Jones v. Red Arrow Heavy Hauling, Inc., 09-90-135

• Decision Date: 12 September 1991
• Docket Number: No. 09-90-135,09-90-135
• Citation: 816 S.W.2d 134
• Parties: Martha Rae JONES, Individually and as Surviving Widow and Community Survivor and Representative of Ila Florice Neal Jones and James Clay Jones, Sr., Survivors of the Estate of James Clay Jones, Jr., Appellants, v. RED ARROW HEAVY HAULING, INC., Appellee. CV.
• Court: Texas Court of Appeals

Page 134

816 S.W.2d 134

Martha Rae JONES, Individually and as Surviving Widow and Community Survivor and Representative of Ila Florice Neal Jones and James Clay Jones, Sr., Survivors of the Estate of James Clay Jones, Jr., Appellants, v. RED ARROW HEAVY HAULING, INC., Appellee.

No. 09-90-135 CV.

Court of Appeals of Texas Beaumont.

Sept. 12, 1991.

Rehearing Denied Oct. 17, 1991.

Dale B. Tillery, Edwards and Tillery, Dallas, for appellants.

Robert A. Black, Mehaffy & Weber, Beaumont, for appellee.

Before WALKER, C.J., and BROOKSHIRE and BURGESS, JJ.

OPINION

BURGESS, Justice.

Martha Rae Jones, individually and as surviving widow and community survivor and as representative of Ila Florice Neal Jones and James Clay Jones, Sr., survivors of the Estate of James Clay Jones, Jr., (hereafter referred to as "Jones") appeal a judgment for the Defendant, appellee Red Arrow Heavy Hauling, Inc. ("Red Arrow"). James Clay Jones, Jr. ("Decedent") was a self-employed truck driver who had contracted with Red Arrow to deliver freight in a trailer owned by Red Arrow. The registered owner of the truck was Tommy Tramel. Decedent was trying to start the truck from underneath the vehicle in an attempt to prevent it from getting stuck in mud during a sudden storm. He sustained fatal injuries when the truck rolled on top of him. Appellants' petition alleged Red Arrow breached its contract with Decedent by withholding sums from his paychecks for the purpose of obtaining coverage, then failing to obtain workers' compensation coverage for him. They also alleged violations of the Texas Deceptive Trade Practices Act ("DTPA") arising from representations made by Red Arrow concerning workers' compensation insurance. They also urged negligence and products liability theories in that Red Arrow failed to systematically inspect the truck and supplied or provided a defective truck to Decedent. The jury found for Red Arrow on all issues. Appellants raise thirteen points of error. Red Arrow brings one cross-point.

Red Arrow withheld sums from Decedent's paycheck for the purpose of obtaining workers' compensation insurance. Red Arrow admitted it never obtained such insurance. During the trial, Red Arrow introduced evidence that Martha Rae Jones filed a workers' compensation suit against Protective Insurance Company ("Protective") for death benefits pursuant to a policy covering Red Arrow's employees, and settled the suit for $72,000. The Protective policy provided benefits only to employees. Protective had denied coverage on the grounds Decedent was an independent contractor not covered under the policy.

Point of error one urges the trial court committed reversible error when it accepted as evidence information concerning Martha Rae Jones' workers' compensation claim and settlement, including the amount of the settlement, because the evidence was a collateral insurance source and was irrelevant, inadmissible, and immaterial to any jury issue. Red Arrow contends the evidence was not collateral because Jones sued for breach of contract to provide workers' compensation coverage. Red Arrow argues receipt and amount of benefit is relevant to whether the contract was breached, whether the non-breaching party was damaged, and the amount of damages.

The Protective settlement was a collateral source in the sense that it was not the result of a workers' compensation policy covering Decedent and was obtained from a party other than Red Arrow. The collateral source rule precludes a tortfeasor from obtaining the benefit of payment conferred upon the injured parties from sources other than the tortfeasor. RESTATEMENT (SECOND) OF TORTS § 920A. The theory behind the collateral source rule is that a wrongdoer should not have the benefit of insurance independently procured by the injured party, and to which the wrongdoer was not privy. Brown v. American Transfer & Storage Co., 601 S.W.2d 931 (Tex.1980), cert. denied, 449 U.S. 1015, 101 S.Ct. 575, 66 L.Ed.2d 474 (1980). Decedent did not pay the premiums for the Protective policy or procure it independently of Red Arrow. However, whatever cause of action Jones had against Protective was in spite of and not because of Red Arrow's performance under the contract. Red Arrow was not a party to the prior litigation and the Protective judgment does not release Red Arrow.

One court of appeals, holding that the employer was not entitled to setoff for medical expenses paid to the employee through the employer's disability policy, stated "it is the nature of the payments, not their source, which is determinative of the question of the collateral source rule." Southern Pacific Transportation Co. v. Allen, 525 S.W.2d 300 (Tex.Civ.App.--Houston [14th Dist.] 1975, no writ). The Protective policy provided benefits only to employees. The Protective judgment stipulated that Protective denied that Decedent was an employee of Red Arrow and that the settlement was not an admission of liability.

The principle...