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Howard v. Wal-Mart Stores East, LP

United States District Court, Sixth Circuit

October 15, 2013

GRANT C. HOWARD, J. ET AL. Plaintiffs, and LIBERTY MUTUAL INSURANCE COMPANY, Intervening Plaintiff,


THOMAS B. RUSSELL, Senior District Judge.

This matter comes before the Court on Defendant Wal-Mart Stores East, LP's Motion in Limine to Admit Evidence of Collateral Source Payments to Plaintiff Grant C. Howard, Jr. (Docket No. 38.) Plaintiffs Grant Howard ("Howard") and Amanda Howard have responded (Docket No. 50), and Defendant has replied (Docket No. 61). Defendant has further submitted a Supplemental Memo in Support of Admissibility of Collateral Source Payments. (Docket No. 70.) Accordingly, this matter is ripe for review.


Howard, a UPS tractor-trailer delivery driver, claims to have been injured on January 13, 2012, when a garage-type door in Wal-Mart's receiving area struck him on the head. (Docket No. 1 at 2.) Plaintiffs allege that Defendant's negligence caused Howard's injury and caused him to incur significant expenses and ongoing lost wages. (Id.) Defendant denies such allegations (Docket No. 5) and argues that expert testimony will prove that Howard malingered his injuries.

Prior to the instant motion, Plaintiffs filed a motion in limine to exclude the testimony of Defendant's expert Dr. James G. Walker, arguing that operation of the collateral source rule would improperly limit Plaintiffs' ability to cross-examine Walker for bias. (Docket No. 34.) Defendant subsequently filed its own motion in limine to admit all evidence of Howard's collateral source payments. (Docket No. 38.)


"The collateral source rule provides that benefits received by an injured party for his injuries from a source wholly independent of, and collateral to, the tortfeasor will not be deducted from or diminish the damages otherwise recoverable from the tortfeasor." Schwartz v. Hasty, 175 S.W.3d 621, 626 (Ky. App. 2005). The rule ensures that a tortfeasor will not enjoy the benefit of insurance obtained by the injured party for his own protection, as such insurance does not diminish the tortfeasor's liability. Id. (citing Taylor v. Jennison, 335 S.W.2d 902, 903 (Ky. 1960)).

However, the rule is not without exceptions. Collateral source evidence may be admitted for proper purposes, such as proof of malingering. "Where the possibility of malingering exists by the claimant, particularly where a plaintiff may be exaggerating his injury for recovery, evidence relating to a claimant's receipt of compensation may be admissible." Peters v. Wooten, 297 S.W.3d 55, 62 (Ky. App. 2009) (citing Burke Enterprises v. Mitchell, 700 S.W.2d 789, 796 (Ky. 1985)).

By extension, evidence of collateral source payments will be admitted to prove "an embellishment... of not being able to afford medical treatment. When the plaintiff has put into hardship and financial distress or implies financial distress caused by defendant's action, the defendant may rebut this by showing that other financial means were available to plaintiff." Peters v. Wooten, 297 S.W.3d 55, 62 (Ky. App. 2009).


Defendants argue that given the breadth of evidence suggesting that Howard was malingering, evidence of collateral source payments in the form of workers' compensation benefits to Howard are admissible. Plaintiffs contend that no exception to the collateral source rule applies and further argue that the risk of prejudice associated with such evidence substantially outweighs its probative value, pursuant to Fed.R.Evid. 403.

Having reviewed the parties' briefs and the relevant caselaw, the Court determines that collateral source evidence of Howard's workers' compensation payments is admissible for the limited purposes of determining whether Plaintiff was malingering and whether he was financially capable of supporting his family. The Court concludes that the probative evidence of Plaintiff's collateral source income outweighs the possibility of unfair prejudice.

Plaintiffs rely upon Transit Authority of River City [TARC] v. Vinson, 703 S.W.2d 482 (Ky. App. 1985), to support their contention that the collateral source rule prohibits admission of workers' compensation payments. Transit Authority upheld the trial court's exclusion of evidence of Social Security, disability, and insurance benefits paid to Vinson, who was injured in a bus accident. The Transit Authority wished to use such collateral source evidence to establish that Vinson was a malingerer. The court excluded such evidence, determining that this evidence was more likely to cause the jury to reduce Vinson's award than to change its mind regarding the extent of his injuries. Id. at 485.

However, a more fitting analysis lies in Davidson v. Vogler, 507 S.W.2d 160, 164 (Ky. 1974), wherein the payments in question were neither public benefits nor an independent insurance policy, but, like the case at bar, compensation from the employer. ...

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