California Court of Appeals, Second District, Sixth Division
Superior Court County of Ventura No.
56-2013-00436036-CU-PA-VTA Rocky J. Baio, Judge.
Horvitz & Levy, Lisa Perrochet and Steven S. Fleischman;
Benton, Orr, Duval & Buckingham, Kevin M. McCormick and
Panda L. Kroll, for Defendants and Appellants.
Simon Law Group, Sevy W. Fisher and Greyson M. Goody; The
Ehrlich Law Firm and Jeffrey I. Ehrlich, for Plaintiff and
injured plaintiff with health insurance may not recover
economic damages that exceed the amount paid by the insurer
for the medical services provided. (Howell v. Hamilton
Meats & Provisions, Inc. (2011) 52 Cal.4th 541, 566
(Howell). The amount of the “full bill”
for past medical services is not relevant to prove past or
future medical expenses and/or noneconomic damages.
(Id. at p. 567; Corenbaum v. Lampkin (2013)
215 Cal.App.4th 1308, 1330-1331 (Corenbaum).) In
contrast, the amount or measure of economic damages for an
uninsured plaintiff typically turns on the reasonable value
of the services rendered or expected to be rendered.
(Bermudez v. Ciolek (2015) 237 Cal.App.4th 1311,
1330-1331 (Bermudez).) Thus, an uninsured plaintiff
may introduce evidence of the amounts billed for medical
services to prove the services' reasonable value.
(Id. at pp. 1330-1331, 1335.)
we are confronted with an insured plaintiff who has chosen to
treat with doctors and medical facility providers outside his
insurance plan. We hold that such a plaintiff shall be
considered uninsured, as opposed to insured, for the purpose
of determining economic damages.
Dave Pebley was injured in a motor vehicle accident caused by
defendant Jose Pulido Estrada, an employee of defendant Santa
Clara Organics, LLC (Santa Clara). Although Pebley has health
insurance, he elected to obtain medical services outside his
insurance plan. A jury found defendants liable for
Pebley's injuries and awarded him $3, 644, 000 in
damages, including $269, 000 for past medical expenses and
$375, 000 for future medical expenses. For the most part,
Pebley recovered the amounts that were billed for past
services and expected to be incurred for future services.
conclude the trial court properly allowed Pebley, as a
plaintiff who is treating outside his insurance plan, to
introduce evidence of his medical bills. Pebley's medical
experts confirmed these bills represent the reasonable and
customary costs for the services in the Southern California
community. Pebley testified he is liable for these costs
regardless of this litigation, and his treating surgeons
stated they expect to be paid in full. The court permitted
defendants to present expert testimony that the reasonable
and customary value of the services provided by the various
medical facilities is substantially less than the amounts
actually billed, and defendants' medical expert opined
that 95% of private pay patients would pay approximately 50%
of the treating professionals' bills. The jury rejected
this expert evidence and awarded Pebley the billed amounts.
on this record, defendants have not demonstrated error except
with respect to two charges. It is undisputed the jury
improperly awarded Pebley the amounts billed by Ventura
County Medical Center (VCMC) and American Medical Response
(AMR) instead of the amounts paid to these providers by his
insurance carrier. The difference between the amounts billed
and the amounts paid is $1, 063. We therefore reduce the
damage award by that amount and affirm the judgment as
AND PROCEDURAL BACKGROUND
9, 2011, Pebley and his wife, Joline, were returning from a
camping trip in their motor home. Mrs. Pebley was driving
eastbound on the 126 freeway in Ventura County when the
vehicle developed a flat tire. She turned on the hazard
lights, pulled over to the right shoulder and stopped. A
portion of the motor home remained in the No. 2 lane.
rearview mirror, Mrs. Pebley saw a Kenworth “big
rig” truck bearing down on them from behind. The
driver, Estrada, who was travelling at approximately 50 miles
per hour, crashed into the left rear end of the motor home
with sufficient force to break the passenger seat in which
Pebley was seated.
truck, which was owned by Santa Clara, was carrying a 40,
000-pound load at the time of the collision. Pebley was
transported to the hospital by ambulance, treated and
released. He suffered injuries to his face, teeth, neck and
Pebley's Medical Treatment
initially sought treatment through his health insurance
carrier, Kaiser Permanente (Kaiser). After filing a personal
injury action against defendants, Pebley obtained care from
an orthopedic spine specialist, Dr. Gerald Alexander, who is
outside the Kaiser network. Pebley testified he was referred
to Dr. Alexander by members of his men's group.
Defendants claim Pebley was referred to the doctor by his
attorneys. They point to an internet article co-written by
one of Pebley's attorneys. The article notes that
“[t]ypically, medical liens in personal injury cases
have been used where the plaintiff is uninsured, or where the
insurance provider will not cover or refuses to authorize
recommended medical care.” The authors propose,
however, that insured plaintiffs use the lien form of medical
treatment, which “effectively allows the plaintiff and
his or her attorney to sidestep the insurance company and the
impact of Howell, Corenbaum
andObamacare.” They maintain that treating on a lien
basis increases the “settlement value” of
personal injury cases. Pebley's post-Kaiser medical
treatment was provided on that basis.
Alexander performed a 3-level cervical fusion surgery on
March 13, 2014. His co-surgeon was Dr. Carl Lauryssen.
At trial, both doctors testified that the injuries Pebley
suffered in the accident necessitated the surgery. Dr.
Alexander also testified that Pebley would require additional
cervical fusion surgery as well as lumbar fusion surgery. Dr.
Alexander explained that a person undergoing spinal fusion
surgery is “never normal again, ” and that Pebley
could expect decreased range of motion, ongoing weakness and
numbness, and chronic pain for the rest of his life.
Motions in Limine
parties filed numerous motions in limine addressing the
admissibility of evidence concerning Pebley's medical
treatment costs. Pebley's motion in limine No. 1
requested exclusion of evidence that Pebley was insured
through Kaiser as well as defense arguments concerning
Pebley's decision not to seek medical treatment through
his insurance. Defendants conceded that Pebley was allowed to
treat with doctors outside his insurance plan, but asserted
the cost of available in-plan services was relevant to the
measure of damages. Pebley claimed a due process right to
make medical treatment decisions irrespective of insurance.
The trial court granted Pebley's motion in limine.
motion in limine No. 2 sought to exclude evidence of the
amounts an insurance company may pay, or what a medical
provider may accept, for medical services, both past and
future. The motion was granted, along with motion in limine
No. 5, which excluded evidence that Pebley obtained most of
his medical treatment on a lien basis.
motion in limine No. 9 sought to preclude the defense's
expert, Dr. Henry Miller, from challenging Pebley's
evidence regarding the reasonable value of medical services.
Pebley asserted that Dr. Miller's methodology for
evaluating marketplace costs improperly includes the rates
that providers accept from insurance companies and Medicare.
The trial court conducted a hearing under Evidence Code
section 402 to determine the admissibility of Dr.
the jury's presence, Dr. Miller explained that part of
his methodology in calculating the fair market value of a
physician's professional fees is to determine what
Medicare pays for that service and then to proportionately
increase that rate to reflect pricing in the relevant
community. Miller takes into account the Milliman ...