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Howell v. Hamilton Meats & Provisions, Inc.

Supreme Court of California

August 18, 2011, Opinion Filed

S179115

Case Summary

Procedural Posture

In a case arising out of an automobile accident caused by a driver for defendant corporation, the trial court granted a defense motion to reduce plaintiff's past medical damages award to reflect the amount medical providers accepted as payment in full. The California Court of Appeal, Fourth Appellate District, Division One, reversed the reduction order. Defendant's petition for review was granted.

Overview

The court concluded that plaintiff could recover as damages for her past medical expenses no more than her medical providers had accepted as payment in full from plaintiff and her health insurer. Plaintiff did not incur liability for her providers' full bills, because at the time the charges were incurred, the providers had already agreed on a different price schedule for the insurer's members. Having never incurred the full bill, plaintiff could not recover it in damages for economic loss. For this reason alone, the collateral source rule was inapplicable. Plaintiff received the benefits of the health insurance for which she paid premiums: her medical expenses had been paid per the policy, and those payments were not deducted from her tort recovery. Plaintiff's insurance premiums contractually guaranteed payment of her medical expenses at rates negotiated by the insurer with the providers; they did not guarantee payment of much higher rates the insurer never agreed to pay. The appellate court incorrectly believed that the reduction order violated the collateral source rule.

Outcome

The judgment of the appellate court was reversed, and the case was remanded to that court for further proceedings.

LexisNexis® Headnotes

 

 

Torts > ... > Damages > Collateral Source Rule > Insurance Payments

Torts > ... > Compensatory Damages > Types of Losses > Medical Expenses

HN1  Insurance Payments

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, the injured person may not 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. No such recovery is allowed for the simple reason that the injured plaintiff did not suffer any economic loss in that amount. Civ. Code, §§ 3281, 3282.

 

Torts > ... > Damages > Collateral Source Rule > Insurance Payments

Torts > ... > Compensatory Damages > Types of Losses > Medical Expenses

HN2  Insurance Payments

The collateral source rule, which precludes deduction of compensation the plaintiff has received from sources independent of the tortfeasor from damages the plaintiff would otherwise collect from the tortfeasor, ensures that the plaintiff may recover in damages the amounts his or her insurer paid for the plaintiff's medical care. The rule, however, has no bearing on amounts that were included in a provider's bill but for which the plaintiff never incurred liability because the provider, by prior agreement, accepted a lesser amount as full payment. Such sums are not damages the plaintiff would otherwise have collected from the defendant. They are neither paid to the providers on the plaintiff's behalf nor paid to the plaintiff in indemnity of his or her expenses. Because they do not represent an economic loss for the plaintiff, they are not recoverable in the first instance. The collateral source rule precludes certain deductions against otherwise recoverable damages, but does not expand the scope of economic damages to include expenses the plaintiff never incurred.

 

Civil Procedure > Remedies > Damages > Compensatory Damages

Torts > ... > Compensatory Damages > Types of Losses > Medical Expenses

HN3  Compensatory Damages

Compensatory damages are moneys paid to compensate a person who suffers detriment from the unlawful act or omission of another, Civ. Code, § 3281, and the measure of damages generally recoverable in tort is the amount which will compensate for all the detriment proximately caused by the tort. Civ. Code, § 3333. Civ. Code, § 3282, in turn, defines "detriment" as a loss or harm suffered in person or property. A person who undergoes necessary medical treatment for tortiously caused injuries suffers an economic loss by taking on liability for the costs of treatment. Hence, any reasonable charges for treatment the injured person has paid or, having incurred, still owes the medical provider are recoverable as economic damages.

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52 Cal. 4th 541 ; 257 P.3d 1130 ; 129 Cal. Rptr. 3d 325 ; 76 Cal. Comp. Cases 1147 ; 2011 Cal. LEXIS 8119

REBECCA HOWELL, Plaintiff and Appellant, v. HAMILTON MEATS & PROVISIONS, INC., Defendant and Respondent.

Subsequent History: Reported at Howell (Rebecca) v. Hamilton Meats & Provisions, Inc., 2011 Cal. LEXIS 8768 (Cal., Aug. 18, 2011)

Time for Granting or Denying Rehearing Extended Howell (Rebecca) v. Hamilton Meats & Provisions, Inc., 2011 Cal. LEXIS 9437 (Cal., Sept. 8, 2011)

Rehearing denied by Howell v. Hamilton Meats & Provisions, 2011 Cal. LEXIS 11417 (Cal., Nov. 2, 2011)

Petition for Rehearing and Request(s) for Modification Denied by Supreme Court November 2, 2011

Prior History:  [1] Civil No. D053620—Court of Appeal, Fourth Appellate District, Division One; San Diego County Superior Court No. GIN053925—Hon. Adrienne A. Orfield, Judge

Howell v. Hamilton Meats & Provisions, Inc., 179 Cal. App. 4th 686, 101 Cal. Rptr. 3d 805, 2009 Cal. App. LEXIS 1874 (Cal. App. 4th Dist., 2009)

Disposition: Petition for review from a judgment of the Court of Appeal, Fourth Appellate District, Division One. Petition for review granted, judgment reversed, and matter remanded.