United States: California Court Of Appeal Opinion Re: Howell Issues With An Uninsured Plaintiff

The California Court of Appeal, Fourth Appellate District, Division Three (Orange County) issued an opinion in Bermudez v. Ciolex (2015) 237 Cal.App.4th 1311, analyzing Howell issues in a case involving an uninsured plaintiff. (Id. at p. 1316.) The court analyzed three questions: "(1) what is the proper measure of medical damages; (2) what evidence is admissible to prove the proper measure of medical damages; and (3) what evidence is sufficient to affirm an award of medical damages based on the proper measure?" (Id. at p. 1328, italics in original.)

The court first held that "the measure of medical damages is the lesser of (1) the amount paid or incurred, and (2) the reasonable value of the medical services provided. In practical terms, the measure of damages in insured plaintiff cases will likely be the amount paid to settle the claim in full. It is theoretically possible to prove the reasonable value of services is lower than the rate negotiated by an insurer. But nothing in the available case law suggests this will be a particularly fruitful avenue for tort defendants. Conversely, the measure of damages for uninsured plaintiffs who have not paid their medical bills will usually turn on a wide-ranging inquiry into the reasonable value of medical services provided, because uninsured plaintiffs will typically incur standard, nondiscounted charges that will be challenged as unreasonable by defendants." (Bermudez, supra, 237 Cal.App.4th at pp. 1330-1331.)

The court then determined that plaintiff's "uninsured status meant that billed amounts were relevant to the amount he incurred (unlike insured plaintiffs, who really only incur the lower amount negotiated by their insurer)." (Bermudez, supra, 237 Cal.App.4th at p. 1335.) According to the court, with an uninsured plaintiff, the billed amounts are also relevant and admissible with regard to the reasonable value of plaintiff's medical expenses. In a footnote, the court "express[ed] some reservations about" Corenbaum v. Lampkin (2013) 215 Cal.App.4th 1308, which held that the amount initially billed is inadmissible in cases of insured plaintiffs whose bills were paid in full or less than the initial billed amount. The court noted that "unless defendants stipulate to the reasonableness of the amount actually paid to settle in full the medical bill, it seems to us that, consistent with pre-Howell case law, evidence of the initial billed amount would be relevant to proving the reasonableness of the discounted amount that was actually paid." (Bermudez, supra, 237 Cal.App.4th at p. 1335, fn. 6.)

Finally, the court made two points about the sufficiency of evidence to support a judgment: (1) the amount paid to settle in full an insured plaintiff's medical bills is likely substantial evidence on its own of the reasonable value of the services provided; and (2) consistent with pre-Howell law initial medical bills are generally insufficient on their own as a basis for determining the reasonable value of medical services. (Bermudez, supra, 237 Cal.App.4th at p. 1335.) The court concluded that "[l]ike insured plaintiffs, uninsured plaintiffs must introduce substantial evidence of both the amount incurred and the reasonable value of the services. The amount incurred sets a cap on medical damages. But unlike the amount paid pursuant to an insurer's negotiated rates, the amount incurred by an uninsured medical patient is not sufficient evidence on its own to prove the reasonable amount of medical damages." (Id. at p. 1337.)

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