By: John Ferrante, Esq. & Robert Kimball, Esq.

Competent complex claims litigation managers constantly monitor legal decisions in their areas of responsibility, especially those that potentially impact case values. Recently, one such decision arose in California, and claims litigation managers should take heed.  Since 2011, the rule in California has been a plaintiff with health insurance could only present to the jury as a measure of their economic damages the amount of medical bills their health insurer actually paid. Howell v. Hamilton Meats & Provisions, Inc., 52 Cal. 4th 541 (2011). The amount a medical provider billed was deemed irrelevant to case value unless the Plaintiff was uninsured. Now comes Pebley v. Santa Clara Organics, LLC, No. S249399 in California. Although Mr. Pebley had health insurance, he chose to treat with medical providers outside of his health plan. An intermediate California appellate court ruled that, despite available insurance, Mr. Pebley would be considered uninsured and allowed his full medical bills to be submitted to the jury as a measure of case value. While the defense can still present an expert to rebut the reasonableness of medical bills, this ruling has now presented insured plaintiffs an avenue to artificially inflate the value of their claim by simply choosing to treat with medical providers outside their health plan. As amicus, the US Chamber of Commerce, on behalf of its 300,000 small business members, recently urged the California Supreme Court to reject this decision.  Stay tuned, and claims litigation managers beware.


John Ferrante, Esq. is General Counsel & Vice President, Litigation Management for Energi, Inc. & Robert Kimball, Esq. is AVP, Litigation/Liability Management for Energi, Inc.