The California Litigator

August 28, 2011

By Barbara Haubrich-Hass, ACP/CAS

Plaintiffs and insurance defense attorneys have followed the Howell case with anticipation.  In the battle between the injured claimants versus the liability insurance, the injured claimants lose again.

CA_Supreme_CourtOn August 18, 2011, in the case of Howell v. Hamilton Meats & Provisions, (2011) No. S179115 the California Supreme Court was asked, “When a tortiously injured person receives medical care for his or her injuries, the provider of that care often accepts as full payment, pursuant to a preexisting contract with the injured person's health insurer, an amount less than that stated in the provider's bill. In that circumstance, may the injured person recover from the tortfeasor, as economic damages for past medical expenses, the undiscounted sum stated in the provider's bill but never paid by or on behalf of the injured person?”

The ruling in Howell held that, “personal injury plaintiffs are not entitled to full recover of medical bills if their insurers paid only a smaller, negotiated amount.”  The court held that, “no such recovery is allowed, for the simple reason that the injured plaintiff did not suffer any economic loss in that amount.”

What does this mean to the injured party?  Justice Joan Dempsey Klein, who opposed the opinion, says it best. 

“I disagree with the majority insofar as it concludes Howell's recovery of medical damages must be capped at the discounted amount her medical providers agreed to accept as payment in full from her insurer. Rather, Howell should be entitled to recover the reasonable value or market value of such services, as determined by expert testimony at trial, just as would be the case if the injured person had not purchased insurance or if the medical services had been donated.”   

Justice Klein further opined that, “Howell is left in a worse position than an uninsured individual or one who was a donee of medical services, persons who are entitled to recover the full reasonable value of their medical care.”  

Justice Klein concluded that, 

 “By limiting the plaintiff's recovery to the reasonable value of the treatment (an amount which the plaintiff is required to prove at trial), I would eliminate the potential mischief created by the Court of Appeal's opinion, which enables a plaintiff to recover damages for medical expenses based on potentially inflated medical bills, while still preserving the full protection of the collateral source rule for all injured plaintiffs, whether or not covered by private insurance.

Under the reasonable value approach, in the event the reasonable value of a plaintiff's treatment exceeds the amount the medical providers have agreed to accept as payment in full from plaintiff's insurer, such difference would be allocated to the plaintiff, rather than to the defendant tortfeasor. This approach preserves the long-standing collateral source rule, and at the same time, prevents a plaintiff from recovering excessive damages based on potentially inflated medical bills.”

The opinion is very lengthy and discussions a wide variety of topics.  If you are a personal injury or insurance defense paralegal, I encourage you to read this opinion. 

 


 

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©Copyright 2011 All Rights Reserved

DISCLAIMER: Barbara Haubrich-Hass, ACP/CAS, is not an attorney. Any information derived from The California Litigator, and any other statements contained herein, are for information purposes only, and should not be construed as legal advice or a recommendation on a legal matter. The information from The California Litigator is not guaranteed to be correct, complete, or current. Barbara makes no warranty, express or implied, about the accuracy or reliability of the information provided within this e-zine/article, or to any other website to which this e-zine/article may be linked.

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DISCLAIMER:  Barbara Haubrich-Hass, ACP/CAS, is not an attorney. Any information derived from The California Litigator, and any other statements contained herein, are for information purposes only, and should not be construed as legal advice or a recommendation on a legal matter. The information from The California Litigator is not guaranteed to be correct, complete, or current. Barbara makes no warranty, express or implied, about the accuracy or reliability of the information provided within this website, or to any other website to which this website or articles may be linked.