Stokes v Muschinske – Case Study

CASE STUDY PREPARED FROM ORIGINAL PUBLISHED OPINION
ERNEST A. LONG
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Stokes v Muschinske 4/8/19
Trial practice; Collateral source rule; Reference to medical insurance; Kaiser,
MediCare
On March 28, 2013, Defendant Martin Muschinske was driving a pickup
truck towing a horse trailer loaded with equipment when he rear-ended Plaintiff
James Stokes’s car. Plaintiffs James Stokes and his wife Patricia Stokes sued
Muschinske and the case proceeded to a jury trial. Prior to trial, Muschinske
stipulated to liability for the accident but disputed the causation, nature, and
extent of Stokes’s injuries and damages.
After a lengthy trial consisting largely of testimony on causation and
damages from numerous medical and other experts, the parties proposed two
vastly different damage awards. Stokes argued his total damages were over
$23.5 million, and asked the jury to award an additional $4 million for Patricia’s
loss of consortium claim. Muschinske argued for damages for Stokes totaling
less than $500,000, with an additional $25,000 for Patricia.
After two hours of deliberation with one 15-minute break, the jury awarded
Stokes $560,537.51 in damages, which was mostly—though not entirely—in line
with the amounts requested by Muschinske. The breakdown and juror count for
each portion of that award was as follows: $26,806.51 in past medical expenses
(12–0); $255,000 in future medical expenses (10–2); $13,731 in past lost earnings
(12–0); $15,000 in future lost earnings (11–1); $100,000 in past non-economic
damages (12–0); and $150,000 in future non-economic damages (12–0). The jury
awarded Patricia $50,000 on her claim (10–2). The jury also found Muschinske
did not act with malice, precluding an award of punitive damages. Judgment
was entered on the verdict.
Stokes moved for a new trial on several grounds, including the two grounds
he raises on appeal. The court denied the motion. Stokes appealed. One of
those issues is discussed here.
Stokes contends the trial court allowed Muschinske to violate the collateral
source rule multiple times during trial through references to Stokes’s past
treatment at Kaiser Permanente and Kaiser medical insurance, as well as
references to Medicare and Social Security disability benefits in relation to future
medical expenses.
The Second District Court of Appeal began by stating that the collateral
source rule generally provides that “ ‘if an injured party receives some
compensation for his injuries from a source wholly independent of the
tortfeasor, such payment should not be deducted from the damages which the
plaintiff would otherwise collect from the tortfeasor.’ ” (Howell v. Hamilton
Meats & Provisions, Inc. (2011) 52 Cal.4th 541, 551) This rule applies to payments
from private insurance as well as public benefits. (see Hernandez v. California
Hospital Medical Center (2000) 78 Cal.App.4th 498, 505–506)
There is also an evidentiary aspect to the collateral source rule: “Because a
collateral payment may not be used to reduce recoverable damages, evidence of
such a payment is inadmissible for that purpose. Even if relevant on another
issue (for example, to support a defense claim of malingering), under Evidence
Code section 352 the probative value of a collateral payment must be ‘carefully
weighed . . . against the inevitable prejudicial impact such evidence is likely to
have on the jury’s deliberations.’ ” (Howell, at p. 552; see Corenbaum v. Lampkin
(2013) 215 Cal.App.4th 1308, 1327.)
Stokes does not contend that the trial court erroneously admitted evidence
of any specific past collateral payments by Kaiser insurance or anticipated future
collateral payments from Medicare or Social Security. Nor does he contend that
any of Muschinske’s experts deducted any past or future collateral payments to
calculate damages, or that Muschinske argued that the jury should make any such
specific deductions. His argument is more generalized: he claims mere
reference to these entities led the jury to infer that he either had received collateral
payments in the past or would receive collateral payments in the future, thereby
prompting the jury to reduce his damages accordingly.
Stokes’s argument is based on the court’s alleged erroneous admission of
evidence, leading the 2nd DCA to review the court’s rulings for abuse of
discretion. (Uspenskaya v. Meline (2015) 241 Cal.App.4th 996, 1000; see Cuevas v.
Contra Costa County (2017) 11 Cal.App.5th 163, 171)
Stokes’s argument is based on the following parts of the record. Stokes
had health insurance through Kaiser Permanente, and for six months after the
accident, he received treatment from healthcare professionals at Kaiser facilities.
Before trial, Stokes filed a motion in limine to preclude any use at trial of the
names “Kaiser” and “Kaiser Permanente” on the theory that the “vast majority
of potential jurors throughout Southern California . . . know that the nature of the
Kaiser business model is that nobody treats at Kaiser unless they have Kaiser
insurance.” He feared his treatment at Kaiser facilities would necessarily reveal
that he had medical insurance, in derogation of the collateral source rule. In
opposition, Muschinske argued that he should be allowed to “discuss where
Stokes received his treatment, especially with those instances where he was
examined and no injury was found.” The court tentatively denied the motion
and allowed the use of the term “Kaiser” but directed the parties not to refer to
“Kaiser insurance.”
Throughout trial, both sides used the term “Kaiser” to refer to Stokes’s
treatment—by Muschinske’s estimation, 398 references in 17 volumes of
reporter’s transcripts. Stokes does not discuss most of these references in his
briefs on appeal, and the Appellate Court is not obligated to comb the record for
him in order to evaluate his argument. (Cal. Rules of Court, rule 8.204(a)(1)(C);
see Caldera v. Department of Corrections & Rehabilitation (2018) 25 Cal.App.5th 31,
46.) Stokes does point out that Muschinske argued in opening statement that
Stokes received care for six months through “healthcare professionals at Kaiser.”
He argued that after he returned to work he did not receive further treatment
from “any healthcare professionals, especially from Kaiser, which is what he
belonged to.” Instead, two-and-a-half years after the accident he went to other
doctors who “were not doctors that Mr. Stokes went to from Kaiser.”
The issue of future Medicare coverage came up during cross-examination of
Stokes’s life-care planner who testified as an expert on the costs of his future care.
She had prepared a long-term treatment plan for him. She testified at length
about the recommended care contained in the plan. On cross-examination,
Muschinske asked the following questions about Medicare and Kaiser:
“Q. Mr. Stokes is 65 years old?
“A. That’s my understanding, yes.
“Q. He’s eligible for Medicare?
Stokes’s counsel: “Objection, your honor. Collateral source.”
The court: “Overruled.”
Stokes’s counsel: “Your honor, may we approach?”
The court: “No.”
The witness: “That would be typical at age 65.”
“Q. Mr. Stokes is a member of Kaiser?
“A. I don’t know that to be the case at this juncture. I think he was in the
past. I don’t know what the current status is.”
Stokes argues the denial of his counsel’s request to approach the bench
signaled to the jury that he was trying to hide future government benefit
payments. Stokes ignores that the court instructed the jury not to “consider my
granting or denying a request for a conference as any indication of my opinion of
the case or of my view of the evidence.” The Appellate Court will presume the
jury heeded this instruction. (Rufo v. Simpson (2001) 86 Cal.App.4th 573, 598)
The next day of trial, Stokes filed a motion to strike any reference to future
availability of Medicare benefits, to preclude any further references to Medicare
pursuant to the collateral source rule, and to instruct the jury not to consider
future Medicare benefits in assessing costs of future care. After discussing the
law on collateral sources at length, the court did not see a need to rule on the
motion at that time, effectively denying it.
Medicare came up again during the cross-examination of Stokes’s wife
Patricia. She testified on direct examination that she and Stokes did not
currently have insurance. Muschinske asked her a series of questions on
cross-examination regarding whether Stokes had applied for Medicare benefits.
Stokes repeatedly objected on collateral source and Evidence Code section 352
grounds, among others, which the court overruled. Patricia testified that they
had applied for Medicare but had not received it yet.
Medicare was mentioned again during testimony from Muschinske’s expert
rehabilitation consultant, who testified to his opinions on Stokes’s future care
needs. He testified that one item of cost for Stokes’s future care would be a case
manager to work with Stokes two to four hours a month for the rest of his life
expectancy. Over Stokes’s objections based on the collateral source rule and
other grounds, the witness explained that “the case manager looks for resources
to help the individual, especially if they have some needs that cost money which
they don’t have. So we look at, for instance, Medicare to see: What does it
cover? How do we document the needs? Sometimes Medicare turns something
down because we—they don’t have the proper documentation. Or, if there’s
other services someone has, other medical services available to them. The case
manager can tap into them. If there’s community resources; tap into those. If
there’s counseling or mental health counseling or services like that adjustment
counseling; we want to tap into those.” The witness also noted, “Medicare is an
example of service that could be provided to an individual. So if someone has
Social Security disability, SSDI for 24 months, they’d be eligible for Medicare.”
Turning to Stokes’s claim of error, most of these references to Kaiser and
Medicare, as well as the single reference to Social Security, merely provided
context and background information on Stokes’s past treatment at Kaiser and on
some aspects of Muschinske’s experts’ calculation of past and future reasonable
medical expenses. They were helpful and even necessary to the jury’s
understanding of the issues. Stokes has not shown the court abused its
discretion in admitting these references to assist the jury’s understanding of the
facts.
A few references arguably did approach the line between permissible
background information and reference to collateral sources. For example, the
questions posed to Stokes’s life-care planner implicated payments by Medicare
and Kaiser insurance. The cross-examination of Stokes’s wife also referenced
Medicare coverage. Yet, even if we assume Stokes has shown the trial court
should have excluded some or all of these references, his claim of prejudice is
based entirely on speculation.
For the references to Kaiser, the Justices can accept that lay jurors in
Southern California might have inferred Stokes had Kaiser insurance that may
have covered his past treatment. But Stokes does not suggest there was evidence
of any specific insurance payments, and there is nothing to suggest the jury
reduced his damages award by some unidentified amount simply because he had
insurance coverage. The jury unanimously awarded him $26,806.51 in past
medical expenses, exactly the amount Muschinske requested based on expert
testimony regarding the reasonable cost for Stokes’s past medical expenses.
Muschinske’s expert used the Medicare “allowable amount” and 130 percent of
the Medicare allowable amount as methods to calculate reasonable value of past
services. Stokes does not suggest the expert deducted any actual Medicare or
other collateral payments in that calculation.
Stokes has identified nothing to suggest that Muschinske’s expert
considered any insurance or other collateral payments in conducting this
analysis. In fact, Stokes’s wife testified on direct examination that Stokes has to
“reimburse every dollar that Kaiser has paid for his care.” The court also
instructed the jury: “You must not consider whether any of the parties in this
case has insurance. The presence or absence of insurance is totally irrelevant.
You must decide this case based only on the law and the evidence.” It is
presumed the jury followed this instruction. (Rufo, at p. 598.)
Likewise, for the Medicare references, Stokes does not point to any evidence
of deductions for specific future Medicare payments, and nothing suggests the
jury subtracted unidentified future Medicare coverage in assessing future medical
expenses. The jury awarded $255,000 for future medical expenses, which was
almost $85,000 more than Muschinske’s proposed amount of $170,582, suggesting
the jury carefully considered the competing expert testimony on the issue of
reasonable future costs and arrived at a reasonable award.
Stokes claims it is “reasonably probable” that the jury discounted his
requested future medical expenses of $5.77 million in light of future Medicare
coverage, but he points to nothing in the record to support that conclusion. He
also contends the jury’s 10–2 verdict on this award shows prejudice because “only
a mere two jurors who voted in the majority needed to have been influenced or
confused” by the Medicare references. This is entirely speculative. It is equally
possible that two jurors dissented because they believed he should have received
no more than $170,582, the amount proposed by Muschinske.
Stokes also attempts to link together different aspects of Muschinske’s
experts’ testimony to show the jury must have reduced his requested future
medical expenses due to future Medicare payments. His argument goes: (1)
Muschinske’s expert rehabilitation consultant testified that a case manager would
help Stokes look for resources like Medicare in the future. (2) Muschinske’s
expert on the reasonable cost of past care used a “benchmark” of Medicare
allowable amounts to calculate reasonable cost because “roughly, 98 percent of
physicians and other medical providers accept Medicare as payment in full.”
(3) Stokes requested $5.77 million in future medical expenses, but the jury
awarded $255,000, which was roughly $85,000 more than Muschinske’s proposed
amount. (4) Because the $85,000 difference is about 2 percent of his requested
amount (actually about 1.5 percent), the jury must have reduced his requested
amount by 98 percent because that is what the jury believed Medicare would
cover.
No one argued this theory to the jury and no rational jury would have
accepted it. The 98 percent figure forming the lynchpin of this theory did not
relate to the proportion of costs covered by Medicare; it related to the proportion
of physicians and medical providers who accepted Medicare payments. To
argue that the jury would have used it to reduce his future medical costs by 98
percent is a non sequitur.
Finally, with regard to Social Security, the single vague reference by
Muschinske’s expert rehabilitation consultant could not have affected the jury’s
verdict. This one reference would not have allowed the jury to infer he would
get Social Security payments in the future, and even if it could, there was no basis
for the jury to somehow quantify those payments, then reduce his future medical
expenses by that amount.
The judgment is affirmed. Respondent Muschinske is awarded costs on
appeal.
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