Cates v. Wilson

361 S.E.2d 734, 321 N.C. 1, 1987 N.C. LEXIS 2508
Supreme Court of North Carolina·Decided November 5, 1987·No. 24PA87·Published·Cited by 61 cases

Opinions

EXUM, Chief Justice.

This is a medical malpractice action. The questions presented are whether evidence was admitted at trial in violation of (1) the collateral source rule and (2) the physician-patient privilege. The Court of Appeals concluded evidence was improperly admitted on both counts and ordered a new trial. We disagree with the Court of Appeals’ conclusion that the physician-patient privilege was violated; but we agree that evidence was admitted in violation of the collateral source rule. Thus, we modify and affirm the Court of Appeals’ decision.

Plaintiff Joyce Cates was a regular patient of defendant Dr. Stanley Wilson. She testified that in January of 1978 she sought his help in reducing her weight. At the time, Ms. Cates weighed 241 pounds and stood 5'8" tall. Ms. Cates also testified she saw Dr. Wilson on several subsequent occasions in 1978. In June and July Dr. Wilson treated Ms. Cates for yeast infections. In August Dr. Wilson referred her to a neurologist and neurosurgeon to correct numbness in her hands caused by carpal tunnel syndrome. Also in August Ms. Cates complained of jumping sensations in her abdomen. In November, Dr. Wilson treated Ms. Cates for urinary problems.

Ms. Cates testified that on 25 February 1979 she experienced periodic intervals of sharp back pain. Her mother, Julia Cates, made an appointment for her to see Dr. Wilson on 27 February 1979. Ms. Cates declared that on the morning of 27 February she experienced a green discharge pouring from her vagina. She proceeded to see Dr. Wilson who, for the first time, administered a pregnancy test. Ms. Cates tested positive. Dr. Wilson then [4] ordered a sonogram which revealed that the baby was ready to be born. Dr. Wilson referred Ms. Cates to Dr. Charles Lomax, an obstetrician. Dr. Lomax and his partner, Dr. Robert Wein, admitted Ms. Cates to the hospital. She gave birth, by cesarean section, to plaintiff Morgan Cates in the early evening of 27 February 1979. Morgan Cates was born mentally retarded and with cerebral palsy.

At trial the court granted defendants’ motion for a directed verdict against Joyce Cates at the close of all the evidence. The jury found that Morgan Cates suffered no injury as a result of any negligence on the part of Dr. Wilson. Judgments for defendants were entered on this verdict against each plaintiff.

I.

The first question presented is whether introduction by defendants of evidence that gratuitous public benefits served, and will serve, to mitigate plaintiffs’ damages violates the collateral source rule. We hold it does, whether the evidence is brought out in defendants’ case in chief or on cross-examination of plaintiffs’ witnesses.

At the outset of the instant case plaintiffs brought a motion in limine to prohibit reference to the fact that Medicaid paid a portion of plaintiffs’ medical expenses. The court denied the motion and at trial allowed defendants to show first, that Medicaid had paid all of Morgan’s medical bills at the time of trial, and second, that Medicaid would continue to pay for many of them in the future. Defendants also elicited evidence regarding other welfare programs which helped defray some of the expenses caused by Morgan’s medical condition. On cross-examination of Julia Cates, Morgan’s grandmother, defendants demonstrated, over objection, that Morgan’s father pays $30.00 a week in child support, and that Joyce Cates receives monthly welfare checks under the “Aid For Dependent Children” program (AFDC). Cross-examination also revealed, this time without objection, that Julia allows Joyce and Morgan to live with her free of charge, helps them meet expenses, and provides an automobile for transporting Morgan to school.

Plaintiffs called Dr. Paul Deutsch, an expert in evaluating the needs of handicapped persons, who testified concerning the costs [5] of Morgan’s current and future needs. On direct examination Dr. Deutsch testified that a local public school, Gateway Education Center, provided excellent training for mentally and physically handicapped persons until age 22. He described its funding through Public Law 94-142, declaring that although this has been a reliable public resource, no one can guarantee its continued availability.

On cross-examination defendants questioned Dr. Deutsch concerning the availability of Intermediate Care Facilities (ICFs) to meet Morgan’s future residential needs. Dr. Deutsch testified that these facilities, administered by the state and funded by Medicaid, functioned as residences for mentally retarded indigents. He declared that while ICFs might meet Morgan’s basic needs, Morgan’s overall best interest would be better served by home care rather than institutional care. He went on to note that while both public programs provide for the care of the mentally handicapped, eligibility for ICFs hinges on indigency. Special education funded under Public Law 94-142 is available to all, regardless of financial status.

Dale Metz, the director and principal of Gateway Education Center, testified for defendants concerning the treatment offered Morgan at Gateway. Metz also testified concerning the availability of ICFs in the Greensboro area. He described a proposed residential facility sponsored by the Greensboro Cerebral Palsy Association for which Morgan might qualify. Metz characterized the proposed facility as “very much in the tentative stages.”

The Court of Appeals held that admission of the above described evidence violated the collateral source rule. It went on to find the error prejudicial. We affirm these aspects of the decision below.

In Young v. R.R., 266 N.C. 458, 466, 146 S.E. 2d 441, 446 (1966), this Court explained the collateral source rule. According to this rule a plaintiffs recovery may not be reduced because a source collateral to the defendant, such as “a beneficial society,” the plaintiffs family or employer, or an insurance company, paid the plaintiffs expenses. Id. Rather, an injured plaintiff is entitled to recovery “ ‘. . . for reasonable medical, hospital, or nursing services rendered him, whether these are rendered him gratuitously or paid for by his employer.’ ” Id. (quoting Roth v. Chatlos, 97 Conn. 282, 288, 116 A. 332, 334 (1922)).

[6] The instant case presents the issue of whether the collateral source rule embraces gratuitous government benefits. We hold it does, believing that this follows logically from our holding in Young. To facilitate application of this rule to the present case, we analyze separately the collateral source rule with respect to past Medicaid payments, future public benefits, and gratuitous care provided in the home.

With regard to Medicaid payments already received we find our Young decision persuasive. In Young we held that receipt of insurance proceeds should not reduce a plaintiffs recovery. 266 N.C. at 466, 146 S.E. 2d at 446. Medicaid is a form of insurance paid for by taxes collected from society in general. “The Medicaid program is social legislation; it is the equivalent of health insurance for the needy; and, just as any other insurance form, it is an acceptable collateral source.” Bennett v. Haley, 132 Ga. App. 512, 524, 208 S.E. 2d 302, 311 (1974).

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Cates v. Wilson, 361 S.E.2d 734, 321 N.C. 1, 1987 N.C. LEXIS 2508 (N.C. 1987).

361 S.E.2d 734 (Cates v. Wilson) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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