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California Issues New Opinion Regarding Recovery of Past Medical Expenses

Ochoa v. Dorado (July 22, 2014, B240595) ___ Cal.App.4th ___

The California Court of Appeal, Second Appellate District, Division Three (Los Angeles), issued an opinion in Ochoa v. Dorado (July 22, 2014, B240595) ___ Cal.App.4th ___, analyzing the issue of damages for past medical expenses. The court concluded “that (1) unpaid medical bills are not evidence of the reasonable value of the services provided and (2) no expert witness declaration is required for a treating physician offering an opinion based on facts acquired in the physician-patient relationship or otherwise acquired independently of the litigation, including, to the extent it is otherwise admissible, an opinion on reasonable value.” (Slip opn., p. 2.)

This case arose out of injuries sustained after defendant rear-ended plaintiffs, husband and wife, on the freeway. (Slip opn., p. 3.) Plaintiffs sued defendants for negligence and loss of consortium. (Ibid.) Plaintiffs named numerous treating physicians as expert witnesses and designated a retained expert on the subject of economic damages, but did not designate a retained expert to testify on the reasonableness of their medical expenses. The trial court granted defendants’ motions in limine, excluding testimony by plaintiffs’ non-retained treating physicians on any expert opinions that were not formed at the time of and for purposes of treatment and excluding evidence of the reasonable amount of plaintiffs’ medical expenses. (Id. at pp. 4-5.) The jury returned a verdict in favor of plaintiffs awarding damages for past medical expenses, past noneconomic damages, future medical expenses, future noneconomic damages, future lost earning capacity and future household services. (Id. at p. 7.) The trial court granted defendants’ new trial motion as to medical damages, loss of earnings, and household expenses damages. (Id. at pp. 9-10.) The trial court also granted defendants’ motion to strike the awards of noneconomic damages. (Id. at p. 11.) Both parties appealed. (Ibid.)

The Court of Appeal found that the JNOV and new trial motions were premature, the order striking the award of noneconomic damages was nonappealable, and that there was no judgment to appeal. (Slip opn., pp. 12-16.) Nevertheless, the court addressed two important legal questions “likely to arise again in postjudgment motions on remand.” (Id. at p. 16.) The court first determined that “the full amount billed, but unpaid, for past medical services is not relevant to the reasonable value of the services provided.” (Id. at p. 19.) The court explained that “this rule is not limited to circumstances where the medical providers had previously agreed to accept a lesser amount as full payment for the services provided. Instead, the observations of Howell [v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541], and the reasoning in Corenbaum [v. Lampkin (2013) 215 Cal.App.4th 1308], . . . compel the conclusion that the same rule applies equally in circumstances where there was no such prior agreement.” (Slip opn., p. 19.) Therefore, “evidence of unpaid medical bills cannot support an award of damages for past medical expenses.” (Id. at p. 24.)

Further, the appellate court concluded that “no expert witness declaration is required for treating physicians to the extent that their opinion testimony is based on facts acquired independently of the litigation, that is, facts acquired in the course of the physician-patient relationship and any other facts independently acquired.” (Slip opn., p. 26.) The court determined “that this includes an opinion as to the reasonable value of services that the treating physician either provided to the plaintiff or became familiar with independently of the litigation, assuming that the treating physician is qualified to offer an expert opinion on reasonable value.” (Ibid.) The court explained that “treating physician who has gained special knowledge concerning the market value of services through his or her own practice or other means independent of the litigation may testify on the reasonable value of services that he or she provided or became familiar with as a treating physician, rather than as a litigation consultant, without the necessity of an expert witness declaration.” (Id. at pp. 26-27.) Here, the trial court erred in precluding a “nonretained treating physician from testifying on the reasonable value of their medical services provided to plaintiffs.” (Id. at p. 27, italics in original.) The Court of Appeal reversed the order granting a partial new trial and the denial of the JNOV, dismissed plaintiffs’ appeals from the order striking the awards of noneconomic damages and defendants’ appeal from the judgment, and directed the trial court to enter judgment promptly on remand. (Id. at p. 28.)

The precedential value of the decision addressing past medical damages and expert testimony seems questionable because it appears irrelevant to the court’s nonjurisdictional portion of the opinion. Generally, “[t]he doctrine of stare decisis extends only to the ‘ratio decidendi’ of an opinion—i.e., the principle or rule that constitutes the basis of the decision. An appellate court dictum (a portion of the opinion not essential or relevant to the court’s decision on the merits) has no precedential effect.” (Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2013) ¶ 14:196, p. 14-82 citing Western Landscape Construction v. Bank of America Nat. Trust Savings Assn. (1997) 58 Cal.App.4th 57, 61 [“Only statements necessary to the decision are binding precedents; explanatory observations are not binding precedent”].) The exception to this rule requires the court to address all legal issues that will arise on retrial, even if appellate resolution of these issues is not “necessary” to the decision whether to affirm or reverse. (Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs, supra, ¶ 8:207, p. 8-146; Code Civ. Proc., §43 [“On reversal of a judgment and remand for retrial, appellate courts are required to determine all questions of law that are necessary to final determination of the case”].) However, this case is not technically on a remand for retrial. Therefore, the exception may not apply. This opinion is not yet final and can be challenged by way of a petition for rehearing and/or petition for review.

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