GULFSTREAM PARK RACING ASSOCIATION, INC. d/b/a GULFSTREAM PARK RACING AND CASINO v. MARGARET VOLIN

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
GULFSTREAM PARK RACING ASSOCIATION, INC., d/b/a
GULFSTREAM PARK RACING AND CASINO, a Florida corporation,
Appellant,
v.
MARGARET VOLIN,
Appellee.
No. 4D19-3471
[May 19, 2021]
Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Michael A. Robinson, Judge; L.T. Case No. CACE-17-
008209(13).
Hinda Klein of Conroy Simberg, Hollywood, for appellant.
Dan Cytryn, Edgar Velazquez, and Daniel Schwarz of the Law Offices
of Cytryn & Velazquez, P.A., Coral Springs, for appellee.
KUNTZ, J.,
Gulfstream Park Racing Association appeals the circuit court’s Final
Judgment for Margaret Volin in this trip and fall case. We address one of
Gulfstream’s arguments on appeal. Gulfstream argues the circuit court
erred when it allowed Volin to introduce evidence of the amount billed by
medical providers instead of the discounted amount Medicare paid in full
satisfaction of her medical expenses. Years ago, we held that “[w]hen a
provider charges for medical service or products and later accepts a lesser
sum in full satisfaction by Medicare, the original charge becomes irrelevant
because it does not tend to prove that the claimant has suffered any loss
by reason of the charge.” Thyssenkrupp Elevator Corp. v. Lasky, 868 So.
2d 547, 551 (Fla. 4th DCA 2003) (on rehearing). We have consistently
applied that holding and do so again today. Thus, we reverse the judgment
and remand for a new trial on damages. We also certify a question of great
public importance to the Florida Supreme Court.
Background
Volin sued Gulfstream for negligence after she fell on Gulfstream’s
property and broke her hip. Volin was 72 years old at the time of her fall
and claimed that before her injury she planned to continue working as a
part-time cashier at Winn-Dixie until she reached 80 years old.
Gulfstream moved to preclude Volin from introducing the gross amount
of her medical bills into evidence because Medicare satisfied her medical
expenses for a lesser amount. Volin responded that under the Florida
Supreme Court’s decision in Joerg v. State Farm Mutual Automobile
Insurance Co., 176 So. 3d 1247 (Fla. 2015), she could introduce the gross
amount of her medical bills. The circuit court denied Gulfstream’s motion,
finding that it would handle any collateral source setoffs post-verdict.
At trial, Volin sought to recover the gross amount of her past medical
bills, totaling $101,402.55. She also sought to recover $35,835.22 in lost
past wages and $25,272.08 for the loss of future earning capacity. Finally,
Volin requested $750,000 for past noneconomic damages and $650,000
in future noneconomic damages.
The jury returned a verdict finding both Gulfstream and Volin 50% at
fault. On the verdict form, the jury awarded Volin $787,508.55, including
$101,402.55 for past medical expenses; $25,271 in past lost wages;
$35,835 for loss of future earning capacity; $325,000 in past noneconomic
damages; and $300,000 in future noneconomic damages.
The court setoff certain amounts from the verdict and entered judgment
for Volin in the amount of $360,225.34.
Analysis
Gulfstream argues the court erred when it denied Gulfstream’s motion
to preclude Volin from introducing the gross amount of her medical bills
to the jury. It contends that Medicare’s satisfaction of the debt for a lesser
amount renders the amount billed inadmissible. We agree that the
amounts a provider billed that Volin will never pay—so called phantom
damages—are inadmissible.
This issue is often a source of confusion. But Justice Bell explained,
joined by Justices Wells and Cantero, that there need not be any
confusion. See Goble v. Frohman, 901 So. 2d 830, 834 (Fla. 2005) (Bell,
J., concurring). He wrote that “[i]t has long been established as a
fundamental principle of Florida law that the measure of compensatory
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damages in a tort case is limited to the actual damages sustained by the
aggrieved party.” Id. (citing Hanna v. Martin, 49 So. 2d 585, 587 (Fla.
1950)). Thus, the amount a doctor bills is not an actual damage if the debt
is settled for a lesser amount by a source such as Medicare. Id. at 833–
34.
At common law, the collateral source rule served as an evidence rule
and a damages rule. As a rule of evidence, the collateral source rule
prohibited the introduction of evidence showing the payment of expenses
by an independent source upon proper objection. Nationwide Mut. Fire
Ins. Co. v. Harrell, 53 So. 3d 1084, 1086 (Fla. 1st DCA 2010) (citation
omitted). As a damages rule, “[t]he collateral source rule permits an
injured party to recover full compensatory damages from a tortfeasor
irrespective of the payment of any element of those damages by” an
independent source. Id. (citation omitted).
However, applying the collateral source rule as a rule of damages
created potential for double recovery, or for a “plaintiff to collect payment
from more than one source.” Pamela Burch Fort et al., Florida’s Tort
Reform: Response to a Persistent Problem, 14 Fla. St. U. L. Rev. 505, 516
(1986). In response, the legislature enacted the Tort Reform and Insurance
Act of 1986. See Ch. 86-160, Laws of Fla. The Act—codified at section
768.76, Florida Statutes—requires a court to setoff certain payments from
collateral sources in personal injury cases. § 768.76(1), Fla. Stat. (2017);
Burch et al., at 550.
Section 768.76(1) “evinces the legislature’s intent to prevent plaintiffs
from receiving a windfall by being compensated twice for the same medical
bills by both their insurance company and by the tortfeasor.” Coop.
Leasing, Inc. v. Johnson, 872 So. 2d 956, 959 (Fla. 2d DCA 2004).
While payments from an insurance company are setoff from a verdict,
Medicare benefits are not setoff and are not considered a collateral source.
See Matrisciani v. Garrison Prop. and Cas. Ins. Co., 298 So. 3d 53, 58 (Fla.
4th DCA 2020). The statute does not authorize a court to setoff payments
from Medicare. § 768.76(2)(b), Fla. Stat. (2017) (“Notwithstanding any
other provision of this section, benefits received under Medicare . . . shall
not be considered a collateral source.”); see also Coop. Leasing, 872 So. 2d
at 960 (stating that “‘benefits received’ under Medicare are not a collateral
source under section 768.76(2)(b) and therefore cannot be set off from her
recovery under section 768.76(1)”).
It seems section 768.76(2)(b)’s classification of Medicare benefits is
what causes the confusion referenced above. But we addressed this issue
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in Thyssenkrupp Elevator Corp. v. Lasky, 868 So. 2d 547 (Fla. 4th DCA
2003). In Thyssenkrupp, we held that it is error to admit the gross amount
of a plaintiff’s medical bills if Medicare paid their medical providers a lesser
amount in full satisfaction of the plaintiff’s medical expenses. Id. at 549–
50; see also Boyd v. Nationwide Mut. Fire Ins. Co., 890 So. 2d 1240, 1241
(Fla. 4th DCA 2005) (explaining the holding in Thyssenkrupp and stating
that “evidence of the contractual discount by Medicare providers should
be excluded from trial”).
The Second District reached the same conclusion in Cooperative
Leasing, 872 So. 2d at 958-60. The issue in Cooperative Leasing was “the
appropriate measure of compensatory damages for past medical
expenses.” Id. at 957–58. The court held “that the appropriate measure
of compensatory damages for past medical expenses when a plaintiff has
received Medicare benefits does not include the difference between the
amount that the Medicare providers agreed to accept and the total amount
of the plaintiff's medical bills.” Id. at 960. As in Thyssenkrupp, the court
held that “[t]he trial court should have granted the appellants’ motion in
limine and prohibited Johnson from introducing the full amount of her
medical bills into evidence.” Id.Volin acknowledges these cases but insists they were implicitly
overruled by Joerg v. State Farm Mutual Automobile Insurance Co., 176 So.
3d 1247 (Fla. 2015). But the holding in Joerg did not address the issue in
this case or in the cases discussed above. In Joerg, the issue was
“[w]hether the exception to the collateral source rule created in [Fla.
Physician’s Ins. Reciprocal v. Stanley, 452 So.2d 514 (Fla. 1984)] applies
to future benefits provided by social legislation such as Medicare . . . .” Id.
at 1253. The Florida Supreme Court “conclude[d] that the trial court
properly excluded evidence of Luke Joerg’s eligibility for future benefits
from Medicare, Medicaid, and other social legislation as collateral
sources.” Id. at 1257. In comparison, this case addresses past medical
bills.
The Second District addressed a challenge to Cooperative Leasing, and
by extension Thyssenkrupp, in Dial v. Calusa Palms Master Ass’n, Inc., 308
So. 3d 690 (Fla. 2d DCA 2020). The court rejected the argument that Joerg
overruled Cooperative Leasing for various reasons. First, Joerg focused on
future benefits. Id. at 691-92. Second, Joerg favorably cited Cooperative
Leasing. Id. at 692 (“If our evidentiary holding in Cooperative Leasing was
so antithetical to Joerg’s holding that the latter implicitly reversed the
former, we doubt the Florida Supreme Court would have favorably cited
our opinion without some kind of caveat or explanation.”). Finally, Joerg
did not address Cooperative Leasing's conclusion that “plaintiffs ought not
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to receive a windfall to recover the purported value of past medical
‘expenses’ that were never paid.” Id.We agree with the Dial court. Joerg did not implicitly overrule cases
barring evidence of the amount a medical provider billed when Medicare
settled the debt for less. Those cases are binding on this panel. See
Matrisciani v. Garrison Prop. & Cas. Ins. Co., 298 So. 3d 53 (Fla. 4th DCA
2020); Boyd v. Nationwide Mut. Fire Ins. Co., 890 So. 2d 1240 (Fla. 4th
DCA 2005); Thyssenkrupp Elevator Corp. v. Lasky, 868 So. 2d 547 (Fla.
4th DCA 2003).
Those cases are also clear: The gross amount the provider billed is
inadmissible as evidence when Medicare satisfies the plaintiff’s medical
expenses for a lesser amount. Section 768.76, Florida Statutes (2017), is
clear too. A trial court cannot setoff the difference between the amount
billed and the amount Medicare paid. As such, we reverse the circuit
court’s judgment and remand for a new trial on damages.
Because this issue arises frequently, the Dial court also certified a
question of great public importance to the Florida Supreme Court:
DOES THE HOLDING IN JOERG V. STATE FARM MUTUAL
AUTOMOBILE INSURANCE CO., 176 SO. 3D 1247 (FLA. 2015),
PROHIBITING THE INTRODUCTION OF EVIDENCE OF
MEDICARE BENEFITS IN A PERSONAL INJURY CASE FOR
PURPOSES OF A JURY’S CONSIDERATION OF FUTURE
MEDICAL EXPENSES ALSO APPLY TO PAST MEDICAL
EXPENSES?
Id. at 692. We join the Dial court and certify the same question to the
Florida Supreme Court.
Conclusion
We reverse the circuit court’s judgment and remand for a new trial on
damages. We also certify the following question of great public importance
to the Florida Supreme Court:
DOES THE HOLDING IN JOERG V. STATE FARM MUTUAL
AUTOMOBILE INSURANCE CO., 176 SO. 3D 1247 (FLA. 2015),
PROHIBITING THE INTRODUCTION OF EVIDENCE OF
MEDICARE BENEFITS IN A PERSONAL INJURY CASE FOR
PURPOSES OF A JURY’S CONSIDERATION OF FUTURE
MEDICAL EXPENSES ALSO APPLY TO PAST MEDICAL
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EXPENSES?
Reversed and remanded; question of great public importance certified.
LEVINE, C.J., and ARTAU, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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