*1 Nо. 31484. Nov. [L.A. 1984.] BARME, JR., Plaintiffs, al.,
WARREN H. et v. al., GAYANNE WOOD et Defendants and Respondents; PARK, OF CITY HUNTINGTON Intervener Appellant.
Counsel Hamrick, Tobin, David Tobin & Clinton M. Kegel, Hodges & Kegel E. Lister Intervener and Appellant.
Burke, Curiae behalf Williams & and Brian A. Pierik as Amici on Sorensen of Intervener and Appellant. Baerwitz, Hart, & Smith, Clifford, Ball, Hunt, & Brown
Shield Home & Greines, Horvitz, Greines, & H. Irving Horvitz & Ellis Horvitz J. Levy, Todd, Thomas Kent Defendants S. L. Richland and John L. Klein for Respondents. Newell, A. Watkins, Danner, & C. P. Joseph
Latham Donald Bryant Wheelock, Jr., Curiae on behalf and Milton A. Miller as Amici Defendants and Respondents.
Opinion
Trust
v. Com
Bank &
Co.
KAUS, J.
In our
decision in American
recent
670],
671, 683 P.2d
munity Hospital
I 1977, In November Barme, Jr., Warren H. a officer em- plaintiff police the ployed by City Beach, a Huntington suffered heart attack while on duty. thereafter, Shortly he underwent heart at St. Francis open surgery of Lynwood; Hospital the during he sustained brain In surgery, damage. 1978, Barme April and his wife this the brought action as against hospital well as a number of treatment, doctors and a nurse involved in his alleging that the brain was damage caused their negligence.
In 1978, September City Beach, the of Huntington a self-insured workers’ carrier, compensation intervention, filed a in complaint seeking to recover from defendants incurred, the incur, it had expenses and was to continuing in providing workers’ (Lab. Code, compensation benefits to Barme. 3852.)2 The § that complaint alleged as of the had city September 1Section providеs “(a) elects, 3333.1 in part: relevant In the event the defendant so in an personal injury action for against provider upon professional a health care negligence, based may he introduce any evidence of payable amount plaintiff as benefit to the as result personal injury Act, pursuant Security any the United States Social state or federal disability act, health, income or compensation any worker’s income-disability or sickness insurance, provides аccident insurance that income-disability coverage, health benefits or any agreement contract or any organization, group, partnership, or corporation to for, provide, pay medical, dental, or hospital, reimburse the cost of or other health care evidence, Where the services. defendant elects to introduce such plaintiff may introduce any evidence of amount which the plaintiff paid right has or any contributed to secure his evidence, insurance benefits concerning (b) which the defendant has introduced No [f] (a) source collateral pursuant any introduced to subdivision shall recover amount benefits against plaintiff subrogated nor shall rights plaintiff it be to the against defend ” (Italics added.) ant. specified, Unless otherwise all section references are to the Civil Code. 2Section 3852 provides part: in relevant “The employee compensation claim an ... does not affect his or her right claim or damages proximately resulting of action for all from injury against person or death Any employer. employer pays other than the who or obligated pay becomes compensation, pays, obligated salary or who pay or becomes may in lieu . . bring . make a against likewise claim or an action the third person. event, suit, In may the latter recover in the same in addition to the benefits; $79,000 total of benefits in such amount
paid approximately $150,000. was to exceеd The asserted these expected city expenditures were caused defendants’ negligence. proximately with respect
In moved for August summary judgment defendants intervention, city’s recovery by complaint maintaining (b). was barred under city opposed was motion on the primarily ground that section unconstitutional under and due principles.4 equal protection process trial of defendants. court favor disagreed granted summary judgment The city appeals.
II Bank, insurance In American the medical malpractice summarized “The which problem “crisis” rise to the MICRA gave legislation. was of MICRA arose when the the immediate to the enactment impetus of the medical malpractice insurance which issued all companies virtually costs of such affording California determined that the policies *5 to such provide were so would no continue coverage high they longer as withdrew from the had in the Some of the insurers coverage they past. medical field while raised the entirely, others malpractice to as they to to what were referred charged frequently doctors and hospitals decided either to stop rates. As a doctors ‘skyrocketing’ many consequence, salary, including all compensation, damages total amount of which he or she was liable for dependents. wage, employee or his or her ...” pension paid or other emolument to the to (Italics added.) of section pleadings on the basis judgment 3Defendants had earlier moved for on the 3333.1, (b), premature because the court had ruled that that motion was subdivision but trial compensation benefits yet the workers’ defendants had not elected to introduce evidence of Barme, the of by prerequisite application an a to received election which the court held was indicating to introduce such section then their intention 3333.1. Defendants filed document action, summary judgment. malpractice evidence in the and mоved for motion, argued that its action opposition summary judgment city 4In to the also its the 3333.1, by subdi section reimbursement under Labor Code section 3852 was not covered meaning (b) of the MICRA “subrogation” vision was action within because suit not a conceding that section on provision. appeal, apparently has not renewed this claim 3333.1, (b) 3852. under section employer’s subdivision was intended bar an action one of the appears compensation benefits are That concеssion well-founded. Workers’ 3333.1, (a) (see fn. subdivision specifically collateral source enumerated in section benefits 1, ante), 3852—has ob- describing employer’s remedy under section and this court—in gave simply right parties, granting employers “in to sue third served that (County Diego San v. statutory equitable subrogation.” recognition principles of Sanfax of Furthermore, 363].) 862, 876, (1977) Corp. 568 P.2d 19 Cal.3d fn. (b) clearly that this history quite indicates legislative of section subrogation provisions, such as Labor statutory provision prevаil was intended to over other a collateral preserved have Code 3852. An earlier draft of subdivision would statute,” but rights “expressly provided were subrogation rights when such source’s was enactment. exception eliminated before the statute’s medical care with to certain risk or treat- providing high procedures respect ment, bare,’ to terminate their in this state or to practice altogether, ‘go i.e., without insurance. The result was that practice malpractice parts available, of the state medical care was not and who were fully patients treated by uninsured doctors faced the of unenforce- obtaining only prospect able judgments if should suffer serious of they malprac- as result injury (36 371.) tice.” Cal.3d at p.
We explained that MICRA “attacked the on several fronts. In problem outline, (1) broad the act reduce incidence and of attempted severity medical malpractice injuries by governmental strengthening oversight education, and licensing and health care discipline physicians providers, (2) to curtail sought unwarranted insurance increases authoriz- premium ing alternative insurance coverage new programs establishing pro- increases, cedures review substantial rate to reduce the attempted cost and increase the efficiency medical litigation revising (Id., legal number of 363-364.) rules to such applicable litigation.” pp.
The collateral source provision before us—likе the periodic payment damages provision at issue American Bank—is one provisions MICRA which was intended to reduce the cost of medical in- surance. Section (a)—which is not at issue here—au- thorizes a defendant in a medical action to introduce evidence of a variety insurance, “collateral source” benefits—including health disability or worker’s benefits. Apparently, Legislature’s was that assumption the trier of fact take the would plaintiff’s *6 of such receipt 3333.1, benefits into account by Section reducing damages.5 (b)—the subdivision turn, in provision challenged that here—provides, 3333.1, (a) 5Earlier drafts of section required subdivision the trier of fact to deduct such collateral (a) source benefits in computing damages, simply but—as enacted—subdivision provides benefits, for the admission of apparently leaving evidence such trier of fact the decision as to how such damages. evidence should afiéct assessment of 3333.1, (a) The purpose of section generally subdivision has attempt been viewed as an to eliminate the recovery” so-called plaintiffs “double obtained who have their medical expenses paid by their own health damages expenses insurance and still obtain for such from (See Keene, defendant tortfeasors. Malpractice Legislator’s Medical Crisis A California's 27, (1976) Guide to the Medical Malpractice pages Issue 31. Cf. v. Cal. Southern Helfend Rapid 173, 61, (1970) Transit Dist. 2 Cal.Rptr. 77 Cal.3d 465 P.2d A.L.R.3d 398] [explaining underlying rationale exсluding the traditional “collateral source” rule evi- benefits].) reasoning dence such collateral source This apply does not com- workers’ benefits, pensation plaintiffs because law under California have not been permitted to obtain recovery double of such benefits. Either the has been entitled to obtain reim- Code, (see bursement recovery from the tort seq.) judgment § Lab. 3850 et or the tort has applicable compensation been reduced workers’ benefits employee. obtained (See (1961) 641].) Witt v. Jackson 73 [17 Cal.2d 366 P.2d Nonethe- less, compensation specifically included workers’ benefits in the collateral 3333.1, (a). source benefits covered subdivision (a) to subdivision introduced pursuant source collateral “[«]o benefits it be subrogated nor shall shall recover amount against plaintiff ” concedes The city apparently rights plaintiff against defendant. it would otherwise the right that this was intended to eliminate provision from a medical 3852 to rеimbursement have under Labor Code section seek 3333.1, however, subdivision that section defendant. It malpractice argues, unconstitutional, due and (b) equal its to both rights process is violating merit. Neither contention has protection.
A reimbursement to seek that an employer’s right acknowledges is that the employer third for benefits from a workers’ party subject and is is of statutory origin properly legally obligated provide however, contends, that The city or abolition.6 legislative regulation arbitrarily eliminating from the due clause the Legislature process prohibits (b) arbitrary is this and maintains that section right, no rational relation to a legitimate public purpose. because it bears Bank, the Legislature cannot in American We As agree. explained it, determine, before public could of the facts light properly of measures interest of the state would be served by adoption costs, such “By reducing reduced the of medical insurance. cost doctors to a level (1) to restore insurance premiums the Legislature hoped med- afford, to resume could them thereby inducing providing hospitals to insure insurance ical care to all of the community, segments med- through be injured would fact as a protection patients available medical (36 372.) The retention adequate ical Cal.3d at malpractice.” p. are clearly legit- coverage care and the preservation adequate imate interests. public related rationally is
It is as clear that section just insurance. By medical the cost of to the objective reducing from med reimbursement obtaining from “collateral sources” prohibiting insurers, obviously reduces the section ical defendants or their *7 (See Ser Physicians’ defendants. the of such potential liability California 266].) (1980) Cal.Rptr. 102 97 Cal.App.3d vice v. Court Superior [162 lead to lower conclude' that this would rationally could Legislature malpractice premiums. expenditures, for workers’ reimbursement employer’s right an to 6Unlike enumerated by of the other collateral sources enjoyed some right the of reimbursement by supremacy 3333.1, (a) guaranteed federal law. Under federal may be section (See, e.g., provisions yield. will course, MICRA’s have to cases principles, of in such id., 112]; 346-347 pp. Cal.App.3d
Brown v. Stewart Blease, J.].) opn. of [conc. the Although city any out that is points savings malpractice premiums to be likely offset health by higher for workers’ compensation, and like, disаbility insurance and the that not circumstance does undermine the rationality of the legislation. that Assuming
(b) would not reduce the the total costs caused by malpractice, Legislature could have determined by the financial mal- redistributing impact field, the practice different among insurers involved the health types the costs be base, would over a spread wider immediate alleviating problems posed by cadre uninsured doctors growing potential of medical shortage cаre. also contends that the it arbitrary is because shifts legislation
some cost medical from health care negligent providers innocent—i.e., to or insurers. In the first nonnegligent—employers place, put matter in it must be remembered that perspective, large the insurers who are burdened been a fee or provision have paid premium provide health or other benefits covered their policies; employers, case, like the city in this be who have chosen to self-insured have decided presumably that it is in their to do so in self-interest order to save the insurance would premium they otherwise incur. Because injury in this case arose well MICRA, after the only enactment of we can assume that the city—and other insurers—took into account the elimination of the right reimbursement in making the relevant economic decisions. In this context, the asserted “innocence” or insurer has little meaning.
Furthermore, the due clause not demand process Legislature does invariably allocate on a liability or fault basis. The negligence well may have determined that only by some the costs of mal- shifting practice from a defendant to the negligent victim’s own “first insur- party” ers, would the victim retain a realistic damages obtain opportunity from malpractice insurance. on Insistence defendants having malpractice and their insurers all bear of the loss have meant that no might insurance would have been offered or that have many doctоrs would prac- ticed uninsured. Rather than victim’s be- reducing recovery yond that mandated (see, other MICRA provisions subd. e.g., § [limiting recovery $250,000]), noneconomic losses to the Legislature may have decided it that was preferable victim’s health or require workers’ compensation insurer to absorb some of the loss. Policy judgments of this nature are within the clearly legislative prerogative.
B *8 3333.1, The that city alternatively argues (b) subdivision denies medical equal protection, affording malpractice defendants benefits a burden on afforded to other tort defendants and employers
not imposing is not imposed to victims medical that who benefits of provide Amer in argument in We similar rejected on other situations. employers Bank, were limited to medical the statutory changes ican that explaining the the in which crisis actions because that was area 370-373.) (36 at the arose. Cal.3d legislation pp. precipitated 3333.1, Since, discussed, the of section just as have provisions the (b) were intended to alleviate those same problems, subdivision clearly the sec limiting not did violate Legislature equal protection principles tion’s to actions.7 medical application is affirmed. judgment
Broussard, J., Lucas, J., J., J., Grodin, and concurred. Reynoso, MOSK, J. I dissent. (1984) 36 Cal.3d Community Hospital
In American Bank & Trust Co. v. 671, 670], this court ap- of majority 683 P.2d slim Cal.Rptr. [204 the the of from damages of a substantial burden proved shifting part was desire to to reason tortfeasor the innocent victim. The purported medical means to lower reduce for medical that I out how vain that In case pointed costs.1 dissent that hospital my vindicated further had then be. The of time has passage to purpose proved Injury In Medical views. the nine since so-called my years adoption 1975, costs have contin- and hospital Reform Act of medical Compensation been to magnanimously to “reform” has astronomically. only ued rise the respon- from much of bestow on health insulation providers generous sibility for their more negligence. egregious court, objections city proffers two additional 7Although appeal not raised in the on trial (2) (1) (b), impermissible “tax” and contending it is to section an that, “gift public an unconstitutional applied public employers, at least as it authorizes specious. funds.” Both contentions are First, as a can be characterized it is difficult to how section see revenue, employer an any public simply precludes but purport It not to raise tax all. does a third expenses obligated which it bear to passing or insurer from on some of the is imposed the workers’ obligations control over under party. plenary Since the has employer determine cases the system, clearly power some it had statutorily expenses. forego of its incurred required to reimbursement or its insurer was only Second, Not does embody improper “gift public an funds.” provision does not but, tortfeasor, negligent from the any payment of funds
the section not authorize (see clearly above, “public” purpose to the serves a costs as discussed shift 385, P.2d 5 Cal.3d 745-746 County Alameda v. Carleson insur- availability adequate adequate malpractice medical care and 953])—promoting the coverage. ance alia, terms, referred to the health crisis in inter of “severe preamble legislation 1The economically marginal a denial of access medically indigent, hardships for the Sess., 12.5.) (Stats. 1975-1976, ch. § Second Ex. . . .” . *9 Now the majority their error аnother shift of compound by yet permitting the burdens of this time from the medical defend- malpractice, ant to the or carrier. plaintiff’s Why workers’ employer compensation or plaintiff’s carrier should bear compensation respon- sibility for the defendant’s defies rational Once explanation. again the only is a reduction purpose suggested by majority hoped-for in medical insurance That an in- the result will be premiums. crease in workers’ be compensation ignored. appears two, As between the which should the burden: the shoulder carrier logically of the tortfeasor or the carrier of the innocent The answer is employer? obvious.
One of the effects of Civil Code section is the shift of burden 3333.1 of medical costs, malpractice, the associated insurance to collateral not, sources. Whether insured or the cities that bear this added burden suffer revenues, decrease in since there is no in which recover way they can thеir workers’ and other compensation caused expenditures negli- gence self-insured, of the health care For provider. cities that are as Hun- Park in tington case, the instant effect is direct reduction in revenues. For cities that Fund, are insured by the State Insurance Compensation indirect, effect is but no less costly, must they higher premiums pay for their workers’ compensation insurance.
Local governments have been serious with facing work- problems rising ers’ compensation сosts. In the Institute for Local Government pub- lished the result of a two-year of workers’ in the study public compensation sector in California. institute noted that workers’ laws compensation and regulations are not “visible issues” which are the public subject media reporting, but that the costs “are rates in local rising alarming government” and that “workers’ has become an issue of se- compensation rious concern to public administrators.”2 From fiscal year 1968-1969 1972-1973, workers’ costs In that increased percent. same period, (261 increase was even higher for and fire police percent) (279 percent) employees.3
The Workmen’s Study Compensation Commission was established 1963 Labor Code 6200-6240 sections study workers’ compensation system and advise the and the Governor of its findings. commission report 1965 found that benefits for employees of insured employers increased from 1953 to 1962 195 percent. Medical benefits over the same rose while percent 137.9 period indеmnity benefits increased Roof,
2Through the Institute for Local Self Government pages 4-5.
3Ibid., page 12. *10 that the trend of work- illustrate percent. 232.2 statistics foregoing in the increasing years steadily, rapidly,
ers’ costs was Civil Code section when the enacted 1975 prior added another burden. improvidently insurance as to isolate medical by respondents attempt not justified cost increases is coverage large that has only experienced medical malpractice is indication that facts. there some Admittedly 3333.1 was to 1975 when section prior were increasing However, to costs to rising employers, shift the burden of those adopted. for workers’ costs cities which themselves have including experienced rising the purported goal is not a rational achieve compensation, approach Indeed, from a public better health care for the residents of California. it is aspect, counterproductive. policy 804, Cal.Rptr.
In Li v. Yellow Cab 13 Cal.3d 811 Company [119 858, 1226, 393], mаde it clear that this court P.2d 78 A.L.R.3d fault, the extent of based on liability must maintain “a in which is system further declared that fault . . . .” We liability should the extent govern liability under which “by system must be contributory negligence replaced it in direct will whose caused damage negligence be borne those (Id., 813.) to their fault.” proportion respective p. of the
If to the injury employee, an contributed in any way employer tort- a third party in his suit recovery employee’s against employer Engineering & (Associated will Cоnstruction accordingly. feasor be reduced (1978) 846-847 Co. Workers’ Bd. Cal.3d v. Comp. Appeals free of 684].) entirely if is neg- 587 P.2d But the employer be in a he as would injury, generally that caused the ligence employee’s due case, of the employer’s there a clear violation medical is him or his car- from the tortfeasor to rights the burden by shifting process rier. First, an it creates elementary two reasons.
Section 3333.1 must fall for are classification, i.e., permitted medical tortfeasors invidious third of their to innocent negligence parties, on much of the burdens pass between is no logical way distinguish There unlike all other tortfeasors. artery during surgery severs victim’s medical who negligently doctor a victim’s automobile severs an artery and a motorist who negligently test, rational this discrimina- modest relationship accident. Under even state untenable. purpose no valid is therefore classification serves tory here or deprives the innocent Second, as applied the code section without semblance of due process. his carrier of their property I would reverse the judgment.
Bird, J.,C. concurred.