Workers’ compensation benefits are now added to the growing progeny of cases arising out of the California Supreme Court’s recent opinion in Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.App.4th 541 (Howell) which limited the amount of medical expenses recoverable by an injured party to the actual amount paid through private insurance. Last week, a California Court of Appeal extended the rationale of Howell and ruled that a plaintiff injured while in the course and scope of his or her employment may only recover the actual amount of medical expenses paid through applicable workers’ compensation benefits.
In Sanchez v. Brooke (2012 WL 745310), Lydia Sanchez, a home health aide, sustained severe burn injuries while working as a live in care giver for an elderly patient of Sanchez’s employer, Glendale Adventist Health, known as Western Health Resources (“Western”). A fire erupted when the elderly patient fell asleep in bed while smoking a cigarette. Sanchez was injured during unsuccessful attempts to save the patient from the fire and later sued the patient’s estate for her injuries. The estate, in turn, asserted an affirmative defense alleging that Western’s negligence was a proximate cause of Sanchez’s injuries as Western failed to take any fire preventative measures.
The jury awarded Plaintiff $903,000 in damages and apportioned 50 percent to the elderly patient and 50 percent to Western. Over the estate’s objection, the trial court entered Judgment of $570,949.87 pursuant to Sanchez’s calculation of the workers’ compensation offset which was applied to the total amount of medical expenses billed. The estate contended the trial court erred in adopting Sanchez’s calculation and that, according to the estate’s calculation, Sanchez was only entitled to receive $290,727.22. The estate argued that the trial court should have applied the workers’ compensation offset on the reduced amount of medical expenses paid through workers’ compensation proceeds. The Court of Appeal, Second District, agreed.
The Court of Appeal analyzed the rationale the California Supreme Court adopted in the Howell opinion noting that, like those insured through private insurance, employees covered through workers’ compensation benefits are “not liable for medical bills incurred as a result of injuries sustained in the course and scope of employment.” Citing language in the Howell opinion, the Court explained that Howell’s rationale was sufficiently broad to compel the same conclusion in employment accidents where the injured employee is covered by workers’ compensation benefits. Consequently, the Court held that where an injured employee’s medical expenses are paid entirely by applicable workers’ compensation benefits, the injured employee may only recover as economic damages the amount of benefits actually paid by the workers’ compensation carrier from a third party tortfeasor.
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