Fifth District Court Of Appeals Affirms Application Of Howell To Medicare And Medi-Cal

Headshot of Robert F BennettOn April 8, 2013, the Fifth Appellate District Court of Appeals published James Luttrell v. Island Pacific Supermarkets, Inc., where it affirmed the application of Howell v. Hamilton Meats (2011) 52 Cal.4th 541, to medical damages paid by Medicare and Medi-Cal. In the case, Luttrell appealed from an amended judgment entered after a jury verdict and post-trial rulings in his personal injury action. In the original action, defendant attempted to limit introduction of evidence at trial regarding the amounts charged for Luttrell’s medical care alleging that only the amounts paid were admissible under Howell. While the trial court denied the request in limine, a post-verdict motion brought by Island Pacific was granted reducing the amount awarded for past medical damages to those amount actually paid instead of those amounts charged. The disparity in the amounts charged versus the amount paid for Luttrell’s past medical care was $118,027.25. Accordingly, the trial court reduced the plaintiff’s award regarding Luttrell’s past medical damages from $256,109.50 to $138,082.25.

In affirming the trial court’s ruling, the appellate court discussed Howell and those related cases which were decided before it. In conformity with Howell the court noted a plaintiff typically may not recover more than the actual amounts paid by him or on his behalf for past medical services, even though the amounts billed for those services were greater. The appellate court also harmonized the reduction by concluding that because Luttrell’s liability to medical providers for his past medical services was limited to the amounts Medicare and Medi-Cal actually paid. Thus, Luttrell’s recovery from Island Pacific for past medical services must be limited to those amounts actually paid.

With this decision, the reach of Howell to the calibration of plaintiff’s special damages has been affirmed to extend not only to private insurers but also to government sponsored insurance plans such as Medicare and Medi-Cal.


Disclaimer: The information contained in this post are provided for informational purposes only. Such information is not intended as, nor does it constitute legal advice, and information is current only as of the date indicated. No attorney-client relationship is created by this website, nor by any exchange of information in connection therewith, unless and until a written agreement containing all terms of representation has been signed.

Ninth Circuit Increases Duty of Insurers To Settle Third-Party Claims

In each insurance policy, California law implies a covenant of good faith and fair dealing. This implied covenant applies to insurers and requires them to settle within the policy limits where there is substantial likelihood of recovery in excess of those limits. On June 11, 2012, the Ninth Circuit Court of Appeals extended that duty and issued a decision in Yan Fang Du v. Allstate Insurance Company, holding that an insurer has a duty to effectuate settlement where liability is reasonably clear, even in the absence of a settlement demand. (Yan Fang Du v. Allstate Insurance Company, et al.,681 F.3d 1118)

On June 17, 2005 Joon Kim was involved in a motor vehicle accident when his car collided with a vehicle containing four parties including appellant: Yan Du, Li Wang, Wan Feng and Shio Feng. At the time, Kim maintained insurance limits through Deerbrook Insurance of $100,000 per person, $300,000 per accident. Following initiation of a claim, Deerbrook evaluated the case on February 15, 2006, wherein they were aware it concerned serious injury of Du and that liability for the accident was accepted. On June 9, 2006, a global settlement demand of $300,000 was made for all four parties wherein the four claimants’ medical costs totaled $142,501.92. In response, Deerbrook’s adjuster advised that insufficient information was known regarding the three claimants other than Du and proposed settlement of Du’s claim for $100,000; this was rejected. On October 31, 2006, Du filed suit and a jury returned a verdict for $4,126,714.46. Kim then assigned his bad faith claim against Deerbrook to Du and Du filed against Allstate and Deerbrook. Du alleged Deerbrook breached the covenant of good faith and fair dealing when it failed to affirmatively settle the doctor’s claim within the policy limit after Kim’s liability for a judgment in excess of the policy became clear on February 15, 2006. At trial the District Court rejected a jury instruction proposed by Du instructing that Deerbrook had an affirmative duty to settle and that their failure to do so may be considered as breach of the covenant of good faith and fair dealing. Judgment was entered for Deerbrook and Du appealed arguing the excluded instruction was proper.

On appeal Du argued that once liability is reasonably clear and damages are established in excess of the policy, an insurer has a duty to effectuate settlement even in the absence of a demand. The Ninth Circuit affirmed the District Court’s ruling on the facts but not the law, holding that while Du’s proposed jury instruction was consistent with the law, it was improper due to a lack of evidence showing that Deerbrook could have extended an earlier settlement offer to Du in the absence of crucial claim information. However, the Court rejected the requirement that a settlement demand was a prerequisite for bad faith liability. As a result, insurers will be required to act more affirmatively in resolution of claims where potential excess liability exists.


Disclaimer: The information contained in this post are provided for informational purposes only. Such information is not intended as, nor does it constitute legal advice, and information is current only as of the date indicated. No attorney-client relationship is created by this website, nor by any exchange of information in connection therewith, unless and until a written agreement containing all terms of representation has been signed.

California Appeals Court Extends Howell v. Hamilton Meats Rationale

In a decision to provide more clarity regarding plaintiff’s special damages, on March 8, 2012, California’s Second District Court of Appeals issued its opinion in Sanchez v. Brooke, 204 Cal.App.4th 126 (2012).   In its ruling, the Court extends the rationale and holding in Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, to preclude plaintiff from recovering as a damage past medical expenses paid to providers accepting a discounted amount as payment in full from an employer under the Workers’ Compensation law. For details, please click here.


Disclaimer: The information contained in this post are provided for informational purposes only. Such information is not intended as, nor does it constitute legal advice, and information is current only as of the date indicated. No attorney-client relationship is created by this website, nor by any exchange of information in connection therewith, unless and until a written agreement containing all terms of representation has been signed.

Supreme Court Grants Review of Howell v. Hamilton Meats

On March 10, 2010 , the California Supreme Court granted review in Howell v. Hamilton Meats (2009) 179 Cal.App.4th 686 (Review Granted and Opinion Superseded (Mar 10, 2010)). As a result, the Howell case can no longer be cited as legal authority in other matters.

The plaintiffs’ bar had used the Howell decision from the Fourth Appellate District to suggest that the recoverable amount of special medical damages was the value of such services for which plaintiff incurs actual liability, regardless of whether the medical providers subsequently accept less as full payment from a private health insurer. The Howell case was contrary to the Hanif, Nishihama, Greer line of cases which allowed a post trial hearing to reduce jury awards for medical specials based on medical care providers write-offs, adjustments and what was accepted as full and complete payment.

The practical effect of the Supreme Court’s decision to grant review is that the Howell opinion’s publication status is now automatically changed from “published” to “not published”. (Rule 8.1105(e).) Under Rule 8.1115(a), a case that is not published cannot be cited as authority in other cases. The citable authority is now back to where it was before Howell and trial courts are now required to choose among Hanif, Nishihama, Greer, Katiuzhinsky and Olsen, as they were before the Howell decision.

After the grant of review, formal briefs on the merits and amicus briefs will now be prepared and filed. It is estimated it will be between twelve and eighteen months before the Supreme Court holds the oral argument and rules on this matter.


Disclaimer: The information contained in this post are provided for informational purposes only. Such information is not intended as, nor does it constitute legal advice, and information is current only as of the date indicated. No attorney-client relationship is created by this website, nor by any exchange of information in connection therewith, unless and until a written agreement containing all terms of representation has been signed.

Mitigation of Damages

Must a personal injury plaintiff mitigate damages by attending medical treatment appointments outside working hours in order not to incur damages for loss of time from work?

A personal injury plaintiff has a general duty to mitigate his/her damages. “The person injured by the wrongful act of another is bound…to exercise reasonable care and diligence to avoid loss or minimize the resulting damages and cannot recover for losses which might have been prevented by reasonable efforts and expenditures on his part.” Valencia v. Shell Oil Co. (1944) 23 Cal.2d 840, 844. “A plaintiff may not recover for damages avoidable through ordinary care and reasonable exertion.” Valle de Oro Bank v. Gamboa (1994) 26 Cal.App.4th 1686, 1691 citing Mayes v. Sturdy Northern Sales, Inc. (1979) 91 Cal.App.3d 69. However, “The duty to mitigate damages does not require an injured party to do what is unreasonable or impracticable.” Valencia 23 Cal.2d at 846. “The rule of mitigation of damages has no application where its effect would be to require the innocent party to sacrifice and surrender important and valuable rights.” Valle de Oro 26 Cal.App.4th at 1691 citing Seaboard Music Co. v. Germano (1972) 24 Cal.App.3d 618, 623.

The court in Christiansen v. Hollings (1941) 44 Cal.App.2d 332, 346 stated “The correct rule is that an injured person must use reasonable diligence in caring for his injuries. What is reasonable diligence depends on all the facts and circumstances of each case.” “The doctrine [of mitigation] does not require the injured party to take measures which are unreasonable or impractical or which would involve expenditures disproportionate to the loss sought to be avoided or which may be beyond his financial means.” Green v. Smith (1968) 261 Cal.App.2d 392, 396.

Despite plaintiff having the duty to mitigate, the burden of proving the extent to which the damages could have been mitigated lies with defendant.

It is true that plaintiff is in duty bound to minimize his damage in any way that he reasonably can, and if he negligently refuses to do so he cannot recover for that which he might have prevented. It is for appellant to establish that the steps taken by plaintiff to so minimize his loss or damage falls short of the obligation so fixed. In other words, the burden is on the defendant to establish matters asserted by him in mitigation or reduction of the amount of plaintiff’s damage.


Disclaimer: The information contained in this post are provided for informational purposes only. Such information is not intended as, nor does it constitute legal advice, and information is current only as of the date indicated. No attorney-client relationship is created by this website, nor by any exchange of information in connection therewith, unless and until a written agreement containing all terms of representation has been signed.

Underinsured Motorist Arbitration – Powers Obtains Defense Award

This underinsured motorist claim went to binding arbitration. In this case, the claimant was a real estate appraiser who claimed that he sustained hip, right knee and lower back injuries arising from a November 1997 motor vehicle accident. The claimant contended that he struck his right knee during the accident, resulting in a medial meniscus tear and damage to the lateral femoral condyle of the knee. He had undergone two right knee arthroscopic procedures and the medical testimony provided that he would probably require total knee replacement in the future. He claimed past medical expenses of $27,310.82, future medical expenses of $91,547.00, past income loss of $20,727.00 and future income loss of $90,488.50.

Brian’s medical experts, forensic anatomist Lawrence Elson, and orthopedist Gordon Lundy, testified that had the meniscus tear and lateral femoral condyle injuries occurred at the time of the accident, the claimant would have had immediate significant pain and objective signs of injury. Dr. Lundy testified that it was possible that he sustained a lumbar sprain or strain as a result of the accident. The medical records showed that a few hours after the accident, Mohamed saw his primary care physician who reported no reference to any right knee complaints or findings and only noted lower back and hip complaints. Six days after the accident, the claimant began physical therapy and at that time complained of right knee pain and swelling.

The accident reconstruction experts for both sides agreed that the underinsured motorist’s speed at impact was 15 miles per hour.

The underlying insurer paid its policy limits of $100,000 to the claimant. The arbitrator awarded total damages of $10,000. Due to the underlying third-party settlement, the net award was zero.