Tessier Report

Tessier Mediation
August 18, 2011
Howell Update
The Supreme Court has issued its opinion in Howell v. Hamilton Meats. The court has rejected the plaintiff's arguments concerning the substantive law of the collateral source rule and accepted the defense position that when private health insurance has "written off" portions of plaintiff's medical bills, the plaintiff may only recover the amount actually paid for the medical care. The court has left open, and has not decided, whether the amount billed by the provider is properly admitted into evidence on other issues.

All cases previously tried in which the trial jury has heard evidence of the amount accepted as full payment by the medical provider but has awarded a greater sum as damages for past medical expenses are now subject to a motion for new trial on grounds of excessive damages. The trial court may permit the plaintiff to choose between accepting reduced damages or undertaking a new trial.

The decision is 6-1, with Justice Klein the lone dissenter.

I will provide a more thorough analysis in the next few days and send along in another email. However, with this decision impacting so many of you and your clients, I felt it important to provide this newsflash...

Stay tuned

Tessier Report

Tessier Mediation
May 19, 2011
Howell Update
The Supreme Court is moving closer to deciding the issues raised in Howell v. Hamilton Meats. Last month, the court requested supplemental briefs on the following issue:

"Assuming, for sake of argument, that only amounts that have been paid or remain owing to medical providers are recoverable as damages for past medical expenses, what evidence of such expenses is admissible in a jury trial? Given defendant's concession that a jury properly hears evidence of 'gross medical bills' (open. br., p. 52), should this court for guidance in other cases approve or disapprove the posttrial 'Hanif' motion procedure used in the trial court?"

These supplemental briefs have been filed and oral argument is set for May 24, 2011 in San Francisco. Seasoned court observers believe that a decision is likely in the Fall. There is a chance however that a decision could be handed down sooner. For those who deal with these issues daily, the sentiment is undoubtedly the sooner the better.

Some lawyers are speculating about what the request for supplemental briefs on this issue means. The only thing that can be said for sure is that the court will tackle the actual issue of what the plaintiff may recover for past medical expenses when private insurance is involved and has paid some or all of these expenses. It would be dubious to read anything else into the briefing request in my view. We can also safely assume that at least one jurist wishes to address the post trial reduction procedure that has been adopted in some jurisdictions.

Cabrera Update
The plaintiff has filed a Petition for Review of The Second District's decision in Cabrera. The court has extended its time to act on the Petition until late June. Therefore, as of this time the Petition has not been granted.

Most observers believe the court may grant and hold the Cabrera case pending the Howell decision. What is interesting is that with the Supreme Court giving itself until late June to act on the Petition in Cabrera, and the oral argument in Howell set for May 24, 2011. Could this be a signal that we will have a decision in Howell before late June? Wishful thinking perhaps.
In the meantime, we deal with the continued uncertainty at mediation and trial on the subject. The wisest course, for cases being tried before the Howell decision, continues to be admitting into evidence the reasonable and necessary medical expenses (the "retail" price) without mention to the jury of a collateral source, and also putting into the trial court record at some point evidence of the amount paid (the "wholesale cost"). This will minimize the possibility of a retrial on the issue of damages, no matter what the court's decision in Howell.

Robert M. Tessier

Cases Discussing Personal Injury Law

California Collateral Source Rule - Cases discussing collateral source rule, and the Hanif and Nishihama Cases

Howell v. Hamilton (2009) - In a personal injury case, the Court of Appeal reversed the trial court's decision granting the defendant's post verdict motion to reduce the jury's special verdict award for the injury-related medical expenses the plaintiff incurred. The trial court's decision was based on fact plaintiff had private health care insurance, which had negotiated a lesser rate for services than the normal market value of such services. The court expressly held the negotiated differential was a benefit within the meaning of the collateral source rule, and thus the plaintiff would have recovered the amount of that differential as part of her recovery of economic damages for the past medical expenses she incurred for care and treatment of her injuries. This case is currently under review by the California Supreme Court and is not citeable in any court.

The issue specified on the Supreme Court's website in the Howell case are: (1) Is the "negotiated rate differential" (i.e., the difference between the full billed rate for medical care and the actual amount paid as negotiated between a medical provider and an insurerr), a collateral source benefit under the collateral source rule, which allows plaintiff to collect that amount as economic damages, or is the plaintiff limited in economic damages to the amount the medical provider accepts as payment? (2) Did the trial court err in this case when it permitted plaintiff to present the full billed amount of medical charges to the jury but then reduced the jury's award of damages by the negotiated rate differential?

Another Collateral Source case, Codner v. Wills (unpublished) held the same as the Howell court, holding that the "trial court did not err" in denying a negligent defendant's motion to reduce the jury's award for past medical expenses based on claims plaintiff's health insurer actually paid less for the medical bills than the reasonable value of the bills.

Yanez v. SOMA Environmental (2010) In a personal injury case in which the trial court had reduced plaintiff's award so as to give the wrongdoer the benefit of plaintiff's insurerr's negotiated medical billing reductions, the Court of Appeal reversed, holding that the case followed by the trial court, Hanif, was improperly applied to the case at hand. The Court of Appeal, Fourth District, Division Three, stated: "Hanif's holding that, as a matter of law, the reasonable value of medical services can never be greater than the cash paid or liability incurred for them cannot sensibly be extended to the private insurance context. Rate discounts negotiated between health insurers and providers must be deemed collateral benefits which, under the collateral source rule, should accrue to the insured plaintiff, not the defendant. Therefore, the trial court erred by reducing Yanez's economic damages for past medical expenses based on Hanif. To the extent the reasonable value of the provider's services was greater than the discounted amounts paid or incurred for those services, Yanez was entitled to the entire amount as damages under the collateral source rule. Since the jury found that $44,519.01 in damages for past medical expenses was reasonable, she was entitled to that amount, without reduction." Note: The Supreme Court granted review in Yanez on September 1, 2010, pending its review in Howelll (grant and hold).

King v. Willmett (2010) In this case, the court reaffirmed the vitality of the collateral source rulle, consistent with Yanez and Howelll. The court stated: "In this case we primarily consider whether, in a negligence action against a nonpublic defendant, the reduction of a plaintiff's award of past medical expense damages to the dollar amount ultimately paid by the plaintiff's private health insurance to his health care providers is appropriate under the collateral source rule. In light of the public policy conclusions expressed by our state Supreme Court and the Legislature's enactment of specific statutes governing the operation of the collateral source rule in limited kinds of cases, we conclude reduction is inappropriate in this case. Therefore, the trial court erred in reducing the award here."

Note: On Ocotber 13, 2010, the California Supreme Court issued an Order that review in King be granted, and the case held pending review (as is customary when there are numerous cases involving the same issue) in Howelll. The case is therefore no longer citeable.

In another Medi-Cal lien reduction case, Lopez v. DHS, the Court of Appeal held that a trial court properly reduced a DHS' lien as requested by plaintiff in a motion under California Welfare and Institutions Code section 14124.76, which was enacted after the Supreme Court's decision in Alhorn v. ADHS.

Casusation of Damages - Big Rig Truck Case

Andreyuk v. Wal-Mart - In this California Truck Accident Case, the Court of Appeal held that a jury verdict finding that Wal-Mart was negligent, but that the negligence did not cause plaintiff's harm, was legally unsupportable, agreeing with the trial court - Wrongful Death

Note: California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). Any opinions contained on this site that are identified as unpublished have not been certified for publication or ordered published for purposes of rule 8.1115. Additionally, published cases may be later "de-published" and the validity and status of every case should be evaluated by a licensed attorney prior to being relied upon as legal authority. Use of this site and its free information features, constitutes your agreement and acknowledgment that the information provided herein is intended for general informational purposes only, and is not legal advice.