Metropolitan News-Enterprise


Wednesday, May 9, 2018


Page 3


Court of Appeal:

No Duty to Mitigate Damages by Relying on Medical Plan

Justice Perren Says It’s Up to the Plaintiff to Decide Whether to Use Services Insurer Would Pay for—at Discounted Rate—or Opt for Care at Full Price


By a MetNews Staff Writer


A plaintiff in a personal injury action who has health insurance, but opts to receive treatment outside the medical plan, may receive recompense for the full amount paid even though the insurance company would have received discounts if doctors and facilities which it covered had been used, the Court of Appeal for this district held yesterday.

The full amount the plaintiff paid may be recouped, the court said, so long as what was billed was reasonable.

The opinion, by Justice Steven Perren of Div. Six, affirms a jury’s award of $3.6 million to plaintiff Dave Pebley in an action against Santa Clara Organics, LLC. The defendant was owner of a vehicle which rammed the motor home in which Pebley was seated, causing him severe injuries.

He initially utilized services that were covered by his Kaiser plan, but decided he wanted care that was not covered. Santa Clara argued that by using doctors and facilities not covered by his Kaiser plan, he was failing in his duty to mitigate damages. The appeals court rejected that contention.

Ordinary Situation

Perren noted that an insured plaintiff will ordinarily have the insurer pay for the care, and the insurer will typically pay less than the amount billed—so that the bills become irrelevant—and a defendant at fault will make reimbursement for actual payments, as well as anticipated future payments. An uninsured plaintiff, he said, will seek the reasonable value of past and future services, and the bills are admissible to show that.

Pebley produced bills, along with expert testimony as to the reasonableness of the sums.

“Here, we are confronted with an insured plaintiff who has chosen to treat with doctors and medical facility providers outside his insurance plan,” Perren wrote. “We hold that such a plaintiff shall be considered uninsured, as opposed to insured, for the purpose of determining economic damages.”

Explains Rejection

Addressing Santa Clara’s argument that Pebley had a duty to mitigate damages by relying on his Kaiser plan, Perren said:

 “Defendants do not dispute…that Pebley is entitled to recover the lesser of (1) the amount incurred or paid for medical services, and (2) the reasonable value of the services rendered….The fact that Pebley chose to pay for those services out-of-pocket, rather than use his insurance, is irrelevant so long as these requirements are met. We therefore reject defendants’ argument that Pebley failed to mitigate his damages. A tortfeasor cannot force a plaintiff to use his or her insurance to obtain medical treatment for injuries caused by the tortfeasor. That choice belongs to the plaintiff. If the plaintiff elects to be treated through an insurance carrier, the plaintiff’s recovery typically will be limited to the amounts paid by the carrier for the services provided….But where, as here, the plaintiff chooses to be treated outside the available insurance plan, the plaintiff is in the same position as an uninsured plaintiff and should be classified as such under the law.”

The jurist related that Pebley needed complex surgery, and chose a doctor who had the skill to perform such surgery.

He remarked:

“As Pebley points out, plaintiffs generally make their health insurance choices before they are injured. These choices may be based on the plaintiffs’ willingness to bear the risk posed by a health maintenance organization (HMO) rationing system because the plaintiff is healthy and requires little care.”

The award was reduced by $1,063 based on discounts Kaiser had received while Pebley was receiving services under its plan.

The case is Pebley v. Santa Clara Organics, LLC, B277893.

Lisa Perrochet and Steven S. Fleischman of Horvitz & Levy joined forces with Kevin M. McCormick and Panda L. Kroll of Benton, Orr, Duval & Buckingham in arguing for Santa Clara. Sevy W. Fisher and Greyson M. Goody of the Simon Law Group and Jeffrey I. Ehrlich represented Pebley.


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