May 13, 2013

Court of Appeal affirms $40,000 in punitive damages after reversing $3.8 million in compensatory damages (Corenbaum v. Lampkin)

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).