Amounts-Paid Cap: Mitigation Reduction

Posted in Law and Information on March 17, 2014

Luttrell v. Island Pacific Supermarkets, Inc. (2013) 215 Cal.App.4th 196, 155 Cal.Rptr.3d 273

A supermarket patron who fractured his hip when an automatic door repeatedly struck him while he was leaving the premises, brought an action for personal injuries against the owner of the market. Following a jury verdict in favor of the plaintiff, the trial court determined that the plaintiff’s recovery for medical expenses should be reduced by 50% due to his failure to mitigate his damages.

Appealing from the judgment, the plaintiff contended, inter alia, that the trial court had improperly applied the 50% reduction to the amount of medical bills paid, rather than the amounts billed. However, the court of appeal affirmed, holding that the amounts-paid limitation  for past medical expenses under Howell v. Hamilton Meats (2011) 52 Cal.4th 541 should be imposed before any reduction for failure to mitigate damages:

In arguing whether the court should have applied the 50 percent reduction to the amounts paid or to the amounts billed, the parties focus on whether Howell is germane to this case at all. A subtler question—skirted by the parties in their briefs but implicated by their arguments (and addressed at oral argument at our invitation)—pertains to the order in which the Howell cap and the mitigation reduction should be applied: should the court first apply the mitigation reduction to the amounts billed, and then impose Howell ‘s amounts-paid cap, or should the court impose the amounts-paid cap first, with the mitigation reduction then applied to that amount?5 In our view, it is clear that the Howell cap must be applied first, since the amount actually paid on the plaintiff’s behalf represents the maximum amount a plaintiff could recover.

The amounts-paid cap is the highest amount of damages the plaintiff may recover for past medical expenses. … Indeed, the amount of billed-but-un paid medical expenses is generally not even admissible at trial on this issue.
. . .
Furthermore, the point of the Hanif–Howell line of cases is that the tortfeasor should be held to pay the full cost of its negligence or wrongdoing—no more and no less. . . .  This can be accomplished if the maximum potential recovery is first ascertained by reference to the amounts actually paid for medical expenses and then reducing it by the percentage attributable to the plaintiff’s contribution to that expense.