Olsen v. Reid
Filed June 23, 2008, Fourth District, Div. Three
Cite as 2008 SOS 3685

Ruling on Reduction of Damages Award Reversed

On August 2003, plaintiff Margaret Olsen was injured when defendant Lynn Reid struck her from behind with a motorized wheelchair. As a result, Olsen suffered injuries. In 2005, she filed a lawsuit against Reid for negligence.

Olsen submitted as evidence the full amount of her medical expense amounting to $62,475.81. The total award including an award for past economic loss is $250,000.

After trial, Reid filed a motion to reduce the verdict relaying on the authority of Hanif v. Housing Authority. Reid claimed that she was entitled for a reduction of the verdict in $57,394.24 because her provider has written off that portion of her bills. The court granted her motion and reduced the amount to $57,394.24.

As a result, both parties file an appeal. Olsen argues that the court improperly reduced the amount.

Whether or not reduction of plaintiff’s medical bill is valid, even defendant did not provide proof that the medical bills were written off.

On appeal, Olsen and “amici curiae” ask the court to reconsider the holding in Hanif v. Housing Authority. The latter case held that when a plaintiff has medical insurance, the damages are limited to the amount actually paid or incurred, and not greater to the amount provided by a medical provider.

Despite Reid’s claim that she is ready to prove what was actually paid to Olsen by her insurer, still she failed to prove her allegations. Her argument that Olsen is entitled only to the amount, she actually incurred and not that is provided by his medical provider was ordered by the court as devoid of merit. She failed to prove the amount written off by plaintiff’s medical provider.

The appealed decision was reversed and the court ordered to award to Olsen the full amount of the jury verdict.

The court in deciding the case also takes in consideration the ‘Collateral Source Rule”. This rule has long been part of California law and based on equity and admiralty. According to this rule, the respondent is not presumed to know or bound to inquire as to the relative equities of parties claiming damages. He is bound to make satisfaction for the injury he has done.