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  • Donna Bader
  • Attorney at Law
  • Certified Specialist in Appellate Law
  • 668 North Coast Hwy, Ste. 1355
  • Laguna Beach, CA  92651
  • Tel.: (949) 494-7455
  • Fax: (949) 494-1017
  • Donna@DonnaBader.Com



Donna Bader

Attorney at Law

Certified Specialist in Appellate Law

668 North Coast Hwy, Ste. 1355

Laguna Beach, CA  92651

Tel.: (949) 494-7455

Fax: (949) 494-1017





A really important new case on Hanif

Here's a case that plaintiff's personal injury lawyers have been hoping for:  Howell v. Hamilton Meats & Provisions, Inc. (2009) 2009 WL 4021368.  In that case, the plaintiff was seriously injured when her vehicle was struck by a truck driven by defendant's employee while he was attempting to make an illegal U-turn across the lane in which plaintiff was traveling.  The jury awarded plaintiff $689,978.63, including $189,978.63 for past medical expenses.

The defendant employer first raised the issue of reducing the past medical expense to what was actually paid in a motion in limine to preclude evidence of amounts not paid by the plaintiff.  Plaintiff argued she was entitled to present evidence of the "gross amount of all medical bills" under Helfand v. Southern California Rapid Transit Dist. (1970) 2 Cal.3d 1

After judgment, defendant brought a Hanif motion, seeking a reduction of the verdict.  It argued the plaintiff did not incur or expend monies for the full value of the medical bills, and thus, the defendant was entitled to the benefit of the "negotiated rate differential."

Plaintiff opposed the motion, arguing she was not a Medi-Cal beneficiary, and therefore, she could recover the full amount of her medical bills under the collateral source rule.  She also argued she incurred medical expenses for the full amount, even signing an agreement that she would be financially liable for all expenses, including those not paid by her insurance.  Plaintiff claimed the defendant shouldn't receive the benefit of her thrift and foresight in obtaining health insurance.

The trial court granted the defendant's motion to reduce the damages by $130,286.90 to $59,691.73, which was the amount of the negotiated rate actually paid by plaintiff's insurers.  It concluded the plaintiff was only entitled to be made whole and should not receive overcompensation for her injuries.  Plaintiff appealed.

The Fourth Appellate District, Division One was faced with the issue was whether a personal injury plaintiff, who has private insurance, may recover the full economic damages for past medical expense billed by the health care providers under the collateral source rule or should that amount be reduced to what the insurer paid as the agreed-upon full payment.

In an opinion written by Justice Nares, the appellate court reversed, finding the plaintiff was entitled to receive compensation for the detriment caused to her pursuant to Civil Code section 3333, which included objectively verifiable monetary losses, such as medical expenses.  Civil Code section 1431.2(b)(1).  In addition, the collateral source rule barred a deduction for compensation received from a source other than the tortfeasor.  In summary, the plaintiff should receive the benefit of her insurance, and not the defendant, who would then otherwise receive a windfall.  (See Rstmt. 2nd of Torts, sec. 920A.)

The court found Hanif v. Housing Authority (1988) 200 Cal.App.3d 3d 635 to be inapposite.  The minor in  Hanif incurred no personal liability because the charges were billed to Medi-Cal and he lacked the capacity to enter into a financial responsibility agreement with the providers.  As a consequence, the court in Hanif did not address the issues presented by Howell.  The court also disagreed with the holding in Nishihama v. City and County of San Francisco (2001) 93 Cal.App.4th 298 [trial court erred in permitting jury to award provider's normal rates, rather than the reduced rates it paid pursuant to agreement].

The appellate court in Howell cited Justice Eileen Moore's concurring opinion in Olsen v. Reid (2008) 164 Cal.App.4th 200, 204 that "[w]ithout statutory authority or the Supreme court's lessing, the Haniff/Nishihama line of cases divorced the collateral source rule from the complicated area of medical insurance," and, "[a]bsent such approval, Hanif/Nishihama simply goes too far."  The Howell court made it clear that making chances to the collateral source rule was best left to the Legislature.

The court also disagreed with Greer v. Buzgheia (2006) 141 Cal.App.4th 1150 about the propriety of bringing a post-trial motion to reduce a jury's award of medical expenses.  Since it had concluded the negotiated rate differential is a collateral source benefit, then the post-trial motion is not necessary, appropriate, or authorized.

The opinion in Howell was filed on November 23, 2009.  We can expect to see a petition for review to the California Supreme Court, as does the plaintiff's attorney, John J. Rice, who is prepared to oppose it.  He notes that "over the last five years, that sum [negotiated rate differential] represents over one billion dollars that hasn't been paid to plaintiff's attorneys."  More to come on this issue      . . .

Even more on punitive damages

The Internet has so substantially increased the amount of information that is available at the press of a button that I often feel overwhelmed.  I know I should be reading legal blogs and commenting on them more than I do, but life is short and I have a day job that requires my attention.  One blog that I enjoy is California Punitive Damages by Horvitz & Levy.  Even though the blog is written by an appellate firm that mostly handles defense appeals, it is always informative.  Recently the authors reported on a paper entitled "The Changing Landscape of Blockbuster Punitive Damage Awards."  You can check out the blog at or you can download the paper from

When Exxon Shipping Co. v. Baker (2008) 128 S.Ct. 2605 was decided in 2008, the U.S. Supreme Court approved a 1:1 ratio between punitive and compensatory damages.  While some legal scholars maintained that this holding was limited to federal maritime cases, others took a more concerned approach that 1:1 would become the norm in all civil cases, especially where punitive damages were accompanied by substantial compensatory damage awards, which is often the case.

In Roby v. McKesson (2009) 2009 WL 4132480, which was recently decided, the California Supreme Court put its stamp of approval on a 1:1 ratio as the constitutional limit in an employment case.

Not surprisingly, California leads the states in terms of number of blockbuster cases and the highest total value of awards, i.e., $49.7 billion.  The authors describe blockbuster punitive damages as a "comparatively new phenomenon," noting the first award breaking the $100 million barrier was in 1985.  They note a "consistent downward trend in the total sale of blockbuster damages in recent years."  The authors also note that State Farm v. Campbell (2003) 538 U.S. 408, 123 S.Ct. 1513, 155 LEd.2d 585 has "dampened the total value of blockbuster punitive damages as well as reducing the number of blockbuster punitive damages in any year."

The authors identified the industries hardest hit by large punitive damages, starting with the cigarette industry, followed by energy and chemical, finance, investment, insurance, pharmaceutical, health care, and violent crime cases. Oddly enough, the automobile industry did not have a statistically significant premium.

In their conclusion, the authors opine that State Farm has indeed had a dampening effect on blockbuster punitive damage awards.  That dampening effect appears to continue with the publication of Exxon Shipping.  The authors also conclude that the levels of punitive damage awards are not driven by the level of compensatory damages, which one might expect to be high if behavior justifying punitive damages is present, but the type of industry involved.

Some updates on punitive damages

Today the California Supreme Court filed its Opinion in Roby v. McKesson, 2009 WL 4132480.  In Roby, the jury found plaintiff was wrongfully discharged due to her medical condition and related disability.  It awarded Roby $3,511,000 in compensatory damages and $15 million in punitive damages on her claims of harassment and discrimination against defendant McKesson.  Roby also obtained an award of $500,000 in compensatory damages and $3,000 in punitive damages against the harassing supervisor.

The Court of Appeal was unpersuaded there was sufficient evidence of harassment and reduced the compensatory damages to $1,405,000.  It also found the punitive damage award was excessive under federal constitutional standards and reduced it to $2 million.

The California Supreme Court found the jury's noneconomic damages awards to be hopelessly ambiguous, but plaintiff conceded this issue rather than face a new trial, a concession the defendants accepted.  The Court rejected the Court of Appeal's determination that the record was insufficient to support the harassment verdict.  Finally, the Court agreed that the punitive damages exceeded the federal constitutional limit, but disagreed with the limit set by the Court of Appeal (1.42 times the reduced compensatory damages of $1,405,000), reducing the amount even further, and stating, "We hold that in the circumstances of this case the amount of compensatory damages sets the ceilings for the punitive damages."  (Opn., pg. 2)

The Court applied the three guideposts set forth in State Farm Mut. Auto Ins. Co. v. Campbell (2003) 538 U.S. 408, including the five reprehensibility factors, and concluded McKesson's reprehensibility was at the low end of the range of wrongdoing.  It also concluded the compensatory damages might include punitive damages.  As such, where the compensatory damages are substantial, the Court stated "then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee." (Opn., pg.  38; State Farm, supra, 538 U.S. at p. 425.)  The punitive damages against McKesson were modified to $1,905,000.  The Court also ordered the trial court to reinstate the jury's $3,000 punitive damage award against plaintiff's supervisor.

The Opinion was written by Justice Kennard and Chief Justice George, and Justices Baxter, Chin and Corrigan concurred. Even though the Court concluded a 1:1 ratio is the federal constitutional limit, it noted, "We based this conclusion on the specific facts of this case." (Opn., pg. 39)

Justice Werdegar wrote a concurring and dissenting opinion, in which Justice Moreno concurred, opining that McKesson's reprehensibility was significantly higher.  Justice Werdegar's award would have been $3.8 million, for a 2:1 ratio.  She pointed out the "unusual task" given to the appellate court to make a "culpability assessments independently" on the basis of a factual record.  Because the appellate courts make their decisions on the "cold record" rather than based on live testimony, Justice Werdegar noted the appellate court "is not as well situated as the jury or trial court to make a fine-tuned culpability judgment about conduct that has been the subject of a trial. "  As such, review should be "performed modestly and with caution."  (Dissenting Opn., pg. 2)

She notes that appellate courts do not sit as a replacements for the jurors but as a check on arbitrary awards.  (Ibid.) Justice Werdegar did not necessarily believe the large noneconomic damages award had a punitive component, and believed the majority failed to consider McKesson's wealth, noting McKesson was #38 on the Fortune 500 and had a market value of $5 billion.  Certainly the reduced punitive damage award could not have a truly deterrent effect on McKesson.

I agree with Justice Werdegar's assessment that fixing a constitutional maximum is a "lamentably inexact enterprise."  (Dissenting Opn., pg. 6.)  But since the difference between highest award, which would have been given by Justice Werdegar (representing a 2:1 ratio), compared to the lowest by the California Supreme Court, represents a difference of over $1.8 million, one might assume that this fact alone demonstrates how the appellate courts may be exceeding their roles in determining the highest constitutionally permissible award, and instead, the courts are deciding the proper amount as if they were replacement jurors who did not have the benefit of actually attending the trial.  But neither award, representing $11.2 million less than the jury's award, will cause McKesson to lose much corporate sleep.

Getting a ruling from the trial court - Pt. 1

What about the judge who refuses to rule even though you request a ruling or says that he or she will only consider admissible evidence?  This situation may arise when the judge forgets to rule on the objection or states something like “the court will only consider admissible evidence” or it was “following Biljac and is only considering the relevant and pertinent evidence.”  (Demps v. San Francisco Housing Authority, supra, at pg. 575.) 


When the trial court refers to Biljac, it means Biljac Associates v. First Interstate Bank (1990) 218 Cal.App.3d 1410, in which the appellate court held that a trial court is not required to issue formal rulings on objections because a summary judgment will be upheld if it is correct on any grounds, even those not relied on by the trial court.  In addition, the court in Biljac raised a presumption that a trial court is not relying on irrelevant or incompetent evidence when it makes its ruling.  Well, maybe in a perfect world but experience teaches us otherwise. This ruling has been overruled by several courts and has been criticized - as it should be - by many courts and attorneys.


In Demps, the appellate court indicated that the trial court was not required to issue a written or formal ruling, and furthermore, there was little purpose served in such a requirement because the appellate court reviews the matter de novo, including objections.  Other courts have held that the failure to obtain a ruling should be treated as though the objections were impliedly overruled and the objectionable evidence then becomes part of the admissible evidence. 


So what is an attorney to do?




Joining forces with Consumer Attorneys of California

A few bloggers who support consumer rights are getting together to offer plaintiffs' attorneys a valuable resource and bundle of information.  Here's the first post from H. Scott Leviant, who writes The Complex Litigator at

George Washington once said:
Discipline is the soul of an army. It makes small numbers formidable; procures success to the weak, and esteem to all.

Letter of Instructions to the Captains of the Virginia Regiments [July 29, 1759]. The advocates of consumer rights, viewing the resources of defense firms and corporate defendants, can relate to the trepidation felt by the out-numbered and out-gunned Continental Army. Because of that disparity in resources, Consumer Attorneys of California ("CAOC") consolidates the voices of consumer attorneys throughout the state to (1) preserve and protect the constitutional right to trial by jury for all consumers, (2) champion the cause of those who deserve redress for injury to person or property, (3) encourage and promote changes to California law by legislative, initiative or court action, (4) oppose injustice in existing or contemplated legislation, (5) correct harsh, unjust and oppressive legislation or judicial decisions, (6) advance the common law and promote the public good through the civil justice system and concerted efforts to secure safe products, a safe workplace, a clean environment, and quality health care, (7) uphold the honor, integrity and dignity of the legal profession by encouraging mutual support and cooperation among members, (8) promote the highest standards of professional conduct, and (9) inspire excellence in advocacy. This post is a multi-blog effort to inform consumer attorneys about CAOC's value and encourage participation in CAOC through membership.

CAOC works tirelessly to protect or advance those causes of import to consumers and their attorneys in California. Often those efforts, though valuable, receive little fanfare. For example, CAOC recently sponsored SB 510, which affects the re-sale of what are known as "structured settlements," in which victims receive financial compensation over a period of time for medical expenses and basic living needs, as determined by a jury. Before SB 510 was signed by the Governor, Courts expressed frustration at their inability to prevent the sale of structured settlements on terms that might ultimately lead to long-term financial hardship for the victim. Now, SB 510 gives judges the information they need to make a reasoned decision about the propriety of a structured settlement sale.

Measures like CAOC-sponsored SB 510 help protect the most vulnerable members of our society and ask for nothing in return. They exemplify the spirit of CAOC. However, CAOC is only as effective in its mission as its membership allows it to be. When consumer attorneys join the ranks of CAOC, its voice gains in power and clarity. But if consumer advocates sit on the sidelines, hoping to benefit from the work of others, CAOC is stretched thin, and we are all at risk as a result.

Now, consumer advocate bloggers from across the state are combining their voices to call upon each and every lawyer and firm that regularly represents plaintiffs to join CAOC, thereby strengthening the consumer's first line of defense. The blogs participating in this unified call to action are:

Show your support of consumers' rights by joining and supporting CAOC. Together we can make an impact that we cannot make alone.