Set-Offs: Shawn T. Strasburg v. Union Pacific Railroad Company, 286 Neb. 743 (2013)
Issue: Whether railroad employer was entitled to a set-off of the entire amount of the medical expenses claimed by FELA plaintiff as opposed to just a set-off for the amount actually paid to settle the bills.
Facts: While attending a safety course hosted by his employer, Union Pacific, the chair upon which plaintiff was seated collapsed causing injury to his back which necessitated disk replacement surgery. Plaintiff initially filed a FELA claim against Union Pacific and a products liability claim against the manufacturer of the chair. In addition, plaintiff’s wife filed suit against the chair manufacturer for loss of consortium.
Plaintiff and his wife settled their case against the manufacturer for $725,000. Per the terms of the agreement, the settlement was allocated at $425,000 for plaintiff and $300,000 for plaintiff’s wife. A jury trial was held on the FELA claim and the jury returned a general verdict for plaintiff in the amount of $1,032,375.43.
Union Pacific filed a post-trial motion to enforce a lien on the manufacturer’s settlement in the amount that Union Pacific had paid in medical benefits. In addition to the amount of medical expenses paid ($139,845.03), Union Pacific also sought a lien for the amount of the write-off it had negotiated with Plaintiff’s medical providers ($121,468.40). Further, Union Pacific sought a setoff for the amount of the settlement plaintiff received from the manufacturer, and alleged that the allocation of the settlement between plaintiff and his wife should be modified to more accurately reflect the relative injury sustained by each. (As there is no loss of consortium under FELA, any settlement reached on a loss of consortium claim is no subject to a set-off against the FELA Defendant).
The district court granted the motion to enforce the medial lien for the amount paid by Union Pacific, but not the write-off amount. The district court refused to modify the allocation of the settlement, but allowed Union Pacific a set-off in the amount of plaintiff’s settlement with the manufacturer ($425,000).
Union Pacific appealed claiming the district court erred in not allowing a set-off for the portion of plaintiff’s medical bills written off as a result of negotiations between the medical providers and Union Pacific, and further erred in refusing to modify the allocation of the manufacturer settlement.
Holding: As Union Pacific did not pay or contribute to the write-off amount, it is not entitled to set off such amount under the plain language of FELA (45 U.S.C §55). Further, although the Court held that a district court should not simply rubberstamp a previous settlement in this type of case, it found that the district court did not abuse its discretion in approving the allocation of the manufacturer’s settlement.
For a complete copy of the Court’s opinion, click here