On March 10, 2010, the California Supreme Court granted review in Howell v. Hamilton Meat & Provisions, a case that established guidelines for determining the amount of damages that may be recovered in personal injury actions.  Briefing is due to be complete on September 15, 2010, with a decision coming some time thereafter.

The Court’s decision will hopefully clear up an issue of California law that has become extremely confused over the past two decades.  Injured plaintiffs are entitled to recover damages that include the reasonable value of medical treatment of their injuries.  But the “reasonable value” of those services is sometimes hard to determine.

In 1988, the Third District Court of Appeal decided Hanif v. Housing Authority, which held that a Medi-Cal recipient’s damages for medical expenses were limited to the amount Medi-Cal paid the providers.  Defense lawyers immediately extended that holding to discounts negotiated by private insurance companies.

Many plaintiffs’ lawyers simply began reducing the amount of medical bills they were claiming on behalf of their clients.  But others – including the author – insisted on higher damages awards, arguing that Hanif did not apply when the plaintiff has health insurance.

Finally, the appellate court in San Diego addressed this issue with the Howell ruling.  The Court held that applying Hanif to private insurance discounts violated the collateral source rule, and that the plaintiff was entitled to recover the entire amount of her medical bills.  The amount at stake was significant – the plaintiff had incurred almost $190,000 in damages, but the defense had argued for a reduction of more than $130,000.

This ruling set up a possible conflict between the courts of different appellate districts, and the Supreme Court granted review to resolve that conflict.  A ruling is expected within the next few months.  Check back here to learn the final outcome.