Lopez v. Safeway Stores, Inc.
129 P.3d 487, 212 Ariz. 198, 2006 Ariz. App. LEXIS 23 (2006)
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Rule of Law:
Under the collateral source rule, an injured plaintiff is entitled to recover the full, reasonable value of medical services billed, not the lesser amount accepted as full payment by the provider pursuant to a contractual agreement with the plaintiff's insurer. A tortfeasor may not benefit from the contractual write-offs an injured party receives from their insurance carrier.
Facts:
- Lydia Lopez slipped and fell while entering a Safeway store, sustaining various injuries.
- Lopez received medical treatment for her injuries.
- Her healthcare providers billed a total of approximately $59,700 for the services rendered.
- Due to contractual agreements between Lopez's medical insurance carriers and her healthcare providers, over $42,000 of the total bill was 'written off as adjustments'.
- The remaining balance of $16,837 was accepted by the providers as full satisfaction of the total bill.
Procedural Posture:
- Lydia Lopez filed a negligence action against Safeway Stores, Inc. in the trial court.
- Before trial, Safeway filed a motion in limine to prohibit Lopez from presenting evidence of medical charges that exceeded the amount actually paid and accepted by her healthcare providers.
- The trial court denied Safeway's motion in limine.
- A summary of Lopez's full medical bills, totaling $59,699.57, was admitted into evidence at trial.
- A jury found in favor of Lopez, awarding $400,000 in damages, which was reduced to a net amount of $360,000 after finding Lopez 10% at fault.
- The trial court entered judgment on the jury's verdict.
- Safeway filed a motion for a new trial, which the trial court denied.
- Safeway (appellant) appealed the judgment and the denial of its motion for a new trial to the Arizona Court of Appeals, with Lopez as the appellee.
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Issue:
Does the collateral source rule permit a personal injury plaintiff to recover damages for the full amount of medical expenses billed by healthcare providers, even when those expenses were satisfied by a lesser amount paid by an insurer due to contractual discounts?
Opinions:
Majority - Pelander, Chief Judge
Yes, the collateral source rule permits a plaintiff to recover the full amount of reasonable medical expenses billed, not just the discounted amount paid by an insurer. The court reasoned that the 'collateral source rule' prevents a tortfeasor from benefiting from payments or benefits the injured party receives from a source independent of the wrongdoer. The contractual discount is a benefit of the plaintiff's insurance, for which the plaintiff provided consideration (premiums), and to allow the tortfeasor to pay the lesser amount would create a windfall for the wrongdoer. The court aligned with the majority of jurisdictions, holding that written-off amounts are a benefit to the insured party and should not reduce the tortfeasor's liability. If a windfall must be had, it should go to the injured party rather than the tortfeasor.
Analysis:
This decision solidifies Arizona's broad application of the collateral source rule to include contractual 'write-offs' from medical bills, aligning the state with the majority of jurisdictions. It establishes a clear precedent that the value of medical services for damages purposes is the amount billed, not the amount paid by insurers after negotiated discounts. This ruling prevents defendants from reducing their liability by leveraging a plaintiff's insurance coverage, thereby reinforcing the principle that a tortfeasor is responsible for the full harm caused and that any benefit from a plaintiff's foresight in obtaining insurance accrues to the plaintiff, not the defendant.
