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California Supreme Court Issues Major Decision on Medical Expenses


California’s Supreme Court is the latest state appellate court to revisit an issue that personal injury and wrongful death attorneys call the “collateral source” rule. In Howell v. Hamilton Meats, a case involving a truck accident victim who received a damages award, the court held that the injured motorist could not recover the difference between the rate the health care provider charged and the amount actually paid by the driver’s medical insurance company.

The motorist had suffered serious injuries when she was struck by a delivery truck because the truck driver performed an illegal and negligent U-turn into her lane. The injury victim required multiple surgeries to treat her spinal injuries, as well as a complex bone graft procedure to treat a serious neck injury.

At trial, a jury awarded the motorist personal injury damages based on the total amount she had been billed for medical care. The defendant trucking company submitted a post-trial motion to reduce medical expense damages by two-thirds, which represented the amount actually paid by her insurance company, and the trial court reduced past medical damages “to reflect the amount the medical providers accepted as payment in full.”

The Court of Appeal reversed the trial court based on its interpretation of existing case law regarding the collateral source rule. The rule provides that judges cannot mitigate damages based on the existence of collateral payments from a third party to an injury victim, including medical insurance coverage. The truck driver’s employer petitioned the California Supreme Court for further review.

The Supreme Court reversed, thus introducing a significant change to California law regarding a plaintiff’s ability to be compensated for medical expense damages. The court noted that the negotiated rate differential between what was charged and what was paid in this case was substantial, and concluded that 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.”

California Personal Injury Lawyers Pursue All Legal Sources of Compensation

Proof of damages is a key aspect of an attorney’s handling of any personal injury or wrongful death claim. The Howell decision makes it all the more important for a truck accident lawyer to thoroughly explain the full extent of all harm suffered by a client. By working with certified life care planning specialists, a California serious injury law firm can help a client secure sufficient compensation for all anticipated future needs.