Morse v. Southern Pac. Transportation Co.

• Citation: 133 Cal.Rptr. 577,63 Cal.App.3d 128
• Court: California Court of Appeals
• Decision Date: 26 October 1976
• Parties: Richard M. MORSE, Plaintiff and Respondent, v. SOUTHERN PACIFIC TRANSPORTATION COMPANY, Defendant and Appellant. Civ. 46810.

Page 577

133 Cal.Rptr. 577

63 Cal.App.3d 128

Richard M. MORSE, Plaintiff and Respondent, v. SOUTHERN PACIFIC TRANSPORTATION COMPANY, Defendant and Appellant.

Civ. 46810.

Court of Appeal, Second District, Division 3, California.

Oct. 26, 1976.

Merrill K. Albert, Los Angeles, for defendant and appellant.

Boccardo, Blum, Lull, Niland, Teerlink & Bell, and Edward J. Niland, San Jose, for plaintiff and respondent.

POTTER, Associate Justice.

Defendant Southern Pacific Transportation Company appeals from an order of the superior court granting plaintiff Richard Morse a new trial in an action for damages for personal injury under the Federal Employers' Liability Act (45 U.S.C.A. § 51, et seq., hereinafter 'FELA'). The court granted plaintiff's motion for new trial on the ground of error of law in admitting evidence not admissible under the rule of Eichel v. New York Central R. Co. (1963) 375 U.S. 253, 84 S.Ct. 316, 11 L.Ed.2d 307. The evidence, admitted at trial over plaintiff's objection, was of plaintiff's retirement for disability and receipt of disability pension payments under the Railroad Retirement Act. (45 U.S.C. § 228b(a)4.)

Plaintiff, a 49-year-old electrician who had been employed by the defendant for almost 20 years, was injured at work on June 4, 1972, when he slipped on some oil and fell on his back. He lost consciousness and suffered a disc injury resulting in two hospitalizations. He was given physical therapy and traction. Subsequently, in July 1973, he required back surgery. In his complaint, filed January 12, 1973, plaintiff alleged the injury was due to defendant's negligence and sought, Inter alia, compensation for lost wages.

The jury trial began December 4, 1974. During the trial, plaintiff's counsel requested, in chambers, an order In limine to prohibit defendant's counsel from introducing evidence that plaintiff was receiving a disability pension under the Railroad Retirement Act. Defense counsel argued that defendant was not seeking a credit for any payments to the plaintiff but had 'the right to prove to this jury' that the plaintiff had elected to retire and was 'receiving retirement income,' including the amount of such income. Defense counsel claimed such evidence was 'really tied to the question' of whether the plaintiff was 'in fact disabled' and admissible on the issue of malingering.

Plaintiff's counsel cited the United States Supreme Court decision in Eichel v. New York Central R. Co., 375 U.S. 253, in support of his contention that the evidence should be excluded. The trial court, without reading Eichel, ruled the evidence admissible.

Thereafter, in the jury's presence and over plaintiff's continuing objections, numerous references were made to the fact of plaintiff's retirement which had been made retroactive to June 1972, and to his receipt of disability payments. Defense counsel referred to the retirement and the receipt of disability benefits during his cross-examination of the plaintiff ¹ and of two of plaintiff's witnesses (a doctor and an economist), in his opening statement and in his closing argument. Two of defendant's medical witnesses on direct examination also referred to the retirement and benefits.

Plaintiff's economist testified that the plaintiff's wage loss from the 1972 accident to December 31, 1974, amounted to $29,367. He also testified that the present value of the future wage loss, assuming plaintiff would have worked until 65 and then would have taken a general retirement, was $151,091. On cross-examination, defense counsel asked if the economist took 'into consideration in the past wage loss computations that (plaintiff) has been on disability since June 8, 1972?' The economist replied he had 'just computed (the) past wage losses' without deductions. Later, defense counsel asked if it would 'be too difficult . . . to figure out past wage loss if we assume that the gentleman was receiving $365 monthly because of a disability retirement.' The economist asked if defense counsel wanted him to deduct these payments, and defense counsel indicated that he did. At that point, plaintiff's counsel objected specifically to any such calculation. The trial court sustained this objection and indicated that it was not going to tell the jury to deduct any amount.

The plaintiff asked for $273,000 of which approximately $180,000 was for past and future wage loss. The jury returned a 9--3 verdict for the plaintiff for.$61,500.

The trial court granted plaintiff's motion for a new trial 'on the ground of error in law, occurring at the trial and excepted to by plaintiff,' stating as its reason 'that the court erred in admitting evidence not admissible under Eichel . . .' Defendant filed this appeal from that order, on February 28, 1975.

Contentions

The only issue presented on this appeal is whether, in an action under the FELA, the admission of evidence that the plaintiff was receiving disability pension payments under the Railroad Retirement Act was an error in law which justified the order granting a new trial. ²

The defendant claims no error of law occurred and, therefore, the order granting a new trial should be reversed and the judgment on the jury's verdict affirmed, because: (1) the evidence was admissible under California Evidence Code section 352, as expounded in the California Supreme Court decision in Hrnjak v. Graymar, Inc., 4 Cal.3d 725, 94 Cal.Rptr. 623, 484 P.2d 599; and (2) the evidence was admissible under federal case law.

Plaintiff contends that the admission of the evidence was an error in law and, therefore, the order granting a new trial should be affirmed because: (1) federal law, not California law, governs this action, and the strict exclusionary rule established by the Eichel decision is controlling; and (2) even if California law were controlling, the evidence should have been excluded under the Hrnjak test. ³

Discussion

We are persuaded that the United States Supreme Court decision in Eichel v. New York Central R. Co., 375 U.S. 253, 84 S.Ct. 11, 316 L.Ed.2d 307, is controlling of the case at bench and requires affirmance of the order of the trial court granting a new trial to plaintiff.

Eichel held that in an action brought under the FELA, evidence that the plaintiff was receiving disability benefits under the Railroad Retirement Act was inadmissible as a matter of law. The defendant, like the defendant herein, offered evidence that the plaintiff was receiving monthly disability pension payments under the Railroad Retirement Act, for the purpose of impeaching the testimony of the plaintiff as to his motive for not returning to work and as to the permanency of his injuries. The trial court excluded the evidence. On appeal from a judgment for the plaintiff, the Court of Appeals for the Second Circuit reversed, holding the exclusion of the evidence to be prejudicial error. The Supreme Court reversed the judgment of the Court of Appeals.

The Supreme Court first noted the conceded impropriety of considering the disability pension payments in mitigation of plaintiff's damages, ⁴ saying in this connection (375 U.S. at p. 254, 84 S.Ct. at p. 317):

"The Railroad Retirement Act is substantially a Social Security Act for employees of common carriers. . . . The benefits received under such a system of social legislation are not directly attributable to the contributions of the employer, so they cannot be considered in mitigation of the damages caused by the employer.' New York, N.H. & H.R. Co. v. Leary, 204 F.2d 461, 468, cert. denied, 346 U.S. 856, 74 S.Ct. 71, 98 L.Ed. 370. (Fn. omitted.)'

The Court next considered and rejected the contention that the evidence of the disability payments was admissible as bearing on the extent and duration of plaintiff's disability and as showing a motive for his not returning to work after the accident. It said in this respect (375 U.S. at pp. 255--256, 84 S.Ct. at p. 317):

'We disagree. In our view the likelihood of misuse by the jury clearly outweighs the value of this evidence. Insofar as the evidence bears on the issue of malingering, there will generally be other evidence having more probative value and involving less likelihood of prejudice than the receipt of a disability pension. Moreover, it would violate the spirit of the federal statutes if the receipt of disability benefits under the Railroad Retirement Act of 1937, 50 Stat. 309, as amended, 45 U.S.C. § 228b(a)4, were considered as evidence of malingering by an employee asserting a claim under the Federal Employers' Liability Act. We have recently had occasion to be reminded that evidence of collateral benefits is readily subject to misuse by a jury. Tipton v. Socony Mobil Oil Co., Inc., 375 U.S. 34, 84 S.Ct. 1, 11 L.Ed.2d 4. It has long been recognized that evidence showing that the defendant is insured creates a substantial likelihood of misuse. Similarly, we must recognize that the petitioner's receipt of collateral social insurance benefits involves a substantial likelihood of prejudicial impact. We hold therefore that the District Court properly excluded the evidence of disability payments. (Fns. omitted.)' (Emphasis added.)

The Supreme Court thus clearly held that exclusion of evidence of these collateral benefits was required if the spirit and fundamental policies of the FELA and the Railroad Retirement Act were to be preserved. Strict and absolute exclusion was deemed necessary to avoid the 'substantial likelihood of prejudicial impact.'

A long line of Post-Eichel cases in the federal courts have followed this rule. (Caughman v. Washington Terminal Company (1965) 120 U.S.App.D.C. 217, 345 F.2d 434, 436; see e.g., Blake v. Delaware and Hudson Railway Company (2d Cir. 1973) 484 F.2d 204, 205; Fuhrman v. Reading Company (3d Cir. 1971) 439 F.2d 10, 14; Page v. St. Louis Southwestern Railway Co. (5th Cir. 1965) 349 F.2d 820, 821--822; Raycraft v. Duluth, Missabe and Iron Range Railway Co. (8th Cir. 1973) 472 F.2d 27, 28.)

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