Proponent Testimony on SB56
Collateral Set Off Statute for Public Colleges and Universities
Senate Civil Justice Committee
April 15, 2015
Chairman Bacon, Vice-Chairman Oelslager, Ranking Member Skindell and members of the Senate Civil Justice Committee, thank you for the opportunity to testify in support of Senate Bill 56, sponsored by Senator Eklund. My name is Paula Paoletti and I am currently the Senior Assistant General Counsel for The Ohio State University Wexner Medical Center with primary responsibility over the medical center’s civil litigation cases. Prior to joining Ohio State, I served as Chief of the Court of Claims Defense section for the Ohio Attorney General ‘s office where I led a team of litigators responsible for defending state officers, agencies and Ohio’s public colleges and universitiesin cases before the Court of Claims.
SB 56 would amend R.C. Section 3345.40 to clarify financial protections for Ohio’s public colleges and universities by limiting the kind and amount of recoveries against these institutions. As currently written, R.C. 3345.40(B)(2) requires any monetary judgment against a state college or university to be setoff by “benefits” received by the plaintiff from insurance policies or “any other source.” For nearly three decades, settlements with other parties have been considered benefits from “any other source” that must be setoff from a state college or university’s liability. The purpose of the statute has always been to afford Ohio’s public institutions of higher education the same safeguards against paying double recoveries that all other State entities receive under a different statute, R.C. Section 2743.02(D).
However, in a recent decision by the Tenth District Court of Appeals, the Court refused to recognize settlements as amounts that must be setoff from state college and university liabilities. Prior to Adae v University of Cincinnati, courts have always applied R.C. 3345.40(B)(2) properly when it came to settlements. Courts would reduce the value of any monetary award against a state college or university by the value of any settlement between plaintiffs and any other person(s) responsible for the same injuries. For instance, if a person was injured on a state university’s property – and both the school and a private contractor were responsible for the property defect that caused the injury – and if the plaintiff entered into a monetary settlement with the private party, then any award against the state university would be reduced by the value of the settlement.
This scenario, which played out repeatedly when a public institutionof higher education was jointly liable with another party for an injury, has been put in jeopardy as a result of the Adae ruling. In that particular case, plaintiffs in a medical malpractice case against the University of Cincinnati were awarded $2 million above what the trial court determined would fully compensate them for their injuries. This extra $2 million resulted from the Tenth District’s judgment that a $2 million settlement with the other defendants could not be credited against the $3.3 million total judgment amount against the University. As a result of this ruling, the plaintiffs received a “double recovery” – more than $5 million on an injury that the courts had determined was valued at $3.3 million.
By refusing to setoff the University of Cincinnati’s award by the amount of the settlement with the private parties, the court of appeals essentially ruled that, to the extent that 3345.40(B)(2) requires university liability to be offset by the amount of “benefits” received, the court could not consider any money received to settle a legal claim from other responsible parties involved in the same injury. Ohio’s public colleges and universities believe that this mistaken interpretation warrants the simple clarification contained in SB 56.
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. 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 thirty 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.
Once again, thank you for the opportunity to testify in support of SB 56. I would be happy to answer any questions that the committee may have.