Getting Around Howell

May 23, 2018

Getting Around Howell Via Medical Liens For Insured Patient/Plaintiffs: A New Case From the Second District

Pebley v. Santa Clara Organics, LLC, et al., 2d Civ. No. B277893 (Super. Ct. No. 56-201300436036-CU-PA-VTA) (Ventura County) seeks to answer this.

Since Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, California law has provided that an injured plaintiff is entitled only to the lesser of the amount actually paid or incurred or the reasonable value of the medical services provided.  Since Howell, it has become standard practice for plaintiffs to avoid insurance treatment and seek doctors who take a lien on their personal injury case to treat them, at higher billed rates for which they remain theoretically liable in full.

In this case, this practice for generating higher medical special damages for the same treatment was unanimously approved by a three judge panel of the Second District Court of Appeals, Sixth Division.

Plaintiff Pebley sought compensation for injuries occurring in an automobile accident. Mr. Pebley had health insurance, but the majority of his medical special damages were incurred on lien.  There was a dispute of fact as to why this occurred. Both parties presented expert testimony on the issue of medical special damages and the jury awarded $269,000 for past medical expenses and $375,000 for future medical expenses.  The testimony on medical special damages was strictly limited by the court as described below.


Motions in Limine

Mr. Pebley’s attorneys filed, and the trial court granted, the following motions in limine:

No. 1 to exclude evidence of plaintiff’s health insurance or cost information from insurance;

No. 2 to exclude evidence of what insurance companies pay, or doctors accept from them, to prove the reasonable value of medical services;

No. 5 to exclude evidence that Pebley’s medical treatment was provided on a lien basis;

No. 9 to exclude expert testimony that was based, in part, upon Medicare and insurance company rates.

Attorneys for the Defendants filed, and the trial court denied, the following motions in limine:

No. 18 to admit evidence that plaintiff’s medical care was obtained on a lien basis and therefore the doctors had not been paid;

No. 19 to admit evidence that plaintiff was insured through both Kaiser Permanente and Medicare.


The Verdict and Motion for New Trial

The jury found liability without comparative fault. Based on the damages evidence, limited as stated above, the jury unanimously awarded Mr. Pebley past medical expenses of $269,000 (the full amount requested by Mr. Pebley), future medical expenses of $375,000, and substantial noneconomic damages. Defendants’ motion for a new trial was denied, and defendants appealed.


The Court of Appeals’ Rulings

The Court of Appeals, Second District, Division Six, approved all of the rulings on the motions in limine stated above, holding as follows:

“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. (Howell, at p. 566.) 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.” (Pebley v. Santa Clara Organics, LLC (May 8, 2018, No. B277893) ___Cal.App.5th ­­­___, Slip Op., at 14.)

The Court of Appeals explicitly states that it intends an insured plaintiff, who chooses to seek lien treatment, should be treated as if they did not have insurance, and the decision should be concealed from the jury (“Evidence of his insurance would have confused the

issues or misled and prejudiced the jury.” (Id. at 15.) The Court of Appeals reviewed the testimony of the experts testifying to damages and found the testimony was consistent with the uncontested jury instructions given.  Notably, the opinion distinguished between CACI No. 3903A (which uses the phrase “reasonable costs”) from BAJI No. 14.10 (which uses the phrase “reasonable value”) and implied there was a significant difference between the two instructions.  (Id. at 17-19.)

The Court of Appeals’ decision in Pebley is in conflict with other Court of Appeals precedents, in particular Ochoa v. Dorado (2014) 228 Cal.App. 4th 120.  These conflicts will continue to be litigated in the future.

Graham Cridland can be contacted at or 916.483.5181