By Philippe Lieberman
Florida’s Collateral Source Rule is often overlooked in landlord-tenant disputes.  Under the rule, an injured party may recover full damages from a tortfeasor even if the injured party recovers money from an independent third-party such as an insurer.  This rule is often overlooked by litigators but can lead to a significant recovery for a client.  I deal with a lot of commercial landlord-tenant disputes where the property is damaged as a result of the tenant’s negligence or intentional misconduct.  Oftentimes my clients will make a claim with their insurance company and also sue the tenant for negligence.  The Collateral Source Rule allows landlords to collect from both the insurance company and the tortfeasor.
While opponents of the Collateral Source Rule complain that it allows for double recovery, the rule serves two practical functions.  First, it rewards the landlord for obtaining insurance.  Recovery from both the insurer and the tortfeasor should not be looked at as “double recovery” but rather recovery of the insurance premiums that the landlord pays for the benefit of the tenants.  A tenant that commits bad acts – intentionally or negligently – should be required to bear some of the cost to insure the premises.
A second practical function of the Collateral Source Rule is that it does not allow the tortfeasor to benefit from wrongful conduct by allowing the liability to be offset by insurance recovery.
In the case of Gormley v. GTE Products Corporation, 587 So. 2d 455 (Fla. 1991), the Florida Supreme Court held that the Collateral Source Rule does permit “double recovery.”  Plaintiffs filed a claim against GTE, the manufacturer of their television set, after their home was damaged in a fire.  The Supreme Court held that no evidence relating to collateral sources was  admissible at trial:
The collateral source rule functions as both a rule of damages and a rule of evidence.  . . .As a rule of damages the collateral source rule permits an injured party to recover full compensatory damages from a tortfeasor irrespective of the payment of any element of those damages by a source independent of the tortfeasor. . .The rule rests on a concept of justice: a tortfeasor should not benefit. . . from an injured party’s foresight in contracting for protection against injury. . .
If the rule were other than what it is, some of the incentive for obtaining insurance might be destroyed.  In that case, the losses occurring to plaintiffs who would not protect themselves with adequate insurance would, in many instances, have to be absorbed by society as a whole.
In a real sense, the collateral source rule does not result in a double recovery in this situation because the plaintiff may have paid substantial premiums over a long span of time without ever having received benefits.  The costs of premium may, in fact, far exceed the benefits received.  (emphasis added)
As the Court succinctly put it, there is no double recovery. The plaintiff is being rewarded and the defendant punished for their respective conduct.  In the landlord-tenant context, it is important for landlords to be aware that they may have claims against the tenant irrespective of their own insurance coverage and should pursue those claims to collect the maximum amount possible.