Where a sanction award is statutorily appealable, may the merits of a medical damages discovery dispute resulting in that sanction be reviewed at the same time?
In Dodd v. Cruz (filed 2/5/2014) B247493, Dodd sued Cruz for injuries sustained in a vehicle accident, including medical surgical expenses he incurred with Coast Surgery Center as a result of the accident. Coast sold to Medical Finance LLC (MedFi) its medical lien for services provided to Dodd. (MedFi's president is Dodd's attorney, Waks.) Cruz sought discovery of documents relating to the lien transaction via subpoena; MedFi succeeded in a motion to quash the subpoena (joined by Dodd), including the trial court's award of $5,600 in sanctions. Cruz appealed the sanction order (sanctions in excess of $5,000 being immediately appealable under Code of Civil Procedure section 904.1, subd. (a)(12).). The Court of Appeal, Second Appellate District, Division Three, reversed the granting of the motion and awarding of sanctions.
The documents sought by Cruz were a contract between Med-FI and Coast that predated Dodd's surgery, a redacted assignment of the claim dated the day of the surgery, and "MedFi's Open Lien Detail;" these documents included evidence of the amount paid for its lien. MedFi objected on grounds of confidentiality, proprietary rights, and relevance. In its motion to quash the subpoena of the documents, MedFi claimed it would incur attorney fees of $5,600 in prosecuting it motion. The trial court granted the motion on grounds of relevancy and awarded the requested sanctions.
Respondents to the appeal first contend the trial court order to quash was not reviewable on a statutory appeal of the sanctions order. The appellate court disagreed, finding that a discovery ruling is reviewable if it "necessarily affects" an appealable order (section 906); here the underlying discovery ruling was "inextricably intertwined" with the monetary sanctions order.
Next, the Court Appeal discussed respondents' contention that the subpoena was not directed at obtaining any documents relevant to this personal injury litigation. It was undisputed that the amount of economic damages, if any, that Dodd may recover for his medical treatment by Coast was one of the subject matters of the lawsuit. The court thus reviewed the measure of damages for past medical expenses: the lesser of the reasonable value of the medical services and the actual amount paid to discharge that obligation. (Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, 555.) The court found that the subpoena was reasonably calculated to lead to discovery of admissible evidence of reasonable value of the services. Coast's belief of reasonable value, allowing for the risk and expense of collection, could be explained from the amount it received for conveying the lien to Medfi. As a part of this inquiry, what a medical provider is willing to accept in relinquishing its claim may be an adjustment downward from the face amount of its gross billing.