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Skip Navigation LinksHome > Practice Areas > Insurance Bad Faith Dispute > California Supreme Court Determines Accident Victims Only Entitled To Amount Paid By Insurance In Howell v Hamilton Meats Provisions Inc


California Supreme Court Determines Accident Victims Only Entitled To Amount Paid By Insurance In Howell v. Hamilton Meats & Provisions, Inc.

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In a significant California Supreme Court case, Howell v. Hamilton Meats & Provisions, the court determined that personal injury victims, such as those injured in car accidents, medical malpractice and bicycle accidents, are not entitled to receive more in compensation for medical costs than the insurance company pays the health care provider.

Many consider this decision a victory for insurance companies because it denies accident victims the full cost of their medical care - and what their injury is worth - instead paying those injured the value of the negotiated rate between an insurance company and the particular medical provider. If you have suffered any type of personal injury, contact an experienced Sacramento accident lawyer to discuss you next steps and determine what this decision may mean for you.

In Howell v. Hamilton Meats, a San Diego woman - Rebecca Howell - was injured in a car/ truck accident when an employee driving Hamilton Meats' truck illegally turned in front of her, causing a car accident. As a result of the incident, Howell sustained serious injuries requiring surgery and significant medical costs.

Hamilton Meats accepted responsibility for the accident and conceded liability as well as the need for the medical treatment Howell received. However, the meat company objected to the amount of money the jury awarded Howell. The jury awarded Howell the full amount of her medical costs, even though this amount had been discounted based on negotiations between her health care providers - including the physicians who treated her and Scripps Memorial Hospital - and her preferred provider organization (PPO) policy. The defense argued that because of the favorable agreements, Howell was not entitled to the larger balance of the original bills but only to an amount adjusted downward to reflect the agreed amount.

The trial court then reduced the jury award to reflect the actual amount the medical providers accepted as payment. On appeal, the Court of Appeals determined that the reduction was improper and violated the "collateral source" rule which provides that "payment made to or benefit conferred on the injured party from other sources are not credited against the defendant's liability." In other words, in situations such as here where Hamilton Meats' liability is established, a negligent party should not benefit from the favorable negotiations between third parties.

The Supreme Court reversed, determining that Howell was only entitled to the discounted amount, not the total amount billed. In a strongly worded dissent, Justice Joan Dempsey Klein noted that insurance coverage should not impact a damage award, noting "a party that caused an accident could benefit unfairly from an individual having insurance" and "would not be paying the full cost of its negligence or wrongdoing."

As Sacramento personal injury lawyers dedicated to obtaining just compensation for those injured, we will be following this decision closely. For more information, or if you have been injured in a California accident, contact the aggressive Sacramento personal injury attorneys at the Law Office of Frederick J. Sette.


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