Another case in the ongoing Hanif saga: Yanez v. Soma Environmental Engineering

The Court of Appeal, First Appellate District, Division One, certified a new opinion for publication in Yanez v. Soma Environmental Engineering, Inc., Case No. A123893, that adds more fuel to the fire over Hanif v. Housing Authority (1988) 200 Cal.App.3d 635. Many plaintiffs' attorneys were delighted with the opinion in Howell v. Hamilton Meats (2009) 179 Cal.App.4th 686, review granted March 10, 2010, No. S179115, citing it to defense counsel and insurance adjusters, only to discover review had been granted by the California Supreme Court. Of course, plaintiffs' attorneys can continue to argue the reasoning,

In Yanez, the plaintiff sued for injuries she suffered in an auto accident.  She was awarded $150,000 in damages, including $44,519 for past medical expenses after a jury trial.  SOMA moved to reduce the award to $18,368 for the amount actually accepted by her medical providers as payment in full under contracts with Aetna and Healthnet, plaintiff's private insurers.  The trial court reduced the judgment and Yanez appealed.  The Court of Appeal reversed the amended judgment and remanded it back to the trial court to restore the original amount of damages and redetermine Yanez's entitlement to costs and prejudgment interest under CCP 998.

At trial, Yanez was able to present evidence of the amounts billed by her health care providers without regard to the amounts actually paid or still considered owing by the provider.  The trial court ruled it would later conduct a post-trial hearing to determine if the amount should be reduced.  In a motion to tax costs, SOMA claimed plaintiff should not have the benefit of CCP 998 because if the medical expense award were reduced, the judgment would be less than Yanez's 998 offer.

The appellate court's opinion, written by Justice Margulies, examines decisions on this issue from around the country and concluded that the trial court erred in reducing the medical specials to the amounts actually paid by insurers.  It found "Haniff used overly broad language and the extension of its holding to private insurance by Nishihama and other cases is inconsistent with the collateral source rule."  (Opn., pg. 14.)  It also noted that whether the full bills reflected the reasonable value of the services provided by health care providers was a separate issue for the jury, and not the trial court, to decide.  The court also stated, "In particular, Hanif did not address or appear to contemplate situations in which patients covered by private health insurance are charged reduced rates by the provider for their care as an insurance benefit negotiated between the insurer and the health care provider."  (Opn., 15.)

Justice Banke filed a 39-page concurring opinion, noting the confusion in the law on the measure of damages for past medical expenses and "[w]ith the exception of damages for gratuitously provided medical services, our Supreme Court has never affirmatively endorsed a measure of damages for past medical expenses nearly certain to result in an economic windfall to the plaintiff - that is, an award that exceeds the dollar amount actually paid or owed (and thus required to be paid in the future) to a provider."  (Concurring Opn., pg. 1.)  Justice Banke noted that the Supreme Court will address Hanif's application outside the Medicaid context, but concluded, "The threshold issue that needs clarification, however, is the measure of damages for past medical expenses."  (Concurring Opn., pg. 32.)  Justice Banke analyzed the measure of such damages, concluding that juries should heard all relevant evidence on the issue of "reasonable value" of medical services.  (Concurring Opn., pg. 39.)

This may not be the last word on this case.  The Opinion was filed on June 24, 2010 and it will be 30 days before it becomes final.  It may be subject to a petition for rehearing, or during the 10-day period after it becomes final, a petition to the California Supreme Court.  The petition could be granted so that the Court could reach a comprehensive opinion that covers the issues raised in Howell and Yanez v. Soma Environmental Engineering, Inc. The Opinion is well worth reading, especially since it covers the history of this area and calculating medical expenses, but it also analyzes the approaches taken by both Justices Moore and Fybel of our Court of Appeal in Olsen v. Reid (2008) 164 Cal.App.4th 200.