By James I. Montgomery, Jr.,Esq.


California Supreme Court Affirms Injured Plaintiffs are Limited to the Lesser Amount Accepted by Medical Providers

 

 

The California Supreme Court published a definitive ruling in Howell v. Hamilton Meats & Provisions, Inc. which focused on the issue of whether an injured plaintiff can recover the “face” amount of a medical bill, or the lesser amount accepted by the medical provider pursuant to a negotiated rate as past medical expenses.  The Court held that the injured plaintiff is limited to the discounted amount that is accepted as full payment. 

 

Issue:  

  

In the circumstance in which a tortuously injured person receives medical care for his or her injuries and the provider of that care accepts an amount less that stated in the provider’s bill as full payment pursuant to a preexisting contract with the injured person’s health insurer, may the injured person recover as economic damages for past medical expenses the undiscounted sum stated in the provider’s bill that was never paid by or on behalf of the injured person?

 

Court Holding:  

 

The Court held that no such recovery is allowed for the simple reason that the injured plaintiff did not suffer any economic loss in the higher amount.  In making it ruling, the court reaffirms the principles set forth in Hanif v Housing Authority (1988) 200 Cal. App. 3d 635 that the plaintiff is limited to the lesser amount accepted.  The Court further held that the collateral source rule is not violated.

 

Facts:   

 

Howell was injured in an automobile accident. Two of her health care providers billed a total of $175,756 dollars for services of which $130,286 was written off or waived.  At the trial level, the court reduced the judgment by the discounted amount in a post trial hearing.  The Court of Appeal reversed holding that the reduction violated the collateral source rule.

 

Issues and Findings:

 

 

2. Hanif applies to private medical insurance.

 

 

 

Issues Left Unresolved:

 

 

 

Print Article

Link to California Supreme Court Published Opinion

 

Questions or Comments? Contact Us at:
Gibbs, Giden, Locher, Turner & Senet, LLP
1880 Century Park East, Suite 1200
E-mail: info@gglts.com or call (310) 552-3400

The content contained herein is published online by Gibbs, Giden, Locher, Turner & Senet LLP ("GGLTS") for informational purposes only, may not reflect the most current legal developments, verdicts or settlements, and does not constitute legal advice. Do not act on the information contained herein without seeking the advice of licensed counsel. For specific questions about any of the content discussed herein or any of the content posted to this website please contact the article attorney author or send an email to info@gglts.com. The transmission of information on this, the GGLTS website, or any transmission or exchange of information over the Internet, or by any of the included links is not intended to create and does not constitute an attorney-client relationship. For a complete description of the terms of use of this website please see the Legal Notices section below.

This publication may not be reproduced or used in whole or in part without written consent of the firm.

Only the named insured can satisfy general liability insurance policy’s self-insured retention and trigger coverage

Case:
Forecast Homes, Inc. v. Steadfast Ins. Co. (2010) 181 Cal.App.4th 1466, 105 Cal.Rptr.3d 200

Digest Presented by Steven R. Cuneo, Jr., Esq. at the 17th Annual GGLTS Review Preview Seminar (2011)

Key Points:
1) CGL policy prohibiting anyone other than the named insured from paying the policy's self-insured retention is valid.
2) Policy language upheld, even though it had the practical effect of denying coverage to an additional insured.

Digest:
Housing developers, Forecast Homes, Inc., and K. Hovnanian Forecast Homes, Inc. (referred to collectively and in the singular as Forecast), appealed from the judgment entered in their declaratory relief action in favor of Steadfast Insurance Company (Steadfast). Forecast contractually required all its subcontractors to defend and hold it harmless against any liability arising out of the subcontractors' work. Subcontractors were required to add Forecast to their general liability insurance policies as an additional insured. Several subcontractors obtained their required insurance coverage from Steadfast, who later refused to indemnify Forecast when a lawsuit was filed by several homeowners against Forecast for construction defects. Steadfast maintained the subcontractor did not pay the policy's self-insured retention (SIR), which was a precondition for coverage. It argued only the named insured, not Forecast, could satisfy the policies' SIR and trigger coverage. The trial court agreed and concluded the policies were unambiguous, not against public policy, and not illusory. AFFIRMED. On appeal, Forecast argued that the insurer was required to specifically list who was precluded from paying the SIR out of their pocket. It asserted Steadfast could have easily inserted language to the effect that only the named insured may pay, or specifically precluded payment by other insurance or by any additional insured (such as Forecast). The Court concluded that Forecast's theory would turn the law of contract interpretation on its head. The endorsement clearly defined “you” and “your” to mean the named insured. And the section in the policy concerning “Your Obligation” explicitly and plainly referred to the named insured's obligation. Finally, the paragraph below this title, warning, “it is a condition precedent to our liability that you make actual payment of all damages and ‘defense costs' for each ‘occurrence’ ... until you have paid [SIR] amounts” clearly described who was to pay. The Court concluded that this clearly and unambiguously only applied to the named insured. Thus, it was not necessary for Steadfast to envision, and then create a list of who possibly could not satisfy the condition precedent.

The content contained herein is published online by Gibbs, Giden, Locher, Turner & Senet LLP ("GGLTS") for informational purposes only, may not reflect the most current legal developments, verdicts or settlements, and does not constitute legal advice. Do not act on the information contained herein without seeking the advice of licensed counsel. For specific questions about any of the content discussed herein or any of the content posted to this website please contact the article attorney author or send an email to info@gglts.com. The transmission of information on this, the GGLTS website, or any transmission or exchange of information over the Internet, or by any of the included links is not intended to create and does not constitute an attorney-client relationship. For a complete description of the terms of use of this website please see the Legal Notices section below.

This publication may not be reproduced or used in whole or in part without written consent of the firm.

Copyright 2011 Gibbs, Giden, Locher, Turner & Senet LLP

CALIFORNIA CONSTRUCTION INDEMNITY AGREEMENTS CLARIFIED
By Steven R. Cuneo, Jr. Esq.

Los Angeles, California - August 15th, 2008

The California Supreme Court recently decided the case of Crawford v. Weather Shield Mfg., Inc., clarifying California law concerning indemnities in construction contracts. An indemnity provision generally requires one party to protect another party from claims, lawsuits or losses related to the contract or work on the project. Indemnity provisions usually encompass two distinct duties:

1.   a duty to defend claims and lawsuits, and;
2.   a duty to pay any ultimate judgment or settlement.

In Crawford, the Court held that the contractual indemnity at issue required the subcontractor providing the indemnity to provide an “up-front” defense of the general contractor as soon as a claim encompassed by the indemnity provision was made. The Court further held that the subcontractor’s duty to defend applied even though the subcontractor was ultimately found not to have been negligent in causing the plaintiff’s damages.

Q: Does the Crawford case apply to residential or commercial contracts?

A: The Crawford case applies to residential construction indemnity agreements entered into before January 1, 2006. Residential construction indemnity agreements entered into after that date are now governed (and limited) by statute. The case also applies to the interpretation of all commercial construction indemnity agreements. Such commercial construction indemnity agreements have not been the subject of recent statutory changes.

Q: What should I do, if anything?

A: Given both: (1) the changes to California’s indemnity statutes over the last few years; and (2) the implications of the Crawford case, all parties to construction contracts should revisit the indemnity provisions in their standard contract forms. If you need any additional information on this case, or on contractual indemnities in California, please contact Steve Cuneo at scuneo@gglts.com.

The content contained herein is published online by Gibbs, Giden, Locher, Turner & Senet LLP ("GGLTS") for informational purposes only, may not reflect the most current legal developments, verdicts or settlements, and does not constitute legal advice. Do not act on the information contained herein without seeking the advice of licensed counsel. For specific questions about any of the content discussed herein or any of the content posted to this website please contact the article attorney author or send an email to info@gglts.com. The transmission of information on this, the GGLTS website, or any transmission or exchange of information over the Internet, or by any of the included links is not intended to create and does not constitute an attorney-client relationship. For a complete description of the terms of use of this website please see the Legal Notices section below.

This publication may not be reproduced or used in whole or in part without written consent of the firm.

Copyright 2011 Gibbs, Giden, Locher, Turner & Senet LLP