MITSUBISHI EE UNION (MMPSEU) v.

MITSUBISHI COMPANY
G.R. No. 175773
June 17, 2013

FACTS:

The CBA of the parties provides that the company shoulders the hospital expenses of the
dependents of its covered employees provided that they pay a premium of 100 pesos per month for such
insurance.

Section 4(d) of the CBA provides that payment shall be directed to the hospital and doctor, and must
be covered by actual billings.

The CBA expired on July 31, 1999 so they executed another for a period of 3 years which increased
the coverage of the insurance from 40k to 50k

Three members of the Union filed for Reimbursement of Hospitalization Expenses of their
Dependents. However, the Company only paid a portion of their hospitalization insurance claims because
MEDIcare already paid for a chunk of their insurance and paying the employees again would amount to
Double Insurance.

The Union’s President wrote a demand letter for a full reimbursement and alleging that a full
reimbursement was given to one Cruz.

The Company said it already paid through the Official Receipts submitted and Cruz’ case is a
different one concerning admissibility of documents.

The Union referred the dispute to the NCMB (National Conciliation and Mediation Board) for
“preventive mediation”.

The proceedings was referred to a Voluntary Arbitrator Capocyan for the interpretation of the CBA
Provision.

The Union said that nothing in the CBA that prohibits obtaining other insurances and
reimbursements can only be obtain through ORs. If reduction is permitted, the company would be unjustly
enriched. Lastly, if ambiguity exists, it should be titled in favor of labor.

The Union claims double indemnity or double insurance which is illegal.

The company asked for the opinion of the Insurance Commission, however, they opted not to render
such. However, when the Union asked, the commission through Atty. Funk rendered one stating that
recovery may be had on both simultaneously mentioning that the result is consistent with the public policy
underlying the “collateral source rule” – that is, x x x the courts have usually concluded that the liability of
a health or accident insurer is not reduced by other possible sources of indemnification or compensation.

Hence, the Voluntary Arbitrator rendered a decision against the Company relying on the opinion of
Atty. Funk claiming that separate premiums were paid for each contract.

The Company filed a Petition for Review in CA stating that the VA committed grave abuse of
discretion in relying solely on the opinion of Atty. Funk. The CA granted the petition stating that the words
of the CBA provision actually intended to make the company liable only for expenses actually incurred by
an employee’s qualified dependent. Thus, the Insurance shall only cover those that are not provided by
health care providers.

Union filed for MR but was denied. Hence, this case.

ISSUE:

Is the CA correct in interpreting the provisions of the CBA and the application of the collateral source
rule?

RULING:

The Court denies the petition stating that Atty. Funk erred in applying the collateral source rule.

The collateral source rule was originally applied to tort cases wherein the defendant is prevented
from benefiting from the plaintiff’s receipt of money from other sources. Under this rule, if an injured
person receives compensation for his injuries from a source wholly independent of the tortfeasor, the
payment should not be deducted from the damages which he would otherwise collect from the tortfeasor.

The collateral source rule is designed to strike a balance between two competing principles of tort
law:
(1) a plaintiff is entitled to compensation sufficient to make him whole, but no more; and
(2) a defendant is liable for all damages that proximately result from his wrong.

The collateral source rule applies in order to place the responsibility for losses on the party causing
them. Its application is justified so that "'the wrongdoer should not benefit from the expenditures made by
the injured party or take advantage of contracts or other relations that may exist between the injured party
and third persons."

Here, it is clear that MMPC is a no-fault insurer. Hence, it cannot be obliged to pay the hospitalization
expenses of the dependents of its employees which had already been paid by separate health insurance
providers of said dependents.

The Voluntary Arbitrator therefore erred in adopting Atty. Funk’s view.

Morever, agree with the CA. The condition that payment should be direct to the hospital and doctor
implies that MMPC is only liable to pay medical expenses actually shouldered by the employees’
dependents. It follows that MMPC’s liability is limited, that is, it does not include the amounts paid by other
health insurance providers. This condition is obviously intended to thwart not only fraudulent claims but
also double claims for the same loss of the dependents of covered employees.

Lastly, CBA constitutes a contract between the parties and as such, it should be strictly construed
for the purpose of limiting the amount of the employer’s liability.