 72. We conclude that the contention is meritorious and necessitates reversal of the judgment and a new trial on the issue of damages.

Unlike evidence of defendant's liability insurance coverage, ² the admissibility of evidence of plaintiff's receipt of collateral insurance benefits is not governed by specific statutory exclusion. Nevertheless, a pervasive public policy has been judicially expressed and California remains a firm proponent of the 'collateral source rule.' ³ This doctrine provides that if an injured party received some compensation for his injuries from a source wholly independent of the tortfeasor, such payment should not be deducted from the damages which the plaintiff would otherwise collect from the tortfeasor.

We recently reaffirmed our adherence to the collateral source rule in two companion cases. In Helfend v. Southern California Rapid Transit District (1970) supra, 2 Cal.3d 1, 84 Cal.Rptr. 173, 465 P.2d 61 and Acosta v. Southern California Rapid Transit District (1970) supra, 2 Cal.3d 19, 84 Cal. 184, 464 P.2d 72, we left no doubt that California is firmly committed to the doctrine and validated its application in cases in which public entities were the defendants. 'The collateral source rule as applied here embodies the venerable concept that a person who has invested years of insurance premiums to assure his medical care should receive the benefits of his thrift. The tortfeasor should not garner the benefits of his victim's providence.

'The collateral source rule expresses a policy judgment in favor of encouraging citizens to purchase and maintain insurance for personal injuries and for other eventualities. * * * To permit the defendant to tell the jury that the plaintiff has been recompensed by a collateral source for his medical costs might irretrievably upset the complex, delicate, and somewhat indefinable calculations which result in the normal jury verdict. * * *

'If we consider the collateral source rule as applied here...