Katiuzhinsky v. Perry

In Katiuzhinsky v. Perry (2007) 152 Cal.App.4th 1288, the uninsured plaintiffs hurt in an automobile accident obtained medical care. (Id. at pp. 1291-1292.) The healthcare providers secured a lien against any personal injury recovery by plaintiffs, then sold plaintiffs' accounts at a discount to a firm specializing in such transactions (MedFin). (Id. at pp. 1291-1293.) "The trial court ruled that as to the bills sold to MedFin, the only admissible evidence of plaintiffs' damages for medical expenses would be the amounts MedFin paid the medical providers to acquire their liens." (Id. at p. 1293.) Concomitantly, applying Hanif/Nishihama, the trial court limited plaintiffs' recovery for medical care bills sold to MedFin to the amount MedFin paid for such accounts. (Katiuzhinsky at p. 1296.) The Katiuzhinsky appellate court found error in the trial court's application of Hanif/Nishihama because plaintiffs remained liable for the full amount billed; MedFin's purchase of the accounts at a discount did not reduce the amount owed by plaintiffs. (Katiuzhinsky at pp. 1296-1297.) In Katiuzhinsky v. Perry (2007), personal injury plaintiffs received services from medical providers who secured a lien against any recovery in plaintiffs' personal injury actions. Some of the providers later sold plaintiffs' accounts, at a discount, to a financial services company. The providers wrote off the balance but plaintiffs remained liable to the financial services company for the full costs of their medical bills. The Court of Appeal held that "the intervention of a third party in purchasing a medical lien does not prevent a plaintiff from recovering the amounts billed by the medical provider for care and treatment, as long as the plaintiff legitimately incurs those expenses and remains liable for their payment." (Id. at p. 1291.) The trial court limited the plaintiffs' recovery for medical care bills sold to MedFin to the amount MedFin paid for the accounts. (Id. at p. 1296.) The appellate court found error in the trial court's ruling because there was evidence the plaintiffs remained liable for the full amount billed; MedFin's purchase of the accounts at a discount did not reduce the amount owed by the plaintiffs. (Id. at pp. 1296-1297.) The plaintiffs should have been entitled to argue to the jury that "the amounts charged to and incurred by them ... represented the reasonable value of the medical services provided." (Id. at p. 1298.)