• Social Security Benefits Are Subject To Collateral Source Rule And Not Considered When Determining Damages For A Wrongful Act
  • March 23, 2011 | Author: Linda Monje
  • Law Firm: Kronick Moskovitz Tiedemann & Girard A Law Corporation - Bakersfield Office
  • In Conservatorship of McQueen, (--- Cal.Rptr.3d ----, Cal.App. 1 Dist., March 14, 2011), a California Court of Appeal considered whether a trial court erred when it instructed a jury not to consider possible resulting decreases to Social Security Supplemental Income (“SSI”) benefits when considering damages for a wrongful act. The court ruled that those benefits are subject to the Collateral Source Rule and therefore the court rightfully instructed the jury not to consider them.

    Ida McQueen suffered from an array of physical and mental difficulties that left her unable to care for herself. Her father, who died in 1990, had stipulated in his will that McQueen had the right to live in his home in Oakland for the duration of her lifetime and that only upon her death would other relatives gain a right to sell the home and share the proceeds.

    Because of McQueen’s conditions, she entered a skilled nursing facility in 2000. That same year, other family members and an attorney visited her and asked her to sign a power of attorney giving her sister, Earline Drumgoole, power of attorney over her matters. McQueen signed the document but later said she merely did as she was told and did not know what the document was.

    In 2004, family members sold the Oakland home and divided the proceeds among themselves, with McQueen still living at the community care facility. When workers at the care facility learned of the sale without McQueen’s consent, Fessha Taye was appointed conservator of McQueen’s estate and brought suit on her behalf alleging her relatives and their attorney fraudulently obtained her power of attorney, sold the property, and wrongfully kept the proceeds for themselves.

    The jury found McQueen’s siblings and their attorney liable and ordered them to pay McQueen $99,900 in potential damages and attorney’s fees. They appealed alleging that the court should not have instructed the jury not to consider the assertion that McQueen suffered no damage from the sale because if she had received those proceeds, her SSI benefits would have been reduced by a like amount.

    The collateral source rule states that “if an injured party receives some compensation for his injuries from a source wholly independent of the tortfeasor, such payment should not be deducted from the damages which the plaintiff would otherwise collect from the tortfeasor,” the court said, citing Helfend v. Southern Cal. Rapid Transit Dist. (1970) 2 Cal.3d 1.

    McQueen’s SSI benefits were such income, the court said. The defendants’ argument that keeping proceeds rightfully belonging to McQueen in order to avoid reductions in her SSI benefits amounted to a shifting of public funds from McQueen to themselves, the court reasoned. Paraphrasing Philip Chang & Sons Associates v. La Casa Novato (1986) Cal.App.3d 59, the court said, “as between appellants who tortuously inflicted injury on McQueen and taxpayers who fund public programs for indigents such as McQueen, the loss should fall on the tortfeasors.”

    That result lead to a conclusion that McQueen had a rightful cause of action for conversion. An action for conversion requires 1) the plaintiff’s ownership or right to possession of the property; 2) the defendants’ conversion by a wrongful act or disposition of property rights; and 3) damages. With McQueen’s establishment of her right to proceeds from the sale regardless of resulting reductions in her SSI benefits, those three prongs were met, the court said.

    Therefore, Defendants failed to show the trial court’s ruling was an abuse of discretion and its judgment against them was affirmed.