In a significant decision on personal injury damages, the California Court of Appeal, upheld a jury's award for future lost earnings and non-economic damages while reinforcing strict limitations on the recovery of past medical expenses. The case, David Yaffee v. Joseph Skeen, et al. (Filed 11/25/2024, C097746 and C097988), involved a dispute over the reasonable value of medical services, with the court holding that evidence suggesting a higher valuation than what was accepted by the hospital as full payment was improperly admitted. While the court affirmed substantial damages for the plaintiff's future economic and non-economic losses, it reversed the trial court's admission of excessive past medical expenses claims, underscoring the continuing impact of Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, on California personal injury litigation.
Factual Background
On June 16, 2015, David Yaffee's (Plaintiff) car was rear-ended by a truck driven by Joseph Skeen, an employee of KLS. Plaintiff initially experienced back and neck pain, which worsened by the following morning, accompanied by leg tingling. After going to work, he sought treatment from his primary care physician at UC Davis Medical Center, who prescribed medications. Plaintiff later consulted a chiropractor and underwent an MRI on June 26, 2015. His symptoms, including worsening leg tingling and persistent back pain, prompted continued care.
On July 7, 2015, Plaintiff experienced intense back and leg pain, rendering him unable to walk. He was treated at the UC Davis emergency room. The attending doctor ruled out life-threatening conditions and prescribed medication. Plaintiff was discharged with instructions for follow-up care.
Plaintiff's condition worsened despite ongoing treatment. In July 2015, an MRI revealed a herniated disc L5-S, compressing a nerve. After trying conservative treatments like physical therapy and steroids, Plaintiff opted for surgery. In September 2015, Plaintiff underwent a microdiscectomy, identifying an acute disc herniation likely caused by the collision. Post-surgery, Plaintiff continued to experience leg numbness and burning pain.
By late 2016, Plaintiff reported chronic back pain and sciatica, which persisted despite steroid injections, affecting his sleep, concentration, and ability to work. He was diagnosed with 'failed spine surgery syndrome." A May 2021 revision surgery alleviated symptoms temporarily, but the pain returned. Plaintiff stopped working in May 2021 and was placed on permanent disability due to severe pain and cognitive impairments caused by his condition. At trial, Plaintiff testified about ongoing, debilitating nerve pain that significantly impacted his quality of life and ability to work.
Plaintiff filed a personal injury lawsuit against Skeen and KLS, with National Insurance intervening as KLS's liability insurer. During trial, the plaintiff, his wife, and a neighbor testified about how his injuries affected his quality of life. Plaintiff's treating physicians detailed his medical treatment, ongoing condition and future needs. He also presented several expert witnesses in support of his case. The defendants presented evidence of Plaintiff's prior back pain dating back to 1999 and offered expert testimony about the health of his back and future care needs. They also called an expert who analyzed plaintiff's past medical expenses.
The jury awarded plaintiff over three million dollars in damages. Defendants filed motions for a new trial, partial judgment notwithstanding the verdict, and to tax costs, all of which were denied. The court later issued an updated judgment, including costs and interests, totaling $1,6455,685.88. Defendant appealed both the original and updated judgments, which were consolidated for review.
Affirmation of Future Lost Earnings and Non-Economic Damages
One central issue in the case centered on the plaintiff's claim for future lost earnings due to permanent disability. The defendants asserted the evidence supporting these damages were speculative. However, the appellate court found that testimony from the plaintiff's vocational and economic experts compelling and found that it provided a solid foundation for the jury's determination.
An injured party may recover damages for detriment that is "certain to result in the future." Civ. Code §3283. California courts recognize that while absolute certainty is not required, there must be sufficient evidence to demonstrate a reasonable certainty that the damages will result from the injury. As noted in Behr v. Redmond (2011) 193 Cal.App.4th 517, 533, "there must be evidence to show such a degree of probability of their occurring as amounts to a reasonable certainty that they will result from the original injury."
Expert witnesses, including treating physicians and rehabilitation specialists, testified that the plaintiff's injuries left him unable to sustain any form of gainful employment. The jury also had evidence of the plaintiff's stable career history, his expected salary trajectory had he remained employed, and the impact of his disabilities on his earning capacity. As a result, the court deferred to the jury's assessment, reinforcing the principle that damages for future earnings must be based on reasonable certainty rather than absolute precision.
Similarly, the defendants attempted to overturn the plaintiff's award of $568,290 in future non-economic damages, arguing that there was no way to accurately predict the extent of his future pain and suffering. However, California law does not require mathematical certainty. A plaintiff must only show that damages claimed are supported by competent evidence. The plaintiff, his wife, and his doctors provided testimony detailing the severity of his chronic pain, emotional distress, and diminished quality of life. The court concluded that this evidence was more than sufficient to uphold the jury's non-economic damages award.
Damages for Past Medical Expenses
To collect compensatory damages for the cost of past medical services, the party seeking such damages must show that the charges for the medical services were reasonable. Moore v. Mercer (2016) 4 Cal.App.5th 424, 436-437. To prove past medical expenses, a plaintiff must satisfy a two-step burden establishing the following:
- "Plaintiff must show that they actually incurred the medical expenses and the amount of the patient's liability for the expenses caps her potential recovery, and
- Plaintiff must prove the reasonable value of the medical services but is entitled to no more than the expenses actually incurred." Moore at 437.
In the case at hand, the defendants challenged the award of past medical damages arguing that the court did not utilize the proper measure to determine the amount of damages and that the claim was not supported properly by the evidence.
The court agreed and determined that the case should be reversed and remanded based on the lower court's erroneous interpretation of the Hospital Lien Act (HLA § 3045.1, et. seq.) The Hospital Lien Act (HLA) provides a mechanism for hospitals to recover costs from third parties when treating patients injured in accidents caused by negligence or other wrongful acts, excluding workers' compensation cases. Under California Civil Code Section 3045.1, hospitals may assert a lien on damages recovered by the injured party to cover reasonable and necessary charges for treatment resulting from the incident.
Further, the court in Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541 explained that "an injured plaintiff whose medical expenses are paid through private insurance may recover as economic damages no more than the amounts paid by the plaintiff or his or her insurer for the medical services received or still owing at the time of trial." Thus, "evidence that the reasonable value of such services exceeded the amount paid is irrelevant and inadmissible on the issue of the damages for past medical service." Corenbaum v. Lampkin (2013) 215 Cal.App.4th 1308, 1329.
In addition, "the collateral source rule precludes deduction of compensation the plaintiff received from a source independent of the tortfeasor to reduce recoverable damages and evidence of such payments is inadmissible for that purpose." Howell at 548, 552.
Reversal of Past Medical Expense Award Under Howell
While the appellate court upheld the jury's awards for future damages, it found reversible error in the trial court's admission of evidence regarding past medical expenses. Specifically, the plaintiff's expert testified that the reasonable value of medical services provided totaled $993,083.21. This was an amount exceeding what the hospital had accepted from the plaintiff's health insurer as full payment. This raised a critical issue under Howell, which held that a personal injury plaintiff cannot recover more in past medical expenses than the amount actually paid to a healthcare provider.
The plaintiff attempted to justify the inflated medical expense calculation by citing the Hospital Lien Act (HLA), arguing that UC Davis had the right to recover the full billed amount rather than the amount accepted from the insurer. However, HLA only allows recovery of the difference between billed and paid amounts when the services rendered qualify as "emergency and ongoing medical services", not post discharge treatment. Since the plaintiff was discharged from the hospital the same day he was admitted, most of his medical expenses did not fall under the scope of the HLA, and the trial court erred in admitting evidence of the full billed amount. By reaffirming Howell, the court emphasized the necessity of limiting past medical expense awards to the actual amount accepted as payment in full.
Thus, the court concluded that the trial court committed reversible error by allowing testimony suggesting that the reasonable value of the plaintiff's medical services exceeded what was accepted in full by the hospital. The Court of Appeal expressly applied Howell to bar recovery of any amounts beyond what the medical provider had accepted from the plaintiff's insurer.
Implications for Personal Injury Litigation
This decision serves as a strong reaffirmation of the Howell doctrine and demonstrates the California courts' unwillingness to make exceptions for plaintiffs seeking to recover inflated medical costs. By strictly enforcing Howell, the appellate court reinforced the principle that plaintiffs cannot claim damages based on artificially high medical billing practices when insurers have negotiated lower rates as payment in full. The decision stands as a significant reaffirmation of established legal principles governing personal injury compensation.