Jump to Navigation
California Supreme Court Decides Important Personal Injury Damage Case

The California Supreme Court, in the August 2011 case of Howell v. Hamilton Meats and Provisions Inc., ruled that a California plaintiff suing for compensatory damages for personal injury because of the negligence of another may not recover the amount of any insurer-negotiated rate differential. The California Supreme Court jumped into the national fray on this issue in an almost-unanimous opinion.

The plaintiff, Rebecca Howell, was a young, gifted athlete severely injured when her SUV was in a truck accident caused by the negligent operation of a delivery truck. The liability of the truck driver's employer was not contested, but an important legal issue arose regarding how much Howell should be compensated for her economic damages.

Economic damages are those financial losses actually incurred as a result of someone else's negligence. In car-accident cases like Howell's, the major compensatory-damage amount is usually for medical bills. Her medical providers billed her about $190,000 for medical treatment from the accident. In a common practice, her medical insurance company had negotiated discounts with her doctors and hospital, after which the insurer only had to pay about $60,000 to satisfy Howell's medical debt.

The difference (about $130,000) was written off by the medical providers pursuant to the discount agreements. At issue was whether Howell should be able to collect this negotiated rate differential amount (also called a "write-down") as compensatory damages because it was actually billed to her or whether she could only collect the discounted amount of $60,000 that the insurance company actually paid on her behalf.

After conflicting decisions from the trial and appellate courts, the California Supreme Court held that "no such recovery is allowed, for the simple reason that the injured plaintiff did not suffer any economic loss in that amount." Although she was billed and arguably the reasonable value of the medical services was $190,000, neither she nor her insurer on her behalf ever paid $130,000 of that amount. The court ruled the real monetary loss was only $60,000.

The plaintiff argued that the court's holding would violate the "collateral-source rule" that says that a plaintiff may recover amounts paid on his or her behalf by a third party (usually an insurer) for injuries received from the negligence of another. Usually that third party can recover the amount it paid out from the plaintiff after recovery in the lawsuit. However, the California Supreme Court said the rule only applies to amounts actually paid out, not to the discounted amount that was never paid.

If you are injured in California by the negligence or recklessness of another person, discuss your case with an experienced personal injury attorney as early as possible to understand your rights and options, including the impact the Howell case may have on your recovery.

Our Firm Locations

Gates, O'Doherty, Gonter & Guy LLP

ORANGE COUNTY OFFICE

Office Managing Partner:
K. Robert Gonter, Jr.
E-mail the Firm | Irvine Law Office

Gates, O'Doherty, Gonter & Guy, L.L.P
38 Discovery, Suite 200
Irvine, CA 92618

Phone: 949-753-0255
Fax: 949-753-0265

San Diego Office

Office Managing Partner:
Douglas D. Guy
E-mail the Firm | San Diego Law Office

Gates, O'Doherty, Gonter & Guy, L.L.P
15373 Innovation Drive, Suite 170
San Diego, CA 92128

Phone: 858-676-8600
Fax: 858-676-8601

Los Angeles office

Office Managing Partner:
Matthew M. Proudfoot
E-mail the Firm | Map and Directions

355 S. Grand Ave, Suite 2450
Los Angeles, CA 90017
Phone: 949-753-0255
Fax: 949-753-0265

Ontario Office

Office Managing Partner:
Sean O'Doherty
E-mail the Firm | Ontario Law Office

Gates, O'Doherty, Gonter & Guy, L.L.P
3350 Shelby St., Suite 200
Ontario, CA 91764

Phone: 949-753-0255
Fax: 949-753-0265