Petition for Writ of Certiorari — Mays v. United States

mi

86-1454. | FILED

MAR 4 1987

T sciniciieiiibiami

; CLERK

See:

wsctinlioaaie

Supreme Court, U.S...

YOSEPH F. SPANIOL, JR.

In The

Supreme Court of the United States |

October Term, 1986

o

REBEL ANN MAYS and EVERETT F. MAYS,

Petitioners,

UNITED STATES OF AMERICA,

Respondent.

°

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

°

Auan Exuiorr RicHMAN

Patricia ANNE PritcHARD

Breit, Best, RicHMAN

AND Boscu, P.C.

Writer Square, Suite 900

1512 Larimer Street

Denver, CO 80202

(303) 573-7777

Counsel for Petitioners

March 5, 1987

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

or call collect (402) 342- 2831

a

QUESTION PRESENTED

Whether medical benefits received by servicemen and

their dependents under the Civilian Health and Medical

Program of the Uniformed Services (CHAMPUS) are a

collateral source for which the United States of America

is not entitled to set-off in awards under the Federal

- Tort Claims Act?

rm

LIST OF PARTIES

Petitioners’ children, Michelle Wamboldt, Vickie

Averett and Michael Mays were added as plaintiffs lby

amendment. All other parties herein are named in the

=<

caption.

iil

TABLE OF CONTENTS

Page

SR ny: | ccc i

Teen sie iiemeomniniilintabains ii

ee ig 8 5 yy! iv

ERE EE a 2

JURISDICTION 2

STATUTES AND REGULATIONS INVOLVBD ...... 2

oe ty et | 4

REASON FOR GRANTING THE WRIT 0. 7

CONCLUSION . SF TREN SAI TNC ee EE 14

APPENDIX (Opinion of Court of Appeals and

Findings of Fact, Conclusions of Law and

I UN sscnicnseneleinnnainnentin . la

iv

TABLE OF AUTHORITIES

Page

Berg v. United States, 806 F.2d 978 (10th Cir. 1986) .. 6,9

Burke v. United States, 605 F. Supp. 981 (D. Md.

| TG Fae A Mtn te, a BY 8

Gomez v. Black, 32 Colo. App. 332, 511 P.2d 531

| | ee 9,10

Haughton v. Blackships, 462 F.2d 788 (Sth Cir. 1972) .. 12

Johnson v. United States, 510 F. Supp. 1039 (D.

Mont. 1981) .. oc

Kistler v. Palsy, 173 Colo. 540, 481 P.2d 722, 724

“2 4 > Yipaantmeseptere errant — a 9

Mooney v: United States, 619 F. — 1525

(D.N.H. 1985) .. ERAT tanta Neato ig oP os

Richards v. United States, 369 U.S. 1, 82 S. Ct.

BL. aaa Easy a Bae Oh Ae 7

Smith v. United States, 487 F.2d 1013 (3d Cir. 1978). 11

Steckler v. United States, 549 F.2d 1372 (10th Cir.

EDEN pcsitdh sia cu scchesduncepesaeeaeiaiaanekaeee aaa adele sasssny 9, 10

United States v. Gaidys, 194 F.2d 762 (10th Cir.

ERE nS ran P NES Patna ge arn wee. ea Grew 7

United States v. Gray, 199 F.2d 239 (10th Cir. 1952) . 9

United States v. Harue Hayashi, 282 F.2d 599

oh fe. toe. Leite ibhitedks teeuad cakes | 11

United States v. Price, 288 F.2d 448 (4th Cir. 1961) 11, 12

Vanderbery v. Carter, 523 F. Supp. 279 (N.D.

eID pra scssecsicts clcaiciceaaerads Suances cee nlbamine atensee aasalinaiaaaneahaentn D

TABLE OF AUTHORITIES—Continued

Page

STATUTES

10 U.S.C. § 1079 2

10 U.S.C. § 1331 3

28 U.S.C. § 1346(b) 2

28 U.S.C. § 2674 ..... 2,4

32 C.F.R. § 199.7 3,5

32 C.F.R. § 199.9 3,5

38 U.S.C. § 310 ...... 10

38 U.S.C. § 331 10

.£>

a

In The

Supreme Court of the United States

October Term, 1986

REBEL ANN MAYS and EVERETT F. MAYS,

Petitioners,

v.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIGRARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

-)

The Petitioners, Rebel Ann Mays and Everett F. Mays,

respectfully pray that a writ of certiorari issue to review

the Judgment and Opinion of the United States Court of

Appeals for the Tenth Circuit, entered in the above-en-

titled proceeding on December 5, 1986.

°

2

OPINIONS BELOW

The Opinion of the United States Court of Appeals

for the Tenth Circuit is reported at 806 F.2d 976, and is

reprinted in the Appendix hereto, p. la, infra.

The Findings of Fact, Conclusions of Law and Order

of the United States District Court for the District of Colo-

rado (Kane, D.J.) is reported at 608 F. Supp. 1476 (D.

Colo. 1985), and is reprinted in the Appendix hereto, p. 6a,

infra.

Ly

—_—

JURISDICTION

This suit was brought under the Federal Tort Claims

Act, 28 U.S.C.§ 2674. Jurisdiction of the United States

District Court was invoked under 28 U.S.C. § 1346(b).

Judgment was entered in Petitioners’ favor in the United

States District Court for the District of Colorado on May

10, 1985. The District Court’s judgment with respect to

the issue of CHAMPUS benefits only was reversed by the

judgment of the United States Court of Appeals for the

Tenth Circuit, entered on December 5, 1986. This Court’s

jurisdiction is invoked pursuant to 28 U.S.C. § 1254(1).

STATUTES AND REGULATIONS INVOLVED

1. 10 U.S.C. § 1079. Contracts for medical care for spouses

and children: plans

(a) To assure that medical care is available for

spouses and children of members of the uniformed services

who are on active duty for a period of more than 30 days,

3

the Secretary of Defense, after consulting with the other

administering secretaries shall contract, under the author-

ity of this section, for medical care for those persons under

such insurance, medical service, or health plans as he con-

siders appropriate.

2. 10 U.S.C. § 1331. Age and service requirements

(a) Except as provided in subsection (c), a person

is entitled, upon application, to retired pay computed under °

Section 1401 of this title, if...

(2) he has performed at least 20 years of service

computed under Section 1332 of this title...

3. 32 C.F.R. § 199.7

(e-1) Program funds.

The funds used by the CHAMPUS program are ap-

propriated funds furnished by the Congress through the

annual Appropriations Act for the Department of Defense

and the Department of Health, Education and Welfare.

4. 32 C.F.R. § 199.9

(e-1) Eligibility.

(b) Persons eligible—

(b)(1) Retiree

A member or former member of a Uniformed

Service who is entitled to retired, retainer, or equiva-

lent pay based on duty in a Uniformed Service.

(b)(2) Dependent.

A person who bears one of the following relation-

ships to an active duty member (under a call or order

that does not specify a period of thirty (30) days or

less, to a retiree, to a NATO member who is stationed

in or passing through the United States on official

business, or to a deceased person who, at the time of

death, was an active duty member or a retiree...

(b)(2)(i) Spouse.

A lawful husband or wife regardless of whether

or not dependent upon the active duty member or re-

tiree.

°

STATEMENT OF THE CASE

This claim arises under the Federal Tort Claims Act,

°8 U.S.C. § 2674, for the negligent failure of physicians and

employees of Fitzsimons Army Medical Center to di-

agnose and treat Rebel Ann Mays for cancer. Rebel Ann

Mays, who died subsequent to the filing of this action, was

the wife and dependent of Everett Mays, a serviceman who

retired after serving twenty-one years in the United States

Air Foree. Following trial to the disiriet court, Respon-

dent was found negligent and judgment was entered in

Petitioners’ favor on May 10, 1985.

As the dependent of a retired serviceman, a portion

of Rebel Ann Mays’ medical and hospitalization expenses

were paid by the Civilian Health and Medical Program of

the Uniformed Services (CHAMPUS). At trial, the par-

ties stipulated that of the Two Hundred Sixty-six Thou-

sand Three Hundred Dollars ($266,300.00) of medical ex-

penses incurred for Mrs. Mays’ care, One Hundred Ninety-

5)

five Thousand Fifty-five Dollars ($195,055.00) were paid

pursuant to the CHAMPUS program. The award of dam-

ages to the Petitioners included funds paid as medical bene-

fits on behalf of Rebel Ann Mays under the CHAMPUS

program, the district court specifically finding that the

benefits were a collateral source for which the United

States was not entitled to a set-off.

The CHAMPUS program was initially enacted as a

medical insurance program entitling dependents of active

duty members of the Uniformed Services to hospitalization

and medical treatment. In 1966, the program was amended

to expand the beneficiary population entitled to coverage

to include retirees with no less than twenty years of service

in the Uniformed Services, and their dependents. Vander-

berg v. Carter, 523 F. Supp. 279 (N. D. Ga. 1981). 32

C.F.R. § 199.9. Everett F. Mays served twenty-one years

in the United States Air Force. Tr. p. 3,1. 17 to p. 4, 1.

5. By virtue of such service, he had earned entitlement to

retirement benefits. Accordingly, his wife and dependent,

Rebel Ann Mays, was entitled to and received CHAMPUS

benefits. The record establishes that had Mr. Mays served

less than twenty years, neither he nor his dependents would

have been entitled to such retirement benefits. Tr. p. 6, 1.

7 to p. 7, 1. 2.

The CHAMPUS program is funded through a budget-

ary allocation by Congress based upon the potential num-

ber of beneficiaries in a given year. The funds used by

the CHAMPUS program are appropriated by Congress

through the Annual Appropriations Act, for the Depart-

ment of Defense and Department of Health and Human

Services. 32 C.F.R. § 199.7(e-1) (1977). The fund is sep-

arate and apart from funds set aside to satisfy judgments

under the Federal Tort Claims Act.

Following the district court’s determination that the

CHAMPUS benefits paid to Rebel Ann Mays were a col-

lateral source, Respondent appealed to the Tenth Circuit

Court of Appeals on the collateral source issue only. In

short, Respondent argued that the-CHAMPUS benefits of

One Hundred Ninety-five Thousand Fifty-five Dollars

($195,055.00) for past medical expenses were not a colla-

teral source and that such an awatd was erroneous. The

liability portion of the award was not appealed and was,

in fact, summarily affirmed by the Tenth Circuit on June

16, 1986.

In Berg v. United States, decided the same day as this

ease, the Tenth Circuit held that government payments are

collateral if the payments come from ‘‘a special fund that

is separate and distinct from general government rev-

enues’’ and to which the plaintiff has contributed. 806

F.2d 978, 985 (10th Cir. 1986). See p. 3a, fra. In the

view of the Tenth Circuit, where the recipient of the bene-

fits made a monetary contribution to the fund, it will be

deemed a special fund separate and distinct from the gen-

eral revenues. As stated by the Court:

All of the money for the CHAMPUS program comes

from the general treasury of the United States; no

money is paid directly into the fund by the recipients

of CHAMPUS benefits. We cannot view these gen-

eral appropriations to the CHAMPUS program as ‘‘a

special fund that is separate and distinct from gen-

eral government revenues.’’ [citing Berg v. United

States |.

See p. 4a, mfra.

Although the Tenth Circuit recognized that Rebel Ann

Mays’ entitlement to receive CHAMPUS benefits was by

virtue of the fact that Everett Mays had served in excess

of 20 years in the Uniformed Services, the Court refused

to find that contribution in the form of service is the type

of contribution contemplated under Colorado’s collateral

source rule. In the Court’s view, Petitioners’ entitlement

to CHAMPUS benefits was based solely on Everett Mavs’

status, rather than his service contribution. The Tenth

Cireuit accordingly reversed the district court’s holding

that the CHAMPUS benefits were received from a colla-

teral source, and remanded for a modification of the dam-

age award. See p. da, infra.

co)

REASON FOR GRANTING THE WRIT

BY IGNORING EVERETT MAYS’ COLLAT-

ERAL CONTRIBUTION TO THE CHAMPUS

FUND, THROUGH HIS TWENTY-ONE YEARS

OF SERVICE IN THE UNIFORMED SER.

VICES, THE TENTH CIRCUIT ERRONEOUS-

LY APPLIED THE COLLATERAL SOURCE

RULE.

In actions brought under the Federal Tort Claims

Act, the plaintiff’s recovery must be measured by the

substantive law of the state in which the tort was com-

mitted; accordingly, state law concerning the collateral

source doctrine is controlling in Federal Tort Claims ac-

tions. Richards v. United States, 369 U.S. 1, 82 S. Ct.

085 (1962); United States v. Gaidys, 194 F.2d 762 (10th

Cir. 1952). Presently, even under similar collateral source

rules, government benefits, including CHAMPUS bene-

fits, are interpreted inconsistently on both the district

court and cireuit court level. For example, both the dis-

trict court below in the present case and the district court

in Mooney v. United States, 619 F. Supp. 1525 (D.N.H.

1985), have found that CHAMPUS benefits are a collateral

source for which the United States is not entitled to set-

off. On the other hand, in Burke v. United States, 605

F. Supp. 981 (D. Md. 1985), it was held that CHAMPUS

benefits were received from a wholly revenue-funded pro-

gram, to which plaintiff did not contribute, and therefore

could not be a collateral source.

While the nature of government payments, including

CHAMPUS benefits, under Federal Tort Claims actions

will necessarily be governed by the particular state’s col-

lateral source rule, it is clear that this Court’s guidance

is needed in interpreting the nature of CHAMPUS bene-

fits, so that they may be correctly analyzed under the

appropriate state’s collateral source rule. Most impor-

tantly, the nature of the beneficiary’s contribution to the

CHAMPUS fund must be addressed, and it must be de-

termined whether contribution in the form of the requi-

site length of service, rather than a purely monetary con-

tribution to the fund, is sufficient for the fund to be

deemed collateral.

The collateral source rule in Colorado, as in many

states, dictates that an injured party’s recoverable dam-

ages cannot be diminished by the value of benefits which

the injured party may have received in the form of medi-

eal care, insurance proceeds, continued wages, welfare,

pension or like benefits she has received from independent

or collateral sources. Steckler v. United States, 549 F.2d

\

1372 (10th Cir. 1977); Kistler v. Palsy, 173 Colo. 540, 481

P.2d 722, 724 (1971). Under Colorado law, the collateral

source rule does not apply to mere gratuitous benefits

received from governmental sources. Gomez v. Black,

32 Colo. App. 332, 511 P.2d 531 (1973).

Prior to its decision in Berg v. United States, 806

F.2d 978 (10th Cir. 1986), there was an obvious conflict

in Tenth Cireuit decisions regarding the application of

the collateral source rule. In United States v. Gray, 199

F.2d 239 (10th Cir. 1952), the court focused on legislative

history and intent to determine that veteran’s hospitaliza-

tion benefits were a collateral source, for which no offset

was allowed. Berg v. United States, 806 F.2d 978, 984

Fn. 4. In comparison, in Steckler v. United States, supra,

the Tenth Circuit focused on the source of the benetit

rather than the legislative intent, and held that Social

Security benefits, funded in part by the beneficiary’s con-

tribution, are ‘‘logically collateral,’’ while veteran’s bene-

fits are ‘‘derived entirely trom government funds and

cannot be claimed to originate in any collateral contribu-

tion.’’ 549 F.2d at 1379.

While to a certain degree, the Berg decision clears up

the confusion left in the wake of Steckler, the J/ays

opinion introduces a new inconsistency. Specifically, Berg

v. Umted States held that government payments are col-

lateral if the payments come from ‘‘a special fund that

is separate and distinct from general government reve-

nues’’ and to which the Plaintiff has contributed. 806

F.2d at 985. Analysis of the source of the benefit, in-

cluding the beneficiary’s contribution thereto is cer-

tainly the better approach and more in line with Colorado

10

law as set forth in Gomez v. Black, supra. However, in

Mays, the Tenth Circuit used an excessively restrictive ap-

proach in analyzing the necessary contribution of the re-

cipient.

The Tenth Circuit summarily dismissed Llverett

Mays’ twenty-one years of service in the Uniformed Ser-

vices as ‘‘not the type of contribution required by the

collateral source rule.’’ p. 4a, infra. However, this in-

terpretation ignores Colorado case law, which requires

only that in order to. be a collateral source, the govern-

mental benefits must not be gratuitous. Certainly, bene-

fits to which one is entitled only after twenty years of

service in the Uniformed Services are not benefits gra-

tuitously bestowed. In fact, eligibility for CHAMPUS

benefits was earned by Everett Mays through the requi-

site twenty years of service in the Uniformed Services.

As such, CHAMPUS benefits are part of a compensation

package offered to servicemen in exchange for their

twenty years of service, and therefore more closely re-

semble the Social Security benefits found in the Steckler

decision to be ‘‘logically collateral.’’ Clearly, without

Mr. Mays’ contribution, in the form of his service in the

U.S. Air Force, CHAMPUS benefits would have been

unavailable to Rebel Ann Mays. The Tenth Circuit’s re-

liance on its previous holding in Steckler v. United States,

that veteran’s benefits are noncollateral, is misplaced.

In order to receive veteran’s benefits, there is no require-

ment regarding length of service. See 388 U.S.C. 64 310

and 331. As such, entitlement to veteran’s benefits is

more properly considered a result of status, rather than

contribution. In contrast, such is not the case with regard

to entitlement under the CHAMPUS program.

——i———+4

11

Several jurisdictions have similarly embraced the rule

that gratuitous governmental benefits paid from unfunded

general revenues are to be deducted from a Federal Tort

Claims Act recovery, while similar benefits conferred oui

of a special fund are not. Smith v. United States, 487

F.2d 1013 (3rd Cir. 1978); United States v. Price, 288

F.2d 448 (4th Cir. 1961); United States v. Harue Hayashi,

282 I'.2d 599 (9th Cir. 1960); Johnson v. United States,

510 F. Supp. 1039 (D. Mont. 1981). In Smith v. United

States, the Third Cirenit held that Social Security sur-

vivor benefits were collateral to a Federal Tort Claims

Act recovery, and should not be deducted. In so holding,

the Smith court cited United States v. Harue Hayashi,

supra, in which the Ninth Cireuit held that Social Security

survivor benefits were a collateral source since the money

came from a special fund supplied by the beneficiary or

a relative upon whom the beneficiary was dependent.

Smith, 587 F.2d 1013, 1015. Similarly, in Johnson v.

United States, veteran’s benefits paid from unfunded

general revenues were held not collateral, while Social

Security disability benefits, paid from a special fund sup-

plied in part by the beneficiary, were held collateral.

In each of these cases, the courts distinguish between

benefits paid by the government out of the general trea-

sury, and benefits paid from a ‘‘special fund’’ created by

the government and supplied in part by contribution of

the beneficiary or one upon whom the beneficiary is de-

pendent. While in each of the three cited cases the con-

tribution to the special fund was through a monetary pay-

ment into the fund, it is likewise clear that contribution

to such a special fund may be made through service. For

12

example, it is generally recognized that the government

often pays its employees less in salary than private em-

ployers but compensates for their lower wages by pro-

viding employees with other incentives, such as fringe

benefits including attractive pension and retirement plans.

Such benefits serve the purpose of attracting and retain-

ing qualified employees who might otherwise be drawn to

private employment. Consequently, the benefits, as part

of the employee’s compensation package, are provided as

a substitute for wages, very similar to a mandatory salary

deduction for henefits.

Such a method of beneficiary contribution to a special

fund has been recognized by the Fourth Cireuit Court of

Appeals in United States v. Price, supra, and by the Fifth

Circuit in Haughton v. Blackships, 462 F.2d 788 (dth

Cir. 1972). In Price, it was held that the benefits received

by plaintiff, as a government employee, under the Civil

Service Retirement Act, were collateral to a Federal Tort

Claims Act recovery. While the disability and retirement

benefit fund was supplied by a mandatory salary deduction

and matched by government contributions, the court noted

that the employee’s contribution to the fund was arguably

greater than the salary deduction, since the portion con-

tributed by the government could be deemed further con-

sideration for the emplovee’s services. 288 F.2d at 451,

Fn. 6. Although it did not involve government benefits,

the same was noted by the Fifth Cireuit in Haughton v.

Blackships, supra, in which the retirement benefits re-

ceived by the plaintiff were funded entirely by employer

contributions. Although the plaintiff made no monetary

contribution to the retirement fund, the court found that

13

such benefits were collateral, holding ‘‘. .. where such pay-

ment by the employer should be considered in ihe nature

of a fringe benefit or deferred compensation, the em-

ployer should rot be entitled to benefit by setting off such

income in mitigation of his responsibility as a tortfeasor.’’

Based upon the foregoing, it is evident that the Tenth

Cireuit’s finding that Rebel Ann Mays received

CHAMPUS benefits because of her husband’s status

rather than a monetary investment, and its holding that

a monetary contribution is required under Colorado’s col-

lateral source rule, ignores economic reality and is overly

restrictive. ‘The district court below made a specific find-

ing that Everett Mays’ contribution in the form of twenty-

one years of service in the Air Force has supplied the

fund trom which Rebel Ann Mays, as his dependent, was

entitled to receive CHAMVUS benetits. Accordingly, her

receipt of CHAMPUS benefits is similar io the receipt

of Social Security survivor benetits or retirement bene-

fits established through a special fund contributed to by

the beneficiary or relative upon whom the beneficiary

was dependent. As demonstrated above, CHUAMVUS is

funded through a separate budgetary allowance by Con-

gress and as such is a separate fund from that which

satisfies judgments under the l’ederal Tort Claims Act.

The CHAMPUS benefits are supplied to dependents oi

retired Uniform Servicemen by virtue of the serviceman’s

twenty years of service. Accordingly, Mr. Mays’ service

clearly supplied the fund out of which Mrs. Mays was

entitled to receive CHAMPUS benefits. Moreover, the

benefits were provided to Everett Mays as compensation

for his years of service, and were not bestowed gra-

tuitously.

‘ l4

As indicated above, a great amount of confusion and —

inconsistency surrounds the issue of CHAMPUS benefits

and government benefits in general. Determination of

the issues involved herein, including the issue of service

contribution as opposed to monetary contribution, will

provide necessary guidance for all courts to properly apply

the collateral source rule as it stands in a particular juris-

diction.

CONCLUSION

For the reasons presented above, this Petition for

Certiorari should be granted.

Respectfully submitted,

Atan Exusorr Richman

Patricia Anne Pritcuarp

Breit, Best, RicumMan

anno Boscu, P.C.

Writer Square, Suite 900

1512 Larimer Street

Denver, CO 80202

(303) 573-7777

Counsel for Petitioners

APPENDIX

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

REBEL ANN MAYS and

)

EVERETT F. MAYS, )

)

Plaintiffs-Appellees, )

) No. 85-2029

v. )

)

UNITED STATES OF AMERICA, )

)

)

Defendant-Appellant.

APPEAL FROM THE UNITED STATES

DISTRICT COURT FOR THE

DISTRICT OF COLORADO

(D.C. No. 80-K-770)

(Filed December 5, 1986)

Nancy E. Rice, Assistant U.S. Attorney (Robert N. Miller,

United States Attorney, with her on the brief), for the

Defendant-Appellant.

Alan E. Richman, of Breit, Best, Richman and Bosch, of

Denver, Colorado (Patricia A. Pritchard, of Breit, Best,

Richman and Bosch, of Denver, Colorado, with him on the

brief), for the Plaintiffs-Appellees.

la

2a

Before HOLLOWAY, Chief Judge, TACHA, Cireuit

Judge, and BROWN,’ District Judge.

TACHA, Cireuit Judge.

This case presents another opportunity to consider

the application of the collateral source rule in Colorado.

In Berg v. United States, No. 85-1969, slip op. (10th Cir.

—, 1986), a suit against the United States under the

Federal Tort Claims Act (FTCA) decided this day, we

held that Medicare hospital insurance benefits are a col-

lateral source. In the present case we consider whether

benefits received from the Civilian Health and Medical

Program of the Uniformed Services (CHAMPUS) are a

collateral source to a FTCA award.

Rebel Ann Mays, the wife of a retired member of the

United States Air Foree, died from eancer in 1982. This

suit was filed by the Mayses against the United States

claiming that the Fitzsimmons (sic) Army Medical Center

(hospital) failed to diagnose and treat her for cancer. The

district court found that the hospital had acted negligent-

ly and awarded damages of $504,300.' The government

does not challenge the finding of liability. The only ques-

tion raised before this court is whether the $195,055 in

CHAMPUS benefits received by Rebel Ann Mays should

be deducted from the damages awarded to the Mays.

*The Honorable Wesley £. Brown, United States District Judge

for the District of Kansas, sitting by designation.

: The decision of the district court is reported in Mays v.

United States, 608 F. Supp. 1476 (D. Colo. 1985).

3a

In Berg, we recognized that Colorado has adopted

the collateral source rule. Slip op. at —. The Colorado

courts have interpreted the collateral source rule to pro-

vide that ‘‘compensation or indemnity received by an in-

jured party from a collateral source, wholly independent

of the wrongdoer and to which he has not contributed,

will not diminish the damages otherwise recoverable from

the -wrongdoer.’’ Kistler v. Halsey, 173 Colo. 540, 545,

481 P.2d 722, 724 (1971) quoted in Berg, slip op. at —.

A plaintiff in a FTCA suit can recover damaces from

the United States in addition to compensation from a

collateral source. We held in Berg that government pay-

ments are collateral if the payments come from ‘‘a special

fund that is separate and distinet from general vovern-

ment revenues’? and to which the plaintiff has contrib-

uted. Slip op. at —. Our question in this ease, therefore,

is whether CHAMPUS benefits satisfy this test.?

The CHAMPUS program provides medical benefits

to, inter alia, the dependents of certain retired members

of the armed services. 10 U.S.C. § 1079. ‘*The funds used

by the CHAMPUS program are appropriated funds fur-

nished by the Congress through the annual Appropria-

tions Act for the Department of Defense and the Depart-

2 The two federal district courts that have considered wheth-

er CHAMPUS payments are a collateral source have reached

different conclusions. Compare Mooney v. United States, 619

F. Supp. 1525, 1529-30 (D.N.H. 1985) (CHAMPUS payments are

a collateral source) with Burke v. United States, 605 F. Supp.

981, 992 (D. Md. 1985) (CHAMPUS payments for past medical

expenses are not a collateral source). We note only that the

court in Mooney found the payments collateral despite the

court’s belief that “it is unclear whether payments made by

CHAMPUS are from a specially funded source.” 619 F. Supp.

at 1530.

4a

ment of Health, Education, and Welfare [now the Depart-

ment of Health and Human Services].’’ 32 C.F.R. § 199.7

(e-1) (1985). All the money for the CHAMPUS program

comes from the general treasury of the United States; no —

money is paid directly into the fund by the recipients of

CHAMPUS benefits. We cannot view these general ap-

propriations to the CHAMPUS program as ‘‘a special

fund that is separate and distinet from general govern-

ment revenues.’’ Berg, slip op. at —*> CHAMPUS pay-

ments come exclusively from the general revenues of the

United States. Therefore, such payments are not from

a source collateral to the United States.

Everett Mays argues that his contribution to the

CHAMPUS program consists of his twenty-one years of

service in the Air Foree. Rebel Ann Mays would not have

been eligible for CHAMPUS benefits if her husband had

not served at least twenty years in the armed services.

32 C.F.R. § 199.9(b) (1985); 10 U.S.C. § 13381(a)(2). This

service, however, is not the type of contribution required

by the collateral source rule. Rebel Ann Mays received

CHAMPUS benefits because of her husband’s status, not

because of a monetary investment. A showing that one’s

status makes one eligible for government benefits is not

a showing that one has ‘‘contributed to a special fund’’

from which benefits are now being received.

In Steckler v. United States, 549 F.2d 1372 (10th Cir.

1977), we held that veterans disability benefits were not

3 The plaintiffs find it important that Congress allocates a

specitied amount of money to the CHAMPUS fund each year.

The collateral source rule, however, is not one that ‘makes

recovery depend on bookkeeping conventions.” Overton v.

United States, 619 F.2d 1299, 1308 (8th Cir. 1980). Rather, the

focus of the rule is on the source of the funds.

5a

a collateral source in a FTCA suit. The military service

that made the plaintiff eligible for veterans disability bene-

fits was not regarded as a ‘‘contribution’’ in Steckler.

549 F.2d at 1379; see also, Feeley v. United States, 337

I'.2d 924, 933-34 (38d Cir. 1964). Accordingly, we will not

characterize the military service of Everett Mays as a

contribution for the purposes of the collateral source rule

here.

The plaintiffs also suggest that the CHAMPUS pro-

gram provides fringe benefits in lieu of a higher salary

for members of the armed services. The acceptance of a

lower salary, it is argued, ean be characterized as a con-

tribution. This argument, however, is contrary to the re-

sult that we reached in Steckler. Even if the CHAMPUS

benefits at issue in this case could be viewed as fringe

benefits, the veterans disability benefits in Steckler could

also be viewed as fringe benefits. Our conclusion that the

benefits in Steckler did not constitute a contribution de-

mands that we reach a similar result concerning the

CHAMPUS benefits in this ease.

The United States has already paid some compensa-

tion through the CHAMPUS program for the injuries

suffered by Rebel Ann Mays. To award damages for a

loss for which the United States has already compensated

the plaintiffs would be to allow a double recovery. There-

fore, we reverse the decision of the district court that

the CHAMPUS benefits were received from a collateral

source and we remand for a modification of the damage

award consistent with this opinion.

REVERSED AND REMANDED.

)

6a

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

CIVIL ACTION NQ,—80-K-770

REBEL ANN MAYS and

EVERETT F. MAYS,

Plaintiffs,

UNITED STATES OF AMERICA,

Defendant.

FINDINGS OF FACT, CONCLUSIONS

OF LAW AND ORDER

(Filed May 10, 1985)

KANE, J.

Plaintiffs’ complaint was filed pursuant to 28 U.S.C.

§ 1346(b) of the Federal Tort Claims Act. It alleged that

physicians and other medical staff at Fitzsimons Army

Medieal Center in Denver, Colorado were negligent in their

eare and treatment of Rebel Ann Mays. Plaintiffs’ orig-

inal complaint alleged the defendant was negligent in:

(1) failing properly to follow up and diagnose the lung

eancer Mrs. Mays manifested in January, 1977; (2) ren-

dering substandard treatment and care to Mrs. Mays in

the administration of a radiation therapy treatment plan;

and (3) failing adequately to inform and disclose to Rebel

Ann Mays the various diagnoses, alternative plans for

treatment and risks involved in the chosen plan of radia-

tion treatment. The original complaint sought damages

for personal injuries and losses sustained by Rebel Ann

Mays and further asserted a claim for loss of consortium

on behalf of Everett Mays, her husband.

Ta

In January 1982, Mrs. Mays died of cancer. In Feb-

ruary 1982, plaintiffs’ first amended complaint was filed

adding a third claim for relief for the wrongful death of

Rebel Ann Mays pursuant to the Colorado Wrongful Death

Statute C.R.S. 13-21-201 and for damages provided for

under the Colorado Survival Statute C.R.S. 13-20-101.

The children of Mr. and Mrs. Mays, Michelle Wamboldt,

Vickie Averett and Michael Mays were added as_plain-

tiffs by an additional amendment.

LIABILITY

The following facts were established at trial: Rebel

Ann Mays’ date of birth was January 31, 1982 (sic). She

was 44 years of age in January 1977. Mrs. Mays was mar-

ried on October 31, 1951 to Everett F. Mays. Mr. Mays

joined the United States Air Force in 1951 and retired after

23 years of service. Following Mr. Mays’ retirement, he

and his wife received medical care pursuant to the Civilian

Health and Medical Program of the Uniform Services

(CHAMPUS).

On January 6, 1977, Mrs. Mays was examined and

evaluated at Fitzsimons’ out-patient clinic for complaints

of voice loss, bronchitis and cough. On that date, chest

x-rays were taken which revealed a shagey round lesion-

in the left lower lobe of her lungs which by x-ray was

estimated to be approximately four (4) centimeters in

size. The reviewing radiologist, Major William James

Morrison, M.D., noted on his report that further follow-up

was required in seven to ten days to exclude the possibil-

ity of carcinoma or organizing infaret. Rebel Ann Mays

was neither advised by Fitzsimons personnel of the need

to return for follow-up examination nor notified of the

condition shown on the x-ray. No follow-up examination

was conducted by physicians or other personnel at Fitz-

simons to rule out the possibility of cancer or infarction.

On March 4, 1977, Rebel Ann Mays returned to Fitz-

simonus for evaluation of complaints of right-sided neck

and shoulder pain. At that time x-rays were taken, how-

8a

ever, no action was taken regarding the previous x-ray

finding or recommendation for follow-up in January 1977.

Mrs. Mays was not contacted by Fitzsimons personnel or

medical staff regarding any of the previously noted find-

ines,

On April 14, 1978, Rebel Ann Mays resigned her posi-

tion as a directory assistance operator with Mountain Bell

because she was experiencing persistent fatigue. On April

27, 1978, Rebel Ann Mavs was examined as an out-patient

at Fitzsimons and evalnated for high blood pressure.

Chest x-rays were again requested. The medical records

reflect that chest x-rays were not taken until] May 23, 1978.

These x-rays displayed the same lesion previously evi-

dent in the January 1977 x-rays. The lesion loeated in

the left lower lobe of the lung had markedly increased in

size and now appeared on x-rays to have grown to an ap-

proximate size of five and one-half (5.5) centimeters.

Mrs. Mays was apparently asked to return to Fitzsimons

on June 1, 1978 for evaluation of several problems inelud-

ing the left lower lobe chest lesion. She was seen and ad-

mitted to the pulmonary service on June 1, 1978.

Diagnostie tests to determine if the lung lesion was

eaneer were conducted. A thoracotomy and left lower lo-

bectomy were performed to remove the tumor on June

22, 1978. The surgery demonstrated lymph node involve-

ment on the bronchial and perihilar nodes. The medias-

tinal nodes were clinically negative. The pathology report

from the surgery revealed that three out of four perihilar

nodes were positive for cancer and five out of eight bron-

chial lymph nodes were positive fer cancer. The report

also confirmed the mediastinal nodes were negative. The

cancer was diagnosed as an adnocarcinoma.

As a result of the positive lymph nodes finding, a

course of radiation therapy was recommended. This ra-

diation therapy was a ‘‘split course’’ program in which

Mrs. Mays received two weeks of radiation therapy. Ra-

diation treatments were initiated on .iuly 6, 1978 and con-

cluded on September 8, 1978. Following completion of

the radiation therapy, Mrs. Mays’ initial recuperative pe-

9a

riod progressed well. On November 17, 1978, Mrs. Mays

was seen and reported no complaints, good appetite with

no weight loss and was requested to return by the exam-

ining physician in five months.

In December 1978 and January of 1979, Mrs. Mays

began to experience numbness and tingling in the legs,

loss of sensation and a loss of bladder control. In carly

January 1979, Mrs. Mays found her ability to walk was

progressively decreasing because of loss of sensation and

muscle contro] in the lower extreinities. Mrs. Mavs was

admitted to Fitzsimons on January 12, 1979 for evaluation

of these signs and symptoms. An initial diagnosis of ra-

diation myelitis was made. There was no treatment for

this condition.

She was discharged on January 16, 1979. Her eondi-

tion progressively deteriorated. She was readmitted to

Fitzsimons on March 12, 1979. By this time, she was para-

lyzed below the mid-chest level. The diagnosis was con-

firmed as a radiation induced tranverse myelitis at the

fourth and fifth thoracic vertebral levels. This was an ir-

reversible condition for which there was no treatment.

On March 22, 1979, Mrs. Mays was transferred by

ambulance from Fitzsimons to Craig Rehabilitation Hoe--

pital in Denver, ,Colorado for intensive rehabilitation for

paraplegia. She remained at Craig Rehabilitation Hospi-

tal until June 15, 1978 (sic) when she was discharged to go

home. During the time period from mid-June 1979, until

May 1980, Mrs. Mays was seen on an out-patient and in-

patient basis at Swedish Hospital, Denver, Colorado on

numerous occasions for complications, including thrombo-

phlebitis and bronchial infections. Additionally, she re-

ceived physical therapy during this time.

In the late spring of 1980, Mrs. Mays began to ex-

perience respiratory difficulty and congestive heart fail-

ure. She was admitted to Porter Memorial Hospital in

Denver, Colorado on May 28, 1980 for purposes of eval-

uating her condition. She had fluid build-up in the peri-

cardial sac surrounding the heart. Perieardiocentisis, a

10a

procedure to remove the fluid, was performed on two oc-

casions to attempt to alleviate this condition. These pro-

cedures were unsuccessful. A pericardectomy and de-

bridement of the sterum was performed in June, 1980.

The findings at surgery were totally consistent with ex-

treme radiation damage to the tissues of the chest and

pericardium. Mrs. Mays had numerous complications fol-

lowing this procedure including respiratory distress re-

quiring a trachostomy and debridement of the sternum

and chest tissues. In addition, she developed a decubitis

uleer which had to be surgically corrected.

On July 24, 1980, Mrs. Mays was transferred from

Porter Memorial Hospital to Craig Hospital. During this

hospitalization, Mrs. Mays was subjected to numerous

procedures including surgical debridement of the sternum

and corrections of the decubitis uleer. Mrs. Mays was

discharged from Craig Hospital in November, 1980. She

returned home for a short period of time, but was read-

mitted to Swedish Hospital on January 23, 1981 because

of a recurrent deep-chest tissue infection.

Mrs. Mays was hospitalized at Swedish until April

16, 1981 during which time numerous surgeries were per-

formed for sternum debridement and closure of the in-

fected wound of the chest. Again, the surgical findings

were consistent with extreme radiation damage to the

chest tissues and cavity. In December 1981, Mrs. Mays was

readmitted to Swedish Hospital for evaluation and po-

tential treatment of a recurrence of her cancer. She re-

ceived limited therapy, but the cancer at this time was

determined to be untreatable. Pursuant to Mrs. Mays’

request, she was discharged on January 22, 1982 to re-

turn home. She died on January 27, 1982.

The evidence establishes two distinct acts of medica!

negligence in the care rendered to Mrs. Mays at Fitz-

simons Army Medical Center. The first related to the

failure to follow-up and diagnose the lung cancer in Jan-

uary 1977. All the medical experts and witnesses who

testified agreed that the failure to notify her of the x-ray

= a

findings on January 7, 1977 was below the standard of

care for out-patient clinical practice in the community at

that time. There were multiple failures on the part of

Fitzsimons Army Medical Center, includins not properly

maintaining records, not notifying Mrs. Mays of her con-

dition, and not ensuring appropriate follow-up care of

her condition,

Had care in conformity with the applicable standard

of care been delivered, timely diagnosis and treatment of

the lung eanecer would have occurred at minimal cost in

late January or early February of 1977. Substandard

care was the cause of the delay in the treatment of Rebel

Ann Mays’ cancer. I find that defendant’s care and treat-

ment of Rebel Ann Mays fell below acceptable standards

of medical care and as such defendant’s care and treatment

of plaintiff was negligent. Larsen v. Linpahl, 167 Colo.

409, 450 P.2d 77 (1968); Short v. Downs, 36 Colo. App.

109, 537 P.2d 754 (1975); Caro v. Bumpus, 30 Colo. App.

144, 491 P.2d 606 (1971).

The plaintiff must also establish that the defendant’s

conduct was the cause of her injury. Portner v. Swear-

imgen, 695 F.2d 435 (10th Cir. 1982). To establish proxi-

mate causation, one must prove with ‘‘reasonable prob-

ability’? that the injury was caused by the defendant’s

negligence. In this case the substandard eare was the

cause of the delay in the treatment of Mrs. Mays’ cancer.

However, this case presents an issue which has not been

addressed by Colorado appellate courts. The issue is

whether plaintiffs may recover damages when the de-

fendant’s conduct was not the cause of the medical con-

dition which caused the injury, but rather was the cause

of a substantially increased risk of resulting harm. In

this case, the resulting harm was a substantially reduced

chance of recovery or survival from the cancer. In other

words, are the plaintiffs entitled to reeover damages for

the negligent failure to diagnose the decedent Rebel Ann

Mays’ lune cancer and the resultant loss of a chance of

recovery. The facts of this case present circumstances

for which there is no guidance from Colorado courts.

12a

Historically, the proof of the element of causation in

failure to diagnose cases in the medical negligence setting

did not permit recovery in cases where the defendant’s

negligence either substantially increased the risk of result-

ing harm or substantially reduced the chances for recov-

ery or survival, but the very nature of the disease or ail-

ment precluded testimony based upon ‘‘reasonable medical

probability’’ that ‘‘but for’’ the doctors’ negligence, the

harm would not have resulted. In response to the harsh-

ness of the strict application of reasonable medical prob-

ability and the difficult cases such as the the instant ease,

courts have carved out the ‘‘value of a chance’’ theory of

causation.

The seminal case with respect to the ‘‘loss of a chance

of survival’? theory is Hicks v. United States, 368 F.2d

626 (4th Cir. 1966). In that case the decedent’s estate

filed an action under the Federal Tort Claims Act on the

theory that death was due to the negligence of a treating

physician. The uneontroverted evidence established that

if the decedent had heen operated on promptly, she would

have survived. The defendant’s contention was that the

decedent’s survival, even given appropriate treatment,

was not an absolute certainty. In response, the court in

Hicks stated:

When a defendant’s negligent action or inaction has

effectively terminated a person’s chance of survival,

it does not lie in the defendant’s mouth to raise con-

jectures as to the measure of the chance that he has

put beyond the possibility of realization. If there

was any substantial possibility of survival and the

defendant has destroyed it, he is answerable... The

law_ does not in the existing circumstances require

the plaintiff to show to a certainty that the patient

would have lived had she been hospitalized and op-

erated on promptly.

Hicks v. United States, 368 F.2d at 632. (Emphasis in

original.)

Other courts followed and adopted the reasoning of

Ilicks and permitted the issue of causation in misdiag-

13a

nosis and failure to diagnose cases to go to the fact finder

based on ‘‘diminished chances’’ or ‘‘inereased risk’’ with-

out strict application of the ‘‘but for’’ test. Many of

these cases have involved failures to diagnose cancer and

the diminished chance of survival resulting from the de-

fendant’s conduct. For example, in Jeanes v. Milner, 428

F.2d 598 (8th Cir. 1970), there was a one-month delay in

sending lab slides to a pathologist. The slide, when exam-

ined by the pathologist showed lymphocarcoma. During

that one-month period, the patient progressed from stage

one lymphoearcoma with a 35% chance of survival to a

stage two lymphoeareoma with only a 24% chance of sur-

vival. Because the delay in diagnosis was prejudicial to

the decedent’s recovery, the court ruled that 11% diminu-

tion in chance of survival was compensable. The Hicks

rationale has been adopted in McBride v. United States,

462 F.2d 72 (9th Cir. 1972). Tn that case, the court held

that when a plaintiff’s cause of action rests upon an al-

legedly negligent failure to give necessary treatment, the

absence of positive certainty does not bar recovery if the

negligent failure to provide treatment deprived the patient

of a significant improvement in his chances for recovery.

Daniels v. Hadley Memorial Hospital, 548 F.Supp. 278,

320, 566 F.2d 649 (D.C. Cir. 1977) again cited Hicks with

approval and ruled, in a ease involving a patient who

went into anaphylactic shock and whose chances of sur-

vival were reduced by defendant’s conduct, that the ex-

tent to which the defendant has interfered with these

chances must be taken into account.

Similarly, in James v. United States, 483 F.Supp. 581

(N.D. Cal. 1980) the United States failed to inform plain-

tiffs of suspected cancer found on a chest x-ray during a

pre-employment physical. Two years later when the lung

eancer was finally diagnosed. it was inoperable. There was

a serious question of whether the. tumor was even op-

erable when the diagnosis occurred, but plaintiff’s ex-

pert indicated that the plaintiff had lost a 10% to 15%

chance of survival over 5 years. The court commented

extensively on the lost chance of benefit from earlier

treatment and stated ‘‘no matter how small the chances

l4a

may have been—and its magnitude cannot be ascertained

—no one ean say that the chance of prolonging one’s life

or decreasing one’s suffering is valueless. 483 F.Supp.

at p. 587.

In Herskovits v. Group Health Cooperative of Pucet

Sound, 664 P.2d 474 (Wash. 1983), the court permitted

recovery in a survival action predicated upon the defen-

dant’s failure to make a timely diagnosis of the dece-

dent’s lung cancer. Expert medical testimony established

that if the decedent’s tumor was a ‘‘stage one’’ tumor

in December 1974 and diagnosed as such at that time,

the decedent’s chance for survival would have been 39%.

Assuming this tumor had progressed to stage two in June

1975, the decedent’s chance for survival was 25%. Thus,

according to expert medical testimony, the delay in diag-

nosis reduces the decedent’s chance for survival by 14%.

The court held that the 14% reduction in the decedent’s

chance for survival was sufficient evidence of causation

to allow the jury to consider the question of whether the

failure of timely diagnosis was a proximate cause of

death, regardless of the undisputed fact that the decedent

had less than a 50% chance of survival at all pertinent

times,

The majority of courts which have addressed the loss

of a chance theory has permitted compensation for the

lost chance of survivability. Rebel Ann Mays sustained

just such an injury by virtue of the defendant’s negligent

medical eare. I hold that the plaintiffs have established

proximate cause in this ease. The defendant caused a

substantial reduetion in Mrs. Mays’ chance of survival

All physicians who addressed this issue in their testi-

mony acknowledged that the failure to follow-up on the

initial x-ray finding in .JJlannary 1977 was below appli-

cable standards of care and that had appropriate follow-

up been conducted, proper diagnosis and probable surgi-

eal intervention would have occurred in January or Feb-

ruary of 1977. Further, it has been established that be-

cause of the approximate 15 to 16 month delay occasioned

lida

by defendant’s negligence, Mrs. Mays’ chances of sur-

vival were reduced by the further spread of the tumor

in the lung, bronchial and perihilar nodes and distant

metastasis in other areas of the hody. Defendant’s ex-

perts, although unable to render specific opinions re-

garding survivahility, were of the opinion that in general

principle Rebel Ann Mays’ survivability had been re-

dueed by the delay in treatment.

The plaintiffs’ expert in radiation oneology, Dr.

Theodore Phillips, was of the opinion that had Mrs. Mavs’

lung cancer been promptly diagnosed in January of 1977

and had appropriate surgical intervention occurred at that

time, Mrs. Mays’ chance of survival would have been 40%.

Further, Dr. Phillips stated that in his opinion in January

1977, Mrs. Mavs had a ‘‘stage one’? tnmor with no lymph

node involvement: however, the delav in diagnosis and

treatment, as a result of the substandard eare rendered

by Fitzsimons Army Medieal Center, permitted the tumor

to progress to ‘‘stage two,’’ thereby reducine Mrs. Mays’

chance of survival to 15° or less. Accordingly, if proper

diagnosis and treatment had been made in January 1977,

Mrs. Mays’ chance of survival would have been two or

three times more likely than was the case in Mav of 1978.

IT find that Dr. Phillips’ testimony is persuasive.

I find that as a result of the medical negligence in

the care rendered at Fitzsimons Army Medical Center,

Rebel Ann Mays’ chance of survival beyond five years

was reduced from 40% to 15%. The plaintiff Everett F.

Mays is entitled to reeover damages for the reduetion in

Rebel Ann Mays’ chance of survival.

The second distinct act of medical malpractice oe-

curred with respect to the radiation therapy administered

to Rebel Ann Mays at Fitzsimons Army Medical Center.

The testimony of expert witnesses established that the

radiation therapy administered to Rebel Ann Mays was

helow applicable standards of radiation therapy in the

community. As a result of the substandard care, Mrs.

Mays received radiation doses to the chest, mediastinum,

l6a

heart and spinal cord in excess of known safe total tol-

erance levels of radiation to those tissues.

This excessive radiation was the cause of Mrs. Mays’

paraplegia and injury of the tissues of the chest, sternum

and heart. I conclude that the multiple surgeries, hospi-

talization and medical expenses incurred by Rebel Ann

Mays were caused by the negligence of the defendant. I

find that the cause of death, however, was the presence

of the eancer in the decedent’s brain.

DAMAGES

The measure of damages is governed by Colorado’s

wrongful death statute which employs the principle of net

pecuniary loss. The losses are-as follows:

The parties stipulate that of the $266,300 medical ex-

penses incurred by the Mays family as a result of the de-

fendant’s negligence, $195,055 has been paid by the

CHAMPUS program under the authority of 10 U.S.C.

§ 1079. In January 1977, Rebel Ann Mays was 44 years

of ave and had a life expectancy of 29 years. Mrs. Mays

was employed as a directory assistance operator at Moun-

tain Bell and had a work life expectaney from that date

of 12 vears. Her salary was approximately $183 biweekly.

In addition, she received fringe benefits in various forms

of health insurance, sick benefits, disability pay, life in-

surance and telephone concessions. She left her employ-

ment at Mountain Bell because of fatigue associated with

her lung ecaneer. Had proper treatment occurred she

would have been physieally capable of returning to her

position as a directory assistance operator. In addition,

she provided household services and bookkeeping ser-

vices for her husband’s trucking business. Further, as

a result of her disability and the attendant care rendered

by Mr. Mays, he was unable to devote the same energy

and time to his trucking business, resulting in a substan-

tial reduction in his gross sales and income for the years

in which Mrs. Mays was paralyzed and disabled. Further,

the plaintiffs Vicki Everett (sic) and Michelle Wamboidt,

17a :

sustained losses of income and time during the time they

rendered care and services for their mother. The plaintiffs

presented unrebutted evidence of economic losses by Don-

ald P. Stegall, Ph.D., an expert economist. Dr. Stevall

computed the total past losses, taking into account per-

sonal consumption of Rebel Ann Mays, to be as follows:

Past Loss

Earnings Capacity (Mrs. May) $ 41,000

Fringe Benefits (Mrs. Mays) 5,600

Bookkeeping Services (Mrs. Mays) 9,400

Household Services (Mrs. Mays) 20,600

Income (Mr. Mays) 73,700

Home Care (daughters) 7,600

Medical Expenses 266,300

Medical Transportation 800

TOTAL PAST LOSS $425,000

I hold that beeause of the added negligence involving ex-

cessive radiation the entire amount of past loss is not af-

fected by the lost chance issue.' Dr. Stegall also testified

'The past losses are attributable to defendant's negligence

both in the failure to give prompt treatment which resulted in

the lost chance and in the treatment which caused the para-

plegia and other radiation injuries. It would be practically im-

possible to allocate past losses to the separate instances of neg-

ligence. Additionally, such a distinction would be irrelevant.

To the extent plaintiffs’ past losses are attributable to defen-

dant’s negligent treatment, they should be entirely recovered

and undiminished by Mrs. Mays’ limited life expectancy from

the cancer known to exist in January, 1977. To the extent past

losses derive from the failure to give prompt treatment and

negligent follow-up, plaintiffs’ should also recover in full. Plain-

(Continued on following page)

18a

regarding the future net pecuniary loss from the date of

trial. From his testimony I find that had Mrs. Mays not

lost the change of a normal life expectancy she would have

future losses as follows:

Earning Capacity $ 37,000

Fringe Benefits 5,100

Bookkeeping 24,300

Household Services 106,800

$173,200

The per cent of chance lost was 25. Therefore, the

_ damage related to net pecuniary loss caused by defen-

dant is .25 x 173,200 or $43,300. The total net pecuniary

loss suffered by the decedent was $468,300. I find that the

value of Mr. Mays loss of consortium from January, 1979,

to Mrs. Mays’ death in January, 1982 is $36,000. The to-

tal of damages, therefore, is $504,300.

COLLATERAL SOURCE

In Kistler v. Halsey, 481 P.2d 722, 724 (Colo. 1971)

the Colorado Supreme Court defined the collateral source

rile as follows:

(Continued from previous page)

tiffs have shown that all medical treatment, not necessitated by

defendant’s affirmative misfeasance, derived from the state of

Mrs. Mays’ cancer as it was in June, 1978. The cost of Mrs.

Mays’ treatment in June, 1977, had the original diagnosis and

treatment been timely, would have been minimal. Defendant

has not rebutted this showing nor shown which, if any, medical

expenses would have been incurred irrespective of the distinct

malpractice episodes. Other than the cost of an initial x-ray, |

doubt that such a showing could ever be made. Thus, all past

— losses were proximately caused by defendant's neg-

igence.

Future net pecuniary loss, however, must be diminished

by Mrs. Mays’ chance of dying before the occurrence of any

of the negligent acts of defendant beginning in January, 1977.

19a -

Simply stated, it is that compensation or indem-

nity received by an injured party from a collateral

source, wholly independent of the wrongdoer and to

which he has not contributed, will not diminish the

damages otherwise recoverable from the wrongdoer.

The phrase ‘‘to which he has not contributed’? has an

ambiguous antecedent, but in view of the Colorado Court

of Appeals decision in Powell v. Brady, 496 P.2d 328

(Colo. App. 1972), aff’d 508 P.2d 1254 (Colo. 1973), I

find that the ‘‘he’’ referred to is the wrongdoer. Oth-

erwise, the rule makes no sense.

In Steckler v. United States, 549 F.2d 1372, 1379 (10th

Cir. 1977) when considering whether Social Security dis-

ability payments are to be regarded as income from a col-

lateral source in a suit against a Veterans Administration

Hospital brought under the Federal Tort Claims <Aet,

Judge Doyle said, in dicta, ‘‘The benefit is unquestion-

ably a non-collateral souree which is deductible from an

award in that it is derived entirely from government funds

and cannot be claimed to originate in any collateral con-

tribution.’’ Judge Doyle, too, noted the dearth of au-

thority in this area. Because the case was remanded, it

left unsettled the question of whether the Social Seeur-

ity payments which are contributed to by the employee

and employer but supplemented by the government are

in whole or in part collateral sources.

The henefits furnished to Rebel Ann Mavs were

health benefits earned by virtue of 20 years of uniformed

service by plaintiff Everett F. Mays in the armed forces.

CHAMPUS is funded through a separate budgetary allo-

eation by Congress based upon the potential number of

beneficiaries. This fund is separate and apart from funds

set aside to satisfy judgments under the Federal Tort

Claims Act. The funds used by the CHAMPUS program

are appropriated funds furnished by the Congress throuch

the Annual Appropriations Act for the Department of

Defense and the Department of Health and Human Ser-

vices (formerly Department of Health, Education and

20a

Welfare). 32 C.F.R. § 199.7(e-1) April 14, 1977. Further,

federal regulations provide that absent at least 20 years

of service in the Armed Forces, service retirees and their

dependents do not qualify for CHAMPUS benefits upon

retirement. 32 C.F.R. § 199.9 April 14, 1977. Thus, the

CHAMPUS benefits are furnished under legislation whol-

ly separate and distinet from recovery under the Tort

Claims Act.

United States v. Gray, 199 F.2d 239 (10th Cir. 1952),

precluded an offset for amounts expended by the Vet-

eraus Administration for the plaintiff’s hospitalization

against a recovery under the Federal Tort Claims Act.

There is no provision under the CHAMPUS legislation

which indicates that Congress intended recovery under

the Tort Claims Act to be offset or diminished by amounts

expended in furnishing hospitalization and medical treat-

ment under the CHAMPUS legislation.

As the Court of Appeals said in Gray:

The Veterans Administration furnished to plaintiff

the hospitalization and treatment under legislation

‘wholly separate and distinct from the Tort Claims

Act. Our attention has not been ealled to any pro-

vision in the Tort Claims Act or in the legislation

relating to hospitalization and treatment furnished

by the Veterans Administration which indicates that

Congress intended for recovery under the Tort Claims

Act to be offset or diminished by amounts. expended

in furnishing hospitalization and treatment for dis-

ability. And in the complete absence of an express

or clearly implied intent on the part of Congress

that such an offset or diminution should be made,

it is not the function of this court to effectuate it

by judicial fiat. Since the cost of hospitalization and

treatment furnished plaintiff could not be asserted

by way of offset or diminuation of any amount to

which plaintiff was entitled under the Tort Claims

Act, tendered evidenee was properly excluded.

United States v. Gray, 199 F.2d 239, 244 (1952). Gray

has not been overruled. Its facts are comparable to the

21a

ease at bar. Accordingly, I believe it is ineumbent upon

me to hold that the collateral source rule is not appli-

cable to this case; it is based on the same Colorado law.

IT IS ORDERED that judgment shall enter in favor

of plaintiffs and against defendant in the amount of

$504,300 plus interests and costs herein expended.

DATED at Denver, Colorado this 10th day of May,

1985.

/s/ John L. Kane, Jr.

UNITED STATES

DISTRICT JUDGE