The California Supreme Court recently limited defendants' liability for "medical special" damages, which ultimately will reduce the amount a plaintiff can recover in personal injury construction-related claims. In Howell v. Hamilton Meats & Provisions, Inc., the California Supreme Court held "that an injured plaintiff whose medical expenses are paid through private insurance may recover as economic damages no more than the amounts paid by the plaintiff or his or her insurer for the medical services received or still owing at the time of trial." The Court rejected plaintiff arguments that defendants are liable for the full "billed" amount, regardless of any discount the insurer may negotiate. "We hold no such recovery is allowed, for the simple reason that the injured plaintiff did not suffer any economic loss in that amount." The Court's ruling prevents plaintiffs from recovering in damages more than the actual harm incurred.

The Court ruled that "when a medical care provider has, by agreement with the plaintiff's private health insurer, accepted as full payment for the plaintiff's care an amount less than the provider's full bill, evidence of that amount is relevant to prove the plaintiff's damages for past medical expenses and, assuming it satisfies other rules of evidence, is admissible at trial." The Court further held that evidence of the higher billed amount was irrelevant "on the issue of past medical expenses."

It should be noted that the holding in Howell still allows a jury to hear evidence of the full value of the medical specials in considering general damages (i.e., pain and suffering) and future medical care. However, the full value of the medical bills cannot support an award for past medical specials greater than the amount paid by the health insurer. As a result, damages related to construction personal injury claims will be limited to only those that are actually incurred by its health insurance provider. This ruling should limit plaintiffs' past medical claims at trial, and will assist with pre-trial negotiations and will ultimately reduce a plaintiff’s construction-related personal injury claim.

If you would like to view the decision, please click HERE. If you have any questions or would like to discuss the impact of this holding in greater detail, please feel free to contact me, or alternatively Theodore Levin (213.417.5309 or tlevin@mpplaw.com), or any MPP attorney in the Construction & Design practice group.

Sincerely,

D. Creighton Sebra
Attorney at Law
213.417.5380
csebra@mpplaw.com

Morris Polich & Purdy LLP
1055 West Seventh Street
Twenty Fourth Floor
Los Angeles, CA 90017
www.mpplaw.com

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