Morrison Law Journal


The Morrison Law Journal November 2015 Volume X, Edition 11 Clarifying The Reach Of Howell v. Hamilton Meats & Provisions, Inc.: Court Of Appeal Rules That Evidence Of (Discounted) Amounts Accepted By Medical Care Providers For Care They Provided To An Uninsured Plaintiff Was Properly Excluded At Trial Because The Payments Were Received From A Medical Care Finance Firm And The Plaintiff Was Still Liable For The Full Amount Of The Bills At The Time Of The Trial By: Edward F. Morrison, Jr., Esq. Larry A. Schwartz, Esq.
As many are aware, the California Supreme Court ruled in the landmark decision of Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541 that an injured plaintiff whose medical expenses are paid through private insurance may recover as economic damages based on those expenses no more than the amounts paid by the plaintiff or his or her insurer for the medical services received and/or still owing at the time of trial (Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541) (“Howell”). In Corenbaum v. Lampkin (2013) 215 Cal.App.4th 1308, the California Court of Appeal, Second District, further ruled that evidence that the reasonable value of past medical services exceeded the amount paid and/or still owing at trial is inadmissible on the issue of the amount of damages for past medical services. However, the impacts of the Howell decision on the proper measure of damages in a case brought by an uninsured plaintiff who has not paid his or her medical bill and remains liable for the medical bill as of the date of the trial, are less clear. In Uspenskaya v. Meline (2015) 241 Cal.App.4th 996 (“Uspenskaya“), the California Court of Appeal, Third District, attempted to shed further light on the admissibility of medical charges incurred by an uninsured personal injury plaintiff and still owing at the time of trial. In Uspenskaya, a defendant's vehicle collided with the plaintiff's vehicle at a busy intersection. The plaintiff sustained spinal injuries and filed suit against the defendant. Eventually, the plaintiff had surgery to repair a herniated lumbar disk. At trial, the jury found defendant negligent and awarded plaintiff a total of $429,773.71 in damages including $261,773.71 in past medical expenses, which was the full amount of her “billed” (but not paid for) medical charges as of the time of trial. The factual twist in Uspenskaya dealt with the fact that the medical care providers for the uninsured plaintiff – which provided their services in part based on a lien against any recovery at trial – sold their lien and rights to payment prior to trial to MedFin Managers, LLC ("MedFin") The plaintiff was 1 not a party to the sale of the lien rights to MedFin and the plaintiff remained liable for the full amount of her medical bills to MedFin. Plaintiff argued at trial, citing the decision in Katiuzhinsky v. Perry (2007) 152 Cal.App.4th 1288 (“Katiuzhinsky”) (another case involving MedFin) that the Howell decision did not apply because, just as in Katiuzhinsky, the plaintiff remained fully liable for the amounts owed insofar as the medical bills. In response, defense counsel in Uspenskaya argued that Howell, and a recent case, Bermudez v. Ciolek (2015) 237 Cal.App.4th 1311 (a bicycle injury accident involving an uninsured plaintiff) stood for the proposition that the amount paid by MedFin could be admitted into evidence to prove the reasonable cost of the treatment. The trial court agreed with plaintiff and excluded evidence of the amounts paid by MedFin. Defense counsel did not proffer any expert testimony as to whether or not the amounts paid by MedFin were reasonable (and it appears the trial court would have permitted evidence of the payments by MedFin to come into evidence if there had been expert testimony as to their reasonableness). On appeal, the Court of Appeal ruled that because Uspenskaya did not involve a transaction between the buyer of the health care treatment (the injured party) and the seller of that treatment (the health care provider), evidence of the amount paid by MedFin was too prejudicial to be admitted, at least without other expert testimony. In that regard, the Court of Appeal ruled that the amount MedFin paid is not necessarily based on the reasonable value of the health care, but rather on collectability factors that are unrelated to reasonable value. The Uspenskya decision is important in that, insofar as uninsured plaintiffs, defense counsel must bear in mind the need to consider putting into evidence expert testimony as to the reasonable value of the medical care itself. About the Authors: Edward F. Morrison, Jr. is the founding partner and Larry A. Schwartz is Of Counsel to The Morrison Law Group, a professional corporation. Their biographies can be viewed at www.morrisonlawgroup.com. Publication Note: The Morrison Law Group wishes to disseminate this publication to all clients and colleagues of the Firm who wish to receive it. Should any recipient desire to be removed from the distribution list, or wishes to have a colleague added, please contact Jim Van Dusen at The Morrison Law Group at 213 356-5504 or vandusen@morrisonlawgroup.com. 2 Disclaimer Note: The legal article presented above is intended to provide general information which may be of interest or use to clients and colleagues of The Morrison Law Group and should not be construed as legal advice on any matter. 3

As many are aware, the California Supreme Court ruled in the landmark decision of Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541 that an injured plaintiff whose medical expenses are paid through private insurance may recover as economic damages based on those expenses no more than the amounts paid by the plaintiff or his or her insurer for the medical services received and/or still owing at the time of trial (Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541) (“Howell”). In Corenbaum v. Lampkin (2013) 215 Cal.App.4th 1308, the California Court of Appeal, Second District, further ruled that evidence that the reasonable value of past medical services exceeded the amount paid and/or still owing at trial is inadmissible on the issue of the amount of damages for past medical services. However, the impacts of the Howell decision on the proper measure of damages in a case brought by an uninsured plaintiff who has not paid his or her medical bill and remains liable for the medical bill as of the date of the trial, are less clear.

In Uspenskaya v. Meline (2015) 241 Cal.App.4th 996 (“Uspenskaya“), the California Court of Appeal, Third District, attempted to shed further light on the admissibility of medical charges incurred by an uninsured personal injury plaintiff and still owing at the time of trial. In Uspenskaya, a defendant's vehicle collided with the plaintiff's vehicle at a busy intersection. The plaintiff sustained spinal injuries and filed suit against the defendant. Eventually, the plaintiff had surgery to repair a herniated lumbar disk. At trial, the jury found defendant negligent and awarded plaintiff a total of $429,773.71 in damages including $261,773.71 in past medical expenses, which was the full amount of her “billed” (but not paid for) medical charges as of the time of trial.

The factual twist in Uspenskaya dealt with the fact that the medical care providers for the uninsured plaintiff – which provided their services in part based on a lien against any recovery at trial – sold their lien and rights to payment prior to trial to MedFin Managers, LLC ("MedFin") The plaintiff was

not a party to the sale of the lien rights to MedFin and the plaintiff remained liable for the full amount of her medical bills to MedFin.

Plaintiff argued at trial, citing the decision in Katiuzhinsky v. Perry (2007) 152 Cal.App.4th 1288 (“Katiuzhinsky”) (another case involving MedFin) that the Howell decision did not apply because, just as in Katiuzhinsky, the plaintiff remained fully liable for the amounts owed insofar as the medical bills. In response, defense counsel in Uspenskaya argued that Howell, and a recent case, Bermudez v. Ciolek (2015) 237 Cal.App.4th 1311 (a bicycle injury accident involving an uninsured plaintiff) stood for the proposition that the amount paid by MedFin could be admitted into evidence to prove the reasonable cost of the treatment. The trial court agreed with plaintiff and excluded evidence of the amounts paid by MedFin. Defense counsel did not proffer any expert testimony as to whether or not the amounts paid by MedFin were reasonable (and it appears the trial court would have permitted evidence of the payments by MedFin to come into evidence if there had been expert testimony as to their reasonableness).

On appeal, the Court of Appeal ruled that because Uspenskaya did not involve a transaction between the buyer of the health care treatment (the injured party) and the seller of that treatment (the health care provider), evidence of the amount paid by MedFin was too prejudicial to be admitted, at least without other expert testimony. In that regard, the Court of Appeal ruled that the amount MedFin paid is not necessarily based on the reasonable value of the health care, but rather on collectability factors that are unrelated to reasonable value.

The Uspenskya decision is important in that, insofar as uninsured plaintiffs, defense counsel must bear in mind the need to consider putting into evidence expert testimony as to the reasonable value of the medical care itself.

About the Authors: Edward F. Morrison, Jr. is the founding partner and Larry A. Schwartz is Of Counsel to The Morrison Law Group, a professional corporation. Their biographies can be viewed at www.morrisonlawgroup.com.

Publication Note: The Morrison Law Group wishes to disseminate this publication to all clients and colleagues of the Firm who wish to receive it. Should any recipient desire to be removed from the distribution list, or wishes to have a colleague added, please contact Jim Van Dusen at The Morrison Law Group at 213 356-5504 or vandusen@morrisonlawgroup.com.