Exhibit,Appendix: FAVALORA, JOSEPH vs. KATY SPRINGS AND MANUFACTURING INC

On March 14, 2011 a Exhibit,Appendix was filed involving a dispute between Favalora, Joseph, and Katy Springs And Manufacturing Inc, for DAMAGES (OTH) in the District Court of Harris County.

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EXHIBIT E
Codner v. Wills
Court of Appeal of California, Second Appellate District, Division Six
December 22, 2009, Filed
Civil No. B198675, Civil No. B202091

Reporter: 2009 Cal. App. Unpub. LEXIS 10143; 2009 WL 4915839
speed

DANIEL CODNER et al., Plaintiffs and Respon- Counsel: Horvitz & Levy LLP, Julie L. Woods,
dents, v. JOHN STEVENSON WILLS, Defen- Adam M. Flake; Law Offices of Lloyd J. Mi-
dant, Cross-complainant and Appellant, IN-N- chaelson and Lloyd J. Michaelson for Defen-
OUT BURGERS, Defendant, Cross- dant, Cross-complainant and Appellant Wills.
complainant and Appellant. DANIEL CODNER
et al., Plaintiffs, JOHN STEVENSON WILLS, Shulman Hodges & Bastian LLP, Ronald S.
Cross-complainant and Appellant, v. IN-N-OUT Hodges, John Mark Jennings and Aileen U.
BURGERS, Cross-complainant and Appellant. Rodriguez for Defendant, Cross-complainant
and Appellant In-N-Out Burgers.
Notice: NOT TO BE PUBLISHED IN OFFI-
CIAL REPORTS. CALIFORNIA RULES Corsiglia McMahon & Allard, B. Robert Allard,
OF COURT, RULE 8.1115(a), PROHIBITS Jeffry W. Lochner; Kirby, Kirby & Kirby, Steven
COURTS AND PARTIES FROM CITING OR C. Kirby and Aimee E. Kirby for Plaintiffs and
RELYING ON OPINIONS NOT CERTI- Respondents Codner.
FIED FOR PUBLICATION OR ORDERED
PUBLISHED, EXCEPT AS SPECIFIED BY Hinton, Alfert & Sumner, Scott H.Z. Sumner and
RULE 8.1115(b). THIS OPINION HAS NOT Jeremy Lateiner for Consumer Attorneys of
BEEN CERTIFIED FOR PUBLICATION California as Amicus Curiae on behalf of Plain-
OR ORDERED PUBLISHED FOR THE PUR- tiffs and Respondents Codner.
POSES OF RULE 8.1115.
Judges: PERREN, J. We concur: GILBERT,
Prior History: [*1] Superior Court of Ventura P.J.,COFFEE, J.
County, No. CIV 239017. Vincent J. O’Neill,
Jr., Judge. Opinion by: PERREN

Core Terms Opinion

trial court, settlement, indemnity, economic
damages, non economic damages, photographs, A motorcycle driven by respondent Daniel
fault, settlement agreement, equitable indemnity, Codner collided with a car driven by appellant
motorcycle, apportionment, tortfeasors, John Stevenson Wills near the exit of appel-
ordinance, traffic, good faith settlement,
nonsettling defendant, medical expenses, jury lant In-N-Out Burger, a restaurant on Harbor
award, restaurant, designed to prevent, medical Boulevard in Ventura. The cause of the acci-
provider, clerical error, good faith, settlement dent was sharply disputed. The Codners
amount, nonsettling, clerical, doctrine, limine, claim that Wills failed to yield the right of way
in making a left turn across the lane in which
Page 2 of 13
2009 Cal. App. Unpub. LEXIS 10143, *1

Codner was traveling. Wills claims that Daniel economic and noneconomic damages contained
Codner was traveling in [*2] excess of the in the settlement agreement rather than the ap-
posted speed limit of 35 miles per hour. Appel- portionment made by the jury. We affirm.
lant In-N-Out Burger allegedly contributed to
the accident by violating its conditional use per- STATEMENT OF FACTS AND PROCEDURAL
mit and a City of Ventura ordinance, causing HISTORY
cars to back up on Harbor Boulevard, impair-
ing Wills’ line of sight, and preventing him from Daniel and Cody Codner were riding a motor-
seeing the motorcycle in time to avoid the col- cycle northbound on Harbor Boulevard in
lision. Ventura. As they were passing the In-N-Out
Burger restaurant, they struck a car driven by
Daniel; his son, Cody, who was a passenger on John Wills who was attempting to make a left-
the motorcycle; and wife, Rebecca, sued hand turn onto Harbor Boulevard from the res-
Wills and In-N-Out alleging negligence, prem- taurant. [*4] Daniel sustained serious injuries,
ises liability and loss of consortium. Wills including brain damage, a fractured pelvis
and In-N-Out filed cross-complaints against and shattered kidney. Cody sustained a frac-
each other for indemnity. In-N-Out settled with tured clavicle requiring multiple surgeries.
Codner for $ 500,000 prior to trial allocating
$ 145,000 to economic damages and $ 355,000 Daniel, his son, and wife filed a complaint for
to noneconomic damages. The trial court ap- damages against Wills and In-N-Out alleging
proved the settlement, finding it was made in negligence, premises liability and loss of consor-
good faith. Despite the settlement, In-N-Out par- tium. Wills and In-N-Out cross-complained
ticipated in the trial. The jury found by spe- against each other for equitable indemnity.
cial verdict that Wills was 100 percent at fault
and awarded damages totaling $ 3,084,305.29. The Codners and In-N-Out settled before trial
The verdict apportioned the award between eco- for $ 500,000. The agreement allocated $
nomic and noneconomic damages in a percent- 145,000 to economic damages and the remain-
age different than that allocated in the settle- der to noneconomic damages. The trial court
ment agreement. approved the settlement agreement, including
the allocations made to economic and noneco-
On appeal, Wills contends the court made nomic damages, and determined that the settle-
three errors during trial: (1) [*3] admitting pho- ment was made in good faith. Wills’ cross-
tographs showing crash test results of a colli- complaint for equitable indemnity against In-
sion between an automobile and motorcycle, (2) N-Out was dismissed as a result of the court’s
refusing to give a negligence per se jury in- good faith determination. In-N-Out partici-
struction as to In-N-Out, and (3) precluding pated in the trial, seeking indemnity from Wills.
Wills from informing the jury of the settlement
between Codner and In-N-Out. Wills also con- Prior to trial, Wills made a motion in limine
tends the trial court erred in denying his post- to exclude photographs contained in an article
verdict motion to reduce the award for past published by the Society of Automotive Engi-
medical expenses to the amount actually paid neers (SAE) showing damage resulting from
by Codner’s insurer. a motorcycle colliding with an automobile at
varying rates of speed. The trial court denied the
In-N-Out cross-appeals asserting the trial court motion. [*5] In-N-Out moved in limine to ex-
made several post-verdict procedural errors, clude evidence of Codner’s claims against In
including amending the judgment after Wills -N-Out and of the settlement and to preclude ref-
filed an appeal. In-N-Out also asserts the trial erence to negligence per se based on alleged
court erred in awarding it indemnity only for violations of In-N-Out’s conditional use permit
economic damages and, alternatively, the trial (CUP) and City of Ventura ordinances. The
court erred in using the apportionment between trial court granted these motions.
Page 3 of 13
2009 Cal. App. Unpub. LEXIS 10143, *5

At trial, Wills testified that his vision was ob- the verdict and granted the motion to vacate
scured when he was attempting to make the left the judgment. The court filed an amended judg-
-hand turn because In-N-Out permitted cars us- ment that limited In-N-Out’s indemnity judg-
ing its drive-thru lane to back up onto ment against Wills to $ 145,000. Both Wills and
Harbor Boulevard. Wills also testified that Cod- In-N-Out appeal from the amended judgment.
ner was responsible for the accident because he The Consumer Attorneys of California filed an
was exceeding the speed limit. amicus curiae brief in support of Codner.

Accident reconstruction experts called by Cod- DISCUSSION
ner and In-N-Out testified that the motor-
cycle was traveling between 35 and 42 miles A. Wills’ Appeal
per hour. The jury was shown the SAE photo-
graphs during the experts’ testimony. The ex- 1. No Reversible Error in Permitting Photo-
perts stated that the photographs were consis- graphs to be Shown to the Jury
tent with their opinions but that they relied on
other factors in reaching their conclusions as Wills asserts the trial court erred in denying
to the speed of the motorcycle. Wills did not his motion to preclude the jury from viewing the
present expert testimony. Several percipient wit- SAE photographs. Wills asserts that showing
nesses called by Wills estimated the motor- the photographs to the jury was prejudicial er-
cycle was going much faster than the speed limit ror because they were inadmissible hearsay,
and was accelerating just before the accident. not properly authenticated and did not repre-
sent circumstances similar to the accident.
The jury returned [*6] a special verdict total-
ing $ 3,084,305.29. Daniel was awarded $ The photographs depicted crash test results and
1,200,648.23 in economic damages and $ were part of a study done by the SAE. They
1,750,000 in noneconomic damages; Cody was were shown to the jury in conjunction with tes-
awarded $ 58,657.06 in economic damages timony by two accident reconstruction experts
and $ 25,000 in noneconomic damages; Re- testifying for the plaintiffs as well as in plain-
becca was awarded $ 50,000 in noneconomic tiffs’ counsel’s opening statement and closing
damages. 1 The trial court entered a judgment in argument. The photographs [*8] depicted the re-
favor of Codner for that amount and a sepa- sults of a crash between a Kawasaki 1000 mo-
rate judgment in favor of In-N-Out forCom- torcycle and a 1989 Ford Thunderbird auto-
plete Indemnity. Wills filed a motion to re- mobile colliding at a 90-degree angle. The
duce the verdict based on the amount of paid motorcycle in the photographs was substan-
medical expenses. tially similar to that driven by Codner;
Wills’ Thunderbird, however, was a 2003 and
On April 30, 2007, Wills filed a notice of ap- its body style differed from the Thunderbird in
peal. On the same day, he filed a motion to set the photographs. In addition, Codner’s motor-
aside and vacate the judgment under Code of cycle hit the Thunderbird at less than a 90-
Civil Procedure section 663 on the ground that degree angle.
In-N-Out’s judgment for indemnity must be re-
duced to $ 145,000 under Proposition 51--the al- The photographs should not have been shown to
location made for economic damages in the jury. It is well established that, while ex-
[*7] the settlement agreement. On May 3, perts may rely on hearsay evidence, such evi-
Wills filed a motion for new trial. Codner and In dence may not be shown to the jury. (See, e.g.,
-N-Out opposed the motions. The trialcourt de- People v. Campos (1995) 32 Cal.App.4th
nied the motions for new trial and to reduce 304, 308 [An expert witness may not, on di-

1 Economic damages means objectively verifiable monetary losses including, but not limited to, medical expenses and loss of
earnings. ( Civ. Code, § 1431.2, subd. (b)(1).)Noneconomic damages means subjective nonmonetary losses including, but not lim-
ited to, pain and suffering, emotional distress, loss of society and companionship and loss of consortium. (Id. at subd. (b)(2).)
Page 4 of 13
2009 Cal. App. Unpub. LEXIS 10143, *8

rect examination, reveal the content of reports substantial evidence. ( Soule v. General Motors
prepared or opinions expressed by nontestify- Corp. (1994) 8 Cal.4th 548, 572.)’. . .A re-
ing experts].)’[T]he rule which allows an ex- viewing court must review the evidence most fa-
pert to state the reasons upon which his opin- vorable to the contention that the requested in-
ion is based may not be used as a vehicle to struction is applicable since the parties are
bring before the jury incompetent evidence.’ entitled to an instruction thereon if the evi-
(Ibid.) dence so viewed could establish the elements of
the theory presented ..... . . .’( Logacz v. Li-
Respondents contend that the photographs
were admissible as experimental evidence. We mansky (1999) 71 Cal.App.4th 1149, 1157.) A
disagree. The cases relied on by respondents judgment may not be reversed on the basis of in-
where photographs were deemed admissible evi- structional error unless the error caused a mis-
dence all have one characteristic absent in carriage of justice and there is a reasonable
this case. In People v. Cummings (1993) 4 probability that in the absence of the error, a re-
Cal.4th 1233, [*9] DiRosario v. Havens (1987) sult more favorable to the appealing party
196 Cal.App.3d 1224, and Culpepper v. Volk- would have been reached. ( Soule, supra, at pp.
swagen of America, Inc. (1973) 33 Cal.App.3d 573-574.)
510, the experiments were performed by the
testifying witness. Thus, the opposing parties The doctrine of negligence per se is codified in
had the opportunity for effective cross-examina- Evidence Code section 669, which states in
tion. (See People v. Gonzalez (2006) 38 part:(a) The failure of a person to exercise due
Cal.4th 932, 950 [court did not abuse discre- care is presumed if: [P] (1) He violated a stat-
tion in admitting photograph where counsel ute, ordinance, or regulation [*11] of a pub-
could cross-examine witness as to differences lic entity; [P] (2) The violation proximately
between photograph and actual crime scene caused death or injury to person or property; [P]
and where jury readily understood differences (3) The death or injury resulted from an occur-
between photographs and crime scene].) rence of the nature which the statute, ordi-
nance, or regulation was designed to prevent;
Although showing the photographs to the jury and [P] (4) The person suffering the death or the
was error, the error was harmless, as the photo- injury to his person or property was one of
graphs provided visual confirmation of the ex- the class of persons for whose protection the
perts’ admissible testimony and was merely statute, ordinance, or regulation was adopted.
corroborative of evidence from independent 
sources. (DiRosario v. Havens, supra, 196 To be entitled to an instruction on negligence per
Cal.App.3d at p. 1233.) se, there must be evidence supporting each of
2. No Error in Refusing to Instruct the Jury on these elements. The first two are matters for the
Negligence Per Se trier of fact to decide, whereas the second
two are to be determined by the court as a mat-
The trial court granted respondents’ motions in ter of law. ( Newhall Land & Farming Co. v. Su-
limine to preclude Wills from offering evi- perior Court (1993) 19 Cal.App.4th 334,
dence that In-N-Out violated a condition of its 347.) The courts may look to the provision’s leg-
CUP and City of Ventura ordinances and ar- islative history in considering the second two
guing that In-N-Out was negligent per se. Ac- elements. ( Lua v. Southern Pacific Transporta-
cordingly, the court denied Wills’ request for a tion Co. (1992) 6 Cal.App.4th 1897, 1902.)
negligence per se instruction. [*10] The trial
court found that neither the CUP nor the ordi- Wills argues that In-N-Out was negligent per
nances were intended to prevent traffic colli- se by violating a provision of its CUP requir-
sions or protect passing motorists. ing a sign to be placed at the entrance to the res-
A party is entitled upon request to correct, non- taurant’s drive-through lane instructing cus-
argumentative instructions on every theory of tomers not to queue beyond the end of the lane
the case advanced by him which is supported by
Page 5 of 13
2009 Cal. App. Unpub. LEXIS 10143, *11

when it reaches full capacity. 2 Wills [*12] sub- ample, the court held that regulations requiring
mitted environmental impact and traffic stud- the deep end of a pool to be marked were de-
ies stating that a drive-through lane could cause signed to prevent drowning, not diving, acci-
traffic to line up in the curb lane on Harbor dents.
Boulevard and that the sign requirement in the
The courts have given traffic regulations a simi-
CUP was intended to mitigate that impact. It is
larly narrow construction. In Capolungo v.
undisputed that the sign was not posted and that
Bondi (1986) 179 Cal.App.3d 346, the court
cars were lined up in the curb lane on Har-
held that a statute limiting yellow curb zones to
bor Boulevard waiting to enter the restau-
vehicles which were loading and unloading
rant’s parking lot at the time of the accident.
was not designed to prevent injury to a bicy-
Wills argues that the line of cars stacked up on
clist struck by a passing car. (See also Gilmer v.
Harbor Boulevard prevented him from seeing
Ellington (2008) 159 Cal.App.4th 190 [statute
Codner in time to prevent the accident.
aimed at preventing gridlock not related to safe
Wills also contends that In-N-Out violated sec- operation of vehicles and not intended to pre-
tion 24.475.020(4) of the City of San Bue- vent traffic accidents]; and see Victor v. Hedges
naventura Ordinance Code which requires (1999) 77 Cal.App.4th 229 [statute prohibit-
drive-up lanes to be of sufficient length ing parking of vehicle on sidewalk not de-
[*13] to accommodate, on the site, at least three signed to prevent injury to pedestrian struck by
waiting vehicles at a pickup station . . . and vehicle other than the illegally parked ve-
five waiting vehicles at an order station . . . with- hicle].)
out blocking access to parking or ingress or Wills did not meet his burden of showing that
egress to adjacent streets. Wills presented no the regulations were designed to prevent traffic
legislative history relating to the ordinance, re- accidents or that Codner was in the class of per-
lying instead on language in the ordinance sons the regulations were intended to protect.
which expresses an intent to preventblocking The legislative [*15] history of the CUP
access to parking or ingress or egress to adja- shows that the sign was intended to prevent traf-
cent streets. Wills argues that In-N-Out’s prac- fic congestion on Harbor Boulevard and the
tice of having an employee take orders out- language of the ordinance shows it was in-
side the fixed order station violated the tended to prevent traffic congestion on the res-
ordinance. The evidence was undisputed that a taurant premises. While a secondary effect
restaurant employee was taking orders from may have been to provide an unobstructed view
customers waiting in line at the time of the ac- of traffic, Wills provided no evidence this
cident. 3 was the purpose of the regulations or that Cod-
ner was in the class of persons meant to be pro-
The California decisions agree that the per se tected by them. (See, e.g., Capolungo v. Bondi,
effect of a statute is limited to the conduct supra, 179 Cal.App.3d at p. 352 [it could al-
the statute or regulation was designed to pre- ways be said, in the most general sense, that any
vent. [Citations.] . . . ’[C]ourts . . .have been statewide scheme for the uniform regulation
careful not to exceed the purpose which they of traffic has an overall purpose of promoting
attribute to the [*14] legislature.’ ( Lua v. traffic safety].) The trial court did not err in re-
Southern Pacific Transportation Co., supra, 6 fusing to give a negligence per se instruction.
Cal.App.4th at pp. 1903-1904.) In Atkins v.
Bisigier (1971) 16 Cal.App.3d 414, 422, for ex- 3. No Error in Excluding Evidence of Good

2 Wills has provided no case law or other authority that a condition in a CUP is astatute, ordinance, or regulation of a public
entity. For purposes of this opinion, we assume that it meets this criteria and that the first element of
Evidence Code section 669,
Stafford v. United Farm Workers
subdivision (a) has been satisfied. (See (1983) 33 Cal.3d 319, 324 [courts have construed
section
669 broadly, applying it to police department manuals and Administrative Code safety orders].)
3
Wills also argued in the trial court that a second Ventura ordinance prohibiting solicitation on City sidewalks was violated by
an In-N-Out employee by taking orders while allegedly standing on the sidewalk. He does not pursue this theory on appeal.
Page 6 of 13
2009 Cal. App. Unpub. LEXIS 10143, *15

Faith Settlement Agreement And Claims nonsettling defendants. [Citation.] Its collusive
Against In-N-Out nature and potential for fraud have been well
documented and recognized. [Citation.] The in-
Wills contends the trial court erred in prohibit- terests of the parties are clearly realigned in a
ing him from informing the jury of the settle- manner not apparent to the trier of fact.
ment between Codner and In-N-Out. He as-
serts that he had a right to have the jury The settlement agreement between In-N-Out
given this information to show bias. He argues and Codner was not a sliding scale agreement--
that[a]fter the settlement, the Codners and In the settlement amount was fixed at $ 500,000,
-N-Out had no reason to continue to blame each and Codner would receive that amount regard-
other for the accident. Instead, [*16] In-N- less of the outcome of the trial. Such an agree-
Out wanted the jury to find Wills 100 percent ment is not subject to the disclosure require-
at fault so that In-N-Out could seek indemnity ments of Code of Civil Procedure section
from Wills for the full economic damages por- 877.5. [*18] ( Everman v. Superior Court (1992)
tion of the settlement, and the Codners wanted 8 Cal.App.4th 466, 471-472.) In Barajas v.
the jury to find Wills 100 percent at fault so USA Petroleum Corp. (1986) 184 Cal.App.3d
they could maximize their total recovery. 974, we held that whether to disclose a sliding
 scale settlement to the jury was subject to
A trial court’s ruling on the admissibility of evi- the trial court’s discretion, and the court did
dence, including the admissibility of settle- not abuse its discretion in failing to do so.The
ment offers, is reviewed for abuse of discre- settling plaintiffs retained their theoretical self
tion. ( Caira v. Offner (2005) 126 Cal.App.4th -interest and bias and could be impeached there-
12, 31-32.) with. Based on this and the trial court’s re-
tained continuing discretion to advise the jury,
Under Evidence Code section 1152, a settle- we cannot say that the trial court’s decision
ment between a plaintiff and one or more joint to not advise the jury of the settlements was ar-
tortfeasors may not be disclosed to a jury to bitrary, whimsical or capricious. ( Id. at p.
prove liability. However, under Code of Civil 989.)
Procedure section 877.5, subdivision (a)(2), a
sliding scale settlement agreement 4 between The trial court indicated that no purpose would
a plaintiff and one or more joint tortfeasors must be served by disclosing the settlement to the
be disclosed to the jury if a defendant party jury other than to show In-N-Out’s liability. The
to the agreement is called as a witness at trial un- court was well within its discretion in refus-
less the court finds that the disclosure will cre- ing to admit such evidence. ( Evid. Code, § 1152,
ate a substantial danger of undue prejudice. subd. (a).) Furthermore, the trial court could
The reason for requiring disclosure is because have concluded that disclosing the settlement
of the collusive nature of such agreements and had the potential of confusing the jury. ( Evid.
the unfair prejudice to the nonsettling defen- Code, § 352.) The record supports the conclu-
dant. ( Moreno v. Sayre (1984) 162 Cal.App.3d sion by the trial court that there was nothing in
116, 125.) As explained in Alcala Co. v. Su- the nature of the settlement that would lead a
perior Court (1996) 49 Cal.App.4th 1308, 1316, reasonable person to infer In-N-Out [*19] had
[*17][t]he typical ’Mary Carter’ agreement is any interest in favoring Codner. Wills has not
secret, calls for the settling defendant to par- shown the court abused its discretion by exclud-
ticipate in the trial on the plaintiff’s behalf, ing evidence of In-N-Out’s settlement with
and provides for a settling defendant to be cred- Codner. (See Albrecht v. Broughton (1970) 6
ited for amounts the plaintiff recovers from Cal.App.3d 173, 178 [There can be no ques-

4 AMary Carter or sliding scale agreement is an agreement between a plaintiff and one or more but not all alleged tortfeasor
defendants, which limits the liability of the agreeing tortfeasor defendants to an amount which is dependent upon the amount
of recovery which the plaintiff is able to recover from the nonagreeing defendant or defendants. ( Code Civ. Proc., § 877.5, subd.
(b);Abbott Ford, Inc. v. Superior Court
(1987) 43 Cal.3d 858, 863, fn. 1.)
Page 7 of 13
2009 Cal. App. Unpub. LEXIS 10143, *19

tion that it was a great advantage to the de- 17,168 in medical costs to $ 3,600, the amount
fense to be able to let the jury know that appel- plaintiff’s health care provider accepted from
lant’s injuries were not wholly uncompensated. plaintiff’s insurance carrier [*21] as full pay-
But that advantage is not one which a party ment for its services. ( Id. at p. 306.)
is entitled to enjoy in the absence of any issue
in the determination of which the evidence In Parnell v. Adventist Health System/West
will be relevant and proper for the jury to hear. (2005) 35 Cal.4th 595, the plaintiff participated
The situation is closely analogous to an admis- in a health plan, which contracted with a pre-
sion of liability by a [settling] defendant].) ferred provider organization (PPO) to give dis-
counts on medical care to its insureds. Par-
4. No Error in Failing to Reduce Jury’s Award nell received treatment at a hospital that was a
of Past Medical Damages preferred provider, which accepted a dis-
counted rate as payment in full, pursuant to the
Wills asserts the trial court erred in denying his hospital’s agreement with the PPO. The hospi-
post verdict motion to reduce the jury’s award tal then filed a notice of lien against Parnell’s
of past medical damages to Daniel and Cody tort claim, attempting to recover the differ-
from $ 521,750.23 to $ 291,577.19. ence between the cost of medical services and
He argues they are not entitled to recover more the amount it received from the insurance pro-
than the insurance company paid to their medi- vider. ( Id. at pp. 598-599.) Our Supreme
cal providers for treatment. He presented evi- Court held that under California’s Hospital
dence that Codner’s health care providers as- Lien Act (HLA) (Civ. Code, §§ 3045.1-
signed their claims to Accent, a financial 3045.6), the hospital could not recover more
recovery company, and that Accent had ac- than the amount it accepted as payment in full.
cepted the smaller sum in full payment for Cod- The court stated:Because Parnell no longer
ner’s [*20] past medical expenses. owes a debt to the hospital for its services, we
conclude that the hospital may not assert a
Wills relies on a line of cases beginning with lien under the HLA against Parnell’s recovery
Hanif v. Housing Authority (1988) 200 from the third party tortfeasor. ( Id. at p. 609.)
Cal.App.3d 635. In Hanif, the trial court
awarded as special damages the reasonable In Katiuzhinsky v. Perry (2007) 152
value of medical care and services, even though Cal.App.4th 1288, personal injury plaintiffs re-
the award exceeded the amount paid by Medi- ceived services from medical [*22] provid-
Cal for that care. The Court of Appeal modi- ers who secured a lien against any recovery in
fied the award, holding that plaintiff was en- plaintiffs’ personal injury actions. Some of
titled to recover only the actual amount paid by the providers later sold plaintiffs’ accounts, at
Medi-Cal. The court reasoned that an award a discount, to a financial services company. The
of damages for past medical expenses in ex- providers wrote off the balance but plaintiffs re-
cess of that actually paid for the care and ser- mained liable to the financial services com-
vices would constitute overcompensation to pany for the full costs of their medical bills. The
the plaintiff. The court stated:[W]hen the evi- Court of Appeal held that[t]he intervention
dence shows a sum certain to have been paid or of a third party in purchasing a medical lien does
incurred for past medical care and services, not prevent a plaintiff from recovering the
whether by the plaintiff or by an indepen- amounts billed by the medical provider for care
dent source, that sum certain is the most the and treatment, as long as the plaintiff legiti-
plaintiff may recover for that care despite the mately incurs those expenses and remains li-
fact it may have been less than the prevailing able for their payment. ( Id. at p. 1291.)
market rate. ( Id. at p. 641.)
Most recently, in Olsen v. Reid (2008) 164
In Nishihama v. City and County of San Fran- Cal.App.4th 200, the jury awarded medical ex-
cisco (2001) 93 Cal.App.4th 298, the court fol- penses in the full amount for which plaintiff
lowed Hanif and reduced a jury award of $ was billed. The trial court reduced the award,
Page 8 of 13
2009 Cal. App. Unpub. LEXIS 10143, *22

finding that the health care providers had writ- of economic damages allocated in the settle-
ten off a large amount of the bill, relying on ment agreement, because Wills had previously
Hanif and Nishihama. The Court of Appeal re- filed a notice of appeal from the judgment
versed the judgment and directed the trial in which the court had entered judgment for
court to reinstate the full amount of the jury’s complete indemnity on In-N-Out’s cross-
award. The court held the trialcourt erred in re- complaint against Wills.
ducing the amount of the jury verdict because
there was no evidence that plaintiffs [*23] were An appeal from a judgment generally strips the
not liable for the full cost of the medical ex- trial court of any authority to rule on the judg-
penses incurred. ment. ( Pazderka v. Caballeros Dimas Alang, Inc.
(1998) 62 Cal.App.4th 658, 666.) However, a
As in Katiuzhinsky and Olsen, Wills has not judgment which is void on its face, because its
met his burden of showing that Codner does not infirmity is determinable from the judgment
remain liable for the full cost of medical ser- roll or record, may be set aside by the trial court
vices rendered. Wills’ only evidence is state- on motion at any time after its entry. The set-
ments from Accent showing that some of Cod- ting aside of a void order by the trial court while
ner’s medical providers assigned their claims for an appeal is pending renders the appeal moot. (
medical services to Accent for a reduced sum. Andrisani v. Saugus Colony Limited (1992) 8
The amount for which a medical provider is will- Cal.App.4th 517, 523.)
ing to sell and a third party is willing to buy
an account receivable has little if any bearing on The [*25] trial court retains the inherent
the value of the services rendered to the plain- power at any time to modify the judgment for
tiff and provides no basis for concluding correction of clerical error in order to reflect the
that Codner does not remain liable for payment court’s intended adjudication. ( Aspen Internat.
of the full amount of the services provided. Capital Corp. v. Marsch (1991) 235 Cal.App.3d
As in Olsen, Wills has not provided any docu- 1199, 1204.) The trial court may not, how-
ments showing the contractual agreement be- ever, amend a judgment to substantially modify
tween Codner and his insurer, or acknowledg- it or materially alter the rights of the parties un-
ment from Codner, Accent, or the medical der its authority to correct clerical error.
providers that Codner has no potential liability (Ibid.; Craven v. Crout (1985) 163 Cal.App.3d
for the full cost of medical services pro- 779, 782.)
vided. (See Katiuzhinsky v. Perry, supra, 152
Cal.App.4th at p. 1291 [where medical lien was When the trial court enters a judgment for dam-
sold to third party, plaintiff was entitled to the ages in excess of statutorily prescribed limita-
full amount billed by the medical provider as tions, the error is presumed inadvertent in the ab-
long as the amount was legitimately [*24] in- sence of evidence to the contrary, and the
curred and plaintiff remained liable for its pay- trial court has inherent authority to amend this
ment].) The trial court did not err in denying clerical error in the judgment at any time to
Wills’ motion to reduce the jury’s award for past comport with the limits set forth in the statute.
medical expenses. ( Pettigrew v. Grand Rent-A-Car (1984) 154
Cal.App.3d 204, 211.) Thus, in Pettigrew, where
B. In-N-Out’s Appeal the Vehicle Code limited liability to $ 15,000
and the trialcourt entered judgment in excess of
1. Jurisdiction to Amend Judgment After Ap- that amount, the trial court had jurisdiction to
peal Has Been Filed correct the clerical error in the judgment at any
time to reduce damages to the amount pre-
In-N-Out contends the

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JACLANEL M. MCFARLAND Track Judge’s New Case

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Document Filed Date

July 29, 2013

Case Filing Date

March 14, 2011

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Exhibit,Appendix: FAVALORA, JOSEPH vs. KATY SPRINGS AND MANUFACTURING INC

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