Howell Reduction to Medical Expenses Applies to CCP Section 998 Offers

How does the Howell rule impact Code of Civil Procedure section 998 offers?  The Fifth District Court of Appeal recently answered that question.

The plaintiff served defendants with a $1,000,000 section 998 offer that was not accepted.  Defendants moved in limine under Howell to permit only the introduction into evidence of paid medical bills.  The court denied the motion, concluding that the amount of billed medical expenses was relevant to the question of reasonable past medical expenses, future medical expenses and pain and suffering. [An issue that has still not been completely resolved].  However, the court stated the verdict would be reduced to reflect the amount of paid medical expenses.  Counsel then stipulated that the amount of billed medicals was $274,514.12 and the amount of paid medicals for Lee was $109,251.61.

Plaintiff obtained a judgment totaling $1,027,014.  The jury explicitly found the past economic loss for Lee’s medical expenses totaled $274,514, which was the amount the parties stipulated was billed to her.  A judgment was filed stating plaintiff was entitled to judgment in the amount of  $1,027,014” and also stated  “[t]he judgment is subject to amendment following post trial hearing concerning: 1) Plaintiffs’ motion for pre-judgment interest and costs; and 2) the stipulated reduction for plaintiffs’ past medical expenses.”

Over the defendants objection, the trial court used the full amount of the judgment to determine whether the defendants obtained a more favorable judgment than the section 998 offer.  The Court of Appeal reversed holding  “any negotiated rate differential included in a jury’s verdict should be subtracted from the judgment or award before it is compared to the offer to compromise ‘for the simple reason that the injured plaintiff did not suffer any economic loss in that amount.’  (Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, 548 (Howell).)”  The case is Lee v. Silveira, 2015 Cal. App. LEXIS 423 (Cal. App. 5th Dist. May 15, 2015).