Pressey v. Children's Hosp. Colo.

• Decision Date: 09 March 2017
• Docket Number: Court of Appeals No. 15CA1372
• Court: Colorado Court of Appeals
• Parties: Naomi PRESSEY, BY AND THROUGH her conservator, Jennifer PRESSEY, Plaintiff-Appellee, v. CHILDREN'S HOSPITAL COLORADO, Defendant-Appellant.

488 P.3d 151

Naomi PRESSEY, BY AND THROUGH her conservator, Jennifer PRESSEY, Plaintiff-Appellee,

v.CHILDREN'S HOSPITAL COLORADO, Defendant-Appellant.

Court of Appeals No. 15CA1372

Colorado Court of Appeals, Division I.

Announced March 9, 2017

Certiorari Dismissed September 8, 2017

Leventhal Puga P.C., James E. Puga, Benjamin I. Sachs, David P. Mason, Denver, Colorado, for Plaintiff-Appellee

Hall & Evans LLC, Alan Epstein, Denver, Colorado; Martin Conklin P.C., John Martin, Carolyn Sprinthall Knaut, Denver, Colorado, for Defendant-Appellant

Opinion by JUDGE GRAHAM

¶ 1 In this medical malpractice action, we are asked to answer two novel questions of law. First, in a post-verdict proceeding to exceed the $1,000,000 cap on damages under the Health Care Availability Act (HCAA), sections 13-64-101 to - 503, C.R.S. 2016, can the trial court consider collateral sources that fall under the contract exception to the collateral source statute, section 13-21-111.6, C.R.S. 2016? And second, can a parent relinquish his or her right to pre-majority medical expenses incurred on behalf of a minor after the statute of limitations has extinguished the parent's claim so that the minor may recover those expenses? For the reasons discussed below, we conclude trial courts may not consider benefits included in the contract exception to the collateral source statute in determining whether to exceed the HCAA cap on damages. We further conclude that a minor cannot recover for pre-majority expenses incurred on his or her behalf by a parent after the statute of limitations extinguishes that claim. We therefore affirm in part, reverse in part, and remand with directions.

I. Background

¶ 2 Four days after birth, plaintiff, Naomi Pressey (Naomi), suffered irreversible brain damage caused by a lack of blood and oxygen to her brain after experiencing cardiopulmonary arrest

. Naomi, by and through her conservator, Jennifer Pressey, sued defendant, Children's Hospital Colorado (the Hospital), for the negligence of its nurses in administering medication to her prior to cardiopulmonary arrest.

¶ 3 The case was tried to a jury, which found the Hospital negligent and awarded Naomi $17,839,784.60. The damages award included past medical expenses, past noneconomic losses, future medical expenses, future lost earnings, and future noneconomic losses.

¶ 4 After trial, the court reduced Naomi's damages to $1,000,000 based on the legislative directive in section 13-64-302(1)(b), C.R.S. 2016. That section reads in pertinent part:

The total amount recoverable for all damages for a course of care for all defendants in any civil action for damages in tort brought against a health care professional ... whether past damages, future damages, or a combination of both, shall not exceed one million dollars, present value per patient, including any claim for derivative noneconomic loss or injury, of which no more than two hundred fifty thousand dollars, present value per patient ... shall be attributable to direct or derivative noneconomic loss or injury; except that, if, upon good cause shown, the court determines that the present value of past and future economic damages would exceed such limitation and that the application of such limitation would be unfair, the court may award in excess of the limitation the present value of additional past and future economic damages only.

¶ 5 Naomi filed a motion to exceed the cap for good cause. In a lengthy written opinion, the court determined that good cause had been shown and, after reducing the amount of noneconomic losses and future medical expenses awarded to Naomi, entered judgment in her favor for $14,341,538.60.

II. Discussion

¶ 6 The Hospital claims several post-verdict errors by the trial court. First, the Hospital argues that the court erred in excluding evidence of Medicaid benefits and private insurance available to Naomi in the post-verdict proceeding to exceed the damages cap. The Hospital contends that if the court had considered that evidence, Naomi would not have established good cause to exceed the cap. Second, the Hospital asserts the court erred in denying its motion for judgment notwithstanding the verdict on Naomi's pre-majority medical expenses because her parents incurred the liability to pay those expenses and the statute of limitations on her parents' claims expired prior to the filing of this suit.

A. The HCAA Damages Cap and the Collateral Source Statute

¶ 7 The Hospital argues that the legislative purpose of the HCAA damages cap cannot be fulfilled if a trial court is precluded from considering the actual losses of a plaintiff based on the contract exception to the collateral source statute. Because the cap imposed by section 13-64-302 can be harmonized with the collateral source exception contained in section 13-21-111.6, we reject this argument. Sound public policy supports both the cap and the contract exception to the collateral source statute.

1. Standard of Review

¶ 8 We review questions of statutory interpretation de novo. Pulte Home Corp. v. Countryside Cmty. Ass'n , 2016 CO 64, ¶ 24, 382 P.3d 821. "In interpreting a statute, we look to ‘the entire statutory scheme to give consistent, harmonious, and sensible effect to all parts’ and apply ‘words and phrases according to their plain and ordinary meaning.’ " Id. (quoting Denver Post Corp. v. Ritter , 255 P.3d 1083, 1089 (Colo. 2011) ).

2. The HCAA Damages Cap and Good Cause

¶ 9 The General Assembly enacted the HCAA "to assure the continued availability of adequate health care services to the people of this state." § 13-64-102(1), C.R.S. 2016. To that end, the General Assembly "clearly and unequivocally" reaffirmed "the limitations of liability set forth in section 13-64-302." § 13-64-102(2)(a). "[T]he clear purpose of the damages cap is to limit damages." Wallbank v. Rothenberg , 140 P.3d 177, 181 (Colo. App. 2006).

¶ 10 The damages cap contained in the HCAA is constitutional and does not usurp a trial court's right to review a jury award. Garhart v. Columbia/HealthOne, L.L.C. , 95 P.3d 571, 581-83 (Colo. 2004). This is because a trial court may uncap damages if it finds "good cause" and determines that application of the cap would be "unfair." § 13-64-302(1)(b). "In making findings as to ‘good cause’ and ‘unfairness’ (which essentially are different ways of saying the same thing), trial courts must consider the ‘totality of circumstances.’ " Vitetta v. Corrigan , 240 P.3d 322, 329 (Colo. App. 2009).

[T]he statute does not specify factors that a trial court must consider when determining whether a movant has shown good cause or unfairness. Therefore, a court may exercise its discretion to consider factors it deems relevant when determining whether a movant qualifies for the ... exception to the cap. The trial court may not make that determination in a vacuum, but must necessarily consider the circumstances in each case.

Wallbank , 140 P.3d at 180-81.

3. Common Law and Post-Verdict Statutory Collateral Source Rule; Medicaid Is a Collateral Source

¶ 11 "At common law, the collateral source rule provided that ‘compensation or indemnity received by an injured party from a collateral source, wholly independent of the wrongdoer and to which he has not contributed, will not diminish the damages otherwise recoverable from the wrongdoer.’ " Colo. Permanente Med. Grp., P.C. v. Evans , 926 P.2d 1218, 1230 (Colo. 1996) (quoting Kistler v. Halsey , 173 Colo. 540, 545, 481 P.2d 722, 724 (1971) ). "The purpose of the collateral source rule was to prevent the defendant from receiving credit for such compensation and thereby reduce the amount payable as damages to the injured party." Van Waters & Rogers, Inc. v. Keelan , 840 P.2d 1070, 1074 (Colo. 1992).

¶ 12 Section 13-21-111.6 abrogates the common law collateral source rule except as to benefits received as the result of a contract. Id. In part, section 13-21-111.6 states as follows:

In any action by any person or his legal representative to recover damages for a tort resulting in death or injury to person or property, the court, after the finder of fact has returned its verdict stating the amount of damages to be awarded, shall reduce the amount of the verdict by the amount by which such person ... has been or will be wholly or partially indemnified or compensated for his loss by any other person, corporation, insurance company, or fund in relation to the injury, damage, or death sustained; except that the verdict shall not be reduced by the amount by which such person ... has been or will be wholly or partially indemnified or compensated by a benefit paid as a result of a contract entered into and paid for by or on behalf of such person .

(Emphasis added.) The italicized portion of the statute is commonly referred to as the contract exception to the collateral source statute. Evans , 926 P.2d at 1230. By including the contract exception, the General Assembly "chose to allow a plaintiff to obtain the benefit of his contract, even if the award resulted in a double recovery." Volunteers of Am. Colo. Branch v. Gardenswartz , 242 P.3d 1080, 1088 (Colo. 2010). "This is consistent with the common law position that it is more repugnant to shift the benefits of the plaintiff's insurance contract to the tortfeasor in the form of reduced liability when the tortfeasor paid nothing toward the ... benefits." Id.

¶ 13 Private insurance, private disability benefits, Social Security disability benefits, and retirement benefits all fall within the contract exception to the collateral source statute. Id. (holding write-offs to his medical bills by plaintiff's health care provider "were a direct result of the benefits negotiated by his health insurance company, which is a source independent of the tortfeasor"); Barnett v. Am. Family Mut. Ins. Co. , 843 P.2d 1302, 1309 (Colo. 1993) (concluding Social Security disability benefits should not be set off from an award under section 13-21-111.6 because they result from a contract entered into...