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Garon v. Miller Container Corp.

January 18, 2007


The opinion of the court was delivered by: John A. Gorman United States Magistrate Judge


Now before the court is the plaintiff's motion in limine (Doc. #20). The motion is fully briefed. For the following reasons, the motion is granted in part and denied in part.

Plaintiff first argues that evidence of the amount of unemployment compensation he received should be excluded, as unemployment compensation is a collateral source and therefore not to be considered by the fact finder. He also asserts that the jury should be instructed not to reduce damages on account of unemployment compensation benefits.

The collateral source rule prohibits the deduction from damages any money the victim received from sources independent of the transaction giving rise to the claim. The purpose of the rule is not to prevent the plaintiff from being overcompensated but rather to prevent the tortfeasor from paying twice. Thomas v. Shelton, 740 F.2d 478, 484 (7th Cir. 1984). "[A]pplication of the collateral source rule "depends less upon the source of funds than upon the character of the benefits received." Haughton v. Blackships, Inc., 462 F.2d 788, 790 (5th Cir. 1972), quoted in U.S. Can Co. v. N.L.R.B., 254 F.3d 626 (7th Cir. 2001). The collateral source rule focuses on what the tortfeasor should pay, rather than on what the plaintiff should receive. EEOC v. O'Grady, 857 F.2d 383, 389 (7th Cir. 1988).

Unemployment compensation is a collateral source. NLRB v. Gullett Gin Co., 340 U.S. 361, 364-5 (1951), Perry v. Larson, 794 F.2d 279, 286 (7th Cir. 1986). In the Seventh Circuit, the decision whether to deduct unemployment compensation benefits is discretionary. Id.. See also, Horn v. Duke Homes, Inc., 755 F.2d 599, 607 (7th Cir. 1985); Hunter v. Allis-Chalmers Corp. Engine Div., 797 F.2d 1417, 1428 (7th Cir.1986); Orzel v. City of Wauwatosa Fire Dept., 697 F.2d 743, 755 (7th Cir.1983); Kohnke v. Delta Airlines, Inc., No. 93 C 7096, 1995 WL 478858, at * 4 (N.D.Ill. March 20, 1995); Stein v. Forest Pres. Dist. of Cook County, No. 92 C 5567, 1994 WL 160563, at * 1 (N.D. Ill., April 28, 1994).

As the Seventh Circuit has noted, courts generally have rejected the attempt to deduct unemployment compensation payments from back pay. Perry, 794 F.2d at 286 n. 3. See, Stein v. Forest Preserve Dist., No. 92C5567 1994 WL 160563 at *2, Apr. 28, 1994 (N.D.Ill.)(ADEA case); E.E.O.C. v. Corinth, Inc., 824 F. Supp. 1302, 1311 (N.D.Ind. 1993)(TITLE VII case); Certified Midwest Inc. v. Local 738, 686 F. Supp. 189, 193 (N.D.Ill. 1988)(arbitration award affirmed). The mere fact that the employer pays a tax that creates a fund from which unemployment benefits are paid is not determinative whether such benefits are considered a collateral source. Perry, 794 F.2d at 286. See also, Schuster v. Shepard Chevrolet, Inc. , No. 99C8326, 2002 WL 507130 at *6, April 3, 2002 (N.D.Ill.). Defendant has provided no explanation as to why the facts in this case might support an offset by the amount of unemployment benefits received by Plaintiff. An offset would reward the Defendant for conduct found by a jury to have been wrongful. Moreover, there is nothing about the facts in this case that would result in the conclusion that Defendant would be paying twice in the absence of an offset.

For those reasons and in light of the above cited authority, I conclude in my discretion that unemployment benefits received by Plaintiff are a collateral source that should not be used to offset any damages that might be awarded in this case. Evidence of the amount of those benefits may not be introduced, and upon submission of an instruction, the court will consider whether the jury should be instructed not to reduce any damages because of Plaintiff's receipt of such benefits. The motion in limine as to this issue is accordingly granted.

Plaintiff next argues that because the defendant has not plead as an affirmative defense plaintiff's failure to mitigate damages, no such evidence or argument should be permitted. Plaintiff also argues that defendant has adduced no evidence during discovery that would support such a defense.

Plaintiffs must mitigate damages by using reasonable diligence in seeking employment after termination. Gaffney v. Riverboat Svcs. of Indiana, Inc., 451 F.3d 424 (7th Cir. 2006). Failure to mitigate damages is an affirmative defense. Fed.R.Civ.P. 8(c); Sheehan v. Donlen Corp., 173 F.3d 1039 (7th Cir. 1999); Hutchison v. Amateur Electronic Supply, Inc., 42 F.3d 1037, 1044 (7th Cir. 1994). Defendant bears the burden of establishing that the plaintiff failed to exercise reasonable diligence to mitigate damages and there was a reasonable likelihood that plaintiff might have found comparable work in the exercise of reasonable diligence. Id., Gaffney, 451 F.3d at 460; Sheehan, 173 F.3d at 1048-49.

The first prong of Plaintiff's argument - that an affirmative defense must be plead -is rejected. Pleadings may be amended to conform to evidence, up to and even after trial, when justice so requires. Fed.R.Civ.P. 15(a). To the extent that evidence is produced at trial, defendant may amend its answer to conform to that evidence.

The second prong of Plaintiff's argument - that there is no such evidence - is premature. That argument will be considered at the close of defendant's case. If Plaintiff is correct that there is no evidence of failure to mitigate, the defense will not go to the jury. Ruling on this issue is denied at this time, with leave to re-raise the question at the conclusion of defendant's case.

The third argument is that any evidence about Garon's work performance, disciplinary issues, and attendance problems should be excluded because the only reason given for Garon's termination was use of the company computer in violation of company policy. As a result, plaintiff argues that this evidence is either irrelevant or its prejudice outweighs any probative value.

Plaintiff is incorrect. What Plaintiff must show to carry his burden is that "a" factor in defendant's employment decision was the complaint he made. That does not preclude the employer from considering other factors as well. To the extent that defendant's explanation at trial is inconsistent with its prior explanation, that goes to the credibility and the weight of the evidence, not to relevance or admissibility. Plaintiff's motion is denied as to this issue.

The fourth argument stems from what plaintiff characterizes as defendant's "claim" that there are employees who saw Garon using the company computer to write the disputed letter. Plaintiff anticipates (and defendant's response to the motion does not rebut that anticipation) that defendant will be trying to introduce this evidence not by offering testimony from the employees who actually saw Garon using the ...

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