Court of Appeals Upholds Insurer’s Introduction of Medical Bills at UIM Trial Even Though Plaintiff Sought No Recovery for Those Bills

Michael R. Giordano

Gladstone v. West Bend Mut. Ins. Co., 2021 WL 1113900 (Ind. Ct. App. 2021)

Plaintiffs’ attorneys, defense attorneys, and insurers have long quarreled about the admissibility of evidence for measuring medical damages in personal injury actions. Before the Indiana Supreme Court’s decisions in Stanley v. Walker, 906 N.E.2d 852 (Ind. 2009) and Patchett v. Lee,  60 N.E.3d 1025 (Ind. 2016), the dispute usually centered on whether the jury should consider the amount charged by the medical providers or the amount actually paid to the medical providers in full satisfaction of those bills. Since the Indiana appellate courts have held that juries can consider both amounts, an increasingly common dispute has been whether medical bills should be admitted into evidence at all. In a case of first impression, the Court of Appeals held that medical bills are relevant and admissible, even if the plaintiff is not seeking any recovery for those bills.

In Gladstone v. West Bend Mut. Ins. Co., the insured was involved in a car accident and sustained a broken right wrist, a laceration to his right forearm, and a contusion to his right knee. The insured asserted a negligence claim against the other motorist, who was dismissed from the case after her auto insurer tendered its liability limit of $50,000. The insured continued the case against his insurer to recover underinsured motorist (“UIM”) coverage, which had an available limit of $200,000.

Before trial, the insured moved to exclude evidence of his medical bills, arguing they were irrelevant because he sought only to recover damages for his pain and suffering. The trial court denied the insured’s motion, so his insurer was allowed to present evidence of his medical bills, which totaled about $14,000 and were reduced by insurance payments and discounts to about $2,000. The jury entered a verdict of $0 for the insured,  who appealed and argued that the trial court abused its discretion in admitting his medical expenses into evidence.

The Court of Appeals disagreed with the insured and affirmed the trial court’s decision. Rejecting the insured’s invitation to adopt a bright-line rule that medical bills are “never” relevant to the jury’s assessment of pain and suffering damages, the Court of Appeals stated, “[c]ommon sense and experience dictate that a more serious injury generally brings with it greater medical expenses as well as greater pain and suffering.”

The Court of Appeals found support for its position in other jurisdictions, which noted that attorneys and  insurers “routinely” consider medical expenses in negotiating settlements and that appellate courts do the same when determining whether the non-economic portion of an award of damages is appropriate. “If the bills are low, as [the insured] apparently considers them to be,” the Court of Appeals explained, “then they tend to establish that [the insured] has not experienced extensive pain and suffering from his injuries, and that is all that Evidence Rule of 401 requires.” Because the insurer cleared the “low bar” for establishing that the insured’s medical bills were relevant, the Court of Appeals found that the trial court did not abuse its discretion in admitting those bills and the paid amounts into evidence.

The Court of Appeals also rejected the insured’s argument that the evidence of his medical bills caused the jury to improperly conclude from the relatively low amounts billed that he had experienced minimal pain and suffering. The insured presented evidence to dispute that his medical bills were an accurate reflection of his pain and suffering. “While the jury may have not credited this evidence,” the Court of Appeals found that the insured had “not established any danger that the jury was unable to grasp [his] theory of the case or that its verdict was the result of confusion.” Thus, the Court of Appeals found that the trial court did not abuse its discretion in admitting evidence of the insured’s medical expenses, even though he sought damages only for his alleged pain and suffering.

The decision in Gladstone is well-reasoned and a victory for defense attorneys and insurers. Savvy plaintiffs’ attorneys have had success in obtaining large verdicts by excluding evidence of medical bills and seeking damages only for pain and suffering where the medical treatment was minimal, or the amounts billed or paid were relatively insignificant. But as the Court of Appeals noted, medical bills are “routinely considered” by attorneys, insurers, and appellate courts in evaluating damages for personal injuries. The outcome of the trial in Gladstone shows that juries are no different.