If Howell v. Hamilton Meats looked like it was going to wipe out lien-based medicine in California, Pebley v. Santa Clara Organics, LLC, 22 Cal. App. 5th 1266 (2018), is the case that pulled it back from the brink. Eight years after Howell capped past-medical damages at amounts actually paid by insurance, the Second District Court of Appeal answered the next obvious question: what if the plaintiff has insurance but chooses not to use it?
The answer, in short: the plaintiff can do that, and the jury gets to decide reasonable value the old-fashioned way — without an insurance-negotiated rate cap quietly capping the verdict.
The Facts
Maria Pebley was injured in a 2010 motor vehicle accident. She had health insurance through Kaiser Permanente. After the accident, she chose to obtain treatment through providers who were not part of the Kaiser network and who agreed to treat her on a lien against her future personal injury recovery. She underwent extensive orthopedic and pain-management care over several years. The lien-based providers billed approximately $260,000.
At trial, the defense moved to exclude evidence of the full billed amount on Howell grounds, arguing that because Pebley was insured, the recoverable past-medicals figure should be capped at what Kaiser would have paid in-network. The trial court rejected the argument and admitted the full billed amounts as evidence of reasonable value. The jury returned a verdict for Pebley. Santa Clara Organics appealed.
What the Court of Appeal Held
The Court of Appeal affirmed. The opinion makes three points that have become load-bearing for California PI practice:
- An insured plaintiff is not required to treat through their insurance. Nothing in California law forces a personal injury plaintiff to use their existing health coverage for accident-related care. A plaintiff who chooses lien-based treatment is making a permissible election, not gaming the system.
- Howell's predicate doesn't apply when there is no insurance-paid amount to point to. The Howell cap operates on the gap between billed amounts and amounts actually paid under a third-party-payor contract. Where the plaintiff treats on lien and no insurance ever paid anything, there is no smaller “actually paid” figure to anchor on.
- The reasonable-value question goes to the jury. What lien-based providers billed is admissible as evidence of reasonable value. The defense remains free to put on its own evidence — expert testimony about prevailing rates, comparable-procedure pricing, even what the plaintiff's insurance would have paid in-network — and the jury weighs it all.
The Defense Toolkit Under Pebley
Pebley did not give plaintiff's counsel a blank check to inflate medical specials. It gave them the right to put billed amounts in front of a jury and argue that those amounts represent reasonable value. The defense gets to push back in real time:
- Cross-examination of treating providers about their billing structure, lien-collection history, and whether they routinely reduce balances at settlement.
- Defense medical experts testifying about what comparable procedures cost in the same geographic market through standard insurance or cash-pay channels.
- Pebley-specific motions seeking to admit evidence of what the plaintiff's insurance would have paid for comparable in-network care — admissible in many California courtrooms as one data point on reasonable value, even when the plaintiff did not in fact use that insurance.
What Pebley Doesn't Decide
The opinion is narrower than some plaintiff-side commentary makes it sound:
- It does not bar the defense from putting on evidence of insurance-negotiated rates as one data point on reasonable value.
- It does not relieve plaintiff's counsel from establishing reasonable value through competent testimony — usually treating-provider testimony or a billing expert.
- It does not exempt lien-based bills from scrutiny under California Evidence Code § 352 or from foundational challenges to the reasonableness of the underlying treatment.
How Pebley Is Working in 2026
Eight years after Pebley, the decision has been cited extensively but never overturned. The California Supreme Court denied review in 2018, and subsequent Court of Appeal decisions have generally followed Pebley's framework for plaintiffs who treat outside their insurance. Practically, the case is the load-bearing precedent for the existence of the California lien-medicine market — an ecosystem of doctors, surgery centers, and imaging providers that forms the working surface of plaintiff PI medicine in the state.
For plaintiff's counsel, the takeaway is workable: an insured client can be referred to lien-based care for accident-related treatment, the billed amounts get to the jury, and Pebley supplies the doctrinal cover. The defense will fight on reasonable value, not on the right to treat. Sixteen years post-Howell and eight years post-Pebley, that is the steady-state equilibrium.
This article is general legal information about a published California appellate decision and is not legal advice.