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California Appellate Court Rules on Forcing Personal Injury Plaintiffs to Treat Through Health Insurance

When people in California are injured in accidents because of the negligence or recklessness of other drivers, they may face devastating injuries that require complex treatment. People who file lawsuits in California to recover damages may recover their past and future medical expenses. If they are insured, their damages recovery will be limited to the amounts that their insurance companies have paid rather than the actual value of the care that was provided. In Pebley v. Santa Clara Organics LLC, 2d Civ. No. B277893, the California Court of Appeals ruled in a case on whether an insured plaintiff is required to stay within his or her own medical plan when seeking treatment for injuries following an accident in order to mitigate the resulting damages.

Factual Background

Plaintiff David Pebley was returning with his wife from a camping trip in the couple’s motor home on May 9, 2011. While Pebley’s wife was driving the motor home east on the 126 Freeway in Ventura County, one of the tires flattened. Mrs. Pebley steered the motor home onto the right shoulder of the freeway, turned on her hazard lights and stopped. A portion of the motor home’s rear end was still extending into a part of the lane. Mrs. Pebley saw a tractor-trailer approaching the motor home while traveling at approximately 50 mph in her rearview mirror. The truck crashed into the rear of the motor home with enough force that the passenger seat where Mr. Pebley was sitting broke. David Pebley suffered serious injuries to his back, neck, face and teeth. He was treated at a hospital and then released, but he required ongoing follow-up treatment for injuries to the vertebrae in his cervical spine.

Pebley was insured by Kaiser Permanente, but he chose to get care from an orthopedic spine specialist who was not a member of his insurance plan. The doctor billed on a lien basis, meaning that he expected to be paid out of Pebley’s ultimate personal injury settlement or award. The doctor did not bill the insurance company and expected to be paid by Pebley if his case was not ultimately successful. Pebley filed a lawsuit against Santa Clara Organics LLC, which owned the truck and employed the driver, and the driver for negligence.

The case went to trial. Prior to trial, the plaintiff filed a number of motions in limine, which the defendants opposed. The plaintiff was allowed by the trial court judge to present evidence of his actual medical bills with experts on both sides testifying to the reasonable value or cost of the services. The jury found for the plaintiff and awarded him the full billed amount for his medical expenses. His gross award was $3,644,000. Of that amount, $269,000 was for his past medical expenses, and $375,000 was for his future expected medical expenses. Santa Clara appealed the amount of damages that he was awarded, arguing that he had a duty to mitigate his damages by seeking treatment within his provider network.

Issue: Are Insured Plaintiffs Required to Stay Within Their Provider Networks?

On appeal, the defendants argued that insured people are limited to recovering the amount of money that their providers actually pay for the cost of their treatment rather than the amount that might be billed. They argued that since Pebley was insured, he was required to see a provider within his network or only to be able to recover what his insurance company would have paid for the care that he received. The plaintiff argued that it was his right to choose what doctor that he would see and that he had no duty to mitigate his damages. He also argued that the amounts that his doctor had charged were reasonable and that the jury’s verdict was accurate.

Rule: Plaintiffs Are not Required to Mitigate Damages by Staying Within Plans


The defendants argued that under Howell v. Hamilton Meats & Provisions, 52 Cal. 4th 541 (2011), insured plaintiffs may not recover more medical damages than what their insurance companies have actually paid. They argued that since Pebley was insured but chose to go outside of his provider network, his recovery for medical losses should have only been the amount that his insurer would have paid after negotiating discounts with their in-network providers. The defendants had presented experts that testified the reasonable value of the medical care that he had received was about 50 percent of the amounts that the doctor had billed. The plaintiff had presented his own experts who testified that the amounts that were billed were the reasonable costs that doctors in the community charged for spinal fusion surgeries.

The court analyzed how uninsured people are treated under the law. They are able to recover the reasonable value of the care that they receive instead of the actual amounts that are billed or that an insurance company would have paid if they had been insured. The court also considered whether or not the plaintiff should have mitigated his damages by seeing a doctor within his insurance network. Finally, the court considered whether the bills that he presented as evidence at trial was sufficient to prove the reasonable value of the care that he had received.

The court found that the plaintiff did not have a duty to mitigate his damages by going to an in-network provider. Instead, the court agreed that the plaintiff had the right to seek treatment from the doctor of his choosing. The court also ruled that he should be treated as if he was uninsured since he was outside of his network, the insurance company was not billed and he was liable for the billed amounts. The court ruled that since he presented experts who testified that the billed amounts were reasonable in the community, it was sufficient for proving his damages.


The appeals court found for the plaintiff and upheld the jury’s award with the exception of $1,063 that it had awarded for the cost of an ambulance. It reduced his total award by $1.063, but the court otherwise allowed his award to stand. The court also awarded the plaintiff his costs on appeal, meaning that the defendants would be responsible for paying those in addition to the award.

Importance of getting help from an attorney

People who have been seriously injured in an accident with a large truck should meet with a Los Angeles attorney who has experience handling complex matters involving severe injuries. An attorney may advise his or her clients about how the clients might maximize their potential recoveries. Contact Steven M. Sweat, Personal Injury Lawyers, APC to schedule a consultation by calling (310) 592-0445 or toll free: 866-966-5240.


1. Pebley v. Santa Clara Organics LLC, 2d Civ. No. B277893, 05/18/2018.
2. Howell v. Hamilton Meats & Provisions, 52 Cal. 4th 541 (2011).

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