California Supreme Court to Hear Controversial Case Regarding Victims’ Compensation: Closely Watched Case Could Result in Windfall Damages in Personal...

The state’s legal community and insurance industry will be watching closely on Tuesday, May 24, 2011, when the California Supreme Court reviews Rebecca Howell v. Hamilton Meats & Provisions, Inc. (case S179115, Supreme Court of California), a precedent-setting case regarding accident victims’ compensation which legal experts say could significantly change how damages are awarded.

Attorney Robert Tyson of Tyson & Mendes, LLP, representing Hamilton Meats, and Gary Simms, representing plaintiff Rebecca Howell, will face off in front of the High Court, arguing a case which could potentially cost insurers and businesses billions of dollars every year.

The case has been under intense scrutiny by both the insurance and legal communities since the Court of Appeals, Fourth Appellate District, reversed a long standing practice allowing personal injury plaintiffs to recover only the amount of medical bills paid by a private health insurance company – versus the total medical expenses charged.

In response to the controversial reversal – which ignited much debate when it was announced in November 2009 -- the law firm of Tyson & Mendes filed a petition for review in December 2009. The State Supreme Court justices voted unanimously to hear that appeal.

According to Robert Tyson, the San Diego-based attorney who filed the petition, the case involves a standard practice in which hospitals bill significantly more than they ever receive from health insurance companies.

Recent appellate court decisions held that plaintiffs may recover not just what is actually paid by the insurance companies, but the full amount of the medical bills, which is typically significantly higher. “Requiring defendant businesses and their insurance companies to pay the total medical bills, which no one ever pays, as opposed to the actual and reasonable medical expenses, grants a super windfall to plaintiffs and their attorneys,” Tyson states.

Tyson says that the issue of payment of medical services is a key component of virtually every personal injury case in this state. Not surprisingly, he says, the law has been in flux since the appellate court decision made news in late 2009. “Insurance companies, businesses, city governments and their legal experts are all watching this case carefully, as insurance costs could skyrocket based on its final outcome. The effect on California consumers could be devastating.”

The appellate court’s ruling involved Rebecca Howell, a San Diego woman who was injured when a truck driven by an employee of Hamilton Meats made an illegal U-turn and hit her car in Encinitas, California. She subsequently underwent numerous surgeries, accruing medical bills totaling nearly $190,000. Her health insurance company settled with the hospital for payment of $59,691, which is standard in such cases.

The motion was later appealed and reversed by the appellate court, which found Howell was entitled to the entire $190,000, marking the first time such an appeal has been granted.

This ruling could have lasting ramifications for individuals, insurance companies and the overall economic climate in California, Tyson notes. “If corporate defendants and insurance companies are now mandated to pay the full medical bills – often three to five times higher than what is actually paid and accepted – consumers will ultimately suffer the consequences, paying more in expensive goods and services and insurance premiums.”

The California Supreme Court has 60 days from Tuesday’s hearing to render its decision.

About Tyson Mendes LLP

Established in 1998, Tyson & Mendes LLP is a minority-owned law firm specializing in business litigation, including commercial and general civil litigation, employment, construction, casualty and products liability, insurance, professional liability, environmental, and automobile and premises liability. With offices in San Diego, Los Angeles, and Riverside, the firm handles litigation throughout all of California. Clients of the firm include corporations, insurance companies, and private individuals. For more information, visit http://www.tysonmendes.com.