“UNMITIGATED” SUCCESS

Nearly seven years ago, the California Supreme Court rendered its decision in Howell v. Hamilton Meats & Provisions, Inc., limiting a plaintiff’s right to recover economic damages for past medical expenses to the reasonable value of the services rendered or the amount actually paid by the plaintiff’s health insurance carrier, whichever is less.

At the time, offering my prediction of the impact Howell was likely to have, I wrote the following:

“In the short run, defendants will undoubtedly temper their settlement offers, believing that juries will be less likely to award substantial “general” damages absent evidence of substantial “special” damages.”

“In the long run, however, the Howell decision does not necessarily bode poorly for plaintiffs. Some in the legal community have argued that the logical nexus between “special” damages and “general” damages is illusory and that “general” damage awards must stand on their own. Adapting to Howell, counsel for plaintiffs are likely to find new and better ways to communicate the nature and extent of the pain and suffering experienced by their clients. “Day in the Life” videos and other techniques are likely to be used with greater frequency — and eventually greater impact — at mediation, arbitration and trial.”

“Although Howell has been criticized by the plaintiffs’ bar as having done fundamental and irreparable damage to the collateral source rule, the decision may someday be viewed more charitably — perhaps, ironically enough, as one which helped generate a new wave of even more creative and effective advocacy techniques on behalf of plaintiffs by their counsel.”

Since I first discussed Howell back in October of 2011, the number of seven and eight figure verdicts obtained in personal injury actions have made those words seem particularly prescient. And just last month, the Court of Appeal — further clarifying Howell and its progeny — handed the plaintiffs’ bar what may well be its most important victory to date.

In Pebley v. Santa Clara Organics, LLC, Division Six of the Second Appellate District held that plaintiff’s decision to treat outside his health insurance plan did NOT constitute a failure to mitigate his damages:

“A tortfeasor cannot force a plaintiff to use his or her insurance to obtain medical treatment for injuries caused by the tortfeasor. That choice belongs to the plaintiff. If the plaintiff elects to be treated through an insurance carrier, the plaintiff’s recovery typically will be limited to the amount paid by the carrier for the services rendered. But where, as here, the plaintiff chooses to be treated outside the available insurance plan, the plaintiff is in the same position as an uninsured plaintiff and should be classified as such under the law.”

Noting there are a variety of reasons an injured plaintiff might choose to treat outside his or her insurance plan, including a desire to utilize the services of a physician or surgeon who specializes in treating the type of injury sustained, the court wrote:

“It is undisputed Pebley required complex surgery to fuse three of his cervical vertebrae. Complications from this type of surgery include paralysis or death. And even absent complications, a poor outcome would leave Pebley with continued pain in his neck and weaknesses and numbness in his arms and hands. Pebley had the right to seek the best care available and the incentive to do so.”

Unless the decision is overturned by the California Supreme Court or abrogated by the legislature, the ruling in Pebley will almost certainly lead more plaintiffs to treat outside their insurance plans, thereby assuring full employment for billing experts on both sides. For plaintiffs and billing experts, you might say that the rejection of defendant’s “failure to mitigate” argument was — both literally and figuratively — an “unmitigated” success.

As always, I would be pleased to assist you and your clients in the dispute resolution process. Please don’t hesitate to contact me if I can be of service.

Best regards,

Floyd J. Siegal

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