The Akron Legal News

Bill would protect colleges from double recoveries in civil lawsuits

TIFFANY L. PARKS
Special to the Legal News
Published: October 9, 2015

Sen. John Eklund has continued to stump for a bill that addresses set-off of collateral recoveries against damages in certain civil actions against state universities or colleges.

Senate Bill 56, previously filed as Senate Bill 326 in the last General Assembly, was crafted to protect state universities and colleges from double recoveries in lawsuits.

The proposal provides that, in actions against a state university or college to recover damages for injury, death or loss to persons or property, recoveries against the educational institution must be reduced by the aggregate of insurance proceeds, disability award, settlements or any other collateral recovery the plaintiff receives or is entitled to receive.

Eklund, R-Chardon, said the measure was crafted to remove the potential for windfall recoveries paid for at taxpayer expense.

“SB 56 would retain the existing rights of plaintiffs to sue these institutions but confirm that in these cases the only appropriate measure of damages is to make the plaintiff whole,” he said.

As in the last legislature, officials from the University of Cincinnati and The Ohio State University have rallied around the bill.

“All of our state universities present potential risks not unlike that of a small city, with not only classrooms and other academic spaces, but research facilities, housing complexes, patient care, transportation, police and athletics,” said Anita Ingram, UC assistant vice president and chief risk officer.

“While each of Ohio’s universities attempts to judiciously undertake and mitigate the risk of these activities, it is an ongoing challenge to balance the inherent risks with the university’s mission of teaching, research and community service.”

Since the original establishment of the Ohio Court of Claims, Ingram said the General Assembly has seen fit to circumscribe the state’s liability to continue to protect public assets, but also to allow for fair compensation in the event of a failure by the state entity or public employees in the course of their duties.

Despite the protection of immunity afforded state institutions under common law and as a matter of statute, she said the general landscape of institutional liability changed in the 1970s and 1980s and it became increasingly difficult to insure public entities in the commercial insurance market.

Ingram said there was a point in the mid-1980s when commercial general liability insurance was unavailable to colleges and universities.

“Insurers were simply unwilling to insure the things that universities do,” she said. “Insurance underwriters were uncomfortable with the potential of such diverse and wide-ranging activities.”

It is within that environment that the General Assembly originally passed legislation that provides no limitation on the compensation that represent the actual loss of the person who is awarded damages.

Ingram said the intent and effect of the statute seemed clear in aiming to avoid double recoveries.

However, in the case of Adae v. University of Cincinnati, the 10th District Court of Appeals interpreted the statute differently.

In that case, which involved a UC faculty physician, the plaintiff had received a $2 million settlement from the hospital where some of the care had occurred.

The court determined that the plaintiff’s total damages were $3.2 million, but refused to consider in its award the $2 million the plaintiff had already received in settlement, relying on an Ohio Supreme Court interpretation of the term “benefits” to limit the offset to amounts received from insurance or public programs.

The court of appeals required the university to play the full amount of total damages, resulting in a recovery of more than $5 million.

“Certainly, the Adae case involved substantial injuries and substantial damages, and in that sense it is unusual. However, it is not unusual for a plaintiff making a claim against a state college or university to also have a claim against a private party,” Ingram said.

“With SB 56, we are attempting to restore (current law) to its original meaning.”

Ingram said the ordinary definition of “benefit” includes concepts such as “advantage,” profit” and “gain,” not simply the accepted and practiced term for insurance proceeds.

Under current law, Eklund said that any “benefits” that a plaintiff receives or is entitled to receive from insurance or any other source must be deducted from any award the plaintiff recovers against a state university or college.

“Courts have narrowly interpreted the meaning of the word, thereby subjecting state colleges and universities to the prospect of double recoveries in some circumstances,” he said, adding that up until 2013, courts would reduce the value of any monetary award against a state college or university by the value of any settlement between plaintiffs and other person responsible for the same injuries.

Paula Paoletti, senior assistant general counsel for the OSU Wexner Medical Center, joined Eklund and Ingram in campaigning for the proposed legislation.

“I want to make clear that SB 56 is not an expansion of any protections for colleges and universities. And we are not seeking to not make the plaintiff’s whole for any injury in which a public college or university is involved,” she said.

“Rather, we are simply trying to restore the same protections that all other state entities have and that public colleges and universities were afforded for nearly 30 years before the Adae decision was issued. The bill will simply reconfirm that our public higher education institutions should be treated the same as any other state entity.”

SB 56 is co-sponsored by Sens. Bill Seitz, Tom Patton and Cliff Hite. The bill is before the Senate Civil Justice Committee.

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