IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION ONE
December 22, 2010
JAMES JAWOROWSKI, PLAINTIFF AND APPELLANT,
MITCHELL ENGINEERING ET AL., DEFENDANTS AND APPELLANTS.
(San Francisco City & County Super. Ct. No. CGC-07-469973)
The opinion of the court was delivered by: Marchiano, P.J.
Jaworowski v. Mitchell Engineering
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
This personal injury case arises from a traffic accident caused by an unsafe lane change. Defendant Finbar James Brody, an employee of defendant Mitchell Engineering driving a company truck, allegedly changed lanes without looking and struck the motorcycle driven by plaintiff James Jaworowski. The jury found Brody 85 percent responsible and returned a verdict for plaintiff. The trial court reduced the amount of special damages by the negotiated rate differential in accordance with Hanif v. Housing Authority (1988) 200 Cal.App.3d 635 (Hanif) and Nishihama v. City and County of San Francisco (2001) 93 Cal.App.4th 298 (Nishihama). The court then denied a defense motion for a new trial and entered judgment for plaintiff.
On appeal, defendants contend the trial court erred by admitting certain expert testimony and accompanying photographs of the accident scene, and by admitting certain evidence of emotional distress. On a cross-appeal, plaintiff challenges the damage award. He contends the court violated the collateral source rule by reducing the special damages by the amount of the negotiated rate differential. We disagree with defendants' contentions and agree with plaintiff's. Accordingly, we affirm the judgment in all respects except as to the award of special damages. We reverse the special damage award and remand with instructions to reinstate the full amount of special damages and enter a new judgment in favor of plaintiff.
The evidence shows two conflicting versions of the accident. Under appellate standards of review, we must accept plaintiff's version. Where testimony conflicts we must view the evidence in the light most favorable to the prevailing party. (See Crawford v. Southern Pacific Co. (1935) 3 Cal.2d 427, 429.) "We have no power on appeal to weigh the evidence, consider the credibility of witnesses, or resolve conflicts in the evidence or the reasonable inferences that may be drawn from the evidence. [Citation.]" (Navarro v. Perron (2004) 122 Cal.App.4th 797, 803; see Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 766.) Plaintiff testified as follows. On January 24, 2006, he was riding his motorcycle from his home in the Sunset District to his welding job in Hunter's Point. He started work at 7:00 a.m. He rode down O'Shaughnessy Boulevard in a generally southeast direction. At the southern tip of Glen Canyon Park, O'Shaughnessy becomes Bosworth Street, which continues generally eastbound toward its intersection with Diamond Street near the Glen Park BART station.*fn1
As plaintiff approached the intersection of Bosworth and Diamond, he was riding in the #1 lane, or the left-hand lane of two lanes of eastbound traffic. His speed was 10−15 m.p.h. After two vehicles in front of him turned left, plaintiff had a clear view of Bosworth all the way down the street past the BART station to the I-280 overpass. The #1 lane in front of him "was absolutely free of any type of traffic." Plaintiff "had a very clear view of an open lane ahead of me."
As he entered the intersection, plaintiff resumed and maintained his normal speed of 25 m.p.h.*fn2 He continued to be able to see all the way to the freeway overpass. His #1 lane was completely open, with no traffic in front of him. He noticed several cars stopped in the #2, or right-hand lane, because of pedestrians using the crosswalk to cross to the BART station. This backed up traffic queuing up in the #2 lane to approach the freeway on-ramp. Plaintiff saw the traffic in the #2 lane slowing, with the brake lights of the vehicles activated. But he saw no turn indicators flashing and had "no real concerns" about somebody pulling out in front of him.
Plaintiff saw a white GMC Sierra pickup truck in the line of stopped traffic queuing up in the #2 lane. This was the truck driven by defendant Brody and owned by defendant Mitchell Engineering. The truck's brake lights were on, but its turn indicators were not. The truck was the last vehicle in the line of queued traffic.
Plaintiff, who had driven motorcycles for 29 years, always looked for indications that a driver was going to pull into his lane. He tended to look in the mirrors of cars ahead of him and make eye contact with drivers. As he approached Brody's truck, plaintiff could see the back of Brody's head, but never saw Brody's head move as if to focus on the truck's inside or left-side rearview mirrors. Plaintiff did not see Brody's head move at all. He also did not see Brody make eye contact with him.
As plaintiff approached the rear bumper of the truck, he glimpsed a light out of the corner of his eye that appeared to be an activated turn indicator. At the same moment, Brody changed lanes into the #1 lane, striking plaintiff's motorcycle. Plaintiff shouted, "What the fuck [are you] doing?" Only then did Brody turn his head and look in plaintiff's direction. Brody "was absolutely startled" and "had a completely scared look on his face." Brody did not attempt to veer away from plaintiff's motorcycle, but continued to move into the #1 lane. Plaintiff braked hard, was pushed into the curb, and was thrown off his motorcycle.
Dr. Harris Meyer, a chiropractor, was parking his motorcycle at the Glen Park BART station at approximately 6:45 a.m. that day. He heard something, looked up, and saw the rear of a motorcycle rising up and the driver in the air. He also saw a pickup truck on the other side, the right side, of the motorcycle. It was his "impression" that the truck had moved into the motorcycle's lane and struck the motorcycle, but he did not actually see the collision. He did see that the motorcycle had landed on top of plaintiff, and that plaintiff was in pain and distress.
San Francisco Police Officer Jose Lopez responded to the scene and investigated the collision. Plaintiff told Officer Lopez that Brody had moved into his lane and forced him into the curb, causing his motorcycle to cartwheel into the air. Brody told Officer Lopez that he moved into the #1 lane because a car slowed down in his lane, and that plaintiff crashed into the rear of his truck. Brody also told Officer Lopez that his truck and plaintiff's motorcycle travelled side by side for about 10 to 15 feet. Brody's statement to the officer apparently did not include any reference to Brody's looking in his mirrors and not seeing the motorcycle. Officer Lopez could not recall Brody telling him what Brody testified to at trial: that when the collision occurred he was already in the #1 lane, and that plaintiff was trying to go around him in the space between the truck and the curb.
Plaintiff presented the testimony of traffic accident reconstructionist James Hughes, a retired San Francisco Police Officer. Hughes had over 20 years' experience of traffic accident reconstruction, had a lifetime certification to teach at junior colleges in the field of accident investigation, and was accredited by A.C.T.A.R., the Accreditation Commission of Traffic Accident Reconstructionists, "the only organization that certifies accident reconstructionists." He had a bachelor's degree in criminal justice administration and a master's degree in organizational psychology, "the study of human perception and response and time and motion studies." Hughes, a former motorcycle officer, had ridden motorcycles for 35 to 40 years and had logged an estimated 200,000 miles.
Hughes visited the accident scene, took photographs, and analyzed the traffic patterns. He testified that the #1 lane was 10 feet wide, and the #2 lane was 22 feet wide. He testified that given the width of the handlebars of plaintiff's motorcycle, the width of the truck and the width of the #1 lane, it is doubtful―although possible―that plaintiff could have been riding next to Brody's truck if Brody was in the center of the #1 lane. Hughes believed there would have been insufficient room, or the vehicles would be practically touching.
Hughes also testified that given the speed of travel, plaintiff's motorcycle would have been 60 feet behind the rear of the truck, not next to it. When asked about plaintiff's contradictory testimony that he was right next to the truck when he saw the turn indicator, Hughes said this was his best recollection and was explained by the fact that plaintiff was moving throughout the sequence of events. Hughes testified such variations between perceptions and reality are common in accident victims. He found "nothing wrong" with plaintiff's overall perceptions of the accident, but noted they were "a little different from reality."
Hughes performed what he called a "sight distance study" of the accident. Standing at the point of impact, he took pictures at the height of 47 inches―the "bottom of the window height" of Brody's truck, and presumably the height of the left-hand rearview mirror. He stood on the dividing line between the #1 and #2 lanes and took six pictures, back up the street in the direction from which plaintiff had driven down toward the point of impact. Assuming plaintiff's speed was 25 m.p.h., he would have travelled 37 feet per second. Hughes positioned a motorcycle in six successive 37-foot intervals to show the position of plaintiff at one, two, three, four, five, and six seconds before the accident. In each picture the motorcycle is clearly visible in a rearward view which, we must assume, approximated the view from Brody's left-hand mirror. The six pictures were admitted as exhibit 3, with each picture captioned: "Motorcycle at Position" followed by the number of "Seconds Before Impact."
In short, the pictures showed that plaintiff's motorcycle would have been visible in Brody's mirror for six seconds before impact. Hughes testified his study "just gives you a picture, as is the motorcycle visible during all these periods. Yes."
Hughes also placed a GMC truck very similar to Brody's with similar mirrors in the #2 lane about 70 feet from the point of impact. Hughes chose that distance because it would have taken 33 feet for the truck to have made a lane change, and the extra distance would apparently account for the distance the truck traveled while the driver looked in his mirrors before a lane change. Thus, Hughes positioned the truck where he believed it would have begun the lane change. He photographed the left-hand rear-view mirror, which shows a clear and unobstructed view of the #1 lane all the way up to the intersection with Diamond Street.*fn3
Hughes testified that, in his opinion, Brody "probably [did] not" look before changing lanes. He testified that Brody was at fault for the accident because of his unsafe lane change, and plaintiff did not contribute to the accident.
Brody testified as follows. On the morning of the accident he was driving the company truck in the #2 lane on Bosworth. He was stopped at the intersection of Bosworth and Diamond. When the light changed to green, he proceeded through the intersection at 10−20 m.p.h. He saw two or three cars lined up at the I-280 on-ramp. He turned on his turn indicator to change lanes and slowed down. He looked in his left-hand rear-view mirror and looked over his left shoulder, and "proceeded gradually to make my lane change." He did not see a vehicle in his rear-view mirror. He took 100 feet and five to six seconds to change lanes.
Brody testified he heard the motorcycle driver yelling and heard scratching. He looked to his left and saw the motorcycle between him and the curb. The two vehicles continued riding side-by-side for about 15 to 20 feet. Then the motorcycle "rattled off the side of me and then . . . dropped . . . over the curb."
Brody drove for another 10 to 15 feet, stopped, and got out of his truck. The motorcycle driver was lying down and "kind of roar[ing]" at him.
Brody claimed he was certain the motorcycle was not in the #1 lane when he moved into it. He testified that after he was completely in the #1 lane, plaintiff's motorcycle "pulled beside me [in the] three-foot gap between me and the . . . curb, which isn't a lane."
As a result of the accident, plaintiff suffered broken ribs and a severe knee injury. Until orthopedic surgery in May 2006, he wore a leg brace that immobilized his leg. He needed ice to reduce the swelling of his knee, and went through ice so fast his freezer broke. He was on extensive pain medication. He was unable to walk, had trouble getting up, and needed his wife's help to shower or go to the bathroom. He "felt like an infant."
Plaintiff's wife testified that during this time she worked two part-time jobs and took care of their child and two dogs. She confirmed she had to help plaintiff with his basic needs, including bathroom needs and feeding him. She had to keep his ice bag constantly filled, even through the night. "It was like working day and night." She felt it was like taking care of another child. She was stressed and had difficulty sleeping. Plaintiff's condition put stress on the marriage and made physical intimacy impossible. Plaintiff was receiving only minimal disability income and they were under financial stress. They had daily arguments and screamed at each other in front of their child. The child would scream "Stop it!" and would go to bed crying with a blanket over his head. At one point, they separated for four months.
Plaintiff's wife also testified he was happy before the accident, but changed after it, and was no longer in the same emotional state.
Plaintiff had reconstructive knee surgery on May 23, 2006, to repair torn anterior cruciate, posterior cruciate, and medial collateral ligaments. His orthopedic surgeon described the injury as "severe." It was a painful operation. Plaintiff will develop permanent, irreversible arthritis in the knee which will cause him intermittent pain. He will also suffer discomfort and "early degeneration of this down the road." After surgery, plaintiff was in physical therapy for several months. By May 2007, plaintiff had lost 30 percent of his knee muscles due to atrophy.
The jury found that both Brody and plaintiff were negligent, but that Brody was 85 percent responsible for the harm to plaintiff. The jury found plaintiff's special damages were $180,297.32, including $121,154 in medical expenses, and awarded general damages of $262,500 for past pain and suffering and the same amount for future pain and suffering, for a total damage award of $705,297.32. As we explain below, the trial court reduced the amount of special damages by the negotiated rate differential, the difference between the amount of medical expenses billed and the amount actually paid by plaintiff's insurer. This reduction resulted in a revised damage total of $624,558.32. With a 15 percent reduction for plaintiff's responsibility, the ultimate damage award was $530,874.57 and the trial court awarded judgment thereon.
A. Defendants' Appeal
Defendants contend the trial court erred by admitting Hughes' accident reconstruction testimony as well as exhibit 3, the sight distance study photographs. Defendants also contend the trial court erred by admitting what they characterize as "broad" evidence of emotional distress. We disagree with both contentions for the reasons stated below.
Hughes' Testimony and the Sight Distance Study Photographs. Defendants contend that Hughes' expert opinions and related exhibits (specifically, exhibit 3) were not based on reliable, credible evidence. (Evid. Code, § 801, subd. (b); see Lockheed Litigation Cases (2004) 115 Cal.App.4th 558, 563−564.) They argue the opinions and exhibits are based on speculation and conjecture and on plaintiff's testimony of the accident, which defendants claim Hughes considered "incredible."
With regard to Hughes' assessment of plaintiff's testimony, defendants misstate the record. As discussed above, Hughes testified that he did not believe plaintiff accurately perceived the accident insofar as he was next to the truck when he saw the turn indicator out of the corner of his eye―Hughes believed plaintiff was further back and was perceiving the accident slightly incorrectly, as is common is these cases. Hughes did not testify at trial that he regarded all of plaintiff's accident testimony as incredible. Rather, Hughes testified plaintiff's testimony was generally credible. By implication, he testified plaintiff's testimony was consistent with Brody's testimony that he changed lanes after he crossed the intersection with Diamond Street, and with "the roadway configuration, officers' evaluation, the contact points on the truck" and the fact that Hughes knew Brody's lane change would take about 33 feet.
Hughes' testimony was not based on speculation or conjecture. It reflects a reconstruction of the accident based on available, credible information by an expert of considerable experience.
Defendants also argue, as they did below, that exhibit 3 lacked foundation. Generally, the exhibit has foundation because it is meant to depict the sight lines from Brody's mirror down the #1 lane at various times before the impact, as computed by a speed of 37 feet per second. It was clear to the jury that the exhibit was illustrative. In any case, it was based on plaintiff's detailed testimony and other information arising from Hughes' expert investigation of the accident. We see no foundational difficulties to the exhibit.
In denying the motion for new trial, the trial court ruled there was sufficient foundation for Hughes' testimony. The court also found that the discrepancy between plaintiff's testimony and Hughes' about where plaintiff was just before impact was adequately explained to the jury. The court did conclude that it was "unfortunate" that the captions on exhibit 3 were admitted, but found that the jury was not misled: "But the captioning on that exhibit, in retrospect, and probably at the time, shouldn't have been allowed. It was unfortunate. You made it really clear though to the jury. I don't think there was any misleading [of] the jury.
"[¶] The exhibit's essential purpose was to show how far back . . . one second is at 25 miles per hour. That's all it was . . . I think that was an appropriate demonstration for the jury to see that at the time . . . .
"[¶] This was a case that was argued really well by both sides. Lots and lots of questions that were designed to undermine everything that Mr. Hughes did. There was no misleading. It was just a competing set of facts instead of assumptions."
In its written order denying the new trial motion, the trial court found that the admission of the captions "did not prejudice defendants and does not warrant a new trial."
We find no error. We agree with the trial court's conclusions regarding lack of prejudice. Thus, any error would be harmless.
Emotional Distress Testimony. Defendants contend the trial court erred by denying their motion in limine to limit evidence of emotional distress to that related to the physical pain and suffering arising from plaintiff's knee injury. Defendants contend the court should not have admitted evidence of emotional distress caused by plaintiff's separation from his wife and other strains on his marriage as a result of the accident.
Defendants based their motion in limine, and their arguments on appeal, on a purported stipulation pursuant to Code of Civil Procedure section 2032.320 (section 2032.320). That statute provides, in pertinent part: "(b) If a party stipulates as provided in subdivision (c), the court shall not order a mental examination of a person for whose personal injuries a recovery is being sought except on a showing of exceptional circumstances. "(c) A stipulation by a party under this subdivision shall include both of the following: [¶] (1) A stipulation that no claim is being made for mental and emotional distress over and above that usually associated with the physical injuries claimed. [¶] (2) A stipulation that no expert testimony regarding this usual mental and emotional distress will be presented at trial in support of the claim for damages."
Defendants find a section 2032.320 stipulation in the transcript of plaintiff's deposition. After plaintiff mentioned he had separated from his wife "to avoid all the stress that was getting created from my lack of income or increasing bills," and "to avoid more hostility in my house," defense counsel asked him: "Are you limiting your pain and suffering claim only to that associated with the surgery and the injury itself and recovery, or is there a diagnosable injury of some type?"
The following colloquy occurred between defense counsel and counsel for plaintiff: "MR. MURRAY [plaintiff's counsel]: Do you have something else that I have missed? You go right ahead.
[¶] "MR. FITZSIMONS [defense counsel]: I'm just asking.
[¶] "MR. MURRAY: I don't understand your question.
[¶] "MR. FITZSIMONS: Are you limiting his psychological claim to pain and suffering?
[¶] "MR. MURRAY: Yes, yes.
[¶] "MR. FITZSIMONS: Nothing else? . . ."
After further colloquy consisting of one page of transcript, which is apparently not in the record on appeal, plaintiff's counsel stated: "[H]e [plaintiff] is not seeing a shrink. We could stipulate that he's not going to put a shrink on the witness stand, but he has had an emotional injury that results from the crash which manifested itself in a number of ways, including having gotten into complaints and disputes with his wife."
Defense counsel did not respond to the offer of a stipulation, but resumed questioning plaintiff.
We do not understand defendants' current claim that there was a stipulation under section 2032.320, because the record simply does not show one. We can only assume defendants find the stipulation in the language just quoted, which seems to us to be nothing more than an offer to stipulate. Even assuming arguendo that the language amounts to a stipulation, as the trial court apparently concluded, plaintiff agreed only that he would not introduce trial testimony of a mental health professional―which he did not. Plaintiff highlighted the fact he was seeking damages for emotional distress arising from the strain on his marriage and did not agree to refrain from introducing trial testimony to that effect―which he did.
The record shows no stipulation between the parties invoking section 2032.320. In any case, that statute involves a plaintiff's stipulation to avoid a mental examination, which is not at issue in this case.
We see no error in the trial court's denial of the motion in limine.*fn4 We see no error in the admission of the testimony. Defendants had ample opportunity to cross-examine plaintiff and his witnesses on this issue.
B. Plaintiff's Cross-Appeal
Of the $121,154 award for past medical expenses, $107,391 was billed by the University of California, San Francisco (UCSF). (The balance of the award is not at issue on appeal.) Plaintiff's private medical insurance carrier paid UCSF only $27,382. Accordingly, the trial court reduced the special damage award by $80,009, the negotiated rate differential, i.e., the difference between the amount billed and the amount actually paid.*fn5
Plaintiff contends this reduction violated the collateral source rule. We agree.
We begin with some basic principles of tort damages. "Every person who suffers detriment from the unlawful act or omission of another, may recover from the person in fault a compensation therefor in money, which is called damages." (Civ. Code, § 3281.) The standard measure of tort damages is "the amount which will compensate for all the detriment proximately caused" by the tort. (Civ. Code, § 3333.) In a personal injury action, economic damages are "objectively verifiable monetary losses including medical expenses . . . ." (Civ. Code, § 1431.2, subd. (b)(1).) "[A] person injured by another's tortious conduct is entitled to recover the reasonable value of medical care and services reasonably required and attributable to the tort. [Citations.]" (Hanif, supra, 200 Cal.App.3d at p. 640.)
In the present case, there is no real dispute that the medical expenses billed to plaintiff were reasonable and customary. Although the record could be clearer, the parties essentially stipulated below that the medical expenses billed were reasonable and customary. At the outset of trial, the court heard plaintiff's motion in limine "to restrict speculation as to reasonable value of medical services." The court noted that defendants could move to reduce special damages under Hanif and Nishihama after trial.
Then the following colloquy occurred: "MR. MURRAY [plaintiff's counsel]: I understood from our conversations yesterday that we would not have to call [plaintiff's] expert, and then we will get those amounts by stipulation. I'm assuming―
[¶] "MR. FITZSIMONS [defendants' counsel]: In our stipulation―just so everyone is clear―is that we'll stipulate that this is the amount of money that was billed by UCSF, period.
[¶] "THE COURT: Without prejudice to your Hanif/Nishihama rights.
[¶] "MR. FITZSIMONS: Right.
[¶] "THE COURT: Right.
[¶] "MR. MURRAY: Does that include customary and reasonable; because that is what our [expert] testified to [at deposition].
[¶] "MR. FITZSIMONS: Well, we're not―it's not going to be an issue. We are not going to dispute the amount of medical specials that were charged here." (Italics added.)
After Mr. Murray expressed concern that Mr. Fitzsimons might later contest reasonability, the trial court responded, "I don't hear Mr. Fitzsimons saying in any way that he's going to backdoor you here."
In the context of the colloquy, the italicized language clearly shows defendants' counsel was declining to challenge the amount of the billing, i.e., was not making an "issue" of whether the amount was customary and reasonable. Thus, there is no need for us to explore the question whether courts grappling with the issue now before us should, at the outset, more closely scrutinize the reasonableness of medical billings. We raise this point because recent analyses of medical billing practices show charges higher than true costs, as well as a marked statewide disparity in billing amounts for the same or similar medical procedures. (See, e.g., Reinhardt, The Pricing of U.S. Hospital Services: Chaos Behind a Veil of Secrecy (2006) vol. 25, No. 1 Health Affairs 57 [suggesting, among other things, that both full and discounted charges established by hospitals for private payors tend to be significantly above true costs, in part to offset losses on Medicaid and uninsured patients]; http://www.1sthealthinsurancequotes.com/medical-surgical-procedures.html.)
Under the collateral source rule, "if an injured party receives some compensation for his injuries from a source wholly independent of the tortfeasor, such payment should not be deducted from the damages which the plaintiff would otherwise collect from the tortfeasor." (Helfend v. Southern Cal. Rapid Transit Dist. (1970) 2 Cal.3d. 1, 6 (Helfend).) The Helfend court described the collateral source rule as "embod[ying] the venerable concept that a person who has invested years of insurance premiums to assure his medical care should receive the benefits of his thrift. [Fn. omitted.] The tortfeasor should not garner the benefits of his victim's providence." (Id. at pp. 9−10.)
The court continued: "The collateral source rule expresses a policy judgment in favor of encouraging citizens to purchase and maintain insurance for personal injuries and for other eventualities. Courts consider insurance a form of investment, the benefits of which become payable without respect to any other possible source of funds. If we were to permit a tortfeasor to mitigate damages with payments from plaintiff's insurance, plaintiff would be in a position inferior to that of having bought no insurance, because his payment of premiums would have earned no benefit. Defendant should not be able to avoid payment of full compensation for the injury inflicted merely because the victim has had the foresight to provide himself with insurance." (Helfend, supra, 2 Cal.3d at p. 10.)
It is common knowledge that in today's health care system, medical insurance providers commonly negotiate a discounted, lower rate of payment of an insured's medical bills for various reasons, and the lower amount is accepted by the health care providers as payment in full. The question has repeatedly arisen whether the negotiated rate differentials thus created are treated as a collateral source for a plaintiff's benefit.
This issue is currently pending before the California Supreme Court in several cases, including a decision of this court.*fn6 Since we have recently stated our views on this issue, we need not repeat our analysis in great detail. While we cannot cite our prior opinion as precedent due to the grant of review, we agree with the majority view nationwide that the negotiated rate differential is a collateral source and should not be deducted from the plaintiff's damage award.*fn7
The negotiated rate differential, also referred to as a "rate discount" or a "write-off," is a collateral source benefit because it is an integral part of the consideration received by the injured plaintiff for his premium payments. The write-offs may reduce the plaintiff's out-of-pocket costs for deductibles or copayments, or for medical services covered by the write-off not fully covered by the policy. This is part of the protection the insured plaintiff obtains by investing in health insurance.
The rate discounts also reflect non-cash pecuniary savings in the cost of providing health care services that are essentially financed by the plaintiff's premiums. "[T]hese contractual discounts confer significant benefits upon medical service providers in addition to just the cash received in discounted payments. In exchange for medical services, providers receive not only the insurer's payments, but also the pecuniary value of numerous additional benefits, among which are prompt payment, assured collectibility, avoidance of collection costs, increased administrative efficiency, and significant marketing advantages." (Stanley, supra, 906 N.E.2d at p. 863 (dis. opn. of Dickson, J.).) Several studies cited in Justice Dickson's opinion show, for instance, that discounts can guarantee a certain number of hospital beds are occupied, attract new blocks of patients, increase market share, and reduce administrative detail. (Id. at pp. 863−864.)
We thus conclude the trial court erred by reducing plaintiff's special damage award by the amount of the negotiated rate differential.
The judgment is affirmed in all respects except the special damages award. That award is reversed and the cause remanded with instructions to the trial court to reinstate the award in the amount as it stood prior to the reduction for the negotiated rate differential, and to enter a new judgment for plaintiff.
We concur: Margulies, J. Dondero, J.