Picture the following. In response to a standard interrogatory that asks a plaintiff to list their alleged sources of damages, the plaintiff alleges their income was reduced to only 60% of their regular earnings while recovering from injury.
At first glance, it might seem like you can calculate the extent of the plaintiff’s alleged damages with no additional information—40% of their regular earnings. But to truly make this calculation, you need to know a little more.
Many states, including Nebraska, have adopted a version of the “collateral source rule.” Under Nebraska’s variant:
“[T]he fact that the party seeking recovery has been wholly or partially indemnified for loss by insurance cannot be set up by the wrongdoer in mitigation of damages, where the wrongdoer did not contribute to the procurement of the insurance.”
Huenink v. Collins, 181 Neb. 195, 196, 147 N.W.2d 508, 509 (1966). “The theory underlying this rule is to prevent a tort-feasor from escaping liability because of the act of a third party, even if a possibility exists that the plaintiff may be compensated twice.” Jacobs Eng’g Grp. Inc. v. ConAgra Foods, Inc., 301 Neb. 38, 63, 917 N.W.2d 435, 457 (2018).
So the question becomes—from what source was the plaintiff paid these reduced wages? Was it because they were only able to work a reduced schedule while recovering from the procedure your doctor performed? Did they take on a new job with less-strenuous physical requirements but at a lower wage? Or was it because they or their employer paid for a short- or long-term disability policy they are receiving benefits from while they recover?
Under the first two scenarios discussed above, the collateral source rule plays no role. But under the last scenario, the collateral source rule may apply, and its application could increase the maximum extent of damages the plaintiff can seek. Therefore, local practitioners should familiarize themselves with the rule and its exceptions, and conduct discovery to probe these sources of claimed damages.