Huge Wage Loss At Center Of Sacramento Auto Accident Case, Part 5 of 8

(Please note: the names and locations of all parties have been changed to protect the confidentiality of the participants in this automobile accident/personal injury case and its proceedings.)

California’s Legislature has recognized the collateral source rule by carving very limited exceptions to that rule which are meaningful only if the rule itself exists. For example, Government Code § 985 sets forth a detailed procedure for when a public entity provides collateral services to an injured plaintiff. That section is applicable only where the public entity is a defendant. It allows the court, post-verdict, to consider giving the public entity credit for the collateral source payments, after taking evidence concerning the nature of the benefits and plaintiff’s reimbursements obligations.

The statute makes clear that “[a]ny collateral source payment paid or owed to or on behalf of a plaintiff’shall be inadmissible in any action for personal injuries or wrongful death where a public entity is a defendant.” The public entity can seek recovery of collateral benefits following a verdict which includes “damages for which payment from a collateral source listed below has already been paid or is obligated to be paid for services or benefits that were provided prior to the commencement of trial…” Id.

Likewise, the Legislature also created a statutory exception to the rule for medical malpractice defendants when it enacted it as an aspect of MICRA (Civil Code § 3333.1, et. seq.). As with the public entity exception, the Legislature crafted a compromise procedure for the evidentiary handling of the exception, and accompanied the change with fundamental changes in the structure of attorney’s fees and general damages in medical malpractice cases. Specifically, the MICRA statutes provide the plaintiff an opportunity to introduce a host of relevant and admissible evidence as to the reasonable value of the medical services provided, including not simply the billed charges, but also evidence of the premiums paid to secure health insurance benefits and other evidence of the reasonable value of those services.

The fact that the Legislature carefully crafted these two narrow exceptions to the collateral source rule is legislative recognition that absent such exceptions the rule has full vitality in California. Shoemaker v. Myers (1990) 52 Cal.3d 1, 22 [ We do not presume that the Legislature performs idle acts, nor do we construe statutory provisions so as to render them superfluous ].

The efficacy of the collateral source rule finds support in widely relied-upon practice guides. See, Flahavan, Rea & Kelly, Cal. Prac. Guide: Personal Injury, p. 3-62.4, § 3:52 (The Rutter Group 2007):

No offset for expenses paid by collateral sources – the collateral’ source rule : Under the collateral source rule, medical benefits (and any other injury compensation) received by plaintiff from sources wholly independent of defendant (e.g., under plaintiff’s health, disability or accident insurance, or social security or disability benefits) are not deducted from the damages otherwise recoverable. Defendant is not entitled to an offset for plaintiff’s collateral source compensation (e.g., medical bills paid by others) and cannot introduce the fact of such payments into evidence on the question of mitigation of damages. [citing Lund and Helfend] This judicially-created rule reflects California public policy of encouraging prudent investment in insurance and ensuring that tort victims are make whole. [citing Lund and Helfend]
Thus, it is beyond question that the collateral source rule has full vitality in this state except in those very limited, legislatively created cases. Nevertheless, in the context of resolving issues concerning liens, such as the Hospital Lien Act ( HLA ), some California appellate courts have seriously eroded the collateral source rule without directly acknowledging as much. (See Part 6 of 8.)
For more information you are welcome to contact Sacramento personal injury lawyer, Moseley Collins.

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