Strategies, Challenges, and Answers

Collateral Source Is Still Good Law Despite Tri-County Equipment Decision

Billed vs Paid

Following the California case of Howell v. Hamilton Meats & Provisions, Inc., 52 Cal. 4th 541, 257 P.3d 81, 128 CalRptr. 3d 658 (2011), the Nevada Law Blogs began wondering if Nevada would follow California’s lead and prohibit Plaintiff’s attorneys from introducing evidence of any medical bills that had been partially or totally forgiven by Plaintiff’s medical provider.  Then came the Nevada case of Tri–County Equip. & Leasing, LLC v. Klinke, 128 Nev. Adv. Op. 33, 286 P.3d 593 (2012). We questioned whether this case would become the vehicle for the Nevada Supreme Court to adopt the Howell precedent and thereby prevent Plaintiffs from offering as evidence the amount of any medical bills that had been written down or forgiven.

But the wholesale adoption of the Howell case was not to be.  Instead, the Nevada Supreme Court, in a narrow legal ruling, kicked the can down the road.  The Nevada Law Blogs felt that a final decision on the billed vs. paid question would have to wait for another day.

However, disagreeing with the Nevada Law Blog’s interpretation, Wal-Mart argued Tri-County was evidence that Nevada had adopted the Howell rule. In the case of McConnell v. Wal-Mart Stores, Inc., 995 F.Supp.2d 1164 (D. Nev., 2014), Wal-Mart argued that Tri-County Equipment case went far enough to demonstrate that Nevada had in fact adopted the Howell standard.  Rejecting Wal-Mart’s argument, the court said:

A creditor’s forgiveness of debt—that is what a write-down in the present context amounts to—is often considered equivalent to payment in other contexts. . .In other words, a creditor’s partial forgiveness of a tort victim’s medical bills via a write-down is properly considered a third-party “payment,” evidence of which is barred by the collateral source rule. The Court rejects the Howell Court’s rationale that a write-down is not equivalent to forgiveness of debt because write-downs are prearranged between insurers and providers. See Howell v. Hamilton Meats & Provisions, 52 Cal.4th 541, 129 Cal.Rptr.3d 325, 257 P.3d 1130, 1138–39 (2011).

995 F.Supp.2d at 1170.

In other words, Proctor v. Castelletti, 112 Nev. 88, 911 P.2d 853 (1996) and its strict reading of the collateral source rule is still the law in Nevada as the Nevada Law Blogs had predicted.

The billed vs. paid challenge is but one of many ways to try and reduce recoverable damages based on the amount billed by a Plaintiff’s medical provider.  For more ideas, feel free to contact Mike Mills at 702-240-6060 x114.

About Michael Mills

Mr. Mills practices in the area of civil litigation and appeals, with particular experience in matters involving trucking liability, insurance defense, insurance coverage, premises liability, products liability and defense of personal injury. Mr. Mills is a member of the Trucking Insurance Defense Association, the Defense Research Institute Trucking Committee and the Nevada Motor Transport Association. Mr. Mills is licensed to practice before the Nevada Supreme Court and the Utah Supreme Court. He is also licensed to appear before the United States Supreme Court, the U.S. District Courts for the Districts of Nevada and Utah, as well as the U.S. Court of Appeals for the Ninth Circuit. Mr. Mills has created 3 Blogs for the benefit of the insurance industry. He serves as editor and publisher of the Nevada Insurance Law Blog, the Nevada Coverage and Bad Faith Blog and the Nevada Trucking Law Blog.

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