Moulton v. Groveton Papers Co.

Decision Date30 July 1974
Docket NumberNo. 6768,6768
Citation323 A.2d 906,114 N.H. 505
CourtNew Hampshire Supreme Court

Sheehan, Phinney, Bass & Green and E. Paul Kelly, Manchester, Hale & Dorr and Stephen H. Oleskey, Boston, Mass., for plaintiffs.

Wiggin, Nourie, Sundeen, Pingree & Bigg and W. Wright Danenbarger, Manchester, for defendants.

LAMPRON, Justice.

The issues on this appeal are three questions of law, transferred in advance of retrial by Mullavey, J., pertaining to the measure of the damages to be assessed against the defendants if verdicts are returned for the plaintiffs. Their actions are for property damages caused on May 20, 1969 by the failure of the Nash Pond Dam, located in Odell and owned by the defendants, which resulted in the discharge of a large amount of water downstream over plaintiffs' properties.

This court in Moulton v. Groveton Papers Co., 112 N.H. 50, 289 A.2d 68 (1972) considered motions to dismiss certain grounds on which plaintiffs sought to recover their damages. As a result of the decision in that case, plaintiffs now seek recovery on two counts: the first based on common law negligence, and the second on a causal violation of RSA 482:42 pertaining to the duties of dam owners to maintain and repair their dams so that they 'shall not become a dam in disrepair' as defined in section 1 III of RSA ch. 482. The first two questions relate to the measure and amount of damages recoverable by the town of Stark for two bridges, one carried away by the flood, the other rendered unsafe and later destroyed. The third question pertains to the damages which the other plaintiffs are entitled to recover for the injury to their real property caused by this flood.

We turn to the first question which reads as follows: 'Assuming liability, does the collateral source rule govern so that the Town of Stark may recover from the Defendants the entire damage that the Town sustained from the flood . . . or is the Town limited to a recovery from the Defendants of any damages for which it has not or will not receive payment from the State of New Hampshire under Chapter 428 of the laws of 1969 or any other State statutes?'

The two bridges damaged by the failure of defendants' dam on May 20, 1969, and which must be replaced, were part of a Class V highway or town road (RSA 230:4 V) in Stark which was also damaged. RSA 230:1 (Supp.1973). Under the provisions of RSA 231:8, the town is under the duty to maintain this road including its bridges. This obligation gives the town of Stark a 'qualified property interest' in both the road and the bridges and a resulting right to recover damages for the cost of repairs made necessary by the negligence of a tort-feasor. Concord v. Burleigh, 67 N.H. 106, 108, 36 A. 606 (1891); The Town of Troy v. Cheshire Railroad Company, 23 N.H. 83, 95, 98 (1851); Hooksett v. Company, 44 N.H. 105, 109-110 (1862).

However, the legislature enacted Laws 1969, ch. 428, effective July 3, 1969, which reads in pertinent part as follows: '428:1 Repair of Bridges and Structures. The department of public works and highways is hereby authorized to repair, reconstruct, or replace, as determined by the commissioner of public works and highways to be appropriate, the following bridges or structures damaged by the flood of May 20, 1969: . . . (I)n the town of Stark, in the Emerson Road over the Nash Stream and over the Ammonoosuc River (the bridges in question in this case). The town's share of the costs incurred pursuant to this section shall be . . . one-eighth in the case of class V highway bridges and structures . . .. 428:2 Repair of Highways. The department of public works and highways is hereby authorized to repair or replace state highways and town roads in the town of . . . Stark which were damaged by the flood of May 20, 1969. 428:3 Appropriations. There is hereby appropriated the sum of three hundred thousand dollars for the purposes of this act. Said appropriation shall be a charge against the highway fund . . ..'

The damaged highway itself has been repaired and the town has been reimbursed by the State for the full cost. The trial court found that '(t)he town has been using two temporary Bailey bridges supplied by the State pending erection of permanent replacements. Permanent replacement of the two bridges may involve the erection of new bridges larger than the old since State requirements for bridges have changed in recent years. The cost of the replacement of the two bridges is likely to exceed the depreciated value of the old bridges prior to the flood of May 20, 1969.' See RSA 229:6; RSA 242:3, 242:19.

The town of Stark argues that the reconstruction of these bridges remains its obligation (RSA 231:8) and that neither Laws 1969, ch. 428, nor any other statute, compels the State to provide it with financial aid for that purpose. It also maintains that, because of certain determinations to be made by the commissioner of public works under Laws 1969, 428:1, and by a unanimous board under RSA 242:4, Stark is not assured that it will receive funds from the State to help meet the cost of the new bridges. Be that as it may, we must assume for the purpose of answering transferred question No. 1 pertaining to the application of the collateral source rule that payments will be made by the State to the town of Stark and that the State will not assert a right of subrogation for these payments.

Under the collateral source rule if a plaintiff is compensated in whole or in part for his damages by some source independent of the trot-feasor he is still permitted to make full recovery against him. D. Dobbs, Law of Remedies § 8.10 (1973); Restatement (Second) of Torts § 920A(2) (Tent. Draft No. 20, 1974). The rule that collateral benefits are not subtracted from the plaintiff's recovery has been applied to benefits paid under an insurance policy or by a relief association; employment benefits; gratuitous payments; social legislation benefits such as social security, welfare, pensions; and benefits received under certain retirement acts. Bell v. Primeaux, 104 N.H. 227, 183 A.2d 729 (1962); Descoteau v. Boston & Maine R.R., 101 N.H. 271, 140 A.2d 579 (1958); Clough v. Schwartz, 94 N.H. 138, 48 A.2d 921 (1946); Abbott v. Hayes, 92 N.H. 126, 26 A.2d 842 (1942); Rolfe v. Railroad, 69 N.H. 476, 45 A. 251 (1898); Colvin v. Goldenberg, 101 R.I. 338, 273 A.2d 663 (1971).

Many articles in favor of, and against, the collateral source rule have appeared in law reviews, bar journals, and similar publications. See Bell, Complete Elimination of the Collateral Source Rule-A Partial Answer to Criticisms of the Present Injury Reparations System, 14 N.H.B.J. 20 (1972); Fleming, The Collateral Source Rule and Loss Allocation in Tort Law, 54 Cal.L.Rev. 1478 (1966); Maxwell, The Collateral Source Rule in the American Law of Damages, 46 Minn.L.Rev. 669 (1962); Schwartz, The Collateral-Source Rule, 41 B.U.L.Rev. 348 (1961); Tait, Connecticut's Collateral Source Rule: Stepchild of the Law of Damages, 1 Conn.L.Rev. 93 (1968); Note, 77 Harv.L.Rev. 741 (1964). The basic argument advanced for its application is that a tort-feasor should not be allowed to escape the consequences of his wrongful act merely because his victim has received a benefit from a collateral source which would constitute a windfall to the defendant wrongdoer. It is also pointed out that in many instances the plaintiff has paid for these benefits in the form of insurance premiums or concessions in the wages he received because of such fringe benefits. If such considerations are not present and the payments are gratuitous, it is maintained that the maker of these payments did not intend to relieve the tort-feasor of any liability, but rather to aid the plaintiff by doing him a favor. D. Dobbs, Remedies § 8.10, at 584-85 (1973). It is also argued that the collateral source rule is designed to offset the inability of ordinary damages to adequately compensate an injured accident victim. Schwartz, The Collateral-Source Rule, 41 B.U.L.Rev. 348, 351 (1961).

The main argument against the application of the collateral source rule is that the main purpose of damages is to compensate the injured party. Hence the defendant should not be made to pay more than the amount needed to make the plaintiff whole. To do otherwise violates the compensatory nature of damages by placing the plaintiff in a better position financially than before the accident. Note, 77 Harv.L.Rev. 741, 753 (1964); Note, 63 Harv.L.Rev. 330, 331 (1949). An examination of the cases in which the rule has been applied will reveal that for the most part they involved personal injuries. Furthermore in some of those cases the collateral payor was subrogated, up to the amount paid, to plaintiff's claim against the defendant. Thus the plaintiff did not receive more than was necessary to make him whole nor was the defendant obliged to pay more than that amount. See 44 Am.Jur.2d Insurance § 1849 (1969); 73 Am.Jur.2d Subrogation §§ 138-140 (1974). This right of subrogation arises by contract, common law or equitable principles, and by statute. RSA 281:14, McCullough v. Company, 90 N.H. 409, 10 A.2d 245 (1939); 73 Am.Jur.2d Subrogation §§ 1-8 (1974); see Wentworth Hotel, Inc. v. F. A. Gray, Inc., 110 N.H. 458, 272 A.2d 583 (1970).

The legislature has had a long-established policy of granting aid to municipalities for the construction, repair and reconstruction of roads and bridges. Such aid fosters the general welfare by assuring good roads and bridges for the general public. RSA chs. 240, 241, 242. There is no provision in those statutes providing for reimbursement by the recipients. By Laws 1969, ch. 428, the legislature appropriated $300,000 out of highway funds to repair, reconstruct or replace highways or bridges in the towns of Colebrook and Stark...

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