California Court of Appeal Feb 27, 2015 No. D064315Unpublished
Filed 2/27/15 Varela v. Birdi CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
GABRIEL VARELA et al., D064315 & D065631
Plaintiffs and Respondents,
v. (Super. Ct. No. 37-2012-00090344- CU-PA-CTL) MONINDER BIRDI et al.,
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of San Diego County, Joan M.
Lewis, Judge. Affirmed.
Horvitz & Levy, Robert H. Wright, Steven S. Fleischman; Willis Depasquale,
Larry N. Willis and Shane M. Biornstad for Defendants and Appellants, Moninder Birdi
and Moninder Birdi & Associates.
Gentes & Associates, Stephen A. Gentes and Sarah E. Risso for Defendant and
Appellant Monider Birdi.
Law Offices of Robert Hamparyan, Robert N. Hamparyan; Law Office of Kane
Handel, Kane Handel; Williams Iagmin and Jon R. Williams for Plaintiffs and
Respondents.
INTRODUCTION
Moninder Birdi and Birdi & Associates appeal a judgment after a jury verdict in
favor of Gabriel and Bernice Varela for damages sustained when Birdi drove his vehicle
into the path of Varela's oncoming bicycle at an intersection in the Point Loma area of
San Diego. Birdi contends (1) the court failed to properly instruct the jury regarding the
speed limit for the street on which Varela was traveling and (2) the court erred in
allowing evidence of future medical expenses without consideration of what Varela's
insurer may pay for such future expenses. We disagree with both contentions and affirm
the judgment. We conclude, under the circumstances of this case, the court properly
instructed the jury regarding the basic speed law and negligence. We further conclude
the trial court properly applied the collateral source rule to exclude evidence of the
amounts Varela's insurer may pay for future medical expenses. Given our conclusion, we
also affirm the order awarding the Varelas their costs and expert witness fees.
FACTUAL AND PROCEDURAL BACKGROUND
A
Varela, who had just been selected to serve as the Commander of a Navy missile
destroyer ship after rising through the ranks over his 26-year Navy career, was riding
his bicycle home from work at the Naval base on the evening of February 8, 2010, when
Birdi drove his vehicle into an intersection directly into Varela's path of travel. Varela
2
hit the front end of the vehicle on the driver's side, he flew up and landed on the ground
in the middle of the intersection. Varela suffered significant injuries. The parties
stipulated Birdi was "negligent in the operation of his vehicle in failing to see [Varela],"
"Birdi violated [Varela's] right of way under the law" and Birdi was "one of the causes
of the collision."1 However, Birdi asserted Varela was comparatively negligent based
on Varela's speed and inattention prior to entering the intersection.
B
The collision occurred in a two-way controlled intersection of Catalina Boulevard
and Orchard Avenue. Birdi, who was traveling west on Orchard Avenue, had a stop
sign. Varela, who was riding north on Catalina Boulevard, had no traffic controls at the
intersection because Catalina Boulevard is a through roadway. Varela had the right-of-
way.
Jeremy Gomez, who was driving northbound in stop-and-go traffic on Catalina
Boulevard on the evening of the accident, noticed Varela riding his bike on the right
hand side of the road. Varela was wearing a white and blue rider's uniform matching his
helmet and bicycle. Varela passed him when traffic slowed or stopped, but Gomez
would pass Varela when traffic picked up. Based on Gomez's own cycling experience,
he felt Varela was "following the rules of the road." Gomez saw Varela enter the
intersection when a vehicle "blew through" the stop sign on Orchard Avenue into
1 The parties also stipulated Birdi's company, Birdi & Associates, is responsible for any harm caused by Birdi because he was operating his vehicle in the course and scope of his employment.
3
Varela's path of travel. Varela struck the front end of the vehicle on the driver's side and
flew off his bicycle into the intersection.
Aron Galvan also noticed Varela riding to the right of traffic on Catalina
Boulevard as she left work at the Naval base. She noticed him because he was wearing a
blue and gold biker outfit. Due to traffic, sometimes Varela would be in front of her and
at other times, he would be behind her. Galvan estimated she and Varela had been
traveling at 35 to 40 miles per hour before the collision occurred. Galvan estimated the
speed limit was 30 to 35 miles per hour. There was a school nearby and a sign requiring
25 miles per hour when the light is flashing. Galvan did not remember seeing the light
flashing that day.
Christopher Davis said he was traveling about 30 miles per hour and was slowing
down when he first saw Varela on the side of the road in his right rear-view mirror after
Davis saw a child running along the left side of the road. Varela was wearing a blue
uniform. Visibility was very good. Davis noticed Varela pedaling rapidly. He believed
Varela was traveling 40 miles per hour when he first noticed him. However, he stated he
was not good at providing speed and distance estimates. He also thought the speed limit
on Catalina Boulevard was 45 miles per hour.
As Davis nosed his vehicle into the intersection, he saw Birdi's vehicle enter the
intersection and start to accelerate across just as the bicycle was about to pass Davis. He
did not see Birdi's vehicle stop and he did not think either the vehicle or the bicycle were
paying attention to the other. Davis saw the bicycle hit the driver side of the vehicle.
4
C
Birdi was renting a home in Point Loma at which to stay during the workweek
because his business was providing consulting for the San Diego International Airport at
Lindbergh Field. He was familiar with the intersection where the collision occurred. He
knew he had a stop sign on Orchard Avenue. He knew there were no traffic controls on
Catalina Boulevard. He also knew he had to yield the right-of-way to oncoming traffic
on Catalina Boulevard.
After leaving work, Birdi drove about 15 minutes until he got to the intersection
of Orchard Avenue and Catalina Boulevard. As he drove, he spoke on his cellular
phone with various individuals from his office. Birdi testified he was on a call a block
from the scene of the collision, but claimed to have finished the call before he reached
the intersection. He denied he was using the phone at the time of the accident. Birdi's
cellular phone records showed three calls to and from his office before the collision,
including a dropped call and attempts by a person from his office to call back at the time
of the collision.
Birdi testified he stopped at the intersection of Orchard Avenue and Catalina
Boulevard and looked both ways before proceeding into the intersection. He thought
traffic was clear when he proceeded into the intersection.
Birdi told the investigating officer he was "surprised" when he felt an impact on
the side of his vehicle and a bicyclist hit the driver door of his vehicle. He stated he did
not see Varela, or any vehicles or bicycles, before he drove into the intersection.
5
D
Officer Michael Gottfried, an experienced traffic investigator with the San Diego
Police Department, was the primary investigator for the collision. Officer Gottfried
interviewed Birdi and other witnesses and photographed, measured, and documented the
collision scene to determine the cause of the collision.
According to Officer Gottfried, Birdi would have had an unobstructed line of sight
of over 1,000 feet in Varela's direction and should have seen Varela when he looked to
his left at the stop limit line on Orchard Avenue. Officer Gottfried concluded Birdi
caused the collision by failing to yield the right-of-way to Varela.
Officer Gottfried testified Catalina Boulevard has a speed limit of 30 miles per
hour at the location of the collision. Although there is a sign stating the limit is 25 miles
per hour when children are present, he determined it was not relevant to the investigation
because school was not in session at the time. On cross-examination, he was shown the
posted sign with the signal light on top and he was asked about the Vehicle Code section
regulating school zones. Officer Gottfried testified the 25-mile-per-hour limit would not
be enforceable at 5:00 p.m. when the accident occurred.
Officer Gottfried was also questioned about the witness statements placing
Varela's speeds anywhere from 16 miles per hour to 40 miles per hour. Officer Gottfried
estimated in his report Varela's speed was 25 to 35 miles per hour. He did not believe the
bicycle could have hit the vehicle at 40 miles per hour based on his observation of the
vehicle and his experience and training. Officer Gottfried also stated the bicycle speed
did not impact his analysis of who had the right-of-way or who was at fault for the
6
accident because Birdi clearly violated Varela's right-of-way. Varela's speed was not
great enough to change the right-of-way violation.
The Varelas' expert, Eugene Vanderpol, agreed. Based on accident
reconstruction, Vanderpol concluded Birdi was at fault for not paying attention, for not
seeing Varela who should have been visible, and for not stopping at the stop sign.
Vanderpol estimated Varela was traveling below the 25 or 30-mile-per-hour speed limit
for several hundred feet before the accident based on the damage to the vehicle, the
bicycle and Varela's injuries.
Birdi's accident reconstruction expert, Gerald Bretting, is an avid cyclist with
racing experience. He conducted an experiment by riding the route Varela took three
times to determine if the estimates Varela was traveling 35 to 40 miles per hour were
realistic. During those ride-throughs, while "working pretty hard," he achieved speeds
of up to 37 miles per hour on the down slope for a few seconds and reduced speeds of 33
to 34 miles per hour as he approached the intersection. Bretting used a high-end road
bicycle weighing approximately 18 pounds for the road tests whereas Varela had an
entry-level road bicycle weighing about 28 pounds.
Based on his own road tests, Bretting prepared animated reconstructions
assuming Varela was traveling at maximum speed of 37 miles per hour decelerating to
33 or 34 miles per hour as he passed Davis approaching the intersection and then 20 to
25 miles per hour at impact after a brief application of the brakes. In Bretting's opinion,
if Varela was traveling slower as he approached the intersection, he may have had
7
sufficient time to avoid the accident or reduce the impact speed of the collision to five-
to-seven miles per hour.
Bretting noted the posted speed limits were 30 miles per hour in some areas, 35
miles per hour in other areas and 25 miles per hour near the school when children were
present. Bretting thought a childcare location was across the street was open until 6:00
p.m., but did not offer an opinion regarding the enforceable speed limit at the time of the
accident. He testified his estimates of Varela's speed would have placed Varela in excess
of the speed limit if it was either 25 or 30 miles per hour.
E
Varela sustained significant and multiple injuries including a concussion, upper
and lower lip lacerations, a fracture of his right hip, a fracture of his right thighbone and a
sprain with a meniscal tear in the right knee. He underwent six surgeries to repair his
femur, hip, lips and right knee as well as scar revision procedures. He developed pain on
the left side of his head, headaches, chronic pain disorder and sleep disorder due to
chronic pain. Due to his perseverance and dedication, Varela recovered to the point he
was able to report to duty and assumed his positions as the Executive Officer and then as
Commander of a Navy missile destroyer ship.
However, the jury heard evidence Varela suffers chronic pain in the occipital
region of his head as well as in the hip, thigh, knee and lower lip. He will require future
medical care including surgeries for knee replacement, removal of the plates and screws
in his hip, removal of the rod in his right femur and possibly hip replacement. To control
Varela's pain, pain specialists recommend a regimen of medications for the rest of his life
8
as well as other possible therapies including steroidal injections, radiofrequency ablation
of the nerve branch, nerve stimulation and/or neurectomy to treat the chronic occipital
pain.
Varela did not seek compensatory damages for past medical expenses. Instead,
Varela presented evidence from medical experts regarding the future medical care he will
require along with estimated costs for the future care. An economist compiled the
anticipated costs and calculated the present value of the future cost of medical care would
be approximately $1.8 million.
F
The jury returned a verdict finding Birdi solely negligent and a substantial factor
in causing harm to Varela. The jury awarded: (1) $1,355,598 for future medical
expenses; (2) $405,801 for future loss of earnings; (3) $800,000 for past noneconomic
loss; and (4) $2.2 million for future non-economic loss. The jury awarded Varela's wife
$14,000 for her loss of consortium claim.
Birdi moved for new trial asserting, among other things, instructional error based
on the refusal to give CACI No. 707 regarding the prima facie speed law and excessive
future economic damages claiming the damages should be reduced to amounts likely to
be paid by Varela's insurer. Birdi proposed showing this amount by comparing the
differential between the amounts billed and amounts paid for Varela's past medical
expenses. Birdi sought a remittitur awarding Varela one-third of the amount of damages
awarded by the jury purportedly based on a comparison of the amounts billed and the
amounts paid for past medical expenses. The court denied the motion.
9
G
The court awarded Varela $616,053.26 in costs as the prevailing party and expert
witness fees under Code of Civil Procedure section 998.
DISCUSSION
I
Jury Instructions
Birdi contends the court committed prejudicial error by declining to instruct the
jury with CACI No. 707 regarding the prima facie speed limit and instructing only with
CACI No. 706 regarding the basic speed law. We are not persuaded.
A
"A party is entitled upon request to correct, nonargumentative instructions on
every theory of the case advanced by him which is supported by substantial evidence."
(Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 572.) However, " '[i]nstructions
should state rules of law in general terms and should not be calculated to amount to an
argument to the jury in the guise of a statement of law. [Citations.] Moreover, it is error
to give, and proper to refuse, instructions that unduly overemphasize issues, theories or
defenses either by repetition or singling them out or making them unduly prominent
although the instruction may be a legal proposition. [Citations.]' [Citation.] Finally,
'[e]rror cannot be predicated on the trial court's refusal to give a requested instruction if
the subject matter is substantially covered by the instructions given.' " (Red Mountain,
LLC v. Fallbrook Public Utility Dist. (2006) 143 Cal.App.4th 333, 359-360.)
10
"We independently review claims of instructional error viewing the evidence in
the light most favorable to the appellant." (Orichian v. BMW of North America, LLC
(2014) 226 Cal.App.4th 1322, 1333.) " 'The refusal of a proper instruction is prejudicial
error only if " 'it seems probable' that the error 'prejudicially affected the verdict.'
[Citations.]" [Citation.] "[W]hen deciding whether an error of instructional omission
was prejudicial, the court must also evaluate (1) the state of the evidence, (2) the effect of
other instructions, (3) the effect of counsel's arguments, and (4) any indications by the
jury itself that it was misled." ' " (Ibid.)
B
Birdi based his comparative fault defense in large part on Varela's speed on
Catalina Boulevard asserting the speed limit was 25 miles per hour and Varela was
traveling faster than that limit when he approached the intersection. Birdi offered two
modified versions of CACI No. 707, one stating the speed limit where the accident
occurred was 25 miles per hour and the other stating the speed limit is 30 miles per hour
in the area unless certain conditions existed, in which case it would be 25 miles per
hour.2 Varela initially requested a version of CACI No. 707 stating the speed limit was
30 miles per hour, but later withdrew the request.
2 Birdi's second modified version is as follows: "The posted speed limit on Catalina Blvd. between Chatsworth Blvd. and Orchard Avenue is 30 miles per hour unless the following conditions existed at the time of the accident: [Varela] was approaching, at a distance of 500 to 1,000 feet from, a school building or the grounds thereof, contiguous to a highway and posted with a school warning sign that indicates a speed limit of 25 miles per hour, while children were going to or leaving the school, either during school hours or during the noon recess period. [¶] If these conditions were present, the speed limit 11
The evidence regarding Birdi's request for an instruction regarding a 25-mile-per-
hour speed limit was not clear. Officer Gottfried testified the applicable speed limit was
30 miles per hour at the time of the accident and the 25-mile-per-hour limit for a school
zone was irrelevant because it would not be enforceable after school hours. One witness
stated the school zone sign flashes when the 25-mile-per-hour limit applies and she did
not recall seeing it flashing that evening.
Birdi's accident reconstruction expert Bretting testified to various speed limit signs
in the area, including the school zone sign. He recalled testimony from one of the
witnesses about seeing a child on the street and thought a childcare facility nearby had
hours until 6:00 p.m. However, he did not offer an opinion regarding the applicable
speed limit. Instead, based on Bretting's estimate of Varela's speed, he testified Varela
would have exceeded the speed limit if it was either 25 or 30 miles per hour.
After considering the proposed instructions and the evidence, the court determined
there was no reliable evidence to support an inference the speed limit was 25 miles per
hour. Instead, the court gave the instruction for the basic speed law (CACI No. 706)
along with CACI No. 700 for the basic standard of care for operation of a vehicle.3 The
was 25 miles per hour. [¶] The speed limit is a factor to consider when you decide whether or not [Varela] was negligent. A driver is not necessarily negligent just because he or she was driving faster than the speed limit. However, a driver may be negligent even if he or she was driving at or below the speed limit."
3 The jury was given the modified version of CACI No. 700 regarding the basic standard of care as applied to Varela was as follows: "A person must also use reasonable care in riding a bicycle. Bicycle riders must keep a lookout for pedestrians, obstacles, 12
court explained the ruling stating, "[H]ere's what I see. And . . . why I think it would be
better to give [CACI No.] 700 instead of [CACI No.] 707 because it's my opinion that
even though an inference isyour argument . . . was that an inference could be drawn
that the speed limit was 25 miles an hour, but that has to be based on reliable evidence. I
didn't find any reliable evidence that would support it, and so I was inclined to just strike
the 25-mile-per-hour instruction altogether. [¶] But I think that it is for the jury to be able
to listen to all of the evidence and your argument and make a determination, and that's
why I think [CACI No.] 700 covers it better for both parties."
Birdi cites no cases requiring an instruction regarding a prima facie speed limit
where (1) there was insufficient evidence to support an instruction regarding the speed
limit requested by a party and (2) the court instructed the jury regarding both the basic
speed law and the standard of care for negligence in operating a vehicle.
In Hardin v. San Jose City Lines, Inc. (1953) 41 Cal.2d 432, 438-440, the court
instructed the jury about both the basic speed law and the prima facie speed limit where
there was evidence a bus on which the plaintiff was injured was traveling in excess of the
posted speed limit in a medium amount of traffic when it came to a sudden stop. The
and other vehicles. They must also control the speed and movement of their bicycles. The failure to use reasonable care in riding a bicycle is negligence." The jury was also given the modified version of CACI No. 706 regarding the basic speed law as applied to Varela as follows: "A person also must ride his bicycle at a reasonable speed. Whether a particular speed is reasonable depends on the circumstances such as traffic, weather, visibility, and road conditions. Bicycle riders must not drive so fast that they create a danger to people or property. [¶] If [Birdi] has proved [Varela] was not riding his bicycle at a reasonable speed at the time of the accident, then [Varela] was negligent."
13
court stated it is proper in a civil case "to give an instruction on the prima facie speed
limit even though proof of speed in excess of that limit is not enough, standing alone, to
show that the vehicle was being operated negligently." (Id. at p. 439.) The court
discussed former Vehicle Code section 513 (predecessor statute to Veh. Code, § 40831),
stating proof of speed in excess of a prima facie speed limit in a civil case does not
establish negligence as a matter of law and it is necessary to establish as a fact that " 'such
excess speed' " constituted negligence. The court concluded, since "[t]he words 'such
excess speed' clearly refer to an excess over the prima facie limit . . . it follows that the
plaintiff may introduce evidence of the prima facie speed limit in order to show that there
was 'such excess speed." (Hardin, supra, at p. 439.) It was in this context the court
stated, "the prima facie speed limit is a factor to be considered with other pertinent
factors and that the plaintiff is entitled to an instruction thereon." (Ibid.) However, the
court did not address a case, such as the one before us, where there was no clear evidence
to support the speed limit the defendant asserted was applicable. Nor did the Hardin
court address a situation where the court instructed the jury regarding the standard of care
for negligence.
Similarly, Beard v. David (1960) 179 Cal.App.2d 175, 176 involved a passenger
in a vehicle who sued the driver of another vehicle for injuries she sustained when the
two collided in an intersection. One of the issues in the case was the speed the vehicle in
which the plaintiff was riding entered the intersection. (Id. at p. 179.) The court
instructed the jury regarding the prima facie speed limit as well as the basic speed law.
(Id. at pp. 180-181.) At the request of the plaintiff, the court gave additional instructions
14
regarding rebuttable presumptions. (Id. at p. 181.) The court determined there was
sufficient evidence to support a prima facie speed limit instruction even though there was
no direct evidence of the posted speed limit, because a police officer testified about the
speed limit in the area and there was no dispute the intersection in which the accident
occurred was in a business district. (Id. at p. 179.) The plaintiff contended the combined
instructions placed on her a burden of proving the speed of the vehicle in which she was
riding was not negligent. The appellate court concluded the defendant was entitled to the
prima facie speed limit instruction even though proof of excess speed alone is not proof
of negligence and any confusion regarding the combined instructions arose from
instructions requested by the plaintiff. (Id. at pp. 181-182.)
In Hodges v. Severns (1962) 201 Cal.App.2d 99, 110-111 the trial court refused to
instruct the jury regarding either the prima facie speed limit for the area where the
accident occurred or the basic speed law. Instead, the court gave an instruction regarding
a rebuttable presumption of negligence for violation of the Vehicle Code and general
duty instructions. The appellate court concluded this was error because the jury was left
with no knowledge of the basic speed law or guidance as to how to evaluate the evidence
in the case.
In this case, the jury had ample guidance to evaluate the evidence. They were
instructed regarding the basic speed law as well as the standard of care for negligence in
operation of a vehicle, both of which required the jury to consider Varela's speed and
gave the jury the opportunity to find Varela comparatively negligent under the
circumstances even if he was riding under the applicable speed limit. Birdi's counsel was
15
permitted to examine witnesses regarding the speed limit and to show the speed limit
sign. Birdi's counsel asked the jury to take the speed limit, including signage, into
account in evaluating whether Varela was comparatively negligent. Under these
circumstances, we cannot conclude the court erred in declining to give Birdi's requested
instruction regarding the prima facie speed limit.
II
Evidence Regarding Future Medical Costs
Birdi contends the holdings of Howell v. Hamilton Meats & Provisions, Inc.
(2011) 52 Cal.4th 541(Howell) and Corenbaum v. Lampkin (2013) 215 Cal.App.4th 1308
(Corenbaum) require a plaintiff asserting a claim for damages in the form of future
medical expenses to limit the amount sought to that which may be paid by the plaintiff's
insurance rather than amounts anticipated to be billed by medical providers. Relying on
these authorities, Birdi contends the trial court erred in admitting evidence of Varela's
future care costs and in applying the collateral source rule to preclude Birdi from
examining witnesses regarding what the future care costs would be if they were obtained
using Varela's military insurance. As we shall explain, we are not persuaded the rationale
articulated in Howell and Corenbaum applies to future medical care estimates.
A
Standard of Review
We review evidentiary rulings made in limine or during trial for abuse of
discretion. (Pannu v. Land Rover North America, Inc. (2011) 191 Cal.App.4th 1298,
1317.) " 'While trial judges ordinarily enjoy broad discretion with respect to the
16
admission and exclusion of evidence . . . , a court's discretion is limited by the legal
principles applicable to the case.' [Citation.] 'Thus, if the trial court's . . . ruling was
based on a misinterpretation of applicable law, an abuse of discretion has been shown.' "
(McIntyre v. The Colonies-Pacific, LLC (2014) 228 Cal.App.4th 664, 670.)
B
Overview of Collateral Source Rule
California has long adhered to the collateral source rule, which provides "if an
injured party receives some compensation for his injuries from a source wholly
independent of the tortfeasor, such payment should not be deducted from the damages
which the plaintiff would otherwise collect from the tortfeasor." (Helfend v. Southern
California Rapid Transit Dist. (1970) 2 Cal.3d 1, 6 (Helfend).) It applies to payments
made by insurers and through social legislative benefits. (Rest.2d Torts, § 920A, com. c,
p. 515.)
In Helfend, the Supreme Court explained the collateral source rule "embodies the
venerable concept that a person who has invested years of insurance premiums to assure
his medical care should receive the benefits of his thrift. The tortfeasor should not garner
the benefits of his victim's providence." (Helfend, supra, 2 Cal.3d at pp. 9-10.) The
court observed "in the context of the entire American approach to the law of torts and
damages, . . . the rule presently performs a number of legitimate and even indispensable
functions." (Id. at p. 13.)
Among those indispensable functions is the primary goal of fully compensating
tort victims for their injuries. The Helfend court noted insurance policies frequently
17
require subrogation or refund of insurance benefits after a tort recovery, so the plaintiff
does not receive double recovery. (Helfend, supra, 2 Cal.3d at pp.10-11.) Additionally,
"generally the jury is not informed that plaintiff's attorney will receive a large portion of
the plaintiff's recovery in contingent fees . . . . Hence, the plaintiff rarely actually
receives full compensation for his injuries as computed by the jury. The collateral source
rule partially serves to compensate for the attorney's share and does not actually render
'double recovery' for the plaintiff." (Id. at p. 12.) Rather, the plaintiff's ability to recover
his medical expenses from both the tortfeasor and his insurance plan "partially provides a
somewhat closer approximation to full compensation for his injuries." (Id. at pp. 12-13.)
Additionally, the Helfend court emphasized the importance of the evidentiary
aspect of the collateral source rule. "To permit the defendant to tell the jury that the
plaintiff has been recompensed by a collateral source for his medical costs might
irretrievably upset the complex, delicate, and somewhat indefinable calculations which
result in the normal jury verdict." (Helfend, supra, 2 Cal.3d at pp. 11-12.)
C
Howell and Corenbaum
In Howell, supra, 52 Cal.4th at page 566, the Supreme Court determined, for past
medical expenses, "an injured plaintiff whose medical expenses are paid through private
insurance may recover as economic damages no more than the amounts paid by the
plaintiff or his or her insurer for the medical services received or still owing at the time of
trial." The court explained it was not abrogating or modifying the collateral source rule,
it simply found it inapplicable.
18
"The rule . . . has no bearing on amounts that were included in a provider's bill but
for which the plaintiff never incurred liability because the provider, by prior agreement,
accepted a lesser amount as full payment. Such sums are not damages the plaintiff would
otherwise have collected from the defendant. They are neither paid to the providers on
the plaintiff's behalf nor paid to the plaintiff in indemnity of his or her expenses. Because
they do not represent an economic loss for the plaintiff, they are not recoverable in the
first instance." (Howell, supra, 52 Cal.4th at p. 548-549.) If a provider accepted less
than the full amount billed, the full amount billed is not relevant to the issue of damages.
(Id. at p. 567.)
Howell affirmed the vitality of the evidentiary aspect of the collateral source rule
stating evidence that "payments were made in whole or in part by an insurer
remains . . . generally inadmissible." (Howell, supra, 52 Cal.4th at 567.) However, the
court expressed "no opinion as to its relevance or admissibility [of the full billed amount]
on other issues, such as noneconomic damages or future medical expenses." (Ibid.)
The court in Corenbaum, supra, 215 Cal.App.4th 1308 followed Howell, supra,
52 Cal.4th 541 and held evidence of "the full amount billed for a plaintiff's medical care
is not relevant to the determination of a plaintiff's damages for past medical expenses,
and therefore is inadmissible for that purpose" whereas "evidence of the amount accepted
by medical providers as full payment does not violate the collateral source rule and is
admissible provided that the source of payment is not disclosed to the jury and the
evidence satisfies the other rules of evidence." (Corenbaum, at p. 1328, italics added.)
19
Addressing some of issues left open by Howell, supra, 52 Cal.4th 541 the
Corenbaum court concluded the full amount billed for past medical services is not
relevant to the determination of damages for future medical expenses and cannot support
expert opinion regarding the reasonable value of future medical expenses. (Corenbaum,
supra, 215 Cal.App.4th at pp. 1330-1331.) "[F]or a jury to consider both evidence of the
amount accepted as full payment, for the purpose of determining the amount of past
economic damages, and the full amount billed, for some other purpose, would most
certainly cause jury confusion and suggest the existence of a collateral source payment,
contrary to the evidentiary aspect of the collateral source rule." (Id. at p. 1331.)
Similarly, "for an expert to base an opinion as to the reasonable value of future medical
services, in whole or in part, on the full amount billed for past medical services provided
to a plaintiff would lead to the introduction of evidence concerning the circumstances by
which a lower price was negotiated with that plaintiff's health insurer, thus violating the
evidentiary aspect of the collateral source rule." (Id. at p. 1332.)
The court also determined evidence of the full amount billed for past medical
expenses is irrelevant to the jury's consideration of noneconomic damages. (Corenbaum,
supra, 215 Cal.App.4th at pp. 1332-1333.) The court concluded there was no
justification for admitting otherwise inadmissible evidence for the purpose of "providing
plaintiff's counsel an argumentative construct to assist a jury in its difficult task of
determining the amount of noneconomic damages." (Id. at p. 1333.)
20
D
Procedural Background and Evidence of Future Medical Costs
In this case, relying on Howell, supra, 52 Cal.4th 541 Birdi moved in limine to
exclude evidence regarding the amount of medical bills in excess of the amount paid by
Varela's insurer for his past medical expenses. Varela's counsel did not dispute the
application of Howell to the claims for past medical expenses, but argued evidence of the
full amount billed for past medical expenses should come into evidence for the issues of
noneconomic and future medical care costs. The court granted the defense motion
precluding introduction of evidence regarding billed amounts for past medical expenses.
Corenbaum, supra, 215 Cal.App.4th 1308 was decided the following day. Ultimately,
Varela did not seek damages for past medical expenses, only damages for future medical
expenses.
About a week after Corenbaum was decided, in discussing a chart submitted by
Varela's economic expert regarding future medical costs, Birdi's counsel cited
Corenbaum, supra, 215 Cal.App.4th 1308 and Howell, supra, 52 Cal.4th 541 and argued
the chart for future medical expenses should be based on amounts that would be payable
under Varela's military insurance. Varela's counsel argued Corenbaum was not
applicable and evidence regarding what insurance would pay is speculative and violates
the collateral source rule. The court stated its belief Corenbaum does not stand for the
proposition future medical costs must be based on insurance rates. Additionally, the
court considered the amount an insurer would pay in the future to be speculative and
would preclude Varela from seeking medical care outside of his plan.
21
During cross-examination of Varela's expert orthopedist, who testified regarding
future care costs, counsel for Birdi asked how much the proposed procedures would cost
at the Naval hospital. The court sustained Varela's objection on the basis the question
violated the collateral source rule because it called for the witness to talk about insurance.
The court later confirmed it did not find Corenbaum, supra, 215 Cal.App.4th 1308
applicable to future medical expenses and questions regarding the cost of care at the
Naval hospital were not only collateral source, but also irrelevant because Varela should
be able to choose whether or not to go to the Naval hospital for care.
When Varela's pain management expert testified regarding the anticipated costs of
future medical care to manage Varela's chronic pain, Birdi asserted a foundational
objection based on Corenbaum, supra, 215 Cal.App.4th 1308, which the court overruled.
In a conference outside the presence of the jury, the court noted a prior witness had
commented Varela would incur no cost for dental implant surgery if he received care
through the Navy. The court again cautioned the parties against such comments
reflecting collateral source. The court granted Birdi a standing objection based on
Corenbaum.
Varela's economist prepared a chart regarding future medical expenses based on
the cost estimates presented by the expert medical witnesses. The present value of the
total future medical costs claimed was $1,823,649.
Birdi's orthopedic expert presented the jury with substantially lower estimates for
certain medical procedures than those presented by Varela's expert ($18,000 for removal
of hip hardware and physical therapy versus $53,000; $30,000-$50,000 for knee
22
replacement versus $125,000). Birdi's pain management expert did not express a counter
opinion to the costs estimated by Varela's pain management expert other than to suggest a
surgical procedure to attempt to cure Varela's chronic head pain at a rate of $10,000.
E
Analysis
Assuming the cost estimates provided by Varela's medical experts were based on
amounts providers typically charged rather than amounts typically received through
insurance or other payment schemes, we do not agree Howell, supra, 52 Cal.4th 541 and
Corenbaum, supra, 215 Cal.App.4th 1308 compel the conclusion such charged fees
should be inadmissible for the purpose of evaluating future medical expenses.4
The Supreme Court in Howell was presented with known quantities: the total
amounts billed up to the time of trial and the amounts accepted by the medical providers
based on agreements between the provider and the insurer. (Howell, supra, 52 Cal.4th
at pp. 549-550.) The Howell court was concerned with identifying an accurate measure
of reasonable compensatory damages for past medical expenses. It concluded "an injured
4 Birdi assumes the costs are based on amounts a medical provider would bill rather than costs a provider may customarily expect to receive. Based on the record before us, we are unable to determine whether Birdi's counsel asked Varela's medical experts in pre- trial discovery for the basis of their opinions regarding future medical costs. On this record, Birdi's counsel did not make an offer of proof or request an Evidence Code section 402 hearing to explore the basis of the Valerlas' medical experts' opinions regarding costs. Counsel for Varela represented the amounts were based on "the reasonable standards and the custom and practice is in the medical industry," but did not state whether the amounts were based on customary charges or customary receipts. Therefore, we are left with an incomplete record to fully analyze Birdi's contention the future care costs presented by Varela were unreasonable.
23
plaintiff whose medical expenses are paid through private insurance may recover as
economic damages no more than the amounts paid by the plaintiff or his or her insurer for
the medical services received or still owing at the time of trial." (Id. at p. 566.) Since the
negotiated discount medical providers offer to the insurer "is not a benefit provided to the
plaintiff in compensation for his or her injuries" it does not fall within the collateral
source rule. (Ibid.) Because the negotiated differential is not an economic loss for the
plaintiff, it is not recoverable. "The collateral source rule precludes certain deductions
against otherwise recoverable damages, but does not expand the scope of economic
damages to include expenses the plaintiff never incurred." (Id. at p. 549; accord,
Corenbaum, supra, 215 Cal.App.4th at p. 1327.)
Future damages are different. "An injured plaintiff is entitled to recover the
reasonable value of medical services that are reasonably certain to be necessary in the
future." (Corenbaum, supra, 215 Cal.App.4th at p. 1330.) "However, the 'requirement of
certainty . . . cannot be strictly applied where prospective damages are sought, because
probabilities are really the basis for the award.' " (Behr v. Redmond (2011) 193
Cal.App.4th 517, 533.) At the time of trial, the precise medical costs a plaintiff will incur
in the future are not known. Nor is it known how a plaintiff will necessarily pay for such
expenses. It is unknown for example, what, if any, insurance a plaintiff will have at any
given time or what rate an insurer will have negotiated with any given medical provider
24
for a particular service at the time and location the plaintiff will require the medical
care.5
A policy requiring a plaintiff to present evidence of future medical expenses based
only on his or her insurance plan at the time of trial would risk under-compensation for
the injury inflicted by the tortfeasor. If the plaintiff were to change or lose insurance or if
the negotiated rates are different at the time the medical care is necessary, an award based
only on current insurance rates may very well be insufficient. It may also unnecessarily
limit the plaintiff's choice for medical care.
In this case, Birdi contends Varela's military service makes him eligible for
lifetime medical benefits and requires him to seek care through the military system. One
of Varela's superiors testified military officers are not authorized to seek medical
attention outside of the military healthcare system without notifying military authorities.
We do not interpret this statement as precluding a military veteran from seeking care
outside of the military system if he or she has the means to pay for such care, but rather
as suggesting the military insurance program may not provide coverage for such outside
care.
5 The Supreme Court in Howell, supra, 52 Cal.4th at page 560 recognized the "complexities of contemporary pricing and reimbursement patterns for medical providers." It noted the complexities of hospital charge-setting practices, the wide disparities in reimbursements based on charges to uninsured patients and those with private insurance or public medical benefits and the fact that "prices for a given service can vary tremendously . . . from hospital to hospital in California." (Id. at pp. 560-561.) Based on this wide variation, the court concluded, "making any broad generalization about the relationship between the value or cost of medical services and the amounts providers bill for them—other than that the relationship is not always a close one—would be perilous." (Id. at p. 562.) 25
It may be that Varela is eligible and entitled to benefits based on his service.
However, as the trial court stated, if Varela does not like the provider available through
the military system or if he would prefer to seek care from an outside specialist, he
should have the opportunity and ability to seek such care outside of his plan. Therefore,
we find no abuse of discretion in allowing Varela to put on evidence regarding reasonable
estimated future medical costs without factoring in anticipated insurance benefits.
Additionally, the trial court did not abuse its discretion in precluding Birdi's
counsel from questioning witnesses about how much procedures would cost at the Naval
hospital. The court was correctly concerned this line of questioning would lead to
discussion of military benefits and coverage in violation of the evidentiary aspect of the
collateral source rule. (Howell, supra, 52 Cal.4th at pp. 563, 567 [affirming evidentiary
aspect of the collateral source rule].) "The potentially prejudicial impact of evidence that
a personal injury plaintiff received collateral insurance payments varies little from case to
case. Even with cautionary instructions, there is substantial danger that the jurors will
take the evidence into account in assessing the damages to be awarded to an injured
plaintiff. Thus, introduction of the evidence on a limited admissibility theory creates the
danger of circumventing the salutary policies underlying the collateral source rule."
(Hrnjak v. Graymar, Inc. (1971) 4 Cal.3d 725, 732-733.)
We do not suggest, however, the defense is precluded from offering alternative
estimates of future medical costs. In this case, although Birdi's economist did not offer a
response to Varela's economist regarding the present value of future medical costs, Birdi's
medical experts did offer opinions regarding estimated costs for certain future medical
26
expenses, which were significantly lower than the estimates provided by Varela's medical
experts. The jury evaluated the evidence and came to a unanimous decision regarding the
reasonable value of the future medical expenses. The jury awarded nearly half a million
dollars less for future medical expenses than requested by Varela. Based on this record,
we find no abuse of discretion.
III
Appeal Regarding Award of Costs
Birdi appealed the order awarding Varela costs and expert witness fees
contending, if the judgment is reversed, Varela can no longer be considered the
prevailing party and the award of costs and fees should also be reversed. Given our
decision herein, this appeal is moot.
DISPOSITION
The judgment and the award of costs and fees is affirmed. Respondents shall
recover their costs on appeal.
MCCONNELL, P. J.
WE CONCUR:
HUFFMAN, J.
AARON, J.
27
AI Brief
AI-generated · verify before citing
Holding. The court held that the trial court properly instructed the jury on the basic speed law and negligence, and correctly applied the collateral source rule to exclude evidence of potential insurance payments for future medical expenses.
Issues
Whether the trial court erred in refusing to instruct the jury with CACI No. 707 regarding the prima facie speed limit.
Whether the trial court erred in excluding evidence of potential insurance payments for future medical expenses under the collateral source rule.
Disposition. Affirmed
Quotations verified verbatim against the opinion
“We conclude, under the circumstances of this case, the court properly instructed the jury regarding the basic speed law and negligence.”
“We further conclude the trial court properly applied the collateral source rule to exclude evidence of the amounts Varela's insurer may pay for future medical expenses.”