PHYSICIAN
CANNOT INTRODUCE EVIDENCE THAT
DISABILITY BENEFITS ARE TAX-FREE IN MALPRACTICE ACTION
Cox v. Superior Court
In Cox v.
Superior Court (2002) 02 CDOS 4424, an injured plaintiff in a medical
malpractice action was receiving $180,000 a year in tax-free disability
insurance benefits because he had paid the insurance premiums with
after-tax dollars. The plaintiff sought a motion in limine to prevent the
physician defendant from introducing evidence at trial that the benefits
being received were also tax-free.
The Court of
Appeal held that although Civil Code section 3333.1 created an exception
to the collateral source rule and allowed the medical malpractice
defendant to introduce the fact that plaintiff was receiving $180,000 a
year in disability benefits into evidence, the statute did not allow
defendant to also introduce the fact that the benefits were tax-free into
evidence. The Court held that evidence that insurance benefits received
were tax-free would invite jurors to speculate as to the tax consequences
of an award.
However, the
Court did note that it was up to the trial court to determine if it should
give an instruction that the jury is not to consider the tax consequences
of any insurance benefits received by a plaintiff in a medical malpractice
case.
Thus,
physicians who are defendants in medical malpractice cases should consider
seeking a motion in limine for an instruction that the jury is not to
consider the tax consequences of any insurance benefits received by the
plaintiff if there is a concern that the jury might automatically discount
evidence of insurance benefits for tax reasons.
