2012-00132992-CU-PA

Jay Harter vs. Charlene Lane

Nature of Proceeding:  Motion to Compel Production of Documents Pursuant to Deposition

Filed By: Mason, Stephen A.

Defendant Lane’s motion to compel production of documents pursuant to deposition
subpoena directed to Philip J. Orisek, M.D., Inc. is GRANTED, as follows.

This is a personal injury action arising out of an automobile accident.  Plaintiff sought
treatment from Dr. Orisek who provided medical services pursuant to a lien.  It appears
a portion of this lien was subsequently sold by Dr. Orisek to “MedFinManager, LLC.”
Defendant issued a subpoena for the deposition of Dr. Orisek’s person most
knowledgeable which included a request for documents relating to the sale of the lien.
In particular, defendant now seeks to compel production of the check reflecting the
amount paid for the lien as well as the contract governing the sale of the lien pursuant
to the recent decision of Dodd v. Cruz (2014) 223 Cal.App.4th 933 since under
California law, damages for past medical expenses are limited to the lesser of the
amount paid or incurred and the reasonable value of the services. (See, e.g., Howell v.
Hamilton Meats & Provisions (2011) 52 Cal.4th 541, 555.)
In opposition, Dr. Orisek argues that the information sought is private, confidential,
privileged and not subject to discovery.  Moreover, he insists that Dodd is
distinguishable and that the Third District’s decision in Katisuzhinsky v. Perry (2007)
152 Cal.App.4th 1288 is controlling.

At the outset, the Court finds that the opposition’s reliance on Katisuzhinsky is
misplaced.  There, the Third District reversed the trial court’s ruling which precluded
the personal injury plaintiffs from introducing evidence of medical expenses beyond
the discounted rate paid by MedFin to their medical providers, finding the trial court did
not correctly apply the rule established in Hanif v. Housing Authority (1988) 200
Cal.App.3d 635 and Nishihama v. City and County of San Francisco (2001) 93
Cal.App.4th 298.  The Court of Appeal explained that the intervention of a third party in
purchasing a medical lien does not prevent a plaintiff from recovering the amounts
billed by the medical provider for care and treatment as long as the plaintiff legitimately
incurs those expenses and remains liable for their payment, and does not forbid the
jury from considering the amounts billed by the provider as evidence of the reasonable
value of the services. (Katisuzhinsky, at 1291.)  Since the present case does not
involve any question relating to the admissibility of evidence or to plaintiff’s ability to
recover any medical expenses and since Katisuzhinsky did not even purport to
address the ability to discover information relating to the sale of a medical lien,
Katisuzhinsky is simply inapposite.

On the other hand, Dodd specifically considered the question presented here:
Whether a defendant in a personal injury action is entitled to obtain through discovery
documents relating to a third party’s contractual relationship with a health care provider
who sold his/her medical lien against the plaintiff’s recovery, including documents
disclosing what the factor paid for the lien. (Dodd, at 936.)  In a unanimous decision,
the Court of Appeal answered in the affirmative and found that the trial court abused its
discretion by quashing the defendant’s subpoena to the entity which purchased the
medical lien.  Among other things, the Second District Court of Appeal noted that the
scope of permissible discovery is very broad:

“In the context of discovery, evidence is ‘relevant’ if it might reasonably assist a
party in evaluating its case, preparing for trial, or facilitating a settlement.
[Citation.] … Any doubts regarding relevance are generally resolved in favor of
allowing the discovery. [Citation.]  Although the superior court has discretion in
granting or denying discovery motions, it is obligated to construe the discovery
statutes liberally in favor of disclosure. [Citation.]”  In reviewing discovery
orders, appellate courts ‘should not use the trial court’s discretion argument to
defeat the liberal policies of the statute.’ [Citation.]  The broad scope of
permissible discovery under the Civil Discovery Act ‘is equally applicable to
discovery of information from a nonparty as it is to parties in the pending
suit.’ [Citation.]” (Dodd, at 940.)

The Court of Appeal continued its analysis of the documents sought by defendant’s
subpoena which, after meet-and-confer efforts, was narrowed to the contract between
the medical provider and the purchaser of the lien, the (redacted) “Creditor’s
Assignment of Claim,” and the purchaser’s “Open Lien Detail.” (Id., at 937.)  The
parties to the appeal in Dodd agreed that the subject matter of that litigation included
the amount of economic damages the plaintiff may recover for his medical treatment
and the defendant insisted that the documents sought were discoverable “because  they are relevant to such damages or, at a minimum, the subpoena is reasonably
calculated to lead to the discovery of admissible evidence,” although both the plaintiff
and the lien purchaser argued otherwise. (Id., at 940.)  After considering the
application of both Howell (i.e., a plaintiff may recover as economic damages no more
than the reasonable value of the medical services rendered and is not entitled to
recover the reasonable value if his or her actual loss was less) and the more recent
Corenbaum v. Lampkin (2013) 215 Cal.App.4th 1308 (i.e., damages for past medical
expenses are limited to the lesser of (1) the amount paid or incurred for past medical
expenses and (2) the reasonable value of the services), the Second District concluded
the defendant’s subpoena was reasonably calculated to lead to admissible evidence in
at least three respects.

First, the information was relevant to the reasonable value of the services by the
medical provider which sold its lien in that the documents could reveal what the
provider believed was the reasonable value of its services, apart from its calculation of
the expense and risk of collection, which “would be at least some evidence of the
reasonable value of [the medical] services.” (Dodd, at 942.)  Second, an expert could
reasonably rely in part on this information regardless of its admissibility to form an
opinion on the reasonable value of the medical services in question. (Id.)  Third, the
subpoena was also reasonably calculated to lead to the discovery of admissible
evidence relating to the amount of medical expenses the plaintiff actually incurred
even though both the plaintiff and the lien purchaser contended the plaintiff remained
responsible for 100 percent of the original billed amount.  More specifically, the Court
found that defendant was entitled to obtain documents relating to lien purchaser’s
collection activity and policies and procedures because they may support the
defendant’s claim that the plaintiff is not actually responsible for the full amount billed. (
Id.)

For these same reasons, this Court holds that the limited documents now sought by
defendant in the case at bar are reasonably calculated to lead to the discovery of
admissible evidence bearing on the medical expenses which are expected to be
claimed by plaintiff as damages attributable to the former.

The only remaining issue to be addressed here is Dr. Orisek’s objection based on his
right to financial privacy.  The Court is not persuaded that the disclosure of the
information sought here will actually invade Dr. Orisek’s right to financial privacy but
even if it would, defendant has made a sufficient showing to overcome this objection
since the information sought is “directly relevant” to one of the fundamental issues
presented in this litigation (i.e., the amount of damages plaintiff is entitled to recover),
the scope of the discovery sought is “narrowly tailored” to only the essential
information, and there does not appear to be any less intrusive means to obtain this
information.  (See, e.g., Tien v. Superior Court (Tenet Healthcare Corp.) (2006) 139
Cal.App.4th 528, 539-540; In re Marriage of Harris (2004) 34 Cal.4th 210, 244.)  As
such, the balance the rights and interests involved weigh in favor of disclosure in this
particular case. (See, e.g., Alch v. Superior Court (Time Warner Entertainment Co .)
(2008) 165 Cal.App.4th 1412, 1423-1425.)

No later than 6/9/2014 the documents requested by defendant Lane’s deposition
subpoena shall be produced.  (The parties remain free to extend this date by mutual
agreement memorialized in writing.)

Defendant is awarded monetary sanctions as against to Philip J. Orisek, M.D., Inc. in
the amount of $760, representing five (5) hours of attorney time plus $60 filing fee.
Sanctions to be paid no later than 6/30/2014 and if not paid by that date, defendant
may prepare for the Court’s signature a formal order granting the sanctions, which may
then be enforced as a separate judgment. (Newland v. Superior Court (1995) 40
Cal.App.4th 608, 615.)

This minute order is effective immediately.  No formal order or other notice is required.
(Code Civ. Proc. §1019.5; CRC Rule 3.1312.)