The Beauty of Double-Dipping

Attorney Morgan Smock lucked out five years ago: He not only survived a bad motorcycle accident, but also was awarded $108,000 in lost earnings even though his bosses kept him at full pay with bonuses.

The state of California didn’t like that, and appealed.

On Tuesday, Smock’s luck held up again when San Francisco’s First District Court of Appeal sided with him, holding that the state’s collateral source rule excluded his employer’s payments from the jury’s consideration.

“However criticized, maligned or debatable the application of the collateral source rule may be in this case,” Justice Peter Siggins wrote, “it is not within our province to depart from established California law, and we decline to do so.”

Justices William McGuiness and Stuart Pollak concurred.

Tuesday’s ruling in Smock v. State of California, 06 C.D.O.S. 3199, stems from a September 2001 traffic accident in which Smock was badly injured when a car changing lanes at the western approach to the San Francisco-Oakland Bay Bridge collided with his motorcycle.

Smock was thrown onto the roadway, breaking his right leg and foot. Jurors later found the state 10 percent liable and the auto driver 90 percent.

The state, however, objected to the court’s decision to award costs jointly and severally. Officials weren’t thrilled either by the court’s decision to apply the collateral source rule and keep jurors from learning that Smock’s employers, Pillsbury Winthrop — with whom he’d just made partner — didn’t dock his pay.

Pillsbury paid Smock for the 1,051 hours of work, at about $103 per hour, that he had agreed to bill for 2001 and 2002.While stating that the collateral rule has been criticized as providing a windfall or double recovery for plaintiffs, Siggins noted that it has been part of the state’s jurisprudence since at least 1854.

“In the end,” he wrote, “while barring the collateral source from consideration may confer a benefit on the victim, allowing it to be considered would benefit the wrongdoer. So, courts choose in such cases to benefit the victim.”

Smock, a 1990 graduate of Boalt Hall School of Law, is now a partner at Minneapolis’ Briol & Associates, where, among other things, he has litigated the purchase and sale of securities and class actions, and handled the business interests of national Internet real estate brokerage companies.

Smock couldn’t be reached for comment.

— Mike McKee

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2 Responses to “The Beauty of Double-Dipping”

  1. Shirley Says:

    Makes no sense to me, but then, I’m not a lawyer.

    Thanks for the post.

    Shirley

  2. Morgan Smock Says:

    Hi I am Morgan Smock. A friend pointed me to this blog entry. I just want to point out two key facts that were lost in the shuffle in the “insta-press” reporting on my case.

    1. It is not true that Pillsbury “didn’t dock his pay.” By mutual agreement, my 2002 pay was reduced by approximately $40,000 to allow me extra time for physical therapy. My leg had been broken completely in two, with multiple fractures, and required almost a year of extensive PT. This fact was not mentioned in the appellate opinion (it was not relevant to their ruling) but was fully documented at trial and set forth in my lawyers’ appellate briefing.

    2. There was no “double dipping.” The jury said I was entitled to approximately $280,000. Because CalTrans is not jointly liable for all the judgment, and because the other defendant is judgment proof, and because of attorney fees, expert fees etc., my net recovery turned out to be barely $100,000. If CalTrans had won its appeal, I would have ended up with about $20,000 on a $280,000 judgment. The trial judge recognized that part of the reason for the “collateral source rule” is to offset all the deductions that get taken from the judgment before it finally gets to the plaintiff’s pocket. I think my case is a great illustration of why that rule usually creates a just result. The notion that I somehow got more than the jury intended is just spin from CalTrans and superficial reporting by journalists.

    Believe me, if I could choose between the judgment I ended up getting, and having my leg back the way it was, I’d choose the leg in a heartbeat. I can’t run now, can’t hike long distances, and have a lifetime of arthritis to look forward to.

    Looks like you have an interesting blog, I’ll bookmark it.

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