In Alabama auto accident injury cases, the purpose is to compensate victims for actual losses caused by the defendant. A substantial part of that typically involves payment of reasonable and necessary medical expenses incurred by the injured party as a result of defendant’s negligence.
These medical bills have to be authenticated and there has to be competent medical testimony as to the necessity of those treatments. In some states, defendants can benefit from certain write-offs or adjustments that are deducted from the medical provider’s charges due to insurance contractors. However in Alabama, we follow the collateral source rule, which states benefits received by plaintiff from a wholly independent source (i.e., the insurance company), shouldn’t diminish the damages otherwise recoverable by the wrongdoer. So payments or credits received by a third-party payor aren’t credited against defendant’s liability.
California, where the case of Uspenskaya v. Meline was recently heard by the Third Appellate District in Sacramento, allows collateral source evidence as well, but there are some exceptions.
In the Uspenskaya case, the question was whether trial court overseeing a traffic injury lawsuit erred in denying admission of defense evidence that a third-party assignee had purchased a medical lien from plaintiff’s health care provider (for her medical bills) at a greatly discounted price. The appeals court ruled the trial court had done nothing wrong.
Here’s what happened:
Defendant collided with plaintiff’s vehicle while the two were at a busy intersection. As a result of that crash, plaintiff sustained spinal injuries, and later had to undergo surgery to repair a herniated lumbar disc. Plaintiff filed a personal injury lawsuit against defendant, and a jury found defendant negligent for plaintiff’s injuries. It was ordered defendant pay $430,000 in damages, and that included $262,000 in prior medical expenses. That amount reflected the total of her medical bills.
Plaintiff didn’t have health insurance. For this reason, she entered into an agreement with her health care providers – the hospital and her treating physician – to repay the full amount of her medical bills. This was done with the medical providers securing liens on plaintiff’s claims against defendant. In other words, whatever plaintiff recovered for her medical bills, her health care providers would have rights to collect. She was still directly, personally and fully responsible to make the payment in full, regardless of the outcome of that lawsuit.
Later, a third-party assignee agreed to purchase the liens from the medical providers. Although total medical bills amounted to $262,000, the third-party assignee paid far less for them. (This guaranteed the medical providers they would be paid something, and the third-party assignee stood to make a profit if the full amount was collected.)
Defendant argued she should only be responsible for the amount assignee paid for the liens. Defendant further argued the actual amount of the original medical bills are irrelevant, and plaintiff should have been barred from presenting them.
Trial court disagreed, and ultimately, the appeals court affirmed.
As plaintiff noted, the third-party assignee is a financial services company that contracted with the hospital and the doctor – not the plaintiff. The injured woman was still “fully and directly” liable for the total amount of medical bills, regardless of what the third-party agreement stated. Therefore trial court did not abuse its discretion and the original damage award for medical bills stands.
Call Allred & Allred P.C. at 334.396.9200 to speak with a Montgomery personal injury lawyer.
Uspenskaya v. Meline , Oct. 28, 2015, California Court of Appeal, Third Appellate District
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Hanco Corp. v. Goldman – Construction Accident Lawsuit, Oct. 14, 2015, Montgomery Injury Attorney Blog