Filed 5/8/18
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
DAVE PEBLEY, 2d Civ. No. B277893
(Super. Ct. No. 56-2013-
Plaintiff and Respondent, 00436036-CU-PA-VTA)
(Ventura County)
v.
SANTA CLARA ORGANICS,
LLC, et al.,
Defendants and Appellants.
An injured plaintiff with health insurance may not recover
economic damages that exceed the amount paid by the insurer for
the medical services provided. (Howell v. Hamilton Meats &
Provisions, Inc. (2011) 52 Cal.4th 541, 566 (Howell). The amount
of the “full bill” for past medical services is not relevant to prove
past or future medical expenses and/or noneconomic damages.
(Id. at p. 567; Corenbaum v. Lampkin (2013) 215 Cal.App.4th
1308, 1330-1331 (Corenbaum).) In contrast, the amount or
measure of economic damages for an uninsured plaintiff typically
turns on the reasonable value of the services rendered or
expected to be rendered. (Bermudez v. Ciolek (2015) 237
Cal.App.4th 1311, 1330-1331 (Bermudez).) Thus, an uninsured
plaintiff may introduce evidence of the amounts billed for medical
services to prove the services’ reasonable value. (Id. at pp. 1330-
1331, 1335.)
Here, we are confronted with an insured plaintiff who has
chosen to treat with doctors and medical facility providers outside
his insurance plan. We hold that such a plaintiff shall be
considered uninsured, as opposed to insured, for the purpose of
determining economic damages.
Plaintiff Dave Pebley was injured in a motor vehicle
accident caused by defendant Jose Pulido Estrada, an employee
of defendant Santa Clara Organics, LLC (Santa Clara). Although
Pebley has health insurance, he elected to obtain medical services
outside his insurance plan. A jury found defendants liable for
Pebley’s injuries and awarded him $3,644,000 in damages,
including $269,000 for past medical expenses and $375,000 for
future medical expenses. For the most part, Pebley recovered the
amounts that were billed for past services and expected to be
incurred for future services.
We conclude the trial court properly allowed Pebley, as a
plaintiff who is treating outside his insurance plan, to introduce
evidence of his medical bills. Pebley’s medical experts confirmed
these bills represent the reasonable and customary costs for the
services in the Southern California community. Pebley testified
he is liable for these costs regardless of this litigation, and his
treating surgeons stated they expect to be paid in full. The court
permitted defendants to present expert testimony that the
reasonable and customary value of the services provided by the
2
various medical facilities is substantially less than the amounts
actually billed, and defendants’ medical expert opined that 95%
of private pay patients would pay approximately 50% of the
treating professionals’ bills. The jury rejected this expert
evidence and awarded Pebley the billed amounts.
Based on this record, defendants have not demonstrated
error except with respect to two charges. It is undisputed the
jury improperly awarded Pebley the amounts billed by Ventura
County Medical Center (VCMC) and American Medical Response
(AMR) instead of the amounts paid to these providers by his
insurance carrier. The difference between the amounts billed
and the amounts paid is $1,063. We therefore reduce the damage
award by that amount and affirm the judgment as modified.
FACTS AND PROCEDURAL BACKGROUND
A. The Accident
On May 9, 2011, Pebley and his wife, Joline, were
returning from a camping trip in their motor home. Mrs. Pebley
was driving eastbound on the 126 freeway in Ventura County
when the vehicle developed a flat tire. She turned on the hazard
lights, pulled over to the right shoulder and stopped. A portion of
the motor home remained in the No. 2 lane.
In the rearview mirror, Mrs. Pebley saw a Kenworth “big
rig” truck bearing down on them from behind. The driver,
Estrada, who was travelling at approximately 50 miles per hour,
crashed into the left rear end of the motor home with sufficient
force to break the passenger seat in which Pebley was seated.
The truck, which was owned by Santa Clara, was carrying
a 40,000-pound load at the time of the collision. Pebley was
transported to the hospital by ambulance, treated and released.
He suffered injuries to his face, teeth, neck and lower back.
3
B. Pebley’s Medical Treatment
Pebley initially sought treatment through his health
insurance carrier, Kaiser Permanente (Kaiser). After filing a
personal injury action against defendants, Pebley obtained care
from an orthopedic spine specialist, Dr. Gerald Alexander, who is
outside the Kaiser network. Pebley testified he was referred to
Dr. Alexander by members of his men’s group. Defendants claim
Pebley was referred to the doctor by his attorneys. They point to
an internet article co-written by one of Pebley’s attorneys. The
article notes that “[t]ypically, medical liens in personal injury
cases have been used where the plaintiff is uninsured, or where
the insurance provider will not cover or refuses to authorize
recommended medical care.” The authors propose, however, that
insured plaintiffs use the lien form of medical treatment, which
“effectively allows the plaintiff and his or her attorney to sidestep
the insurance company and the impact of Howell, Corenbaum
and Obamacare.” They maintain that treating on a lien basis
increases the “settlement value” of personal injury cases.
Pebley’s post-Kaiser medical treatment was provided on that
basis.
Dr. Alexander performed a 3-level cervical fusion surgery
on March 13, 2014.1 His co-surgeon was Dr. Carl Lauryssen. At
trial, both doctors testified that the injuries Pebley suffered in
the accident necessitated the surgery. Dr. Alexander also
testified that Pebley would require additional cervical fusion
surgery as well as lumbar fusion surgery. Dr. Alexander
explained that a person undergoing spinal fusion surgery is
“never normal again,” and that Pebley could expect decreased
1Defendants claim Pebley became Medicare eligible in
2013, but Medicare was not billed for the surgery.
4
range of motion, ongoing weakness and numbness, and chronic
pain for the rest of his life.
C. Motions in Limine
The parties filed numerous motions in limine addressing
the admissibility of evidence concerning Pebley’s medical
treatment costs. Pebley’s motion in limine No. 1 requested
exclusion of evidence that Pebley was insured through Kaiser as
well as defense arguments concerning Pebley’s decision not to
seek medical treatment through his insurance. Defendants
conceded that Pebley was allowed to treat with doctors outside
his insurance plan, but asserted the cost of available in-plan
services was relevant to the measure of damages. Pebley claimed
a due process right to make medical treatment decisions
irrespective of insurance. The trial court granted Pebley’s motion
in limine.
Pebley’s motion in limine No. 2 sought to exclude evidence
of the amounts an insurance company may pay, or what a
medical provider may accept, for medical services, both past and
future. The motion was granted, along with motion in limine No.
5, which excluded evidence that Pebley obtained most of his
medical treatment on a lien basis.2
Pebley’s motion in limine No. 9 sought to preclude the
defense’s expert, Dr. Henry Miller, from challenging Pebley’s
evidence regarding the reasonable value of medical services.
Pebley asserted that Dr. Miller’s methodology for evaluating
marketplace costs improperly includes the rates that providers
2The trial court denied defendants’ corresponding motions
in limine (Nos. 18 and 19) to admit evidence that Pebley sought
medical treatment on a lien basis and was insured through
Kaiser and Medicare.
5
accept from insurance companies and Medicare. The trial court
conducted a hearing under Evidence Code section 402 to
determine the admissibility of Dr. Miller’s testimony.
Outside the jury’s presence, Dr. Miller explained that part
of his methodology in calculating the fair market value of a
physician’s professional fees is to determine what Medicare pays
for that service and then to proportionately increase that rate to
reflect pricing in the relevant community. Miller takes into
account the Milliman Study, which was jointly funded by the
American Hospital Association and insurance companies.
Pebley’s surgery was performed at Olympia Medical Center
(Olympia). Based on publicly available reports sent to the
California Office of State Health Planning and Development, Dr.
Miller determined the amount Olympia would accept as payment
for its facility services, as distinct from what it would charge. Dr.
Miller used the same information to determine the cash prices
accepted by other medical facilities. Dr. Miller confirmed his
calculation by telephoning Olympia and discovering that the cash
price the hospital would accept for the surgical procedure
performed on Pebley was $40,000, as opposed to the $86,599.85
billed for the procedure. Dr. Miller employed a different
methodology to calculate the costs of professional services (i.e.,
physician fees rather than facility/hospital fees).
The trial court ruled that Dr. Miller could opine about the
facility/hospital fees, but not the professional physician fees. It
determined that Dr. Miller was “competent to testify as to
everything except for the professional services fees” because his
opinion on those fees required references to insurance. As a
result, Dr. Miller testified at trial that the amount Olympia,
Total Care Medical, Pacific Hospital of Long Beach, St. Jude
6
Medical Center, VCMC and Kaiser would accept for their services
totaled $54,615.56, instead of the $120,876.55 requested by
Pebley. Dr. Miller was not permitted to offer any opinions
regarding the reasonable value of the treating physicians’ care.
The amount charged by Drs. Alexander and Lauryssen totaled
$103,031.60.
Defendants’ motion in limine No. 16 sought to exclude
evidence of unpaid “bills” from health care providers pursuant to
Howell and its progeny. This would have required Pebley to
introduce independent evidence of market rate values for the care
he received. The trial court denied the motion. It also denied
defendants’ motion in limine No. 20, which sought to prevent Dr.
Alexander from offering opinions on the “reasonableness” of
medical expenses based on unpaid billed amounts.
The trial court stated it was extending the ruling in
Bermudez, which involved an uninsured plaintiff, to cover the
facts of this case. As a result, the full lien amounts that were
billed were admissible. The court acknowledged, however, that
under Howell, “clearly, the notion is the full amount billed is not
the appropriate amount, it’s somewhere . . . below that.” It
explained: “So it really boils down to a . . . battle of the experts.
Plaintiff[] can come in and say, here’s [my] bill, it’s $300,000 and
an expert says, hey, 300 is right on. And the other side is going
to come in and say, no, we can get all of these things for $100,000,
and, but we can’t have any talk at all about insurance, about how
the $100,000 is justified.”
D. The Verdict and Motion for New Trial
The jury unanimously found that defendants were
negligent, and that neither Pebley nor his wife was negligent. It
awarded Pebley past medical expenses of $269,000 (the full
7
amount requested by Pebley), future medical expenses of
$375,000, past noneconomic damages of $900,000, and future
noneconomic damages of $2,100,000.
Defendants moved for a new trial, arguing the damages
were excessive and that the award of medical expenses could not
stand under Howell and its progeny. The trial court summarily
denied the motion. Defendants appeal.
DISCUSSION
A. Standard of Review
Whether a plaintiff “‘“is entitled to a particular measure of
damages is question of law subject to de novo review.”’” (Markow
v. Rosner (2016) 3 Cal.App.5th 1027, 1050.) The amount of
damages, however, is a question of fact. The award will not be
disturbed if it is supported by substantial evidence. (Ibid.)
The trial court’s evidentiary rulings are reviewed for abuse
of discretion. (Moore v. Mercer (2016) 4 Cal.App.5th 424, 444
(Moore).)
B. Admissibility of Medical Providers’ Bills to
Prove Economic Damages
“Before 1988 a plaintiff, relying on the collateral source
rule, could recover the full amount of a health provider’s charges
despite the fact that an insurer or governmental agency had
prenegotiated a discounted rate for the services and the plaintiff
was not liable for the full amount. (Helfend v. Southern Cal.
Rapid Transit Dist. (1970) 2 Cal.3d 1, 6.) The collateral source
rule states that ‘if an injured party receives some compensation
for his injuries from a source wholly independent of the
tortfeasor, such payment should not be deducted from the
damages which the plaintiff would otherwise collect from the
tortfeasor.’” (Moore, supra, 4 Cal.App.5th at p. 437.)
8
The 1988 change came when the Court of Appeal decided
Hanif v. Housing Authority (1988) 200 Cal.App.3d 635 (Hanif).
That case limited awards for medical damages in cases where the
plaintiff has a benefit (in that case Medi-Cal) that has a
prenegotiated arrangement with the medical services provider for
reduced cost of the services. (Id. at pp. 643-644.) A similar rule
was adopted for private medical insurance in Howell, supra,
52 Cal.4th at page 566. Since Hanif and Howell, “the measure of
medical damages is the lesser of (1) the amount paid or incurred,
and (2) the reasonable value of the medical services provided.”
(Bermudez, supra, 237 Cal.App.4th at p. 1330; see Howell, supra,
52 Cal.4th at p. 555.)
Thus, “an injured plaintiff whose medical expenses are paid
through private insurance may recover as economic damages no
more than the amounts paid by the plaintiff or his or her insurer
for the medical services received or still owing at the time of
trial.” (Howell, supra, 52 Cal.4th at p. 566.) The court in Howell
reasoned that because insured plaintiffs incur only the fee
amount negotiated by their insurer, not the initial billed amount,
insured plaintiffs may not recover more than their actual loss,
i.e., the amount incurred and paid to settle their medical bills.
(Id. at p. 555.) The court explained, “It follows from our holding
that when a medical care provider has, by agreement with the
plaintiff’s private health insurer, accepted as full payment for the
plaintiff’s care an amount less than the provider’s full bill,
evidence of that amount is relevant to prove the plaintiff’s
damages for past medical expenses and, assuming it satisfies
other rules of evidence, is admissible at trial. . . . Where the
provider has, by prior agreement, accepted less than a billed
amount as full payment, evidence of the full billed amount is not
9
itself relevant on the issue of past medical expenses.” (Id. at
p. 567.)
Howell recognized there is “an element of fortuity” involved
with respect to the medical expenses a tortfeasor may be liable to
pay. (Howell, supra, 52 Cal.4th at p. 566.) For example, “[a]
tortfeasor who injures a member of a managed care organization
may pay less in compensation for medical expenses than one who
inflicts the same injury on an uninsured person treated at a
hospital.” (Ibid.)
Relying upon Howell, the Court of Appeal in Corenbaum
concluded that in an action involving an insured plaintiff,
evidence of the full amount billed for past medical services is
irrelevant and thus inadmissible to prove past medical expenses,
future medical expenses and/or noneconomic damages.
(Corenbaum, supra, 215 Cal.App.4th at pp. 1328-1333.) In so
ruling, the court distinguished Katiuzhinsky v. Perry (2007) 152
Cal.App.4th 1288, 1295-1296 (Katiuzhinsky), which determined
that evidence of the full amount billed is admissible to assess the
reasonable value of past medical services if the plaintiff is
uninsured and “remained fully liable to [his or her] medical
providers for the full amount billed . . . .” (Corenbaum, at
p. 1328, fn. 10.)
Citing Howell and Corenbaum, the court in Ochoa v.
Dorado (2014) 228 Cal.App.4th 120 (Ochoa), held that even
where there is no prenegotiated discounted rate, “the full amount
billed, but unpaid, for past medical services is not relevant to the
reasonable value of services provided.” (Id. at p. 135.) Ochoa
acknowledged that Howell “did not expressly hold that unpaid
medical bills are not evidence of the reasonable value of the
services provided,” but it interpreted Howell as “strongly
10
suggest[ing] such a conclusion.” (Ochoa, at p. 135.) The court
declined to follow Katiuzhinsky, finding it unpersuasive with
respect to whether billed medical charges reflect the reasonable
value of services provided. (Ochoa, at p. 138.) Rather, it
concluded that “evidence of unpaid medical bills cannot support
an award of damages for past medical expenses.” (Id. at p. 139.)
The Court of Appeal in Bermudez, supra, 237 Cal.App.4th
1311, rejected Ochoa’s reasoning in cases involving uninsured
plaintiffs. It noted that Howell had clarified the law with respect
to the recovery of medical damages where the injured person is
insured, but that “[t]he ramifications of Howell . . . in a case
brought by an uninsured plaintiff (who has not paid his bill) are
less clear.” (Bermudez, at p. 1329, italics omitted.) The court
explained, “Howell certainly did not suggest uninsured plaintiffs
are limited in their measure of recovery to the typical amount
incurred by an insured plaintiff, or, for that matter, the typical
amount incurred by any other category of plaintiff.” (Ibid.) Nor
did Howell offer any “bright-line rule on how to determine
‘reasonable value’ when uninsured plaintiffs have incurred (but
not paid) medical bills”; it merely endorsed the use of a “market
or exchange value,” which Bermudez deemed consistent with
Katiuzhinsky. (Bermudez, at p. 1330.) Bermudez concluded,
“[T]he measure of damages for uninsured plaintiffs who have not
paid their medical bills will usually turn on a wide-ranging
inquiry into the reasonable value of medical services provided,
because uninsured plaintiffs will typically incur standard,
nondiscounted charges that will be challenged as unreasonable
by defendants.” (Id. at pp. 1330-1331; accord Uspenskaya v.
Meline (2015) 241 Cal.App.4th 996, 1007.)
11
In sum, when a plaintiff is not insured, medical bills are
relevant and admissible to prove both the amount incurred and
the reasonable value of medical services provided. (Bermudez,
supra, 237 Cal.App.4th at p. 1335, 1337; Katiuzhinsky, supra,
152 Cal.App.4th at pp. 1295-1296 [bills for charges incurred by
the plaintiff were admissible “as they reflected on the nature and
extent of plaintiffs’ injuries and were therefore relevant to [the
jury’s] assessment of an overall general damage award”].) But
the uninsured plaintiff also must present additional evidence,
generally in the form of expert opinion testimony, to establish
that the amount billed is a reasonable value for the service
rendered. (Bermudez, at pp. 1336, 1338.) Thus, if the plaintiff
has an expert who can competently testify that the amount
incurred and billed is the reasonable value of the service
rendered, he or she should be permitted to introduce that
testimony. The defendant may then test the expert’s opinion
through cross-examination and present his or her own expert
opinion testimony that the reasonable value of the service is
lower. A jury could, based on this “wide-ranging inquiry,” best
decide the reasonable value of the medical treatment, which is
likely to be the cap on the uninsured plaintiff’s medical damages.
(Id. at pp. 1330-1331, 1338.)
C. An Injured Plaintiff Who Elects Not to Use an Available
Insurance Plan Will be Treated as “Uninsured”
The threshold issue before us is whether Pebley is to be
classified as insured or uninsured under Howell and its progeny.
Although Pebley admittedly has health insurance, he chose to
receive medical services outside his insurance plan. As
defendants concede, Pebley had a right to choose physicians and
medical facilities outside his plan, but they maintain he also had
12
a duty to mitigate his damages. They assert he did not meet this
duty when he elected to treat with lien providers.
Defendants cite no specific authority for this assertion.
They reference general authority that every plaintiff has a duty
to take reasonable steps to minimize the loss caused by a
defendant’s actions. (Placer County Water Agency v. Hofman
(1985) 165 Cal.App.3d 890, 897.) For example, “[u]nder the
avoidable consequences doctrine as recognized in California, a
person injured by another’s wrongful conduct will not be
compensated for damages that the injured person could have
avoided by reasonable effort or expenditure.” (State Dept. of
Health Services v. Superior Court (2003) 31 Cal.4th 1026, 1043;
Rosenfeld v. Abraham Joshua Heschel Day School, Inc. (2014)
226 Cal.App.4th 886, 900 [“‘[A] plaintiff’s recoverable damages do
not include those damages that the plaintiff could have avoided
with reasonable effort and without undue risk, expense, or
humiliation.’”].)
Defendants maintain Pebley failed to mitigate his medical
expenses by opting for the most expensive method to pay for his
treatment. They contend that Pebley’s unreasonable choice of
going outside his insurance plan for treatment resulted in excess
medical expenses which constitute avoidable losses Pebley seeks
to pass on to defendants.
Defendants do not dispute, however, that Pebley is entitled
to recover the lesser of (1) the amount incurred or paid for
medical services, and (2) the reasonable value of the services
rendered. (Howell, supra, 52 Cal.4th at pp. 555-556; Bermudez,
supra, 237 Cal.App.4th at pp. 1330-1331, 1337.) The fact that
Pebley chose to pay for those services out-of-pocket, rather than
use his insurance, is irrelevant so long as these requirements are
13
met. We therefore reject defendants’ argument that Pebley failed
to mitigate his damages. 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.
There are many reasons why an injured plaintiff may elect
to treat outside his or her insurance plan. As Pebley points out,
plaintiffs generally make their health insurance choices before
they are injured. These choices may be based on the plaintiffs’
willingness to bear the risk posed by a health maintenance
organization (HMO) rationing system because the plaintiff is
healthy and requires little care. This decision may appear much
different after a serious accident, when the plaintiff suddenly
needs complex, extensive care that an HMO is not structured to
provide. (See, e.g., Pegram v. Herdrich (2000) 530 U.S. 211, 220-
221 [147 L.Ed.2d 164] [“inducement to ration care goes to the
very point of any HMO scheme”].) The plaintiff also may wish to
choose a physician or surgeon who specializes in treating the
specific type of injury involved, but who does not accept the
plaintiff’s insurance or any other type of insurance. In addition,
health care providers that bill through insurance, rather than on
a lien basis, may be less willing to participate in the litigation
process.
14
It is undisputed Pebley required complex surgery to fuse
three of his cervical vertebrae. Complications from this type of
surgery include paralysis or death. And even absent
complications, a poor outcome would leave Pebley with continued
pain in his neck and weakness and numbness in his arms and
hands. Pebley had the right to seek the best care available and
the incentive to do so.
Pebley testified he met with Dr. Alexander and was
comfortable with the surgeon’s credentials and experience. As a
result, Pebley chose to have Dr. Alexander perform the cervical
spine fusion surgery. Pebley confirmed he is personally liable for
all of the costs of that surgery and his related treatment.
Defendants cite no authority suggesting that Pebley’s tort
recovery should be limited to what Kaiser (and possibly
Medicare) would have paid had he chosen to treat with providers
who accept that insurance. The better view is that he is to be
considered uninsured (or non-insured) for purposes of proving the
amount of his damages for past and future medical expenses.
(See Bermudez, supra, 237 Cal.App.4th at pp. 1336-1337.) It
would be inequitable to classify Pebley as insured when Pebley,
and not an insurance carrier, is responsible for the bills. Indeed,
precluding Pebley from recovering the reasonable value of the
services for which he is liable would result in both
undercompensation for Pebley and a windfall for defendants.
(Katiuzhinsky, supra, 152 Cal.App.4th at p. 1296.)
Finally, we conclude the trial court did not abuse its
discretion by excluding evidence of Pebley’s insured status under
Evidence Code section 352. Pebley had the right to treat outside
his plan. Evidence of his insurance would have confused the
issues or misled and prejudiced the jury.
15
D. The Parties Properly Engaged in a “Wide-Ranging Inquiry”
Regarding the Reasonable Value of Pebley’s Medical Expenses
Because Pebley elected to treat outside his insurance plan,
the trial court did not err by allowing him to introduce evidence
of the $269,498.65 in billed charges for his past medical services.
(Bermudez, supra, 237 Cal.App.4th at p. 1335, 1337;
Katiuzhinsky, supra, 152 Cal.App.4th at pp. 1295-1296.) But
that evidence was insufficient, by itself, to establish the
reasonable value of the services rendered. (Bermudez, supra, at
pp. 1336, 1338.) Under Bermudez, Pebley was required to proffer
expert testimony on the issue. (Id. at p. 1335.)
The two surgeons who performed Pebley’s cervical fusion
surgery, Drs. Alexander and Lauryssen, both offered their
opinions concerning the reasonable value of Pebley’s medical
care. Dr. Alexander testified as a non-retained treating surgeon
and also as a retained spine expert. Dr. Alexander, who is board
certified, has performed approximately 1,000 cervical spinal
fusion surgeries and between 2,000 and 3,000 lumbar surgeries.
Dr. Alexander was shown Exhibit No. 85, which set forth
Pebley’s billed medical costs for accident-related care through the
date of trial. Dr. Alexander explained that “[i]n addition to being
familiar with the costs of these types of surgeries for my own
patients, I’ve reviewed hundreds of other cases and I’m very
familiar with the standard costs for this type of treatment.” This
included familiarity with the costs of emergency room treatment,
MRIs, CT scans, physical therapy and ambulance transport.
Dr. Alexander testified that all of the costs listed on Exhibit
No. 85 are “reasonable and customary costs in the community.”
With respect to future medical care, Dr. Alexander stated Pebley
would require a lumbar fusion surgery, as well as one or two
16
additional cervical fusion surgeries. He testified that the lumbar
surgery would cost “around $175,000,” including the hospital
charges. As for the cervical fusion surgeries, he said the
reasonable and customary cost for one level is $125,000. If two
levels are done, the cost is closer to $175,000. He opined that the
surgeries are reasonably certain to be necessary at some point in
Pebley’s lifetime.
On cross-examination, Dr. Alexander testified there is an
expectation that a private pay party with a large bill will pay the
bill. Pebley has not paid his bill, but Dr. Alexander expects it will
be paid. He conceded he does not always get paid 100% of his
bills, but stated he does not routinely discount them.
Dr. Lauryssen, the neurosurgeon who served as co-surgeon
during Pebley’s surgery, testified (via deposition) that he is a
former director of spine research at Cedars-Sinai Medical Center
and Olympia. He has done close to 4,000 surgeries, about half of
which involved the cervical spine. Dr. Lauryssen testified that he
lived and practiced in Los Angeles for ten years and is familiar
with the costs for cervical and lumbar surgeries at hospitals in
that area. He stated the reasonable and customary all-inclusive
cost for the cervical fusion surgery that Pebley underwent is
about $150,000. He explained this amount would also be a
realistic estimate for the reasonable and customary cost of the
future cervical fusion surgery that Pebley would require.
As defendants point out, both surgeons emphasized the
reasonable cost of the medical services rather than their
reasonable value, market value or exchange rate value. The
applicable jury instructions, however, refer to “cost” instead of
any type of “value.” The trial court instructed the jury with CACI
No. 3903A, which states: “To recover damages for past medical
17
expenses, David Pebley must prove the reasonable cost of
reasonably necessary medical care that he has received.” (Italics
added.) It further states: “To recover damages for future medical
expenses, David Pebley must prove the reasonable cost of
reasonably necessary medical care that he is reasonably certain
to need in the future.”3 (Italics added.) Thus, as far as the jury
was concerned, it was Pebley’s burden to prove the “reasonable
cost” of past and future medical expenses. The surgeons’
testimony was consistent with CACI No. 3903A and, in the
absence of an objection to the instruction, it was appropriate for
them to testify regarding the reasonable cost of reasonably
necessary medical care that Pebley has received and is expected
to receive in the future.4
It is apparent from the record that both surgeons “were
qualified to provide expert opinions concerning the reasonable
value of the medical costs at issue. [Their] opinion testimony was
based in part on the medical costs incurred by [Pebley] and in
part on other factors considered by the experts, including their
own experiences treating patients. This was not purely
speculative evidence without any basis in the real world (like, for
Defendants did not object to this instruction. Nor do they
3
contend it was given in error.
4In contrast to CACI No. 3903A, BAJI No. 14.10 states that
the measure of damages for personal injury expenses is “[t]he
reasonable value of medical [hospital and nursing] care, services
and supplies reasonably required and actually given in the
treatment of the plaintiff to the present time [and the present
cash value of the reasonable value of similar items reasonably
certain to be required and given in the future]. [¶] [These are
items of economic damage.].”
18
instance, speculative lost profits expert testimony in a business
dispute). [Pebley] actually suffered severe injuries and
underwent expensive medical treatment. The evidence presented
was sufficient to support an award of . . . past [and future]
medical damages.” (Bermudez, supra, 237 Cal.App.4th at
p. 1339; see Moore, supra, 4 Cal.App.5th at p. 434 [upholding
jury’s award where the medical experts “testified the amounts
they billed reflected their ordinary and customary charges and
the reasonable value of their services”].)
Moreover, the trial court allowed defendants to present
their own expert evidence regarding the reasonable value of
Pebley’s past and future medical expenses. (See Moore, supra,
4 Cal.App.5th at p. 446 [noting “defendant had the opportunity to
present evidence to rebut plaintiff’s assertion that the reasonable
value of the services was the full amount of the charges”].) Dr.
Miller testified that the amount the medical facility providers
would accept for their services totaled $54,615.56, instead of the
$120,876.55 requested by Pebley. Although Dr. Miller was not
permitted to testify as to the reasonable value of the professional
fees, defendants’ other expert, Dr. Richard Kahmann, a spinal
surgeon, testified that 95% of patients who pay for his care out of
pocket pay about 50% of what he charges.
During closing argument, defense counsel reminded the
jury of Dr. Kahmann’s testimony and requested that the jury
“take the figures that are related to the neck surgery and
attendant care and the future medical specials, and that you
reduce that by 50 percent, and then go to Dr. Kahmann’s column
on reasonable cost. And as you take all of these items and apply
Dr. Kahmann’s testimony, his expert opinion on these issues in
addition to Dr. Miller’s expert opinion on these issues, the past
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medical costs reasonably total . . . $78,214.63. When you perform
the same analysis with respect to the future medical specials, the
figure is $75,602.52 . . . . The total for the past and future
medical specials is $153,817.15 [sic].” This sum is substantially
less than the $644,000 awarded by the jury.
As contemplated in Bermudez, the trial court permitted a
“wide-ranging inquiry into the reasonable value of medical
services provided.” (Bermudez, supra, 237 Cal.App.4th at
p. 1331.) Each side presented two experts. The jury was
instructed that “[if] the expert witnesses disagreed with one
another, you should weigh each opinion against the others.” The
jury presumably followed this instruction and rejected the
defense experts’ testimony as less credible. (See People v. Boyette
(2002) 29 Cal.4th 381, 436; People v. Sanchez (2001) 26 Cal.4th
834, 852.) The credibility of battling experts is within the jury’s
province. (County of Monterey v. W. W. Leasing Unlimited (1980)
109 Cal.App.3d 636, 646.)
Defendants contend they were unable to effectively engage
in a “battle of the experts,” because the trial court excluded Dr.
Miller’s testimony regarding the reasonable value of the medical
professionals’ fees. This contention would be more persuasive if
Dr. Kahmann had not been allowed to opine on the same subject.
The fact that Dr. Miller’s proposed evidence was cumulative to
Dr. Kahmann’s testimony undercuts defendants’ claim of
prejudice. (See South Bay Chevrolet v. General Motors
Acceptance Corp. (1999) 72 Cal.App.4th 861, 906.) This was not,
as defendants assert, a situation in which the only measure of
cost or value before the jury was the medical professionals’ full
bills. (See Children’s Hospital Central California v. Blue Cross of
California (2014) 226 Cal.App.4th 1260, 1279.)
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E. The Damage Award Must be Reduced by $1,063
The jury awarded Pebley the full amounts billed by VCMC
and AMR ($14,816.50 and $1,608.19, respectively), even though
Pebley’s insurance carrier paid a lesser amount for the services
($13,828.50 and $1,533.19, respectively). Pebley concedes these
two awards violate Howell and that the judgment must be
reduced by $1,063 -- the difference between the amounts billed
and the amounts actually paid. (See Howell, supra, 52 Cal.4th at
p. 566.)
DISPOSITION
The judgment is modified to reduce the award of damages
by $1,063 to $3,642,937. In all other respects, the judgment is
affirmed. Pebley shall recover his costs on appeal.
CERTIFIED FOR PUBLICATION.
PERREN, J.
We concur:
GILBERT, P. J.
TANGEMAN, J.
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Rocky J. Baio, Judge
Superior Court County of Ventura
______________________________
Horvitz & Levy, Lisa Perrochet and Steven S. Fleischman;
Benton, Orr, Duval & Buckingham, Kevin M. McCormick and
Panda L. Kroll, for Defendants and Appellants.
The Simon Law Group, Sevy W. Fisher and Greyson M.
Goody; The Ehrlich Law Firm and Jeffrey I. Ehrlich, for Plaintiff
and Respondent.
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