Motion,Ex Parte: CHARLES HUSBAND VS. ASBESTOS DEFENDANTS (B*P) AS REFLECTED ON EXHIBITS

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                                1 | John R. Brydon [Bar No. 083365]

George A. Otstott [Bar No. 184671]

2 |/Thomas J. Moses [Bar No. 116002]

BRYDON HUGO & PARKER ELECTRONICALLY
3 |/135 Main Street, 20th Floor FILED
San Francisco, CA 94105 Superior Court of California,
4 ||Telephone: (415) 808-0300 County of San Francisco
Facsimile: (415) 808-0333 FEB 21 2012
Email: service@bhplaw.com Clerk of the Court
Attorneys for Defendant BYE ALISON se epuly Clerk
UNION CARBIDE CORPORATION

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SUPERIOR COURT - STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO — UNLIMITED JURISDICTION

CHARLES HUSBAND, (ASBESTOS)

1 Case No. CGC-09-275098

Plaintiff,

2 DEFENDANT UNION CARBIDE

vs. CORPORATION’S MCTION IN LIMINE
3 NO. 16 TO LIMIT ADMISSION OF
ASBESTOS DEFENDANTS (B**P), EVIDENCE REGARDING PLAINTIFF'S

4 PAST MEDICAL EXPENSES TO ONLY
Defendants. THOSE AMOUNTS ACTUALLY PAID BY
5 OR ON BEHALF OF PLAINTIFF

Defendant UNION CARBIDE CORPORATION (“Union Carbide”) hereby moves
this Court for an order in limine limiting the admission of any evidence regarding for the

past medical expenses of Plaintiff CHARLES HUSBAND (“Mr. Husband”) through

documents, expert testimony, or otherwise, to only those amounts actually paid by or on
behalf of Mr. Husband.

This motion is based upon this notice, the memorandum of points and authorities
attached hereto, the pleadings and records on file herein, and upon such other documents
and oral argument as may be presented at the hearing on this motion.

MEMORANDUM OF POINTS AND AUTHORITIES

I, INTRODUCTION
The California Supreme Court, in its recent opinion in Howell v. Hamilton Meats &

Provisions, Inc. (Aug. 18, 2011, 5179115) 52 Cal.4th 541 [2011 WL 3611940], has resolved a
1

BRYDON
Huco & PARKER DEFENDANT UNION CARBIDE CORPORATION’S MOTION IN LIMINE NO, 16 TO LIMIT ADMISSION

13S Main SrREET

_- 20" Fook OF EVIDENCE REGARDING PLAINTIFF'S PAST MEDICAL EXPENSES TO ONLY THOSE AMOUNTS
San ranaicn, CA IIS ACTUALLY PAID BY OR ON BEHALF OF PLAINTIFF1 ||long-standing split of authority over the proper measure of damages for past medical

2 ||expenses that were incurred by or on behalf of an injured plaintiff (or the decedent in a

3 ||wrongful death action). Adopting the approach taken by the Courts of Appeal in Hanif.
4 ||Housing Auth. of Yolo County (1988) 200 Cal.App.3d 635, and Nishihama v. City and County of
San Francisco (2001) 93 Cal.App.4th 298, 306-307, the Supreme Court (by a 6-1 vote) agreed

that the proper recovery for a plaintiff's or decedent’s past medical expenses must be

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limited to the amounts actually paid by or on a plaintiff or decedent's behalf, as opposed to

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the amounts that may have been billed by their medical care providers.

9 Accordingly, Union Carbide requests that this Court issue an order limiting the

0 ||evidence that may be admitted in this case with regard to Mr. Husband's past medical

1 j/expenses, and thus any potential award regarding same, to only those amounts actually paid
2 ||by or on Mr. Husband's behalf.

3 |. UNDER HOWELL, PLAINTIFF MAY ONLY RECOVER AS DAMAGES FOR HIS
4 PAST MEDICAL EXPENSES THE AMOUNTS OF THE MEDICAL BILLS
ACTUALLY PAID BY PLAINTIFF OR ON HIS BEHALF

California law has long recognized that an injured party who received medical
treatment for tortiously-caused injuries suffers a compensable economic loss, and is
entitled to an award of damages for any reasonable charges for that treatment. (See

Melone v. Sierra Railway Co. (1907) 151 Cal. 113, 115.) When the costs of that medical

treatment were paid in whole or in part by a third party, such as a medical insurer, the
“collateral source rule” is implicated; under that 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)

The Supreme Court's opinion in Howell has now answered a question debated by
the various California courts of appeal for at least the last twenty years—namely, the

proper scope of an injured party’s economic damages for their past medical treatment.

2

BRYDON
Huco & PARKER DEFENDANT UNION CARBIDE CORPORATION’S MOTION IN LIMINE NO, 16 TO LIMIT ADMISSION

13S Main SrREET

_- 20" Fook OF EVIDENCE REGARDING PLAINTIFF'S PAST MEDICAL EXPENSES TO ONLY THOSE AMOUNTS
San ranaicn, CA IIS ACTUALLY PAID BY OR ON BEHALF OF PLAINTIFFw Nn =

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BRYDON
Huco & PARKER
138 Main Steer
20" Fook
Sun Praneiseo, CA 94105

In deciding that only the amounts actually paid by on behalf of the injured party was the
proper measure of those damages, instead of the amounts billed by the medical
providers, the Howell Court confirmed that the collateral source rule “has no bearing on
amounts that were included in a provider's bill but for which the plaintiff never
incurred liability because the provider, by prior agreement, accepted a lesser amount as
full payment.” (Howell, supra, 2011 WL 3611940 at *1.) The Court added:

Such sums are not damages the plaintiff would otherwise have collected from the
defendant. They are neither paid to the providers on the plaintiff's behalf nor
paid to the plaintiff in indemnity of his or her expenses. Because they do not
represent an economic loss for the plaintiff, they are not recoverable in the first
instance. The collateral source rule precludes certain deductions against otherwise
recoverable damages, but does not expand the scope of economic damages to include
expenses the plaintiff never incurred.

(Ud. [emphasis added].)

The Howeil Court has now adopted a “bright-line” rule applicable to all civil
litigation: that an award of past medical expenses must not exceed the amounts actually
“paid by or on behalf of” the injured plaintiff or decedent:

When a tortiously injured person receives medical care for his or her injuries, the
provider of that care often accepts as full payment, pursuant to a preexisting
contract with the injured person's health insurer!, an amount less than that stated
in the provider's bill. In that circumstance, may the injured person recover from
the tortfeasor, as economic damages for past medical expenses, the undiscounted
sum stated in the provider's bill but never paid by or on behalf of the injured
person? We hold no such recovery is allowed, for the simple reason that the injured
plaintiff did not suffer any economic loss in that amount.

(Howell, supra, 2011 WL 3611940 at *1 [emphasis added].)
In so ruling, the Howell Court adopted the approach advocated by a series of

appellate decisions, starting with Hanif v. Housing Auth. of Yolo County (1988) 200

! The Howell opinion noted that if the court in Hanif had been correct when it ruled that a tort plaintiff could
only recover what was “paid or incurred” for the plaintiff's medical care, it was still necessary to decide
whether Hanif properly could be extended to a plaintiff covered by private health insurance. (The Hanif
plaintiff had been a Medi-Cal recipient.) The Howell Court ultimately found that Hanif was right and should
‘be extended to cover private health insurers. (See Howell, supra, 2011 WL 3611940 at *5.)

3

DEFENDANT UNION CARBIDE CORPORATION’S MOTION IN LIMINE NO, 16 TO LIMIT ADMISSION
OF EVIDENCE REGARDING PLAINTIFF'S PAST MEDICAL EXPENSES TO ONLY THOSE AMOUNTS
ACTUALLY PAID BY OR ON BEHALF OF PLAINTIFF1 ||Cal.App.3d 635, which limited recovery for a plaintiffs or decedent’s past medical

2 ||expenses to the amounts actually paid, as opposed to the amounts billed. (Hanif, supra, 200
3 ||Cal.App.3d at 640; see also Cabrera v. E. Rojas Properties, Inc. (2011) 192 Cal.App.4th 1319,
4 1/1328, Greer v. Buzgheia (2006) 141 Cal. App.4th 1150, 1157; Nishihama v. City and County of
San Francisco (2001) 93 Cal.App.4th 298, 306-307.)

In Howell, like in the present case, the defendant sought an in limine order to

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exclude the admission into evidence of any medical bills that neither the plaintiff nor

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her health insurer had paid, arguing, pursuant to the Hanif/Nishihama line of cases, that
9 ||because only the amounts paid by the plaintiff and her insurer could be recovered, the
0 ||evidence regarding the larger amounts that had been billed by the providers were

1 | irrelevant and should be excluded. (Howell, supra, 2011 WL 3611940 at *1.) The trial

2 ||court denied the motion, ruling that while the plaintiff would be allowed to present her
3 || full medical bills to the jury, any reduction to reflect payment of reduced amounts

4 ||would be handled through “a posttrial Hanif motion.” (Id.)

5 After a verdict in favor of the plaintiff, which included an award of $189,978.63 in
6 ||past medical expenses (an amount equaling the amounts billed on plaintiff's medical

7 ||bills submitted into evidence during the trial), defendant Hamilton filed a “Hanif

8 ||motion” to reduce the past medical special award to $59,691.73, the amount actually

9 ||paid by the plaintiff and/or her insurers, after various “write-offs” had been deducted
20 || from the billed treatment charges. (Howell, supra, 2011 WL 3611940, at *2.) The trial

21 |/court granted Hamilton’s motion, but that ruling was reversed by the court of appeal,
22 | /asserting that the reduction award violated the collateral source rule. (id.)

23 The Howell Court upheld the trial court’s decision to reduce the past medical bill
24 ||award. The Supreme Court first noted that none of the competing appellate court

25 |/opinions dealt specifically with the “central” question of whether “restricting recovery
26 |/to amounts actually paid by a plaintiff or on his or her behalf contravenes the collateral

27 |/source rule.” (Howell, supra, 2011 WL 3611940 at *5.) In ruling that the damage award

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BRYDON
Hugo & Parker DEFENDANT UNION CARBIDE CORPORATION’S MOTION IN LIMINE NO, 16 TO LIMIT ADMISSION
20" Fook OF EVIDENCE REGARDING PLAINTIFF'S PAST MEDICAL EXPENSES TO ONLY THOSE AMOUNTS

San ranaicn, CA IIS ACTUALLY PAID BY OR ON BEHALF OF PLAINTIFFw Nn =

~~ Dw Bb

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BRYDON
Huco & PARKER
138 Main Steer
20" Fook
Sun Praneiseo, CA 94105

had properly been subject to reduction by the trial court, the Howell Court followed
Hanif in finding that “a plaintiff may recover as economic damages no more than the
reasonable value of the medical services received and is not entitled to recover the
reasonable value if his or her actual loss was less.” (Howell, supra, 2011 WL 3611940 at
*6, citing Hanif, supra, 200 Cal.App.3d at 641.)

Addressing the situation where a plaintiff had private medical insurance, the
court further acknowledged that “write-offs” negotiated by a plaintiff's insurers that
resulted in a reduction of the billed amount effectively reduced the potential economic
loss to the insured plaintiff. (Howell, supra, 2011 WL 3611940 at *7.) The court noted that
as the insured’s prospective liability pursuant to the negotiated terms of a health
insurance policy would be limited solely to the amounts the insurer agreed to pay the
providers for the services they were to render, an insured party “cannot meaningfully
be said ever to have incurred the full charges.” (Id.)?

The court also rejected the notion that its ruling would result in “windfalls” to
tortfeasors because damage awards would be reduced due to the favorable rates of
payment that were negotiated by the injured person's medical provider. After
reviewing the “complexities of contemporary pricing and reimbursement patterns for
medical providers” in modern health insurance policies, the Howeil Court noted that
looking to the negotiated prices providers accepted from insurers to establish the
“reasonable value” of those services “makes at least as much sense, and arguably more”
than looking merely at the amounts that were billed. (Howell, supra, 2011 WL 3611940 at
*11.) The court added:

[I]t is not possible to say generally that providers’ full bills represent the real
value of their services, nor that the discounted payments they accept from

? The Howeil Court noted that medical providers “who agreed to accept discounted payments by managed
care organizations or other health insurers as full payment for a patient's care do so not as a gift to the
patient or insurer, but for commercial reasons and as a result of negotiations. As plaintiff herself explains,
hospitals and medical groups obtain commercial benefits from their agreements with health insurance
organizations; the agreements guarantee the providers prompt payment of the agreed rates and often have
financial incentives for plan members to choose the providers’ services.” (Howell, sipra, 2011 WL 3611940 at
*8.)

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DEFENDANT UNION CARBIDE CORPORATION’S MOTION IN LIMINE NO, 16 TO LIMIT ADMISSION
OF EVIDENCE REGARDING PLAINTIFF'S PAST MEDICAL EXPENSES TO ONLY THOSE AMOUNTS
ACTUALLY PAID BY OR ON BEHALF OF PLAINTIFFprivate insurers are mere arbitrary reductions. Accordingly, a tortfeasor who
pays only the discounted amount as damages does not generally receive a
windfall and is not generally underdeterred from engaging in risky conduct.

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(Id)

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Finally, the Howell Court ruled that any differential between the amount “billed”
and the amount “actually paid” with regard to the charges for medica! treatment was

not recoverable as a “benefit” provided to an insured by having medical insurance. As

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an insured plaintiff did not incur liability for the providers’ full bills, because the

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providers had already agreed to accept the insurer’s price schedule as payment in full
for any services rendered under that policy, a plaintiff could not recover that differential
as damages for economic loss because they “never incurred the full bill” in the first
place. (Howell, supra, 2011 WL 3611940 at *12.)

In sum, the Howell Court agreed that because an insured plaintiff did not “incur
liability in the amount of the negotiated rate differential, which also is not paid to or on
behalf of the plaintiff to cover the expenses of the plaintiff's injuries, it simply does not
come” within the collateral source rule. (Howell, supra, 2011 WL 3611940 at *13.) Asa
result, the Howell court adopted this “bright-line” rule:

We hold...that an injured plaintiff whose medical expenses are paid through

private insurance may recover as economic damages no more than the amounts

9 paid by the plaintiff or his or her insurer for the medical services received or still
20 owing at the time of trial.

(Howell, supra, 2011 WL 3611940 at *14.)°
Ill. BY LIMITING THE DAMAGES RECOVERABLE FOR PAST MEDICAL

EXPENSES, HOWELL ALSO NARROWS THE SCOPE OF ADMISSIBLE
EVIDENCE REGARDING THOSE DAMAGES

Under Evidence Code section 350, only relevant evidence is admissible.

26 ||? The Howell Court noted that in situations where a trial jury was provided evidence of the amounts accepted
as full payment by an injured plaintiff or decedent’s medical providers, but nevertheless awarded a greater
27 |/sum as damages for past medical expenses, the defendant—instead of bringing a “Hanif motion” ~may
move for a new trial on grounds of excessive damages. (Howell, supra, 2011 WL 3611940 at *15; see Code Civ.
28 |/Proc., § 657(5).)
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BRYDON
Hugo & Parker DEFENDANT UNION CARBIDE CORPORATION’S MOTION IN LIMINE NO. 16 TO LIMIT ADMISSION
20" FLooR OF EVIDENCE REGARDING PLAINTIFF'S PAST MEDICAL EXPENSES TO ONLY THOSE AMOUNTS,
Sen ras, CA MINS ACTUALLY PAID BY OR ON BEHALF OF PLAINTIFF1 ||Evidence Code section 210 defines “relevant evidence” as “evidence ... having any

2 ||tendency in reason to prove or disprove any disputed fact that is of consequence to the
3 ||determination of the action.” Evidence is relevant if it “tends ‘logically, naturally, and
4 |\by reasonable inference’ to establish material facts.” (People v. Benavides (2005) 35

Cal 4th 69, 90 [citing People v. Garceau (1993) 6 Cal.4th 140, 177].) Although a trial court

has broad discretion in determining the relevance of evidence, it has no discretion to

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admit irrelevant evidence. (Id. [citing People v. Crittenden (1994) 9 Cal.4th 83, 132].)

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As the Howell Court itself noted, the “bright-line” rule on past medical expenses
9 ||set out in its opinion narrowed the scope of the evidence that would be relevant and
0 ||admissible to prove the damages allowed under that rule:

1 It follows from our holding that when a medical care provider has, by agreement
2 with the plaintiff's private health insurer, accepted as full payment for the
plaintiff's care an amount less than the provider's full bill, evidence of that
amount is relevant to prove the plaintiff's damages for past medical expenses

4 and, assuming it satisfies other rules of evidence, is admissible at trial.

5 || (Howell, supra, 2011 WL 3611940 at *15.)
6 In contrast, the Howell Court emphasized that evidence of the full billed amount of
7 |\a plaintiff's medical treatment, in situations where his or her health care provider

8 ||accepted less than a billed amount as full payment, is not relevant on the issue of past

9 ||medical expenses, and is thus inadmissible. (Id.) If, after being presented with evidence
20 |/only of the amounts accepted as full payment by a plaintiff's medical providers, a jury
21 |/should nevertheless award a greater sum as damages for past medical expenses, the

22 | defendant’s remedy is to move for a new trial “on grounds of excessive damages.” (Id.)
23 The Howeil Court noted that its ruling maintained the evidentiary aspects of the

24 | collateral source rule:

25 While the amounts paid on a plaintiff's behalf may be put before the jury to prove
26 the plaintiff's damages for past medical expenses, “[e]vidence that such
payments were made in whole or in part by an insurer remains...generally
7 inadmissible... (Id. [emphasis added].)
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BRYDON
Hugo & Parker DEFENDANT UNION CARBIDE CORPORATION’S MOTION IN LIMINE NO, 16 TO LIMIT ADMISSION
20" Foor, OF EVIDENCE REGARDING PLAINTIFF'S PAST MEDICAL EXPENSES TO ONLY THOSE AMOUNTS

San ranaicn, CA IIS ACTUALLY PAID BY OR ON BEHALF OF PLAINTIFFPursuant to the Supreme Court's ruling in Howell, then, ary evidence of the amounts

billed that exceed the amounts paid would be irrelevant to Plaintiffs claim here for past

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medical expenses. As a result, that evidence is inadmissible for that purpose in this case,

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and is properly subject to exclusion by in limine order.
IV. CONCLUSION

As damages cannot be awarded against Union Carbide for medical expenses which

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neither Mr. Husband nor his insurer were required to pay, this Court is requested to issue

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an in limine order that any evidence of those expenses, such as copies of medical bills or
expert testimony about those bills, is admissible only to the extent that they establish the

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0 ||amounts actually paid by or on behalf of Mr. Husband.

1 | Dated: February 21, 2012 BRYDON HUGO & PARKER
2
3 By: /s/ Thomas ]. Moses
John R. Brydon
4 George A. Otstott
Thomas J. Moses
5 Attorneys for Defendant
6 UNION CARBIDE CORPORATION
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BRYDON
Hugo & Parser | DEFENDANT UNION CARBIDE CORPORATION'S MOTION IN LIMINE NO. 16 TO LIMIT ADMISSION
20" Foor, OF EVIDENCE REGARDING PLAINTIFF'S PAST MEDICAL EXPENSES TO ONLY THOSE AMOUNTS

San ranaicn, CA IIS ACTUALLY PAID BY OR ON BEHALF OF PLAINTIFF