IN THIS ISSUE:
By: Paul T. McBride
Under California law, an award of attorney's fees is typically not available to a prevailing party at trial. The most common exceptions to this rule are statutes authorizing recovery of attorney's fees for particular actions and contracts authorizing recovery of attorney's fees in breach of contract actions. However, in personal injury lawsuits, the loser typically does not pay the winner's attorney's fees.
A rather obscure provision in the discovery sections of the Code of Civil Procedure can provide a back door for recovery of attorney's fees, including in personal injury cases. The provision is Civil Code Section 2033.420, dealing with a party's failure to admit the truth of a matter when requested to do so in a pre-trial Request for Admission.
Under CCP 2033.420, if a party fails to admit the truth of a relevant matter, thus forcing the other side to prove the truth of the matter at trial, the party requesting the admission may obtain a court order requiring the non-admitting party to pay the reasonable expenses incurred in making that proof at trial, including reasonable attorney's fees. The court may award such fees unless it finds that the non-admitting party "had reasonable grounds to believe that that party would prevail on the matter." Both plaintiff and defense attorneys should be aware of this provision, in particular, those defense counsel who refuse to admit liability even when it is staring them in the face.
A recent Court of Appeals case, Grace v. Mansourian, illustrates this point nicely. Mr. Mansourian, the defendant, drove his car into an intersection and struck a car driven by Mr. Grace, the plaintiff. Mr. Mansourian told the responding police officer the light was yellow when he entered the intersection. An eyewitness, Ms. Napoli, told the police officer the light was red. She made this statement in the presence of Mr. Mansourian, who responded, "I ran a red light?" Ms. Napoli said, "Yes, you did." Mr. Mansourian did not reply. This conversation was included in the responding police officer's report, who found Mr. Mansourian at fault for the accident.
Mr. Grace sued Mr. Mansourian for the personal injuries he sustained in the accident. His attorney served Requests for Admissions upon Mr. Mansourian requesting Mr. Mansourian to admit 1) that he ran the red light, 2) that he was negligent in doing so, and 3) that his negligent conduct caused Mr. Grace's injuries. Mr. Mansourian denied all three Requests for Admission.
At trial, Mr. Mansourian's attorney told the jury the case was one of credibility. If they believed Mr. Mansourian's testimony that the light was yellow when he entered the intersection, they should find him not negligent. However, if they believed Ms. Napoli's testimony that the light was red, they should find him negligent.
The plaintiffs called the plaintiff, the eyewitness, the investigating officer, and an accident reconstruction expert to prove their side of the case, i.e. that Mr. Mansourian ran a red light. The defense did not designate a liability expert. Instead, they merely put Mr. Mansourian on the stand to repeat his claim that the light was yellow when he entered the intersection. The jury did not believe him. They found him liable.
After trial, Mr. Grace's attorneys moved the court for an award of attorney's fees under CCP 2033.420, arguing that Mansourian had no reasonable basis to refuse to admit that the light was red or that he was negligent. They sought over $170,000 for the attorney's fees Mr. Grace subsequently incurred in having to prove these two facts at trial.
The trial court refused to award attorney's fees to the plaintiff. It held that Mr. Mansourian had the right to have a jury decide his claim that the light was yellow.
On appeal, the trial court's ruling was reversed and the case remanded with instructions that Mr. Grace be awarded the amount of attorney's fees and other expenses he incurred because of Mr. Mansourian's wrongful refusal to admit he ran the red light and to admit he was negligent. According to the Court of Appeals, the evidence against Mr. Mansourian was overwhelming. There was not simply Ms. Napoli's eyewitness testimony, but also that of the accident reconstruction expert and the investigating police officer.
The court stated that it is not sufficient grounds to deny a request for admissions to merely have "some evidence" to contest an issue. Rather, the defendant must reasonably believe he will prevail on the issue at trial. Otherwise, he is simply wasting the court resources and the jury's time, which is exactly what Requests for Admission are designed to prevent. A good faith belief means, it said, "more than a hope or a roll of the dice."
The lesson to be learned from this case for a defense practitioner is to be objective in evaluating liability. If your case is a pure loser, refusing to admit liability can cost your client attorney's fees on top of all other recoverable damages, often doubling or even tripling the client's ultimate exposure.
By: Grant R. Mullen
In Bermudez v. Ciolek (No. G049510, filed June 22, 2015, Superior Court Case No. 30-2012-00539759), the California Court of Appeal, Fourth Appellate District, Division Three, held that an uninsured plaintiff's (no medical insurance) unpaid medical bills, substantiated by medical expert testimony regarding the reasonableness and necessity of the medical charges, were properly admitted and were sufficient evidence to support an award of damages.
This case arises from a motor vehicle accident when two vehicles collided at a light controlled intersection. Defendant Ciolek was travelling westbound making a left hand turn. Defendant Heacox was travelling eastbound. Ciolek turned and stopped in front of Heacox. Heacox struck Ciolek's vehicle and veered towards the sidewalk where plaintiff Bermudez was astride his bicycle striking the plaintiff. Bermudez suffered very serious injuries as a result of the accident. Bermudez had no medical insurance at the time of the accident. Bermudez sued both defendants for negligence.
At trial, neither defendant filed a motion in limine to exclude the medical bills and charges. None of these charges had been paid at the time of trial. The parties stipulated to the admissibility (not the reasonableness) of plaintiff's summary of past medical bills totaling $445,430.64. The parties also stipulated to the reasonableness (not just the admissibility) of $15,000.00 in recent medical charges not reflected in Ex. 239. Accordingly, plaintiff's claim for past medical expenses exceeded $460,000.00 at trial. Plaintiff's expert medical witnesses testified (without objection) to the fairness and reasonableness of the medical expenses incurred by plaintiff, up to $414,255.59. Plaintiff's experts found $46,175.41 of the medical charges to be too high, hence not reasonable, so plaintiff argued past medical expenses of $414,255.59 to the jury. Defendants argued that the amounts were not reasonable and disputed the services as medically necessary.
The jury returned a special verdict against Ciolek only, in the amount of $3,751,969. This included past medical expenses of $460,431.00, which was $46,175.41 in excess of what plaintiff's experts testified was fair and reasonable. Ciolek appealed, claiming the verdict was based on insufficient evidence to prove the reasonableness and necessity of the charges and that plaintiff's experts lacked the necessary foundation to show the medical treatment charges were within the "market value" for such medical services.
The Court of Appeal rejected Ciolek's bid for a new trial. But, because $46,175.41 of the judgment was not supported by substantial evidence, the damage award was reduced to $3,706,793.60, with the judgment affirmed as modified and the Court held that (1) the jury verdict finding Heacox negligent but not a "substantial factor" in causing the plaintiff's harm was not inconsistent and was based on substantial evidence; that according to Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4 th 541 ("Howell") and its progeny; (2) unpaid medical costs and expenses are admissible when offered into evidence by an uninsured plaintiff (insured plaintiffs can only seek to admit medical expenses paid by the plaintiff or his insurance carrier for the medical services received or still owing at the time of trial) ( Howell, supra, 52 Cal.4 th at p. 566); and (3) the summary of the medical bills and the plaintiff's medical expert testimony concerning the bills was sufficient evidence to support the jury's finding that the medical bills were the reasonable value of the medical services provided. The Court rejected Ciolek's argument that a proper foundation had not been set by plaintiff's experts to give the opinions they gave at trial. Further, the Court found that Ciolek was unable to pursue this argument on appeal because appropriate objections were not made at trial. No motion in limine was filed and no objections or motions to strike were made on relevance or lack of foundation.
This case raises several important issues:
- The insured plaintiff can only recover the amount actually paid by the plaintiff or plaintiff's insurer as medical expenses per Howell. The uninsured plaintiff is not so fettered. He can receive all past medical expenses incurred if the jury finds they were reasonable and necessary. Howell recognized that, all other factors being held equal, the amount recovered by an uninsured plaintiff may be higher than that recovered by an insured plaintiff: "There is, to be sure, an element of fortuity to the compensatory damages the defendant pays under the rule we articulate here. A tortfeasor who injures a member of a managed care organization may pay less in compensation for medical expenses than one who inflicts the same injury on an uninsured person treated at a hospital (assuming the hospital does not offer the person a discount from its chargemaster prices). But, as defendant notes, '[f]ortuity is a fact in life and litigation'"(Id. at 566).
- Unpaid medical expenses, standing alone, cannot serve as a basis for a jury verdict awarding economic damages for medical expenses. The plaintiff must lay a foundation, by expert medical testimony that the charges are reasonable and fall within the market value of such medical services and that the subject medical services were medically necessary.
- Counsel must depose the medical experts thoroughly and question the expert's foundation concerning the medical charges for reasonableness and necessity. If the expert's opinions concerning reasonable value of the services does not reflect the actual market rates for those services, motions in limine should be filed and objections timely made at trial to preserve the record. Further, counsel should request the trial court to allow questioning of the expert under Evidence Code Sections 402 and 803 to test the foundational underpinnings of the expert's opinions before they are presented to the jury. The trial court is the "gatekeeper" and it is counsel's job to help the "gatekeeper" carry out this function properly.
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