Insurance companies scored a big victory with the California Supreme Court's recent decision in the case of Howell v. Hamilton Meats & Provisions (click here for the Google Scholar version of the decision). In personal injury/accident cases the accident victims are allowed to recover, among other things, the reasonable cost of medical expenses for treatment related to the accident. For those with health insurance, as you probably know, the health insurers negotiate reduced rates with hospitals and doctors so that the hospitals and doctors accept discounts, often times substantial discounts, from their normal billed rate.
In the Howell case, Howell was seriously injured in an auto accident and received substantial medical treatment. The billed amount of her treatment was about $190,000. However, since Howell had health insurance, the hospital and doctors ended up accepting only about $60,000 for Howell's treatment.
Therefore, the California Supreme Court held that regarding the amount of medical expenses recoverable by Howell, she could only recover the amount actually paid for her treatment, $60,000, even though the reasonable value or market value of her treatment arguably exceeds $60,000.
There are 2 big side-effects of this ruling. The first side effect is that it causes a situation where an uninsured person has a better case than an insured person because the uninsured person with Howell's injuries can claim $190,000 in medical expenses while Howell can only claim $60,000. A general legal principle called the "collateral source rule" says that if an injured person is compensated for his injuries from someone besides the tortfeasor, that payment shouldn't be taken into account in figuring out the amount of the injured person's damages. The California Supreme Court decided the collateral source rule did not apply to health insurance and limited the recoverable amount to the actual amount paid, even though the majority of other states allow the injured person to recover the reasonable value of the medical treatment, even if that exceeds the actual amount paid.
The second side effect is that as a practical matter, the amount of money awarded for pain and suffering is often based on the amount of medical bills (in general, in personal injury cases you can recover the amount of medical bills, property damage, lost earnings and earning capacity, and pain and suffering: it is common for pain and suffering to have the most value out of these damage categories). Therefore, the value of many personal injury cases will be substantially reduced because, as seen in Howell, if there is health insurance the amount of medical bills will probably be less than 50% what they would have been if there was no insurance: for Howell, the pain and suffering is based on $60,000 in medical bills instead of $190,000. Also, the Howell case was silent on how the difference in the billed rate and the amount paid makes a difference in figuring out the amount to award for pain and suffering: arguably plaintiffs will now not be able to even refer to the billed medical expenses to explain the extent of their injuries (meaning, if the jury is barred from hearing that the billed medical expenses were $190,000 and only hears the medical expenses were $60,000, a pain and suffering award is likely.to be smaller).
For more on this case, see this Sacramento Bee blogpost on the case, an interview with the appellate lawyer representing Howell, and a pro-insurer view of this case.
Sunday, October 23, 2011
Saturday, October 22, 2011
Employment Law – Law clerk exempt from overtime pay because he was classified as a professional employee
Matthew Zelasko-Barrett sued a Northern California law firm, Brayton-Purcell LLP, for not paying him overtime for his work for them as a law clerk after he graduated from law school and before he passed the bar exam. The California Court of Appeals recently ruled Zelasko-Barrett was not entitled to overtime pay because he was considered to be a professional employee (click here for the Google Scholar version of the ruling).
Here’s a quick explainer on being eligible for overtime pay in California: employees are generally eligible for overtime pay unless they are exempt. Exempt employees are those who are deemed to be executive, administrative, or professional employees.
A professional employee is one who is licensed or certified in certain named professions (including law, medicine, teaching, and accounting) OR one who primarily works in a learned or artistic profession. A learned profession means the job requires advanced knowledge of a field or science that usually requires prolonged study, and the work is intellectual and is not standardized in nature. A professional employee must also exercise discretion and independent judgment in performing the job duties and earn at least 2 times the minimum wage for full-time employment.
Zelasko-Barrett had not passed the bar yet, so he was not licensed or certified as a lawyer at that time. Zelasko-Barrett’s job duties as a law clerk included drafting pleadings, preparing and managing discovery, legal research, exercising discretion and judgment to choose the documents and arguments to be used in depositions and hearings, speaking with opposing counsel, clients, and witnesses, and supervising clerical staff. Zelasko-Barrett had a supervising attorney and he was not able to sign any pleadings or appear in court because he had not yet passed the bar exam.
Based on the above, the court found Zelasko-Barrett’s job duties required a “significant level of discretion” in the actions taken by him, even if Zelasko-Barrett’s recommendations were not always used by his supervising attorney in the final version of his work. Therefore, the court ruled Zelasko-Barrett met the requirements to be considered an exempt professional employee and was exempt from overtime pay.
It is important to remember this court’s ruling was based on Zelasko-Barrett’s specific job duties. Another law clerk with more menial duties could still be entitled to overtime pay.
For more on this story, see this San Francisco Chronicle article, and for more information on the rules of overtime pay in California, see this from the California Department of Industrial Relations. Zelasko-Barrett has passed the bar exam and is apparently now self-employed in San Francisco.
Here’s a quick explainer on being eligible for overtime pay in California: employees are generally eligible for overtime pay unless they are exempt. Exempt employees are those who are deemed to be executive, administrative, or professional employees.
A professional employee is one who is licensed or certified in certain named professions (including law, medicine, teaching, and accounting) OR one who primarily works in a learned or artistic profession. A learned profession means the job requires advanced knowledge of a field or science that usually requires prolonged study, and the work is intellectual and is not standardized in nature. A professional employee must also exercise discretion and independent judgment in performing the job duties and earn at least 2 times the minimum wage for full-time employment.
Zelasko-Barrett had not passed the bar yet, so he was not licensed or certified as a lawyer at that time. Zelasko-Barrett’s job duties as a law clerk included drafting pleadings, preparing and managing discovery, legal research, exercising discretion and judgment to choose the documents and arguments to be used in depositions and hearings, speaking with opposing counsel, clients, and witnesses, and supervising clerical staff. Zelasko-Barrett had a supervising attorney and he was not able to sign any pleadings or appear in court because he had not yet passed the bar exam.
Based on the above, the court found Zelasko-Barrett’s job duties required a “significant level of discretion” in the actions taken by him, even if Zelasko-Barrett’s recommendations were not always used by his supervising attorney in the final version of his work. Therefore, the court ruled Zelasko-Barrett met the requirements to be considered an exempt professional employee and was exempt from overtime pay.
It is important to remember this court’s ruling was based on Zelasko-Barrett’s specific job duties. Another law clerk with more menial duties could still be entitled to overtime pay.
For more on this story, see this San Francisco Chronicle article, and for more information on the rules of overtime pay in California, see this from the California Department of Industrial Relations. Zelasko-Barrett has passed the bar exam and is apparently now self-employed in San Francisco.
Welcome to this blog!
This is a blog focusing on personal injury, accident, labor, and employment law in California, especially as it relates to Los Angeles and Long Beach. This blog is published by Kenneth Tanji, Jr., of LT Pacific Law Group LLP, based in City of Industry and Long Beach. I hope you find this blog informative.
For more information about our firm and recent legal developments, please see our website our my Twitter feed. You can also call us at (626) 810-7200 or (562) 284-7748.
Se habla espanol, visite nuestro sitio web en español o llame a nuestro asistente legal, Carlos Reyes, en el (562) 284-7748.
For more information about our firm and recent legal developments, please see our website our my Twitter feed. You can also call us at (626) 810-7200 or (562) 284-7748.
Se habla espanol, visite nuestro sitio web en español o llame a nuestro asistente legal, Carlos Reyes, en el (562) 284-7748.
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