On June 22, 2015 the California Court of Appeal for the Fourth Appellate District carefully applied tort law doctrines regarding negligence, causation, and damages, and specifically explained for uninsured accident victims some of the rules governing the measure and evidence of medical damages previously developed by the California Supreme Court for insured accident victims. (Bermudez v. Ciolek and Heacox (2015) 237 Cal. App. 4th 1311.)
The case involved an intersection collision between two vehicles, one driven by Ciolek who was turning left from a westbound direction, the other driven eastbound by Heacox, who intended to proceed straight through the intersection. The Heacox vehicle veered to the southeast corner of the intersection and struck and severely injured plaintiff, who was on the sidewalk astride his bicycle.
At the time of the collision, the victim apparently had no medical insurance. The jury returned a verdict of more than $3.7 million, finding both drivers negligent but that causation was established only for Ciolek, the driver turning left. On appeal by Ciolek after his new trial motion was denied, the Court of Appeal rejected the argument that the verdict was inconsistent in finding both defendants negligent but concluding that only Ciolek’s conduct caused the accident. Although, the court said, some negligence findings are inherently inconsistent with a finding of no causation, in this case it was reasonable for the jury to conclude the collision would have occurred in the intersection regardless of whether Heacox was negligent. Also, the Court of Appeal rejected Ciolek’s argument that the jury’s decision violated the physical law of conservation of momentum, since Ciolek made the argument for the first time on appeal.
With respect to medical expense damages, the court disentangled and analyzed three separate issues for cases involving uninsured plaintiffs: (1) what is the proper measure of medical damages; (2) what evidence is admissible to prove the proper measure; and (3) what evidence is sufficient to affirm an award of medical damages? Addressing the first question, the court observed that as a consequence of the discrepancy in recent decades between the amount patients are typically billed by health care providers and the lower amounts usually paid in satisfaction of the charges (either by a health insurer or otherwise), controversy has arisen as to how to measure the reasonable costs of medical care in a variety of factual settings. The measure of medical damages is the lesser of (1) the amount paid or incurred, and (2) the reasonable value of the medical services provided.
Thus, under the landmark case decided by the California Supreme Court in Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, an injured plaintiff whose medical expenses were paid through private insurance was limited in recovering as economic damages no more than the amount paid by the plaintiff or his or her insurer for the medical services received or still owing at the time of trial. (Howell, supra, 52 Cal.4th at p.566.) “In other words,” Howell held, “a plaintiff may recover as economic damages no more than the reasonable value of the medical services received and is not entitled to recover the reasonable value if his or her actual loss was less.” “But the holding in Howell ultimately depended upon the ‘paid or incurred’ prong of the [proper measure] test, not the ‘reasonable value prong.’” Accordingly, “[i]t was not necessary in Howell to examine the mechanics of properly measuring damages in the case of an uninsured plaintiff.” This case thus filled the void left by the dictum of the Howell decision.
Secondly, with regard to what evidence is admissible to prove the proper measure of medical damages, the court held that the uninsured status of plaintiffs meant that billed amounts are relevant to the amount they have incurred, unlike insured plaintiffs, who actually incur only the lower amounts negotiated by their insurers. With uninsured plaintiffs, the billed amounts are also relevant and admissible, but here with regard to the reasonable value of the medical expenses in issue.
In a footnote, the court expressed its reservations about the decision in Cornbaum v. Lampkin (2013) 215 Cal.App.4th 1308, which held that the amount initially billed is inadmissible in cases of insured plaintiffs whose bills were paid in full for less than the initial billed amount. The court decided that unless defendants stipulate to the reasonableness of the amount actually paid to settle in full the medical bill that it seemed to this court that, consistent with the pre Howell case law, evidence of the initial billed amount would be relevant to proving the reasonableness of the discounted amount that was actually paid.
The court also ruled that the amount paid to settle in full an insured plaintiff’s medical bills is likely substantial evidence in itself of the reasonable value of the services provided, and, also consistent with the pre Howell law initial billed medical bills are usually insufficient on their own to create a basis for determining the reasonable value of medical services. Like insured plaintiffs, uninsured plaintiffs must introduce substantial evidence of both the amount incurred and reasonable value of the services. The amount incurred sets a cap on medical damages, but unlike the amount paid pursuant to an insurer’s negotiated rates, the amount incurred by an uninsured plaintiff is not sufficient evidence on its own to prove the reasonable amount of his or her medical damages.
Richard B. Wolf is a partner in the Los Angeles office of the nationwide law firm of Lewis Brisbois Bisgaard & Smith LLP. Since 1970, he has specialized in insurance coverage advice and litigation.
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