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California Supreme Court Grants Review of Collateral Source Rule Affecting Medical Damages in Tort Cases

2010 | Topics: Business Litigation, Class Actions, Product Liability

Briefs are currently being filed in the California Supreme Court to seek a final opinion on whether full charges for medical expenses should be payable to tort plaintiffs as damages even where those expenses have been partially paid by an insurer or written off by a provider.

In Howell v. Hamilton Meats & Provisions, Inc. (S179115), the Fourth Appellate District Court of Appeal reversed a trial court’s order that reduced a jury’s award of medical expenses to a plaintiff to the amounts actually collected by her medical providers, rather than permitting an award of an amount that was not expended for her medical services. In doing so, the Court of Appeal rejected and distinguished existing California authority, including Hanif v. Housing Authority (1988) 200 Cal.App.3d 635 and Nishihama v. City and County of San Francisco (2001) 93 Cal.App.4th 298. Instead, it concluded that the amount of medical expenses written off by plaintiff’s medical providers should be awarded to her under the “collateral source rule.” The collateral source rule applies when an injured party obtains payment for its medical expenses even if the injured party has already been compensated for these expenses by an independent source (i.e. an insurer). The Supreme Court granted review in March to determine, among other issues, whether the plaintiff’s economic damages should be limited to the amount the medical provider accepts as payment. Hamilton Meats filed its opening brief in April, and Howell’s brief is expected to be filed in June.