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Washington’s Collateral Source Rule: Billed v. Paid

Washington State recognizes the collateral source rule in personal injury claims. Under the rule, plaintiffs are allowed to recover damages from a tortfeasor notwithstanding any compensation received for the same injury from an independent source. Payments plaintiff receives due to injuries, which are not from the tortfeasor, are collateral source and will not reduce the damages otherwise recoverable. Hayes v. Wieber Enterprises, Inc., 105 Wn. App. 611, 616, 20 P.3d 496, 498 (2001) (citing Cox v. Spangler, 141 Wn.2d 431, 439, 5P.3d 1265(2000)).

“Plaintiffs in negligence cases are permitted to recover the reasonable value of the medical services they receive, not the total of all bills paid.” Hayes, 105 Wash. App. 611, 616, 20 P.3d 496, 499 (citing Patterson v. Horton, 84 Wn. App. 531, 543, 929 P.2d 1125 (1997).) “And the amount actually billed or paid is not itself determinative.” Hayes, 105 Wn. App. 611, 616, 20 P.3d 496, at 499. It is a question of fact for the jury to determine the amount of damages for past medical specials. Hawkins v. Marshall, 92 Wash. App. 38, 44, 962 P.2d 834 (1998); Maurer v. Grange Ins. Ass’n, 18 Wash. App. 197, 203, 567 P.2d 253 (1977).

Plaintiff cannot recover the amount a medical provider billed or the amount that was paid by Plaintiff or on behalf of Plaintiff unless the amounts reflect the reasonable value of the medical services. Torgeson v. Hanford, 79 Wash. 56, 58-59, 139 P. 648 (1914).

“While evidence of collateral source compensation received by plaintiff may well be relevant for a variety of purposes, such evidence is excluded under collateral source rule on the basis that it is unfairly prejudicial because the jury could use it for improper purposes.” Cox v. Spangler, 141 Wash. 2d 431, 440–41, 5 P.3d 1265, 1270 (2000), opinion corrected, 22 P.3d 791 (Wash. 2001).

The collateral source rule requires exclusion of evidence of other money received by plaintiff so the jury will not infer the claimant is receiving a windfall, and invalidate the defendant’s responsibility. Therefore, even when otherwise relevant, proof of collateral payments are usually excluded to avoid such payments to be improperly used by the fact finder to reduce the plaintiff’s damage award. Id.

The rule is applied broadly, but there are a few exceptions to the collateral source rule. The rule does not apply to 1) compensation that is not independent of the tortfeasor, such as if the payments are made by the Defendant’s Personal Injury Protection carrier, Maziarski v. Bair, 83 Wash. App. 835, 841 n.8, 924 P.2d 409 (1996); 2) if the compensation was for a different injury, Wheeler v. Catholic Archdiocese of Seattle, 124 Wash. 2d 634, 641, 880 P.2d 29 (1994); and 3) per statutory exception, it does not apply for injuries, which occur as a result of health care. Wash. Rev. Code § 7.70.080.

ABOUT THE AUTHOR: Angelina Petrosyan is an associate attorney in Tyson & Mendes’ Seattle office. Ms. Petrosyan specializes in general liability, employment, and construction litigation. Contact Angelina at 206.420.4267 or apetrosyan@tysonmendes.com.