Our report on this case is a bit tardy, because I was
traveling abroad when the decision was issued. The main issue in this
case has nothing to do with punitive damages, but it merits a brief mention
here because the court’s treatment of the punitive damages award is somewhat
unusual.
The primary question in this appeal was whether, in light of
the California Supreme Court’s opinion in Howell
v. Hamilton Meats, personal injury plaintiffs can present
evidence of the amounts their medical providers billed for services, even though
the providers agreed to accept lesser amounts as payment in full for their
services. Howell held that a plaintiff’s damages are properly
measured by the amount paid, not the amount billed. The question here was
whether the amount billed was nonetheless admissible as relevant on the issues
of future medical expenses and noneconomic damages.
The trial court allowed the plaintiffs to introduce evidence
of the amount billed, but the California Court of Appeal (Second Appellate
District, Division Three) held, in a published opinion, that the evidence was inadmissible. Accordingly, the Court of Appeal reversed the jury's $3.8 million
compensatory damages award for a new trial. Interestingly, the court
chose not to reverse the jury’s award of $40,000 in punitive
damages. Ordinarily, when an appellate court reverses a compensatory
damages award for a new trial, reversal of the punitive damages is virtually
automatic. But perhaps the court in this case thought that the small
amount of punitive damages awarded here dictated a different result.
Full disclosure: Horvitz & Levy represented the defendant in
this appeal, although we did not brief or argue the punitive damages
issues. We associated into the case after the initial briefing,
submitting a supplemental brief and presenting oral argument for the
defendant. The Court of Appeal inadvertently omitted our firm’s
name from the slip opinion (presumably because we were not the initial counsel
of record).
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