Plaintiff Keltner was involved in a car accident with as US Postal Service employee.  The USPS employee while driving a tractor trailer, owned by USPS, ran a red light and struck plaintiff’s vehicle.  USPS admitted negligence and fault.  The only issue in front of the US District Court, Western Division was that of damages.[i]

Plaintiff was taken to the hospital following the accident.  He was released the same day.  His doctor testified that the wreck had aggravated plaintiff’s previously-asymptomatic degenerative condition.



The Court stated that:  In Tennessee, damages in personal-injury actions “primarily compensate the wronged party for his or her injuries and are intended to make the wronged party whole.”[i]   A plaintiff has the burden of proving damages, and his proof “must be as certain as the nature of the case permits and must enable the trier of fact to make a fair and reasonable assessment of the damages.”[ii]   The Court determined that Keltner had proven the existence of damages and given the Court a sufficient basis to make a reasonable estimate of such damages. The Court found that Keltner should recover damages in two broad categories.

·         First, he should recover his economic damages. This includes medical expenses already incurred as a result of the collision and future expenses for reasonably necessary medical care.

·         Second, he should recover his non-economic damages. This includes the physical and emotional pain and suffering he experienced and continues to experience because of the collision, as well as his loss of enjoyment of life.


A.         Economic Damages

The Court cited West v. Shelby Cnty. Healthcare Corp., stating that recovery for medical expenses in personal-injury cases is “limited to those expenses that are reasonable and necessary.”[iii]  

1.         Past Medical Expenses

It was undisputed that Keltner received a total of $47,699.32 in bills for medical treatment.  This total was for the charge for services rendered rather than the actual amount paid by Keltner or Keltner's insurance on his behalf.  The USPS argued that a reasonable assessment of medical damages should be determined by the discounted rate that his insurer previously negotiated and actually paid—$11,782.06—rather than the undiscounted rate that a healthcare provider might charge an uninsured or an insured with a different health insurer.[iv]

a.            Keltner Court’s Analysis of West v. Shelby

The Court noted that the Tennessee Supreme Court recently addressed the issue of healthcare bills under the state's Hospital Lien Act.[v]  In West v. Shelby, “the parties disagreed about the reasonableness of the amount of the [healthcare provider's] charges” for services.[vi] The Supreme Court found the disagreement “understandable because the [healthcare provider] had two versions of its costs—one for [the patients] and their insurance companies and another for the lien and the third-party tortfeasor.”[vii]

The Tennessee Supreme Court held that the healthcare provider's “non-discounted charges ... should not be considered reasonable charges” for the purposes of the Hospital Lien Act. The non-discounted charges were not reasonable because they did not reflect the rate for services in the actual marketplace: few insurers pay the hospital's listed, full charge. Furthermore, healthcare providers further their own economic interest by agreeing to discount charges for patients insured by separate companies.[viii]


b.           Decision in West v. Shelby is Applicable to Personal Injury Cases

The Court in Keltner stated that: Although ruling on the Hospital Lien Act, the Tennessee Supreme Court's reasoning should also aide this Court's duty to make a fair and reasonable assessment of damages.[ix]  Tennessee courts have not addressed the issue in a generic personal-injury case, but the Court in Keltner found the reasoning of the Supreme Court of California persuasive. In Howell v. Hamilton Meats, that Court held that although “[t]he collateral-source rule precludes certain deductions against otherwise recoverable damages,” it “does not expand the scope of economic damages to include expenses the plaintiff never incurred.”[x] Thus, in California, “an injured plaintiff whose medical expenses are paid through private insurance may recover as economic damages no more than the amounts paid by the plaintiff or his or her insurer for the medical services received or still owing at the time of trial.”[xi]

c.            Court in Keltner applied rule from West v. Shelby, and only awarded plaintiff discounted cost of medical bills for past medical expenses

The Court stated in its analysis that Keltner's insurance provider paid a certain amount of money for medical care, and that the hospitals, clinics, and chiropractors' offices accepted that payment as payment in full.  In other words, the non-discounted rate was not an “expense” because it was not “expended” or even “incurred.”[xii]  The medical-care provider never demanded that Keltner or his insurer pay the chargemaster rate because that rate was inapplicable to Keltner.

Thus, if the Court allowed Keltner to put forth evidence of a never-incurred price and refused to allow evidence that no one ever paid that price—the care provider all the while considering the bill paid in full—the result would be a windfall for the Plaintiff. Keltner would “recover” for medical expenses that were never incurred by anyone.

Therefore, the negotiated rate is a fair assessment of Keltner's true damages. For those medical expenses, the Court awarded Keltner $11,782.06 (the discounted amount) for past medical expenses, plus a few bills USPS had left out of its calculation of the discounted amounts.[xiii] 

2.         Future Medical Expenses

There was no additional analysis of future medical expenses, under the West v. Shelby decision.   In Tennessee, “persons seeking future medical expenses must present evidence (1) that additional medical treatment is reasonably certain to be required in the future and (2) that will enable the trier of fact to reasonably estimate the cost of the expected treatment.”[xiv]

In the Keltner case, plaintiff’s doctor testified that he was reasonably certain that that plaintiff would need to continue to receive nerve blocks (for pain treatment/management) in the future.  The court estimated plaintiff’s life expectancy, along with frequency of needing nerve blocks, and estimate of cost per nerve block.  The Court awarded plaintiff $33,721.52 as a fair and reasonable estimate of compensation for likely future medical expenses.[xv]


B.         Non-economic Damages

The West v. Shelby was not analyzed regarding non-economic damages. The Court in Keltner awarded plaintiff $25,000 for pain and suffering, and $25,000 for loss of enjoyment of life. 


The United States District Court, Western Division, determined that even though the Supreme Court’s decision in West v. Shelby was under the Hospital Lien Act, the Supreme Court’s reasoning should also aide the District Court's duty to make a fair and reasonable assessment of damages, in a personal injury case.

The District Court held that the non-discounted rate of medical bills was not an “expense” because it was not “expended” or even “incurred.”  Plaintiff could not recover for expenses that were never incurred by anyone.  The negotiated or discounted amount was a fair assessment of plaintiff’s true damages.  The plaintiff was awarded the discounted rate of medical bills.

[iv] Keltner v. U.S., at *4.

[v] Keltner v. U.S., at *4; See Tenn.Code Ann. §§ 29–22–101 to 107.

[viii] Keltner v. U.S.  at *4.

[ix] Keltner v. U.S. at *4.

[x] Keltner v. U.S., at *6; Howell v. Hamilton Meats & Provisions, Inc., 52 Cal.4th 541, 129 Cal.Rptr.3d 325, 257 P.3d 1130, 1133 (Cal.2011). The collateral-source rule “permits plaintiffs to prove and recover medical expenses, whether paid by insurance or not.” Steele v. Ft. Sanders Anesthesia Grp., P.C., 897 S.W.2d 270, 282 (Tenn.Ct.App.1994) (citing Donnell v. Donnell, 220 Tenn. 169, 415 S.W.2d 127, 134 (Tenn.1967)). The doctrine is a “substantive rule of law that bars a tortfeasor from reducing damages owed to a plaintiff by the amount of recovery the plaintiff receives from sources that are collateral to the tortfeasor.” J & M, Inc. v. Cupples, No. E2004–01328–COA–R3–CV, 2005 Tenn.App. LEXIS 301, at *7, 2005 WL 1190704 (Tenn.Ct.App. May 20, 2005) (citing Jackson v. City of Cookeville, 31 F.3d 1354, 1359 (6th Cir.1994)).

[xii] Keltner v. U.S, at *6.; (citing Restatement (Second) of Torts § 924).

[xiii] Keltner v. U.S, at *5.

[xiv] Keltner v. U.S., at *5; Singh v. Larry Fowler Trucking, Inc., 390 S.W.3d 280, 287 (Tenn.2012) (quoting Henley v. Amacher, No. M1999–02799–COA–R3–CV, Tenn.App. LEXIS 72, at *45, 2002 WL 100402 (Tenn.Ct.App. Jan. 28, 2002)).

[xv] Keltner v. U.S, at *5.