ACA Benefits and MediCal Service Discounts Admissible at Trial as Evidence of Market Value of Future Medical Benefits

In a case certified for publication by the first Appellate District, division one (Contra Costa County), the appellate court determined the trial court erred in ruling that evidence of future ACA benefits is inadmissible.

Brian Cuevas, Plaintiff through his G.A.L., filed a medical malpractice action against the County of Contra Costa based on injuries he sustained at birth. Plaintiffs life care planner, Jan Roughan, based her estimate of future costs for plaintiff’s medical care by referencing a national database that reflects the average charges billed for each type of service. Ms. Roughan specifically ignored service discounts associated with Medi-Cal, even though plaintiff is currently receiving Medi-Cal benefits, and specifically ignored negotiated discounts that would potentially be available under insurance procured through the ACA.

As a result of motions in limine granted by the court, defendant’s life care planner, Linda Olzack, was prohibited from presenting three alternate cost scenarios: 1) plaintiff would continue to be covered by Medi-Cal, 2) plaintiff would procure private insurance under the ACA, and/or 3) would pay for his expenses out of pocket. Ms. Olzack’s Medi-Cal life care plan showed reimbursement rates that appeared to be substantially lower than the rates paid by persons without insurance, with a more than 60 percent difference between charges based on private pay rates and the Medi-Cal rates (for certain services). In addition, Ms. Olzack was prepared to show the life care plan costs estimated by Ms. Roughan were four to six times higher than the corresponding Medi-Cal and/or ACA rates for certain services.

Because Ms. Olzack’s evidence was never presented, the jury awarded $100 million for future medical, hospital, surgical, and rehabilitation care expenses, which the jury reduced to $9,577,000 in present cash value.

Relying on the Howell case, the Corenbaum case, and the Markow case, the Court of Appeal came to the conclusion the collateral source rule is not violated when a defendant is allowed to offer evidence of the market value of future medical benefits. The appellate court also concluded the defense presented sufficient evidence to support the continued viability of the ACA, as well as its application to plaintiff’s circumstances, and that it was error for the trial court to exclude evidence of future insurance benefits that might be available under the ACA.

Hands Off!

On January 1, 2017 a new law regarding the use of cell phones goes into effect, all with hope it will reduce vehicular accidents. Before its enactment, the law only proscribed handheld cellphone calls or handheld texting. The new law makes all handheld use of a cellphone while operating a vehicle illegal. No more handheld cellphone selfies, and no more handheld GPS searches.

Vehicle Code, §23123.5(a) is changed from “A person shall not drive a motor vehicle while using an electronic wireless communications device to write, send, or read a text-based communication … .” to “(a) A person shall not drive a motor vehicle while holding and operating a handheld wireless telephone or an electronic wireless communications device … .”

A handheld phone may be operated by use of the driver’s hand while driving ONLY if 1) the handheld phone is mounted on the vehicle’s windshield, dashboard, or center console, and 2) the driver’s hand is used only for a single swipe or tap of the driver’s finger.

The fine for the initial violation is $20.00, while the fine goes up to $50.00 for every subsequent violation.

Code of Civil Procedure, §998 Revisited

After SHCP’s August 14, 2015 blog entry discussing Statutory Offers, Assembly Bill No. 1141 was signed into law by Governor Brown. AB 1141, effective January 1, 2016, amends CCP, §998 to equalize the treatment of expert witness costs awarded to a prevailing party. AB 1141 states, “This bill would clarify that this provision [CCP, §998] requires a plaintiff to cover only expert witness costs that arose postoffer.” AB 1141 will result in both parties being exposed to the same expert fee penalties for turning down a statutory offer and not doing better at trial.

Unaffected by AB 1141, CCP, §998(d) reads, “If an offer made by a plaintiff is not accepted and the defendant fails to obtain a more favorable judgment or award …, the court … may require the defendant to pay a reasonable sum to cover postoffer costs of the services of expert witnesses … in addition to plaintiff’s costs.”

To effectuate the legislature’s intent stated above, the word “postoffer” was added to CCP, §998(c)(1), which has been amended to read, “If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, … the court or arbitrator … may require the plaintiff to pay a reasonable sum to cover postoffer costs of the services of expert witnesses… .”

Reptile Within

Callaghan, a licensed concrete subcontractor, acted as owner-builder for his home improvement project, which included construction of a pool/spa. To minimize noise, the pool equipment was to be installed in an underground vault. The property did not have natural gas service so propane lines were run to the house and backyard. Callaghan did not know installing a propane fueled heater underground is dangerous.

Callaghan hired Dunn’s Designer Pools (Dunn’s) to build the pool/spa and to install the pool equipment in the vault. Neither Regalado, a Dunn’s employee, nor his supervisor, David Fleming, read the instruction manuals for the spa heater or propane conversion kit, those manuals warning of a risk of explosion if installed in a pit or low spot. After installation, Regalado commenced readying the pool equipment for final County inspection. After bleeding the propane line while in the vault, Regalado told Fleming he was ready to turn on the heater. Fleming told Regalado to proceed, so Regalado turned on the filter pump and heater. As Regalado climbed out of the vault, the propane bled into the vault ignited. The explosion propelled Regalado into the air, severely burning him, injuring his back, and causing other substantial injuries.

Regalado sued Callaghan for negligence and premises liability. The jury awarded Regalado a total of about $6,584,000.00, and assessed 40 percent of fault to Callaghan.

After a lengthy discussion concerning the basis of Callaghan’s liability, the appellate court directed its attention to the issue of the “reptile” arguments of Regalado’s counsel. By way of background, the “reptile” approach was developed by Don Keenan, a plaintiff’s attorney, and David Ball, a trial consultant to appeal to the reptilian part of the human brain and its instinct to protect and survive. The reptile approach is considered by many to be a hybrid of the improper “Golden Rule” argument. The “Golden Rule” argument is that no one on the jury would choose to trade places with the plaintiff, but if the juror was forced to do so, it would be a question of how much the jury member would personally want for compensation.

During closing argument, Regalado’s counsel quoted typical reptilian phrases and told the jury that its decision would impact the community. He continued, “Your voice really is going to have an impact. [¶] . . . You are the voice. You are the conscience of this community. You are going to speak on behalf of all the citizens in Riverside County and, in particular, Coachella Valley. [¶] You are going to make a decision what is right and what is wrong; what is acceptable, what is not acceptable; what is safe, and what is not safe. You are going to announce it in a loud, clear, public voice. And that is going to be the way it is.”

Regalado’s counsel went on to state that “[t]hese courtrooms, these courthouses, exist for one reason: It’s to keep the community safe. Period. That is the sole function of courtrooms, and it’s why the state spends so much money on courtrooms. [¶] In the criminal part of the system, the jury identifies criminals and gets rid of them. . . . It’s a matter of public policy, public safety. [¶] On the civil end of things, same function it’s all about keeping the community safe. You identify bad conduct, negligent conduct. You don’t send anybody to jail, but you announce what it is, and everybody is going to live by it. And in the civil end, you, the jury, tells the wrongdoer, ‘You are going to compensate the person you hurt.’ [¶] . . . And you are going to tell the wrongdoer, ‘If you do this stuff in our community, you are going to pay.’ ”

After a break and after Regalado’s counsel had continued through a significant portion of his closing argument, Callahan’s counsel objected, stating “[Regalado’s] counsel is making a reptile argument where he’s talking about the role of the jury verdict in enforcing the greater good for the general public.” The trial court found the objection was untimely.

Nonetheless, the appellate court opined that counsel’s remarks telling the jury that its verdict had an impact on the community and that it was acting to keep the community safe were improper.

The bottom line is that the courts now recognize the reptile approach as improper. Counsel should keep a keen eye out for any attempt by plaintiffs’ counsel to posture a case as a “reptile case”, and immediately fight any such attempt. Any references to the reptile approach must immediately be met with objection, including in responses to written discovery and deposition questions. And at the trial phase, and as the appellate court reiterated, there must be an immediate objection coupled with a request a curative admonition.

Minor’s Compromise

A minor’s compromise is always required for settlement of a minor’s claim/lawsuit according to California law. You may have heard of the “below $5,000.00” exception, purportedly allowing for settlement of a minor’s claim/lawsuit without a minor’s compromise hearing. That is not only wrong, it is a dangerous cost-cutting method of attempting to settle a minor’s claim. The “below $5,000.00” exception has arisen from attorneys misconstruing the option which allows a judge to order minor’s settlements below $5,000.00 be managed by the minor’s parents without further supervision of the court.

No matter how “ironclad” a settlement agreement is for a settlement below $5,000.00, without a minor’s compromise being granted, that minor has a right to sue after reaching the age of majority.


Small, Henstridge, Cabodi & Pyles recently had the privilege of participating in a mock mediation for habitability claims developed by The Travelers Insurance Company=s large loss claims department in Denver, Colorado. The participants included several major law firms in California as well as a number of experienced claim representatives.

The event was mediated by the Honorable James McBride, retired. The fact pattern involved a habitability lawsuit against multiple defendants, including property owners, management companies and maintenance/building contractors.

Senior partners Robert Henstridge and K.J. Cabodi represented the firm at the mock mediation that involved approximately 50 claims representatives from the Travelers Denver and Hartford offices.

The day-long mediation and question-and-answer session afforded our office the opportunity to discuss the handling of habitability claims in California in a Areal life@ setting, as well as to present a methodology to dispose of these claims in a timely and cost-effective manner. Anyone who is interested in discussing the fact pattern for the mediation and SHCP=s expertise in this area of California law can contact Robert Henstridge or K.J. Cabodi for additional details and information.

Assumption of the Risk Doctrine Still Alive and Well in California

Summer is fast approaching which means families will be flocking to amusement parks and carnivals throughout the state.  A recent California appellate case entitled Griffin v. The Haunted Hotel, Inc. (2015) WL 7355112, affirmed the age-old Assumption of the Risk Doctrine in California tort law.


Briefly, plaintiff sued the Haunted Hotel, Inc. which ran the Haunted Trail, for injuries plaintiff suffered when he was running from an actor wielding a gas powered chainsaw (saw was deactivated.)  The trial court granted the Haunted Hotel’s motion for summary judgment, determining under the Assumption of the Risk Doctrine that the defendant did not have any duty to plaintiff.  In essence, the court concluded that the risk of being frightened, running and possibly falling is inherent in the purpose of entering an amusement attraction like a haunted house.

 The moral of the story:  if you don’t want to be scared out of your wits, don’t go into a haunted house.



Attorney’s Fees Clause- A Second Thought

It may be wise to think twice before including prevailing party attorney’s fees clauses in standard residential and/or commercial lease agreements.  Under established law, each party to an agreement is responsible for paying its own attorney’s fees unless provided by statute or the language of the contract.  The attorney’s fees clause is usually standard language in all real estate lease agreements we encounter.

In the last few years, the “attorney’s fees clause” has often times worked to the landlord’s disadvantage in litigation involving habitability claims (substandard and/or dangerous housing) or exposure to various toxins in commercial settings.  Often times it is the attorney’s fees clause that drives litigation against the landlord and increases the value of an otherwise insignificant claim.  (Note: uncorrected statutory violations can still give rise to the recovery of attorney’s fees in habitability cases.)

How is the lessor affected if the clause is removed?  The odds of collecting attorney’s fees on a deadbeat tenant who must be evicted, a tenant who damages some fixtures, or absconds in the middle of the night are problematic at best.

However, the opportunity to curtail or eliminate altogether multi-party habitability claims or specious toxic exposure issues may be far more valuable to the lessor down the road.  It is certainly worth a second thought.

Have questions about Request for Admissions Denial Danger?

Feel free to contact us with your questions here, and we’d be happy to clarify any questions you may have!

Request for Admissions Denial Danger

A perplexing California Fourth Appellate District case regarding denial of Request for Admissions, Grace v. Mansourian has just been ordered published.  The case involved a defendant who had a good faith belief that the traffic light was “green,” while other “witnesses” and the traffic investigation disagreed.  Verdict for plaintiff, who recovered costs for proving matters denied by defendant’s Request for Admissions denials.

The Appellate court held that the defendant’s firm belief the light was green was not reasonable in light of all the evidence.  In a somewhat convoluted ruling, the Court stated that it was irrelevant as to defendant’s reasonable belief he did not run the light, but rather if the defendant reasonably believed he would prevail on that issue at trial.

Do you believe the court would have decided in this manner if plaintiff would have held to a “reasonable” belief the light was green?

Be careful of broad-stroke denials of Request for Admissions and polish your crystal ball for your “Request for Admissions you can prevail on the specific issues at trial.

Have questions about Request for Admissions Denial Danger?

Feel free to contact us with your questions here, and we’d be happy to clarify any questions you may have!