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Sorrell et al., Appellants, v. Thevenir, Appellee. Clark et al. v. Quality Stores, Inc.

Nos. 92-2382, 93-1041
Supreme Court of Ohio
69 Ohio St. 3d 415; 1994 Ohio 38; 633 N.E.2d 504; 1994 Ohio LEXIS 1129
 
January 11, 1994, Submitted  
June 1, 1994, Decided

PRIOR HISTORY: 
 
Appeal from the Court of Appeals for Gallia County, No. 91-CA-4.

On order from the United States District Court, Northern District of Ohio, Western Division, Certifying Questions of State Law, No. 3:91CV7704.

Case No. 92-2382

In her complaint before the court of common pleas, plaintiff-appellant Sherry A. Sorrell alleged that on September 15, 1988, she was working as a cashier at Brown's Market. Plaintiff alleged that as she bent over to sweep dirt into a dustpan, defendant-appellee, James A. Thevenir, came up behind her and grabbed her about the waist. As a result of defendant's unexpected conduct, plaintiff pulled herself up suddenly and twisted. Consequently, plaintiff alleged she has endured severe pain, requiring medical treatment and causing her to miss work.

Plaintiff and her spouse filed the instant action requesting damages for physical injuries, emotional distress, loss of income and loss of consortium, and demanded a jury trial. A jury eventually returned a verdict of compensatory damages in the amount of $ 10,128.26. In response to an interrogatory, the jury declared that $ 5,000 of this amount was for pain and suffering. The jury awarded nothing for  future damages, and nothing to plaintiff's husband.

Subsequently, in accordance with R.C. 2317.45, the trial court conducted a post verdict hearing wherein plaintiff disclosed the extent and nature of all statutorily defined collateral benefits received by her. Defendant asserted that pursuant to R.C. 2317.45(B)(2) he was entitled to a setoff of the entire jury verdict, since plaintiff had received over $ 14,000 in workers' compensation benefits.

In an opinion dated January 31, 1991, the trial court held R.C. 2317.45 to be unconstitutional under Section 16, Article I (right to a remedy), and Section 5, Article I (inviolate right to a jury trial) of the Ohio Constitution. In addition, the court held that since the fundamental constitutional right to a jury trial was involved, a strict scrutiny test applied in determining the constitutionality of R.C. 2317.45 under the Due Process Clause of the Ohio Constitution. The trial court concluded that the statute failed to meet the strict scrutiny test and further observed that "the statute was enacted to cure a supposed 'insurance crisis.' There is no demonstrated evidence from which to conclude that a 'crisis' ever existed or that [Am.Sub.H.B.   No. 1, 142 Ohio Laws Part I, 1661] cured this 'crisis.' There is no compelling reason to trample plaintiff's constitutional rights to relieve a particular industry of liability." Thus, the trial court entered judgment in favor of plaintiff for the entire amount of the jury verdict without setting off the collateral benefits (workers' compensation) she received.

Upon appeal, the court of appeals reversed and remanded in a split decision. The appellate court majority held that while the case was not exactly on point, Morris v. Savoy (1991), 61 Ohio St.3d 684, 576 N.E.2d 765, "indicates the [Supreme Court of Ohio] would find R.C. 2317.45 to be constitutional."

The cause is now before this court pursuant to the allowance of a motion to certify the record.

Case No. 93-1041

According to plaintiff-petitioner Bobbie Clark, on November 4, 1989, he was injured as the result of the negligence of defendant-respondent Quality Stores, Inc. in maintaining its property.

Plaintiff and his spouse filed a personal injury action against defendant in the United States District Court for the Northern District of Ohio, Western Division. A jury returned a general verdict in favor of plaintiff  in the amount of $ 241,168, plus $ 25,000 for the spouse's loss of consortium.

Subsequently, defendant moved for a setoff of $ 146,000 for disability income, including future disability income, from Social Security and the state of Ohio, as well as the disability retirement benefits from the Public Employees Retirement System.

Thereafter, in response to a motion by plaintiffs, the federal district court certified the following questions to this court:

"A. Whether O.R.C. § 2317.45, which allows for the reduction of an award of damages in a tort action by the amount of collateral benefits, as defined in O.R.C. § 2317.45, violates the Ohio Constitution[?]

"B. Are Social Security disability income benefits paid to Plaintiff a collateral source pursuant to O.R.C. § 2317.45(A)(1)(a) where the benefits were received following the tort, and the plaintiff asserted and the defendant disputed that the plaintiff was permanently and totally disabled as a consequence of the tort, and each party submitted evidence to support its position at trial[?]

"C. Are payments made through a disability income program by Plaintiff's employer, the State of Ohio, a collateral source pursuant to O.R.C. § 2317.45(A)(1)(a) where the benefits were received following the tort, the plaintiff asserted and the defendant disputed that the plaintiff was permanently and totally disabled as a consequence of the tort, and each party submitted evidence to support its position at trial[?]

"D. Does Plaintiff's election to receive disability retirement benefits pursuant to the provisions of the Public Employees Retirement System, O.R.C. § 145.01 et seq., cause those benefits to be deemed a collateral source pursuant to O.R.C. § 2317.45(A)(1)(a) where the benefits were received following the tort, the plaintiff asserted and the defendant disputed that the plaintiff was permanently and totally disabled as a consequence of the tort, and each party submitted evidence to support its position at trial[?]

"E. What procedure should a trial court follow to determine whether an entitlement to such collateral benefits resulted from the tort, where the jury has returned a general verdict in favor of the plaintiff[?]

"F. Which party has the burden of proof on the issues under O.R.C. § 2317.45(B)(2)(a)(i) of what collateral benefits have been received or are 'reasonably certain' to  [***6]  be received as a result of the tort within the next sixty months after entry of judgment[?]"

The cause is now before this court pursuant to Rule XVI (now XVIII) of the Supreme Court Rules of Practice.

DISPOSITION: Judgment accordingly.

JUDGES:  

A. William Sweeney, J. Douglas, Resnick, F.E. Sweeney and Pfeifer, JJ., concur. Moyer, C.J., and Wright, J. dissent.

OPINION BY: SWEENEY

OPINION:   A. WILLIAM SWEENEY, J. In the cases before us, R.C. 2317.45 is assailed as being unconstitutional on the grounds that it violates the following provisions of the Ohio Constitution: Section 16, Article I (due process, right to a remedy and open courts), Section 2, Article I (equal protection), and Section 5, Article I (right to a jury trial). For the reasons that follow, we hold R.C. 2317.45 to be unconstitutional under all of the foregoing constitutional provisions.
...

I

R.C. 2317.45, n1 part of the Tort Reform Act of 1987 ("Act"), was enacted by Am.Sub.H.B. No. 1, 142 Ohio Laws, Part I, 1661, 1694, and   became effective   January 5, 1988. The purpose of the Act, as stated in its title, is "to make changes in civil justice and insurance law, thereby reducing the causes of the current insurance crisis and preventing future crises, and ensuring the availability and affordability of insurance coverages required by charitable nonprofit organizations, public organizations, political subdivisions, individual proprietors, small businesses, and commercial enterprises."
....
One commentator noted that another purpose of the Act is to prevent double recoveries in tort actions. ... However, opponents of the Act, including the Ohio Public Interest Campaign, claimed that the insurance industry had contrived an insurance crisis in order to promote and protect "organized price   gouging" by insurance underwriters. Gongwer News Service, Inc., Ohio Report (Jan. 21, 1987) 2. See, also, Schroeter & Rutzick, "Tort Reform" -- Being an Insurance Company Means Never Having to Say You're Sorry (1986), 22 Gonzaga L.Rev. 31.

In any event, one effect of the Act is to limit the collateral source rule adopted in Pryor v. Webber (1970), 23 Ohio St.2d 104, 52 O.O.2d 395, 263 N.E.2d 235. n2 We turn now   to evaluating R.C. 2317.45 in light of the aforementioned provisions of the Ohio Constitution.
 ...


II   Jury Trial

A

,,,

R.C. 2317.45 requires trial courts to deduct from a plaintiff's jury award collateral benefits which have been or will be received by the plaintiff, irrespective of whether the collateral benefits are actually duplicated in the jury's verdict. The statute does not require that damages be allocated between economic or noneconomic damages or even past or future economic damages. The statute merely directs the trial court to deduct the amount of the collateral benefit from the total jury award. In this respect, courts may, consistent with R.C. 2317.45, enter judgments in disregard of the jury's verdict and thus violate the plaintiff's right to have all facts determined by the jury, including damages. See Miller v. Wikel Mfg. Co. (1989), 46 Ohio St.3d 76, 81, 545 N.E.2d 76, 81 (Douglas, J., concurring in part and dissenting in part). As a result of R.C. 2317.45, plaintiff Sorrell in case No. 92-2382 has not been fully compensated for her injuries because the specific jury award for her pain and suffering is totally eliminated due to her receipt of workers' compensation benefits, even though workers' compensation allows no compensation whatsoever for pain and suffering....

We hold that R.C. 2317.45 encroaches upon the fundamental and inviolate right to trial by jury, and therefore is unconstitutional under Section 5, Article I of the Ohio Constitution.

III     Due Process

....

However, with respect to the goal of R.C. 2317.45 of eliminating double recoveries, the means employed in the statute to attain the goal are both irrational and arbitrary. Of primary significance is that the statute requires deductions from jury verdicts irrespective of whether a collateral benefit defined in R.C. 2317.45(A)(1) is actually included in the verdict. ... Thus, the statute can arbitrarily reduce damages that a jury awards a plaintiff, since under the statute it is irrelevant whether any collateral benefit actually represents any portion of the jury's award. In the case of Mrs. Sorrell, R.C. 2317.45 arbitrarily and unreasonably eliminated her entire jury award, since her workers' compensation benefits exceeded the jury verdict of damages, notwithstanding that workers' compensation pays nothing for pain and suffering.

In addition, amicus curiae Ohio Academy of Trial Lawyers raises the persuasive argument that no double recovery from a tortfeasor occurs in the typical tort case involving collateral benefits, since ordinarily one of the supposed double recoveries is merely the plaintiff's benefit of his bargain with his own insurance company. In both of the causes sub judice, the benefit of the bargain is  the employer-paid workers' compensation and disability compensation programs that are earned by the plaintiff-employees as an employment benefit.

In any event, regardless of whether the jury allocates damages to categories, R.C. 2317.45 does not accord due process to tort victims under either the strict scrutiny or rational basis test, and therefore we hold that it violates the Due Process Clause found in Section 16, Article I of the Ohio Constitution.

IV Equal Protection

...

R.C. 2317.45 and 2305.27 establish two classifications of tort victims: medical malpractice tort victims and all other tort victims. 1 In Morris, supra, the majority upheld the constitutionality of R.C. 2305.27 in setting off medical malpractice collateral benefits. However, the viability of that holding is questionable at best given our resolution of the causes of sub judice.

Under R.C. 2305.27, jury awards in medical malpractice claims are subject to a collateral source rule different from the rule for awards in all other tort cases. R.C. 2305.27 does not require deduction of collateral benefits attributable to insurance proceeds where premiums were paid either by or for the plaintiff, or by the plaintiff's employer. Savage v. Correlated Health Serv., Ltd. (1992), 64 Ohio St.3d 42, 591 N.E.2d    1216, and Hodge v. Middletown Hosp. Assn. (1991), 62 Ohio St.3d 236, 581 N.E.2d 529, held that the collateral source rule of R.C. 2305.27 does not require setoffs for benefits received from workers' compensation, Social Security or Medicare. However, under R.C. 2317.45, all non-medical-malpractice tort awards would be reduced by the amount of such benefits.
....

"If there was an insurance crisis, it would be a crisis affecting all tort defendants. There is no rational reason for distinguishing between medical malpractice tort defendants and all other tort defendants. This disparate treatment can result in vastly different results involving the same injury. For example,  two tort victims suffer the identical injury, the laceration of an artery resulting in death. One tort victim is injured by a piece of broken glass while driving a company truck within the scope of employment. The other tort victim is injured by the medical negligence of a physician who lacerates an artery during an elective surgery procedure. Both tort victims remain in the hospital for ten days before their death. Due to the difference in the collateral source statutes, these two identical injuries may result in vastly different compensation  for the victim. The Equal Protection Clause mandates that those similarly situated be similarly treated."

Thus, even under the less stringent rational basis test applied by the majority in Morris, supra, we believe that 4 R.C. 2317.45 is constitutionally infirm on equal protection grounds. Accordingly, we hold that R.C. 2317.45 also violates Section 2, Article I of the Ohio Constitution.

V     Right to a Remedy/Open Courts

Section 16, Article I of the Ohio Constitution provides in full:

"All courts shall be open, and every person, for an injury done him in his land, goods, person, or reputation, shall have remedy by due course of law, and shall have justice administered without denial or delay."

...

In the Sorrells' case, the statute not only denies plaintiffs a meaningful remedy,  it completely obliterates the entire jury award. As discussed earlier, the statute treats all collateral sources the same and requires collateral benefits to be deducted from the total jury award regardless of whether the jury specifically awards damages in a category for which there were collateral benefits. Under these circumstances where the collateral source benefits reduce the entire jury award, the tortfeasor obtains a rebate for the damages he or she caused, and the victim's rights to a jury trial, a meaningful remedy and open courts become hollow rights hardly worth exercising. See Morris, supra, 61 Ohio St.3d at 710, 576 N.E.2d at 784 (A.W. Sweeney, J., concurring in part and dissenting in part).

...

 In addition, certain tort victims will realize that R.C. 2317.45 could render their trip to court futile, since receipt of collateral benefits defined in the statute makes pursuit of a claim not worth the time and expense involved. For these tort victims, like plaintiffs herein, R.C. 2317.45 undermines the right to a jury trial, a meaningful remedy and open courts.

VI Based on all the foregoing, we hold that R.C. 2317.45 violates Sections 2, 5 and 16, Article I of the Ohio Constitution, and is unconstitutional in toto.

Therefore, in case No. 92-2382, the judgment of the court of appeals is reversed and the judgment of the trial court is reinstated. In case No. 93-1041, the first certified question is answered in the affirmative, thereby rendering the remaining certified questions moot.

Judgments accordingly.

Douglas, Resnick, F.E. Sweeney and Pfeifer, JJ., concur.

Moyer, C.J., and Wright, J., dissent.