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Evidence of Full Medical Bills Not Relevant to Establish Damages
By: Guy N. Webster
The California Court of Appeal, 2nd Appellate District, issued an important opinion in Corenbaum v. Lampkin, addressing two issues left open in Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541.
You may recall that, in Howell, the California Supreme Court held a plaintiff claiming medical expense damages “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.” Howell left open whether evidence of billed, but unpaid, medical expenses could be admissible for other purposes including (1) future economic damages and (2) non-economic damages (e.g., general damages and pain and suffering.
Corenbaum answered “no” to both, concluding “that evidence of the full amounts billed for plaintiffs’ medical care was not relevant to the amount of damages for past medical services, damages for their future medical care or non-economic damages. Because plaintiffs have not shown that evidence of the full amounts of their medical bills was relevant to any other issue, the admission of such evidence was error.”
Corenbaum further makes clear that experts may not rely on the billed but unpaid portions past bills to forecast future medical expenses: “Because the full amount billed for past medical services provided to plaintiffs is not relevant to the value of those services, we believe that the full amount billed for those past medical services can provide no reasonable basis for an expert opinion on the value of future medical services. Evidence of the full amount billed for past medical services provided to plaintiffs therefore cannot support an expert opinion on the reasonable value of future medical services.”
Practical note: This decision minimizes the ultimate potential impact for defendants at trial, by keeping out of evidence any references to larger medical expenses that were actually paid at much lower levels.
The opinion can be viewed there: Corenbaum v. Lampkin
Falling Out of a Hospital Bed Is Not a Basis for Professional Negligence
By: Philip H. Lo
The California Court of Appeal, Second District, reversed an order sustaining a demurrer without leave to amend to a complaint for general negligence and premises liability against a hospital. The plaintiff suffered injuries when the railing on her hospital bed collapsed, causing her to fall to the floor.
The appellate court surveyed the case law surrounding hospital bed falls, for guidance in deciding whether such a fall constituted general negligence or professional negligence, in order to apply the proper statute of limitations. California Civil Code section 3333.1, of the Medical Injury Compensation Reform Act of 1975 (MICRA), defines professional negligence as a negligent act or omission by a health care provider in the rendering of professional services, which act or omission is the proximate cause of a personal injury, provided that such services are within the scope of services for which the provider is licensed.
The plaintiff was injured when the hospital bed rail collapsed. The plaintiff did not allege that the hospital was professionally negligent in failing to raise the bed rail or failing to supervise or secure her. The alleged negligence was that the hospital simply failed to use reasonable care in maintaining its premises and to make a reasonable inspection of the equipment. This had nothing to do with the hospital rendering professional services for which it is licensed. The appellate court found the negligent act alleged one of general negligence and not professional negligence as defined by MICRA, and therefore, the claim was not subject to the statute of limitations for professional negligence.
Practical note: Claims for professional negligence must be based on acts which occur in the rendering of professional services for which the health care provider is licensed.
The opinion can be viewed there: Flores v. Presbyterian Intercommunity Hospital
Broadway Musical Shines Spotlight on Fair Use
By: Nicole M. Charney
The United States Ninth Circuit Court of Appeal affirmed a Central District of California District Court order granting summary judgment and award of attorneys’ fees in a copyright infringement suit regarding the use of a seven-second clip of Ed Sullivan’s introduction of the Four Seasons in The Ed Sullivan Show. The clip was used in a musical, Jersey Boys, a dramatization about the Four Seasons, to mark an historical point in the band’s career.
The defendant asserted the defense of “fair use” under 17 U.S.C. § 107, which lists four factors to determine a fair use of copyrighted work: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used; and (4) the effect of the use upon the potential market for or value of the copyrighted work. First, the court found that the use “put the clip to its own transformative ends” as a “biographical anchor.” Second, the clip conveyed mainly factual information as opposed to fictional stories, which go to the core of intended copyright protection. Third, the appellate court found the seven-second clip “hardly qualitatively significant,” as Sullivan simply identifies the group that is about to perform, and the copyright holder sought to protect Sullivan’s charismatic personality, which itself is not copyrightable. Fourth, the clip does not impact the market for the original work or deprive the copyright holder of a derivative use because Jersey Boys is not a substitute for The Ed Sullivan Show, the clip is seven seconds long, it appears only once in the play, and does not allow for repeated viewing of the clip. The Ninth Circuit appellate court found that all four factors favored a finding of fair use, noting that “this case is a good example of why the ‘fair use’ doctrine exists.”
The fair use doctrine is “an integral part of copyright law precisely because it gives authors ‘breathing space within the confines of copyright’ to build upon their predecessors’ works.”
Practical Tip: The use of a seven-second television clip in a biographical production constitutes “fair use” when the use of the clip is for its historical significance and does not usurp the demand for the original clip.
The opinion can be found there: SOFA Entertainment, Inc. v. Dodger Productions, Inc.
Law Enforcement Personnel Have no Duty to Come to the Aid of Another Unless a Special Relationship Exists.
By: Philip H. Lo
The California Court of Appeal, Fifth District affirmed the trial court’s order sustaining a demurrer by the California Highway Patrol (CHP) and dismissing an action on the grounds that no duty of care was owed to bus passengers. The CHP 911 operator failed to enter the code for a lane blockage, delaying CHP response, resulting in a collision between a bus and an overturned SUV blocking one lane.
The appellate court held that the CHP did not owe the bus passengers a duty of care. California rules concerning the duty, or lack thereof, to come to the aid of another apply to law enforcement personnel. The special relationship must be created before the CHP owes a duty of care. A special relationship arises when law enforcement personnel voluntarily assume a protective duty, where an express promise has induced reliance or when the actions of the law enforcement personnel have placed a person in peril or increased the risk of harm.
The special relationship rule is narrow and reserved for unusual cases. The appellate court found no special relationship between the CHP and the bus passengers, holding that the CHP is not an insurer of safety on the highway, but rather an enforcer of the Vehicle Code.
The full opinion can be viewed there: Greyhound Lines, Inc. v. Dept. of California Highway Patrol
Determination of Prevailing Party for Award of Attorney’s Fees per Contract Does Not Include Promissory Estoppel Claim
By: Philip H. Lo
The California Court of Appeal, Fourth District, reversed an order for contractual based attorney’s fees awarded to the prevailing party. The plaintiff prevailed on its promissory estoppel claim, but lost on its claim for breach of contract. The trial court awarded attorney’s fees to plaintiff and denied the defendant's request, finding plaintiff the “prevailing party” based on a net positive monetary award to the plaintiff.
The appellate court held that the promissory estoppel claim, while similar in many ways to a contract claim, was not based on the contract and, thus, the award of damages for that claim could not be considered when determining the prevailing party of the contractual claims. In excluding promissory estoppel from classification as a contractual claim, the appellate court concluded that the defendant, having defended the breach of contract claims, was the prevailing party for purposes of awarding attorney’s fees under California Civil Code section 1717 for “actions on a contract.”
Practical note: Attorney’s fees provisions in contracts will only benefit the prevailing party of those claims based on or arising out of the contract itself.
The opinion can be viewed there: Barnhart v. CMC Fabricators
Negligent Infliction of Emotional Distress? Only if the Bystander knows why.
By: Philip H. Lo
The California Court of Appeal, Second District, affirmed summary judgment granted to a manufacturer against a cause of action for Negligent Infliction of Emotional Distress, finding that the plaintiff did not know, at the time of the injury, that the defective product caused the injury. While scuba diving with her brother, plaintiff witnessed his death and believed he had suffered a heart attack. The plaintiff did not know at the time that the defective part had cut off the oxygen supply, causing her brother’s death.
The appellate court followed the California Supreme Court’s rationale in Thing v. La Chusa (1989) 48 Cal. 3d 644, which set forth three mandatory requirements to state a claim for negligent infliction of emotional distress (NIED). Plaintiff failed to satisfy the second mandatory requirement that the plaintiff must be present at the scene of the injury-producing event at the time it occurs and is then aware that it is causing injury to the victim. Following the reasoning set forth in medical malpractice actions regarding bystander NIED, the appellate court held that the plaintiff must actually have a contemporaneous awareness of the causal connection between the defendant’s actions and the victim’s injuries.
Practical Note: Stand-alone claims for NIED by bystanders are vulnerable to summary judgment where plaintiff had no knowledge what caused the injury.
The opinion can be viewed there: Fortman v. Forvaltningsbolaget Insual AB
More Uses for the Assumption of Risk Doctrine in California
By: Guy N. Webster
The California Supreme Court applied the primary assumption of risk doctrine, which previously had been applied in lawsuits involving primarily sports activities, to “non-sport” recreational activities. The Supreme Court decision addressed a split in the California Courts of Appeal on whether the primary assumption of risk defense was limited to so‐called “active sports.”
The plaintiff, who fractured her wrist while riding as a passenger in a bumper car at an amusement park, sued the park operator on theories of negligence and common carrier liability alleging that the operator should have employed available, additional safety measures. The defendant obtained summary judgment, on the basis that plaintiff assumed the risk of injuries from bumper car collisions. The Court of Appeal reversed the trial court, following a line of intermediate appellate decisions limiting the primary assumption of risk defense to “active sports,” holding that riding bumper cars did not qualify as an “active sport”.
In reversing the Court of Appeal, the California Supreme Court held that primary assumption of risk applies to non-sport recreational activities involving an inherent risk of injury to voluntary participants where the risk cannot be eliminated without altering the fundamental nature of the activity. The Court examined the public policy behind the assumption of risk doctrine and recognized that the public policy behind the doctrine is to avoid a chilling effect on activities which have certain inherent dangers, lest the imposition of liability fundamentally alter the nature of the activity or inhibit vigorous participation. The Nalwa Court concluded that the primary assumption of risk defense applies “squarely to injuries from physical recreation, whether in sports or non-sports activities.”
The Court declined to apply the heightened standard of common carrier liability to the defendant in relation to the bumper car ride. The Court also rejected the position that primary assumption of the risk should not apply to defendants who are subject to state safety regulations, such as amusement parks.
Practical note: The Assumption of Risk Doctrine now applies in a wider range of activities, not previously associated with “active sports”, with the new scope extending to activities with an inherent risk of injury to voluntary participants.
The decision can be viewed there: Nalwa v. Cedar Fair, LP
Corporate representative Is Not Personally Bound By an Oral Settlement Agreement Entered Into On Behalf of the Corporation
By: Philip H. Lo
The Court of Appeal, Sixth District, overturned a court order compelling the individual representative of a non-profit organization to execute a settlement agreement in his individual capacity. The individual representative had not appeared before the court personally and was not a party to the underlying action. Oral settlement agreements between corporations, affected through individual representatives, bind only the corporations and not the representatives personally.
Since the trial court did not have personal jurisdiction over the corporate representative as an individual it could not compel him to execute the settlement agreement. The appellate court distinguished its holding from the rule set forth in Teitelbaum Furs, Inc. v. Dominion Ins. Co. (1964) 231 Cal. App. 2d 80, which held that where an appellant was not aggrieved by the portion of the judgment it was appealing, it has no standing to appeal. This appellate court held that a corporation has a valid interest in the accurate enforcement of a settlement agreement, giving it standing to appeal an order compelling execution of the settlement agreement even if it was not aggrieved by the order.
Practical note: Corporate representatives must be wary of the roles they assume on behalf of the corporation, lest they unwittingly place themselves personally at risk.
The opinion can be viewed there: Canaan Taiwanese Church v. All World Mission
Construction Defect Plaintiff Must Comply with California Civil Code Section 910 (SB 800), especially the notice of claim requirement, Before the Developer’s Mandatory Disclosure Obligations are triggered
By: Philip H. Lo
The California Court of Appeal, First District, denied a petition seeking writ relief from an order staying a construction defect lawsuit pursuant to Civil Code Section 930. Known as SB 800, California Civil Code Section 910, et seq. provides for a pre-litigation procedure to address construction defect claims.
Plaintiffs had failed to provide statutorily mandated notice of claim before filing the underlying action upon the developer’s failure to meet its disclosure obligation under Civil Code Section 920. The developer noted that its disclosure obligation was premature, as plaintiff failed to provide written notice of a claim in accordance with the statute. While the disclosure obligation did not specifically require proper notice of claim, the appellate court held that proper notice was nevertheless required.
Practical note: The statutory notice requirements and pre-litigation procedure set forth in Civil Code Section 910, et seq. (SB 800) must be followed before the developer’s statutory obligations are triggered.
The opinion can be viewed here: Darling v. Superior Court (Western Pacific)
No Duty to Defend Claim for Advertising Injury If There is No Potential for Coverage
By: Philip H. Lo
The California Court of Appeal, Second District, affirmed a summary judgment granted to the insurer, finding that the insurer did not owe a duty to defend because there was no potential for coverage of a lawsuit for “advertising injury” when there had been no disparagement. The insured sued for declaratory relief seeking a determination that the “advertising injury” clause of the insurance policy required the insurer to provide a defense for its insured against a claim that the insured’s advertisements disparaged another company’s products.
The appellate court found that the advertisements at issue contained no reference to the other company’s product or name and, thus, no disparagement occurred. To prevail, the insurer had to establish the absence of a potential for coverage, proving that the policy cannot provide coverage for the underlying claim. In challenging a recent appellate decision (Travelers v. Charlotte Russe (2012) 207 Cal.App.4th 969), the appellate court questioned how a reduction in price constituted disparagement. In the absence of advertisements that actually identified and disparaged another’s product or name, there can be no potential for coverage; and, therefore, no duty to defend.
Practical note: To prevail against a claim for breach of duty to defend an “advertising injury” claim, the insurer must establish an absence of a potential for coverage, with the allegations and facts known.
The opinion can be viewed there: Hartford Cas. Ins. Co. v. Swift Distribution, Inc.
