DEFENDANTS CAN STILL FILE PRE -TRIAL MOTIONS TO REDUCE MEDICAL DAMAGE AWARDS UNDER HANIF

In personal injury cases, a successful plaintiff is generally allowed to recover damages to cover the cost of his or her medical expenses.  However, what often happens is that an insurance carrier will negotiate with a plaintiff’s doctors, hospitals, etc., and receive a discount on the amount the insurance carrier actually has to pay for the medical services provided to that plaintiff.  Despite this discount, a plaintiff will still try to collect the full amount of medical costs as damages, whether his or her insurance carrier actually paid that full amount or not.

In Cabrera v. E. Rojas Properties (February 8, 2011), plaintiff Ingrid Cabrera was injured when she fell down a staircase on property owned by defendant E. Rojas Properties, Inc.  Before trial, Rojas filed a motion to exclude evidence of Cabrera’s medical bills in excess of the amounts actually paid by Cabrera’s insurer as full payment for those bills.

After trial, a jury found Rojas was negligent in its use or maintenance of the property, while finding Cabrera herself was 10 percent negligent.  The jury also awarded Cabrera $57,534.45 in past medical expenses and $135,556.45 in total damages.  However, judgment was entered in the amount of $78,242.63, because Cabrera’s insurer was only required to pay $8,914.26 as full payment of the $57,534.45 amount for past medical expenses.  Not surprisingly, Cabrera appealed this reduction of damages he was allowed to collect for past medical expenses.

The “collateral source rule” is a doctrine which requires that “if an injured party receives some compensation for his injuries from a source wholly independent of the [defendant], such payment should not be deducted from the damages which the plaintiff would otherwise collect from the [defendant].”  Under this rule, Cabrera argued that an injured person is entitled to compensation from the tortfeasor for medical care even if such costs are covered by the person’s insurance.   (Hanif v. Housing Authority (1988) 200 Cal.App.3d 635, 639-640.)  However, the Court of Appeal disagreed with Cabrera’s argument that Rojas could not “take advantage of [Cabrera’s] insurer’s thrift in negotiating medical bills.”

Instead, the Court of Appeal ruled that Cabrera’s argument went against current California law, including the Hanif case and the Court’s decision in Nishihama v. City and County of San Francisco (2001) 93 Cal.App.4th298.  Current California law provides that a plaintiff “cannot recover more than the amount of medical expenses he or she paid or incurred, even if the reasonable value of those services might be a greater sum.”  (Katiuzhinsky v. Perry (2007) 152 Cal.App.4th1288, 1290.) 

In this case, there was no dispute as to either the amount paid by Cabrera’s insurer to the hospital which treated Cabrera, or the amount that was written off by that hospital.  Instead, the Court of Appeal noted that Cabrera could point to no prior case law that says the collateral source rule allowed her to recover the full amount billed for her medical costs after her insurance company already convinced the hospital to “write off” a large portion of the bill.

In short, until the California Supreme Court rules on the specific issue of whether an award for medical expenses can be reduced because a plaintiff’s insurer received a discount on the bills from that plaintiff’s medical provider, defendants can still file pre-trial motions to present this issue to a trial judge.  Defendants will need to continue investigating the amounts actually paid by insurance companies to medical care providers as part of their regular pre-trial preparation.

Congratulations!

Please congratulate our attorneys, Jonathan A. Ross and Arnold S. Levine for their successful appeal on behalf of Holy Cross Mortuary.  Cristobal Garau had entered into an agreement with the Mortuary for the funeral and interment of his mother.  This agreement was later challenged by Carlos Garau, Cristobal's brother.   While the Garau brothers fought over the mother's final resting place, the Mortuary was left in possession of the mother's body.  When the Mortuary filed a Petition for Order of Interment with the Court in order to end the prolonged dispute, Carlos Garau objected to the court even hearing the matter.  The trial court disagreed, and not only ruled the Mortuary acted properly, but also awarded control of the mother's body to Cristobal Garau.  Carlos Garau appealed this decision.  The Court of Appeal upheld the trial court's decision in favor of Cristobal Garau, and allowed the Mortuary to complete the funeral and interment.