Friday, November 17, 2017

Tennessee Collateral Source


In a case closely watched by Tennessee lawyers, the Tennessee Supreme Court has declined to change the law on what evidence can be used to prove medical expenses in cases involving personal injury.  The Court held that Tennessee law continues to allow plaintiffs to use full, undiscounted medical bills to prove their medical expenses instead of the discounted amounts paid by insurance companies.

In a case filed in Crockett County, Jean Dedmon sued for injuries she sustained in a car accident.  Mrs. Dedmon attached the bills from her hospital and her doctors to her legal complaint.

While Mrs. Dedmon’s case was pending, the Tennessee Supreme Court issued its opinion in another case, West v. Shelby County Healthcare Corporation.  West involved a hospital’s legal claim, called a lien, for the full amount of patients’ unpaid medical expenses.  The Court in West observed that most hospitals routinely send bills to all patients, regardless of whether the patients have insurance. These bills are far larger than the discounted payments the hospitals have contractually agreed to accept from insurance companies for those patients that do have insurance.  Based upon the specific provisions of the lien statute, the West Court held that the hospital’s lien was limited to the discounted amounts paid by the patients’ insurance companies. 

After the Supreme Court’s decision in West was announced, the defendants in Dedmon argued to the trial court that West had also changed the law in Tennessee for all cases involving personal injuries. After West, they said, personal injury plaintiffs who have insurance can no longer use the full medical bills to prove their medical expenses.  The trial court in Dedmon agreed.  Based on West, it limited the plaintiffs’ proof on medical expenses to the discounted payments the hospital and doctors had contractually agreed to accept from Mrs. Dedmon’s insurance company. The plaintiffs appealed to the Court of Appeals.

The Court of Appeals reversed.  It held that West does not apply in personal injury cases outside the context of the lien statute.  Consequently, even plaintiffs who have insurance can use full, undiscounted medical bills to prove medical expenses. However, it also said that defendants can use discounted insurance payments to prove that the undiscounted bills are not reasonable.

The Tennessee Supreme Court agreed that its holding in West was not intended to apply to all personal injury cases.  West only applies to hospital lien cases.

The defendants nevertheless urged the Court to adopt a new approach.  They argued that courts should value medical services the same way as a house or a car, by the “fair market value.”  The discounted amounts paid by insurance companies are basically the “fair market value” of medical services, they said, so medical expense damages should be limited to the discounted insurance amounts.

The Supreme Court disagreed.  It explained that Tennessee has always followed the so-called “collateral source rule,” which means that payments and other benefits received by plaintiffs that do not come from the defendant — in other words, benefits that are “collateral” to the defendant — may not be used to reduce the defendant’s liability to the plaintiff.  The rule also prevents defendants from telling juries about plaintiffs’ insurance and other such benefits because it might cause juries to think the plaintiffs have already been paid for their injuries. 

The Court observed that, in recent years, health care has become extremely complex.  Pricing for medical services is distorted by many things, including deep discounts demanded by insurance companies, laws that require hospitals to treat patients who cannot pay, and benefits like TennCare that pay a set amount for all treatment of a patient.  One result has been a widening of the gap between hospitals’ standard rates for uninsured patients and the discounted amounts hospitals accept from insurance companies.

The Court looked in depth at different ways other states have handled this issue.  Only a few states have either limited plaintiffs’ medical expense damages to the discounted insurance amounts or allowed defendants to use the insurance payments to reduce their liability.  Both approaches are contrary to the collateral source rule. Both approaches would end up treating plaintiffs with insurance differently from plaintiffs without insurance. Neither approach takes into account benefits other than private insurance, such as TennCare, charity, or gifts.  

Importantly, the Court said, “it is evident that medical expenses cannot be valued in the same way one would value a house or a car,” since “health care services are highly regulated and rates are skewed by countless factors, only one of which is insurance.”  There is no reason to think the discounted insurance rates are a more accurate way for courts to determine the value of medical services.    

The Court acknowledged that the collateral source rule is imperfect.  It said that the defendants had “ably pointed out the shortcomings of the collateral source rule in the current health care environment.  They are substantial and we do not minimize them.”  However, the defendants had not pointed “to a better alternative.”

After its thorough review, the Court declined to alter existing law in Tennessee. It held that the collateral source rule applies in this case. As a result, the plaintiffs may use evidence of Mrs. Dedmon’s full, undiscounted medical bills as proof of her reasonable medical expenses. It held that the defendants may not use the discounted rates paid by Mrs. Dedmon’s insurance company for any purpose.  The defendants are free to use any other evidence to show that the full medical expenses are not reasonable, so long as that evidence does not violate the collateral source rule.       

To read the unanimous opinion in Jean Dedmon v. Debbie Steelman et al., authored by Justice Holly Kirby, go to the opinions section of TNCourts.gov.

Wednesday, November 15, 2017

Criminal Conviction and Civil Defense

I am working on several cases currently where a party was criminally convicted and then we have filed a civil suit.  The criminal conviction precludes a defense to the civil liability on the case.  Below are some cases that illustrate this.

Criminal conviction precludes litigation of the same issue in a civil suit.   Jordan v. McKenna,  573 So.2d 1371, 1376 (Miss. 1990).  See also Hardin v. Aetna Casualty and Surety Company, 5 Cir.1967, 384 F.2d 718, cert. denied, 391 U.S. 971, 88 S.Ct. 2047, 20 L.Ed.2d 886; United States v. Fabric Garment Company, 2 Cir.1966, 366 F.2d 530; United States v. Gramling, 5 Cir.1950, 180 F.2d 498; Teitelbaum Furs, Inc. v. Dominion Insurance Company, 1962, 58 Cal.2d 601, 25 Cal.Rptr. 559, 375 P.2d 439; Taylor v. Taylor, 1962, 257 N.C. 130, 125 S.E.2d 373; In re Kravitz' Estate, 1965, 418 Pa. 319, 211 A.2d 443; Mineo v. Eureka Fire & Marine Insurance Company, 1956, 182 Pa.Super. 75, 125 A.2d 612; Eagle, Star and British Dominions Insurance Company v. Heller, 1927, 149 Va. 82, 140 S.E. 314, 57 A.L.R. 490; see Local 167 of International Bro'hood of Teamsters v. United States, 1934, 291 U.S. 293, 54 S.Ct. 396, 78 L.Ed. 804; Connecticut Fire Insurance Company v. Ferrara, 8 Cir.1960, 277 F.2d 388, cert. denied, 364 U.S. 903, 81 S.Ct. 231, 5 L.Ed.2d 195; Stagecrafters' Club, Inc. v. District of Columbia Division, D.D.C.1953, 111 F.Supp. 127.

See Breeland v. Security Insurance Co., 421 F.2d 918, 922 (5th Cir.1969) (summary judgment appropriate in civil case from opposing party been criminally convicted of the offense).   [A] conviction in a prior criminal case is conclusive, in a subsequent civil action, of the facts upon which the conviction was based.  United States Fidelity and Guaranty Co. v. Moore, 306 F.Supp. 1088. 1095 (N.D.Miss.1969):

Wednesday, November 8, 2017

Modification of Visitation Exchange Point

On Tuesday, the Mississippi Court of Appeals decided Smith v. Mull located here.  One of the interesting issues in the case was the modification of the dropoff point for visitation exchanges.

The Court explained that:

"When modification of visitation is at issue, the material change in circumstances test is not applicable because the court is not being asked to modify the permanent custody of the child.  To modify a visitation order, it must be shown that the prior decree for reasonable visitation is not working and that a modification is in the best interest of the child.  The chancellor has broad discretion to determine the specific times for visitation."

The Court ended up not modifying the visitation exchange since it was not shown to not be working and only benefited one parent.  This may be something to go over with clients who are contemplating moving.

Friday, November 3, 2017

Suit Against Yourself

On Thursday, the Mississippi Supreme Court decided Cyndy Howarth, Individually, Wife, Wrongful Death Beneficiary, and as Executrix of the Estate of Richard Howarth, Jr., Deceased, Juliet Howarth McDonald, Individually, Daughter, and as Wrongful Death Beneficiary of Richard Howarth, Jr., Deceased, and Cyndy Howarth, as Guardian, Natural Mother and Next Friend of Cynthia Howarth, a Minor and Wrongful Death Beneficiary of Richard Howarth, Jr., Deceased v. M & H Ventures, LLC.

In this case, the wrongful death beneficiaries sought to recover from M&H Ventures based on the negligent acts or omissions of the pilot, Howarth. But because Howarth was the sole member of M&H Ventures and it had no employees, M&H Ventures could act or fail to act only through Howarth.  The comparative negligence statute, Mississippi Code Section 11-7-15, provides:

In all actions hereafter brought for personal injuries, or where such injuries have resulted in death, or for injury to property, the fact that the person injured, or the owner of the property, or person having control over the property may have been guilty of contributory negligence shall not bar a recovery, but damages shall be diminished by the jury in proportion to the amount of negligence attributable to the person injured, or the owner of the property, or the person having control over the property.
Miss. Code Ann. § 11-7-15 (Rev. 2004) (emphasis added).

As such, the Mississippi Supreme Court ruled that essentially one could not sue himself for damages.

Monday, October 30, 2017

Taxes and Innocent Spouse


Domestic abuse often includes control over finances. An important part of managing finances is understanding one’s tax rights. Taxpayers have the right to expect the IRS to consider facts and circumstances that might affect the individual’s taxes.

Taxpayers have the right to:

  • File a separate return even if they’re married.
  • Review the entire tax return before signing a joint return.
  • Review supporting documents for a joint return.
  • Refuse to sign a joint return.
  • Request more time to file their tax return.
  • Get copies of prior year tax returns from the IRS.
  • Seek independent legal advice.

Taxpayers also have the right to request relief from the liability shown on a joint return. This is known as innocent spouse relief. Here are a couple of examples:

Example 1:

  • A taxpayer signs a joint return with their spouse.
  • The taxpayer thought their spouse paid all taxes due.
  • The IRS contacts the taxpayer because the taxes shown on the joint return were not paid.

Example 2:

  • The taxpayer signs a joint return with their spouse.
  • The taxpayer didn’t know about their spouse’s unreported income or erroneous deductions.
  • The IRS adjusted the taxes due because of their spouse’s improper items.

To apply for Innocent Spouse Relief, a taxpayer fills out Form 8857, Request for Innocent Spouse Relief. More Information:

Wednesday, October 25, 2017

Get Autopsy Records

Is there a way to get autopsy records in Mississippi?  The next of kin can obtain the records with or without an estate being open.  Mississippi Code 41-10-3 provides that:

§ 41-10-3. Heirs of decedents authorized to obtain copy of decedent's medical records under certain circumstances; termination of authorization.

(1)  The following words and phrases shall have the meanings ascribed in this section unless the context clearly indicates otherwise: 
(a) "Heir" means any person who is entitled to a distribution from the estate of an intestate decedent, or a person who would be entitled to a distribution from the estate of a testate decedent if that decedent had died intestate. 
(b) "Medical records" means any communications related to a patient's physical or mental health or condition that are recorded in any form or medium and that are maintained for purposes of patient diagnosis or treatment, including communications that are prepared by a health-care provider or by other providers.  The term does not include (i) materials that are prepared in connection with utilization review, peer review or quality assurance activities, or (ii) recorded telephone and radio communications to and from a publicly operated emergency dispatch office relating to requests for emergency services or reports of suspected criminal activity; however, the term includes communications that are recorded in any form or medium between emergency medical personnel and medical personnel concerning the diagnosis or treatment of a patient. 
(2)  Where no executor or administrator has been appointed by a chancery court of competent jurisdiction regarding the probate or administration of the estate of a decedent, any heir of the decedent shall be authorized to act on behalf of the decedent solely for the purpose of obtaining a copy of the decedent's medical records.  The authority shall not extend to any other property rights relating to the decedent's estate. 
(3)  A custodian of medical records may provide a copy of the decedent's medical records to an heir upon receipt of an affidavit by the heir stating that he or she meets the requirements of this section and that no executor or administrator has been appointed by a chancery court with respect to the estate of the decedent. 
(4)  The authority of the heir to act on behalf of the decedent shall terminate upon the appointment of an executor or administrator to act on behalf of the estate of the decedent.  However, the custodian of medical records shall be entitled to rely upon the affidavit of the heir until the custodian of medical records receives written notice of the appointment of an executor or administrator. 
(5)  A custodian of medical records shall not be required to provide more than three (3) heirs with a copy of the decedent's medical records before the appointment of an executor or administrator. 
(6)  The provisions of this section shall not prohibit an executor or administrator from requesting and receiving the medical records of a decedent after his or her appointment. 

Sunday, October 22, 2017

Irreconcilable Differences - Unconstitutional

Mississippi is one of only two states that does not have a unilateral no fault divorce ground.  Back in June, a chancellor held that the lack of a unilateral no fault divorce was unconstitutional. A link to the opinion is here.  The opinion is very detailed and constitutionally sound.  The case is currently up on appeal at the moment and a domestic violence group has filed an amicus brief located here.   

I would not be surprised if this case did not make it to the U.S. Supreme Court.  From a legal analysis standpoint, the opinion by the trial court makes sense.