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California Court of Appeal further clarifies Howell and grants publication of Audish v. Macias, et al.
8/27/24
California’s Fourth Appellate District recently ordered that a critical opinion be published concerning clarifications to the collateral source rule. The appellate court heard arguments about an underlying auto v. auto action brought by Plaintiff David Audish. In the underlying case, a trial court entered a civil judgment after a jury found that Plaintiff Audish and Defendant David Macias operated their vehicles negligently. The jury assigned 50% liability to Audish and 50% liability to Macias. The jury held that Audish suffered $65,699.50 in damages ($29,288.94 in past medical expenses, $3,620 for past non-economic damages, and $32,790.56 for future medical expenses). Audish appealed on three issues, but the most significant was his argument that the trial court violated the collateral source rule by admitting evidence that he would have Medicare insurance at age 65.
In the trial court, Audish brought a motion in limine to preclude any mention of the availability of healthcare insurance. The trial court partially denied the motion, stating that an expert witness with proper foundation could testify about the reasonable value of medical care based on the rates insurers pay for medical treatment.
At trial, Audish’s life-care planner testified to the reasonable costs of her future treatment, stating that it was based on what medical providers charged patients and not the negotiated amounts insurers pay. The expert also agreed that her estimate did not account for what Medicare or other insurers would pay.
The appellate court, tasked with determining whether the collateral source rule was violated, found that the trial court did not violate the rule or abuse its discretion in allowing testimony concerning Audish’s future eligibility for health insurance. The Court, citing Howell v Hamilton Meats & Provisions, Inc., explained that the collateral source rule does not provide a defendant with a credit against his potential liability for payments made by a third party. Rather, the collateral source rule allows an injured plaintiff to recover from a defendant “money an insurer has paid to medical providers on his or her behalf.” (Howell v Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, 551.) The Court also cited Cuevas v. Contra Costa County (2017) 11 Cal.App.5th 163, stating that the Cuevas court concluded that “the collateral source rule is not violated when a defendant is allowed to offer evidence of the market value of future medical benefits.” (Cuevas, at p. 180.)
The Court, following Howell and its progeny, affirmed the judgment. On June 6, 2024, Macias’s request for publication was granted, further solidifying that the future value of medical benefits from an insurer is admissible to allow a jury to determine a plaintiff’s future damages.
Please contact Samuel D. Gallman at sgallman@fmglaw.com or your FMG relationship partner to discuss this critical update.
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