• Stay tuned: Consumers won big Monday. Can they win two in a row? Tuesday, November 24, 2009

    Attorneys steeped in the arcane collateral source issue addressed by one California court of appeal on Monday are awaiting a second decision expected any day by a second appellate court on the same issue.

    On Monday, the San Diego-based Second District Court of Appeal ruled that an insurance company could not avoid its full responsibility, and was required to reimburse Rebecca Howell for medical costs she incurred for stemming from a traffic accident, giving her the benefit she had bargained for when she bought health insurance .

    In the Howell case, the trial judge sided with the defense, and slashed the jury verdict. In the pending case, Superior Court Judge Vincent J. O’Neill, Jr. of Ventura County, refused the defense request that he reduce the jury verdict.

    The case, Daniel Codner and Cody Codner vs John Stevenson Wills, has been briefed and argued. A decision is due no later than Dec. 7.

    The new case also involves a traffic accident.

    Dan and Cody Codner, who had paid for health care insurance, were riding on their motorcycle in Ventura on Aug. 17, 2003, when Wills crashed into them. Wills complained that traffic leading to an In-N-Out Burger stand contributed to the accident.

    Dan Codner medical charges amounted to $463,093, and Cody Codner’s medical bills totaled $58,657. The jury returned a verdict awarding full medical damages to the Codners.

    After the verdict, Wills asked the judge to slash Dan Codner’s damages to the negotiated amount paid by the insurance company for their care–$247,403 for Dan Codner, and $18,924 for Cody–thus leaving the Codners with nothing for their investment in health insurance.. The trial court denied that request. 

    The insurance company appealed to the California Court of Appeal.

    In an amicus brief filed on behalf of Consumer Attorneys of California, consumer attorney Scott H.S. Sumner told the justices:

    The issue presented herein is whether it is proper for a trial court in a post-verdict hearing to reduce a non-public entity or non-medical malpractice defendant’s liability to an amount less than the actual detriment caused by their tort, based on plaintiff’s private collateral source investment benefits.  As a matter of contract law, the collateral source rule, and in deference to Legislative prerogative, no court should question the sufficiency of contractual consideration between plaintiff’s health insurers and medical providers in order to reduce a defendant’s liability.

    To read the full brief, please go here.

    In an interview, Sumner summed up the issue: “It is a simple notion of contract law. You get to keep what you paid for.”

    “If Codner tracks Howell, we’d have decisions  from two different appellate districts, and it is going to be a lot harder for the liability insurers to justify depriving consumers of the benefits they have bargained for,” he added.

    Daniel Codner vs John Stevenson Wills; In-N-Oout Burgers, Court of Appeal,Second District, Division Six, No. B198675.

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