Thursday, November 9, 2017


One of the basic tenants of tort law is that of the Collateral Source Rule (CSR).  Under the CSR, the fact that an injury victim uses their own medical insurance (defined to include medical insurance, HMO benefits, automobile insurance medical payment coverage, Medi-Cal benefits, Medicare benefits, VA benefits or any coverage of medical bills by a collateral source) to cover their medical bills does not result in a credit to the tortfeasor for the amount of such payments.

The tortfeasor (and their liability insurance carrier) remain liable for the full amount of the reasonably incurred medical bills, and without credit for the fact that the injury victim's collateral sources have paid all or part of the bills.

The only limitation on the CSR in regard to medical bills is that the tortfeasor is never responsible for more than the "adjusted" amount of the bills, that being the net sum that the medical care provider has accepted as payment in full from either the injury victim and/or their collateral source, as opposed to what the gross amount of the bill is.

The rationale for the CSR is that the tortfeasor should not benefit from the prescience of their victim in having the forethought to have collateral source coverage.

Most collateral sources have reimbursement rights (aka "subrogation") for the amount of the benefits expended should the injury victim obtain a settlement or recovery, so that is another reason that the tortfeasor should not receive credit for collateral source payments.

The CSR also applies to claims for loss of earnings or wages due to having been injured.  As such, if the injury victim receives state disability benefits, private disability benefits, or sick pay benefits from their employer, the tortfeasor does not receive credit for such payments.

One interesting wrinkle to the applicability of the CSR to disability retirement income benefits was recently addressed by myself in an article that I authored in the Fall 2017 issue of The Gavel, the official publication of the Orange County Trial Lawyers Association.

The article is reprinted on my website at

Wednesday, July 19, 2017

Bad Neighbor Cases

A not uncommon inquiry that I receive from prospective clients deals with issues involving abusive or obnoxious neighbors, or what is generically referred to as a "bad neighbor" case.

The typical case involves a homeowner or renter who has problems with an adjacent next door or across the street neighbor, the latter of whom engages in a consistent pattern of harassment.  Common complaints include making false police reports, abusive/offensive language, undue noise, parking issues, unruly kids, dumping debris across property lines, and petty vandalism.

Many of these prospective clients want to seek a restraining order (RO), but this is a difficult remedy to obtain, much less to fashion.  To obtain a RO, the complainant must prove by clear and convincing evidence (a much higher burden than the usual "preponderance of the evidence" that is the norm in most civil actions) that unlawful harassment has occurred.

Unlawful harassment means much more than somebody taking offense at an obnoxious person -- it requires evidence of stalking, physical violence, or a reasonable apprehension of physical violence.  You can't get a RO just because you don't like somebody.

As imposition of a RO can have negative consequences against the person that is being restrained, so most judges will require proof of something that equates with actual criminal behavior.  Imposition of a RO can result in loss of firearm possession or a negative reference in a background check, not to mention the imposition of criminal penalties (fines and incarceration) if  subsequent violation of a RO is proven, so judges require a clear showing of unlawful harassment before they will impose so drastic a remedy.

The usual RO will require the offending party to stay a certain distance from the party seeking the relief, i.e., "come no closer than 300 yards and do not contact that person".  However, in a "bad neighbor" context, where the offending party lives across the street or next door, such stay away orders are nearly impossible to impose given the proximity of the parties to each other.

The filing of false police reports is also difficult to remedy, as a civil action for damages based on such a theory may embroil the plaintiff at the wrong end of an anti-SLAPP motion under C.C.P. sec. 425.16 (this subject is beyond the scope of this blog, but information on it can be found in The Legal Gazette section of and which could find the plaintiff being ordered to pay for the defendant's attorney's fees and costs.

This is because the filing of a police report is a First Amendment exercise in petitioning the government for redress of grievances.  Suing in civil court for damages for activity that falls within the First Amendment is a major uphill battle.

Unfortunately, the law is of limited use in the context of a bad neighbor case.  The party suffering such problems may often be better served by retaining a realtor, as opposed to an attorney.

Bottom-line:  you don't have to love your neighbor, but you should go to reasonable lengths to avoid a confrontation with same, even if you don't want to.

Thursday, March 30, 2017


Over the past number of years, a series of groundbreaking case decisions have seriously affected both the amount and the procedure for a claimant in a bodily injury case to seek damages for their medical bills incurred to treat the injury.

Under a line of decision which may be generally referred to as the Hanif/Howell progeny of cases (see my blog from 2014 as to how this case law evolved), a claimant can only claim as economic damages the full amount billed by any given healthcare provider if there have been no payments made on the bill from a collateral source, such as the claimant's own medical insurance.  If there have been any payments from the claimant's own medical insurance and the provider has adjusted their charges in reciprocity for being paid, then the maximum amount that the claimant can claim as damages is the adjusted amount received by the provider as payment in full (i.e., the amount paid by the claimant's own medical insurance plus any out of pocket co-pays or deductibles personally borne by the claimant).

As most healthcare providers will routinely adjust their total charges in order to get timely payment from medical insurance, this will reduce the amount that the claimant can otherwise claim as damages.  For the reasons stated hereafter, this is not necessarily a negative thing.  Under what is known as the Collateral Source Rule, the fact that the claimant's own medical insurance paid some of the bills is not admissible as evidence at trial, nor does the defendant get a credit against what they are legally responsible for in medical expense damages just because the claimant's own medical insurance paid down the bills.

The public policy upholding the Collateral Source Rule is that the negligent defendant should not benefit from the claimant's prescience in having health insurance to begin with.

The plaintiffs' trial bar has had a difficult time in accepting the Hanif/Howell restrictions on what amounts can be claimed as medical damages in light of the above.  This is especially true where the claimant's medical expenses have been paid down via a governmental assistance source like Medi-Cal or Medicare, and which pay the provider pennies on the dollar as payment in full.

In the experience of this practitioner, many plaintiffs' attorneys will counsel their clients NOT to use their own medical insurance, or alternatively won't even apprise their clients of the impact of Hanif/Howell on their claim, much less of what may happen if the recovery at trial isn't sufficient to cover the unpaid medical bills.

In the opinion of this practitioner, in order to protect the client the attorney should always counsel the client to use their own medical insurance (or governmental assistance program) to pay down their bills, to the extent that they have coverage and the healthcare provider will accept it.

There are three (3) basis reasons behind this approach:

1.  Even when liability in a personal injury case is clear, there is no guarantee that a plaintiff will recover any damages at all if the case goes to trial.  If the plaintiff still owes medical bills for treatment of their injuries and the bills were not submitted to their medical insurance carrier in a timely fashion, then if they get nothing or an amount less than the bills at trial then they will be left holding the bag for personal responsibility for paying same.  Medical insurance companies require timely submission of bills as a condition of extending coverage benefits.

2.  Given the Hanif/Howell authorities, some trial judges may allow the introduction into evidence at trial of the plaintiff having available medical insurance, at least if it has not been utilized.  This is because the plaintiff has an affirmative legal duty to mitigate their damages, and the defendant will argue that they did not do so by not using their own medical insurance.   This type of evidence, if admitted, would give the defendant the argument that the plaintiff should get nothing in damages for their medical bills, and will cast the plaintiff in an unfavorable light in front of
a jury.

3.  Whether medical insurance is used or not, the defendant's obligation to pay economic damages for medical bills is limited only to those bills that are "reasonable and necessary".  There is even a jury instruction on this point.  When the bills haven't been submitted to medical insurance and the provider is treating solely on a lien basis, then many such providers will commonly "jack up" the amount of the bills given the fact that they may not be paid for as long as a year down the line, and they expect the plaintiff's attorney to try and negotiate with them after the case is resolved to take a lesser amount as payment in full.  Such inflated lienholder bills are harder to characterize as being "reasonable and necessary".  The argument becomes easier for the plaintiff to make if the bills have been adjusted downwards due to payment being made by their own medical insurance carrier.

It is somewhat of an open question as to whether it constitutes legal malpractice for a plaintiff's attorney to counsel their client not to use their own medical insurance to pay down their bills.  But at the very least, it is potentially very dangerous for the plaintiff not to do so.  The attorney should explain to the client the potential pitfalls of not doing so.

Attorneys should err on the side of caution and put their client's case and financial situation in the best possible position, especially if the matter does not turn out so favorable for the client in the long run.