Polito v. Holland, 45117

• Decision Date: 09 March 1988
• Docket Number: No. 45117,45117
• Citation: 365 S.E.2d 273,258 Ga. 54
• Parties: POLITO v. HOLLAND, et al.
• Court: Georgia Supreme Court

Page 273

365 S.E.2d 273

258 Ga. 54

POLITO v. HOLLAND, et al.

No. 45117.

Supreme Court of Georgia.

March 9, 1988.

David Garth King, Bernard L. Hoppenfeld, King & King, P.C., Atlanta, for Barbara Polito.

Gary M. Cooper, Victor Alexander, Jr., Atlanta, E. Freeman Leverett, Heard, Leverett, Adams & Phelps, P.C., Elberton, for Janet Dianne Holland, et al.

Gene Mac Winburn, Morton G. Forbes, Wiley A. Wasden III, Richard A. Marchetti, Irwin W. Stalz, Jr., Seaton D. Purdom, J. Kenneth Moorman, amici curiae.

GREGORY, Justice.

Polito was a passenger in an automobile driven by Holland when a collision occurred with another automobile operated by Harp. Polito sued Holland and Harp for damages arising out of her alleged injuries. The Tort Reform Act of 1987 (1987 Ga.Laws 915; OCGA § 51- 12-1 et seq.) became effective after suit was filed but before trial. Holland moved pursuant to OCGA § 51-12-1(b) to amend the pre-trial order to allow evidence of collateral benefits received by Polito relative to the alleged damages. Polito filed a motion in limine seeking to block admission of collateral benefits. The trial court ruled the evidence admissible and therefore granted Holland's motion and denied Polito's motion. The case is here on interlocutory appeal. We reverse.

The issue for decision is whether OCGA § 51-12-1(b) is to be given retroactive effect to events predating its enactment in a trial following its enactment.

1. The parties make powerful arguments regarding the legislative intent. Holland and Harp point to several indicators of an intent to give the law retroactive effect. Polito does the opposite. Intent is not expressed one way or the other in the statute in question. We must decide this case on the basis of established rules of construction where there is no expressed intent.

2. Generally statutes prescribe for the future and that is the construction to be given unless there is a clear contrary intention shown. Talmadge v. Cordell, 170 Ga. 13, 20, 152 S.E. 91 (1930); OCGA § 1-3-5. On the other hand, where a statute governs only procedure of the courts, including the rules of evidence, it is to be given retroactive effect absent an expressed contrary intention. Pritchard v. The Savannah Street & R. Co., 87 Ga. 294, 13 S.E. 493 (1891). Slaughter v. Culpepper, 35 Ga. 25 (1866). These rules guide us to the result required in this case once it is determined whether OCGA § 51-12-1(b) is procedural (evidentiary) or substantive. In order to do that we must consider the collateral source rule as it existed prior to the enactment of OCGA § 51-12-1(b).

3. Substantive law is that law which creates rights, duties, and obligations. Procedural law is that law which prescribes the methods of enforcement of rights, duties, and obligations. Kilbreath v. Rudy, 16 Ohio St.2d 70, 242 N.E.2d 658(3, 4) (1968); Manuel v. Carolina Casualty Insurance Co., 136 So.2d 275 (La.App.1962). The collateral source rule is primarily substantive in nature. It gives a party the right to recover damages undiminished by collateral benefits. It refuses credit to the benefit of a tortfeasor of money or services received by the plaintiff in reparation of the injury or damage caused which emanate from sources other than the tortfeasor. R. Maxwell, The Collateral Source Rule in the American Law of Damages, 46 Minn.L.Rev. 669, 670 (1962). "The collateral source rule, stated simply, is that the receipt of benefits or mitigation of loss from sources other than the defendant will not operate to diminish the plaintiff's recovery of damages." R. Sedler, The Collateral Source Rule and Personal Injury Damages: The Irrelevant Principle and the Functional Approach, 58 Ky.L.Rev. 36, 38 (1969). Apparently the rule came into Georgia law through the opinion of Judge Samuel Lumpkin ¹ in The Western and Atlantic Railroad v. Meigs, 74 Ga. 857 (1885). He wrote that damages due a widow on account of the wrongful death of her husband caused by the negligence of the defendant railroad should not be reduced by the amount of life insurance proceeds she received. The rule has been applied in many decisions under varying circumstances. (See the collection of cases by Judge Eberhardt in Cincinnati, New Orleans & Texas Pacific Railway Company v. Hilley, 121 Ga.App. 196, 201, 173 S.E.2d 242 (1970)).

For a resolution of the case at hand it is important to understand there are two consequences of the collateral source rule. One is substantive and is that damages are not reduced by the amount of collateral benefits plaintiff receives. The other consequence of the rule is evidentiary in effect. Because of the substantive consequence of the rule, evidence of collateral benefits is not generally material.

The first consequence of the rule is simply a direct application of the substantive principle. Collateral benefits do not reduce damages. A good example of a straightforward application of this consequence of the rule is Western & Atlantic R. Co. v. Sellers, 15 Ga.App. 369, 83 S.E. 445 (1914). There evidence was admitted that the employer gave plaintiff his wages during the time he was unable to work because of his injuries. The trial judge correctly charged the jury that plaintiff was entitled to recover lost wages from defendant notwithstanding the gratuitous payment by his employer.

The second consequence is a result of the interaction between the collateral source rule and a rule of evidence. If collateral benefits may not be set off against damages, evidence of collateral benefits is immaterial in a damage case. Certainly that is true if the only proposition for which it is offered is in reduction of damages, because it is then offered to help prove a proposition which is not a matter in issue. (Materiality is used here as one component of the rule of relevancy. Cleary, Ed., McCormick On Evidence, § 185 (1984)). The substantive collateral source rule removes the proposition as an issue in the case and the evidence rule of materiality precludes proof of collateral benefits. Barrett v. Western and Atlantic Railroad Company 144 Ga. 47, 85 S.E. 1016 (1915); Partridge, et al. v. Lee, 116 Ga.App. 800, 159 S.E.2d 113 (1967). To the extent the rationale of Bryan v. Bryan, 242 Ga. 826, 251 S.E.2d 566 (1979) differs with that expressed here, it will not be followed.

Of course there may be another issue in a case to which evidence of collateral benefits is material. When such evidence is admitted on another issue it is proper to charge the jury that collateral benefits shall not reduce damages the tortfeasor is otherwise liable to pay. Western & Atlantic Railroad Co. v....