“Howell” Cap on Medical Damages Applied Before Reduction for Failure to Mitigate

April 15, 2013

By:  Paul Lipman

On 4/8/13, the First District in Luttrell v. Island Supermarkets addressed how mitigation of damages is to be subtracted from the recovery under the California Supreme Court “Howell” ruling limiting plaintiffs to the discounted amounts insurance or Medi-Cal pays doctors in full satisfaction of plaintiff’s debt.  In essence, the case holds that where the jury finds that the plaintiff is partially responsible for his damages because of failure to mitigate, the order of reductions is:  (1) First, reduce all the medical billings to the amount paid by insurance or Medi-Cal (or other government program, or worker’s compensation) to pay off the doctors.  Let’s say the original billings were $100,000 and insurance paid the doctors at the discounted insurance rates at $30,000.  So the total recoverable for plaintiff is now a maximum of $30,000.  (2) Next, apply the failure-to-mitigate percentage to the total.  So, let’s say the jury finds that 50% of plaintiff’s damages are due to due to plaintiff’s failure to do something to avoid damages.  That means that the $30,000 is now discounted by 50%, and the defendant owes plaintiff $15,000.  Very simple, but plaintiff had argued that mitigation should have been taken off the original undiscounted billings, and then to apply the Howell procedure of reducing those billings to amounts paid to discharge them.  It turns out that in Luttrell, doing it plaintiff’s way would have made him a little more money, enough to put him over the top on his “998” offer to compromise, and thus would have earned him very substantial costs recovery.

In Luttrell, an already disabled plaintiff (used one or two canes, was supposed to be using a walker but didn’t, and sometimes used a wheelchair) slipped and fell in defendant’s market trying to exit the automated doors, breaking his hip. He was operated on and underwent physical therapy, incurring $177,403 for the hip treatment.  Upon discharge from physical therapy he was told to do exercises and stretching and walk every day, but plaintiff admitted that he did not do the leg exercises or other things.  He was also told to use a special pillow to prevent ulcers.  He developed a skin ulcer on his leg (common with bedridden patients or others who do not move enough).  He was re-hospitalized and incurred $513,145 for the ulcer, totaling $690,548.   The court granted defendant’s motion to reduce the specials to the amounts paid by Medi-Care ($138,082), and then took 50% off of the ulcer-treatment portion of that reduced amount for failure to mitigate.  This was held proper on appeal.