The Appellate Court for the Second District has held that the measure of economic damages for a plaintiff that chooses to obtain medical services outside of his or her insurance plan is the reasonable value of the services. Pebley v. Santa Clara Organics, LLC, et al. (2018) 22 Cal.App.5th 1266. As many practitioners are familiar, under Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, 566 (Howell), the measure of economic damages for an injured plaintiff is the amount paid by the insurer for medical services. The amount charged by the medical providers is not considered to show past or future medical expenses or the potential value of noneconomic damages. (Id. at p. 567; Corenbaum v. Lampkin (2013) 215 Cal.App.4th 1308, 1330-1331 (Corenbaum). On the other hand, for an uninsured plaintiff the measure of economic damages is the reasonable value of the medical services rendered or expected to be rendered, and the uninsured plaintiff may introduce the amounts billed for medical services. Bermudez v. Ciolek (2015) 237 Cal.App.4th 1311, 1330-1331 (Bermudez).

In Pebley, plaintiff was injured when his motor home was rear-ended by the driver of defendant's truck on the 126 freeway in Ventura County. Plaintiff received medical treatment and 3-level cervical fusion surgery on a lien basis from doctors and the hospital, which were outside of his insurance plan.

In Pebley, the trial court extended the ruling in Bermudez. The Pebley court acknowledged dicta in Howell, wherein that court opined that as "an element of fortuity," a tortfeasor who injures an insured person may pay less for medical expenses than a tortfeasor that inflicts the same injury on an uninsured person. Id. at p. 1274. The appellate court reasoned that an uninsured plaintiff must present additional evidence, generally expert testimony, to support that the amount of medical services billed is the reasonable value of services rendered, and that he or she should be permitted to introduce that testimony. The defendant can then test that evidence under cross-examination and through rebuttal expert testimony.

The court considered defendants' argument that plaintiff failed to mitigate his damages by receiving treatment with medical providers outside of his insurance plan. However, defendants did not cite authority that plaintiff's treating with providers outside of his plan was a failure to mitigate damages. Defendants conceded that plaintiff had a right to choose his medical providers, and that he was entitled to recover either the lesser of the amount paid for medical services or their reasonable value. The court found it irrelevant that plaintiff chose to pay out-of-pocket rather than use his insurance, and thereby, rejected defendants' argument that he failed to mitigate his damages. Id. at p. 1277-1278. The court stated that a plaintiff cannot be forced to use his or her insurance to obtain medical treatment for injuries caused by a tortfeasor. Where a plaintiff chooses to be treated by a provider outside of his or her insurance plan, the court held that the plaintiff is in the same position as an uninsured plaintiff and should be classified as such under the law. The court thought it inequitable to consider plaintiff as insured when he himself would have been responsible for the bills.

The Pebley case should be considered by both plaintiff and defense attorneys in personal injury actions as they engage in settlement negotiations and prepare for trial. The party responsible for paying for a plaintiff's medical expenses becomes a much more crucial question.