California Court of Appeal clarifies Howell and proceeds to publish Audish v. Macias

California’s Fourth Appellate District published its opinion in Audish v. Macias, clarifying the collateral source rule in personal injury cases. The Court built on the foundation provided by Howell v. Hamilton Meats & Provisions, Inc. finding that evidence concerning a plaintiff’s eligibility for future benefits, like Medicare, is not barred under the collateral source rule. This major development may lead to reduced damages, as the defense will be able to put on evidence that a plaintiff is eligible for future coverage that may affect the cost of treatment for alleged personal injuries. 

Audish arose from an automobile accident. Upon considering the issue of liability, the trial court found that Audish and Macias were both 50% responsible for the accident, and awarded Audish damages in the amount of $65,699.50 USD. Audish appealed the ruling arguing that the trial court erred by partially denying his motion in limine regarding the exclusion of evidence of his future Medicare eligibility and allowing Macias to present evidence that Audish will be eligible for Medicare when he turns 65. This evidence was crucial as Audish’s life care planner calculated his  future medical care without calculating the applicable Medicare rates for the recommended medical care.

The Appellate Court’s Ruling

Collateral source rule

The Appellate Court considered whether or not admitting evidence of future Medicare eligibility violated the collateral source rule. The collateral source rule generally excludes evidence that a plaintiff has received, or will receive, compensation related to his or her injuries from a source other than the defendant. The purpose of the rule is to prevent the defense from unfairly reducing the damages a plaintiff may be awarded.

In its ruling, the Court looked to Howell in which it held that the collateral source rule is not meant to provide credit to a defendant for an amount covered by a third-party, but rather to allow a plaintiff to recover “money an insurer paid to medical providers on his or her behalf.” 52 Cal.4th 541, 551 (2011). The Court reasoned that the evidence regarding Audish’s Medicare eligibility was not evidence of a definite payment made to Audish, or one to be made in the future, but constituted speculative future benefits that constitute admissible evidence under the collateral source rule. It also looked to Cuevas v. Contra Costa County which held that future medical expenses are inherently speculative. 41 Cal.App.5th 971 (2019). In conclusion, the Court found that evidence of Audish’s future Medicare eligibility is a factor to be considered and not evidence of a definite future payment.

Publishing the court’s opinion

The Court also decided, despite intense lobbying from the plaintiffs’ bar, not to “depublish” its opinion in this matter. As such, Audish is precedent in California, and attorneys may cite this opinion in their briefs. The publication of opinions is  significant  in California because pursuant to California Rules of Court, unpublished cases are not citable. For the Court of Appeal, opinions are published if the panel which decided the case or a majority of the  rendering court certifies the opinion for publication before the decision is final in that court. CRC 8.1105(b). The California Supreme Court may overturn and order that an opinion certified for publication is not to be published. CRC 8.1105(e)(2). This process is referred to as “depublication” and it may be initiated either by the Supreme Court on its own volition, or by any person who requests that an opinion be depublished. CRC 8.1125(a).

On August 21, 2024, the Supreme Court heard a petition to review and depublish the Court of Appeal’s opinion in Audish. Ultimately the Court denied the petition and the opinion will be published. Publication of this opinion enshrines the clarification of California Law allowing the admission of evidence about speculative future benefits or similar factors affecting future medical care prices when a jury is considering damages to be awarded.

The opinion’s impact

The Court of Appeal’s clarification on this matter, as well as the Supreme Court’s decision to publish the opinion, will have a major impact on litigation in similar civil cases. In terms of legal arguments, defendants can utilize this argument when submitting evidence that speaks to future medical costs when disputing the quantum of a plaintiff’s alleged damages. Hopefully, this ruling will make for more reasonable settlements in California.