Smith v. Lopez-Miranda
165 F. Supp. 3d 689
W.D. Tenn.2016Background
- Car accident on May 9, 2014 in Memphis; plaintiff (Tennessee resident) alleges injuries as a passenger after defendant (North Carolina resident) rear-ended the vehicle.
- Plaintiff seeks to recover medical expenses as damages; hospitals' original (undiscounted) bills exceed amounts actually paid by plaintiff’s insurer under negotiated rates.
- Defendant filed a motion in limine asking the court to exclude undiscounted medical charges and limit recoverable damages to the amounts actually paid by the insurer.
- Plaintiff opposes, arguing West v. Shelby County Healthcare Corp. does not control and that reducing billed amounts would violate the collateral source rule.
- Court must apply Tennessee substantive law (diversity jurisdiction) and decide whether “reasonable and necessary” medical expenses are the full billed charges or the insurer-paid amounts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether undiscounted hospital bills may be introduced as "reasonable and necessary" medical damages when insurer paid a negotiated, discounted amount | Plaintiff: full, undiscounted bills are recoverable; discounts are collateral-source benefits that should not reduce defendant's liability | Defendant: recoverable damages should be limited to amounts actually paid by insurer (discounted rates) following West | Court: discounted amounts actually paid are the reasonable/necessary charges; undiscounted bills inadmissible |
Key Cases Cited
- West v. Shelby Cnty. Healthcare Corp., 459 S.W.3d 33 (Tenn. 2014) (hospital lien context: only amounts actually paid by insurers reflect reasonable and necessary charges)
- Borner v. Autry, 284 S.W.3d 216 (Tenn. 2009) (plaintiff must prove medical expenses are necessary and reasonable)
- Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (1996) (federal courts sitting in diversity apply state substantive law)
- Howell v. Hamilton Meats & Provisions, Inc., 52 Cal.4th 541 (2011) (collateral-source rule does not expand damages to include expenses plaintiff never incurred)