Scholz v. Metropolitan Pathologists, P.C.

• Decision Date: 26 April 1993
• Docket Number: No. 92SA277,92SA277
• Citation: 851 P.2d 901
• Parties: Franz J. SCHOLZ and Ingeborg O. Scholz, Plaintiffs-Appellants/Cross-Appellees, v. METROPOLITAN PATHOLOGISTS, P.C., a Colorado corporation, Defendant-Appellee/Cross-Appellant.
• Court: Colorado Supreme Court

Page 901

851 P.2d 901

61 USLW 2707

Franz J. SCHOLZ and Ingeborg O. Scholz Plaintiffs-Appellants/Cross-Appellees, v. METROPOLITAN PATHOLOGISTS, P.C., a Colorado corporation Defendant-Appellee/Cross-Appellant.

No. 92SA277.

Supreme Court of Colorado En Banc.

April 26, 1993.

Rehearing Denied June 7, 1993.

Haddon, Morgan & Foreman, P.C., Norman R. Mueller, Ty Gee, Denver, Branney, Hillyard, Kudla and Jurdem, Joseph J. Branney, Neil Hillyard, John S. Portman, Englewood, for plaintiffs-appellants/cross-appellees.

Johnson, Ruddy, Norman & McConaty, P.C., Collie E. Norman, Thomas H. Anderson, Denver, for defendant-appellee/cross-appellant.

Wilcox & Ogden, P.C., Ralph Ogden, Denver, amicus curiae, for Colorado Trial Lawyers Ass'n.

Davis, Graham & Stubbs, Andrew M. Low, Robert A. Gatter, Jr., Denver, amicus curiae, for Physician Insurers Ass'n of America, amicus curiae, for American Tort Reform Ass'n.

Michael J. Norton, U.S. Atty., James W. Winchester, Sr. Litigation Counsel, Michael E. Hegarty, Denver, amicus curiae, for the U.S.

Chief Justice ROVIRA delivered the Opinion of the Court.

Franz and Ingeborg Scholz appeal the district court's ruling reducing the amount of damages awarded by a jury for noneconomic and derivative losses pursuant to the Health Care Availability Act ("HCAA"), sections 13-64-101 to -503, 6A C.R.S. (1992 Supp.), refusing to award prejudgment interest for future damages, and refusing to award all actual costs alleged to have been incurred by plaintiffs subsequent to defendant's refusal of a settlement offer. ¹ We affirm in part and reverse in part.

I

In 1989, Franz Scholz developed a bladder problem. Scholz was examined by Dr. Myron Yakely, a specialist in the field of urology, who opined that Scholz's problem was caused by an obstruction due to a reaction to medication Scholz was taking. Dr. Yakely's examination also revealed a hardened spot in the prostate. An ultrasound, which revealed nothing abnormal, and a biopsy were taken. The biopsy was analyzed by Dr. Howard Pirch, a specialist in the field of pathology and an employee of Metropolitan Pathologists, P.C. (Metropolitan). When Metropolitan gave the results of the biopsy to Dr. Yakely, he advised Scholz that they were positive for cancer.

As a result of this diagnosis, Scholz underwent surgery for the removal of his prostate gland. Approximately two weeks after the operation, Dr. Yakely informed Scholz that the operation had been unnecessary as Scholz never had prostate cancer. Dr. Yakely explained that the misdiagnosis was the result of Metropolitan's mislabeling of slides that were produced from the biopsy.

In 1990, the Scholzes filed suit alleging negligence against Dr. Yakely, Dr. Pirch, and Metropolitan. After learning of the genesis of the misdiagnosis, plaintiffs dismissed Drs. Pirch and Yakely from the suit, and added as a defendant Robert Cunningham, the lab technician responsible for labeling the slides.

The parties then entered into a pretrial stipulation for the dismissal of Cunningham as a defendant, while preserving plaintiffs' claim that the HCAA was inapplicable to this case. At the beginning of trial, Metropolitan admitted liability and the case went to the jury solely on the issue of damages. The jury awarded total damages of $1,416,829 to Mr. Scholz ² and $159,250 to Mrs. Scholz on her derivative claim. ³

Defendant then filed a motion for reduction of the jury verdict pursuant to the HCAA, arguing that plaintiffs' combined recovery for noneconomic and derivative damages was limited to $250,000. Plaintiffs argued that the HCAA was inapplicable to this case and, if the HCAA applied, the provisions limiting the damage award were unconstitutional.

The district court denied plaintiffs' motion for entry of judgment on the jury verdict--applying the HCAA and rejecting plaintiffs' constitutional challenges. The court reduced the total noneconomic and derivative damages for both plaintiffs from $914,250 to $250,000. After the addition of prejudgment interest, judgment in favor of plaintiffs was entered in the total amount of $1,065,929.09. Defendant paid $1,000,000 towards this judgment claiming that its total liability, including prejudgment interest, was limited to $1,000,000 under the HCAA.

II

The first issue for review concerns whether the HCAA is applicable to this case. Plaintiffs argue that because the injuries they suffered were caused by Cunningham, an unlicensed, nonprofessional lab technician, the HCAA is inapplicable as Cunningham is not a "health care professional" as that term is defined in the HCAA. We disagree.

Section 13-64-302, 6A C.R.S. (1992 Supp.), provides, in pertinent part, that:

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 ... or a health care institution ... shall not exceed one million dollars, present value per patient, including any derivative claim by any other claimant, of which not more than two hundred fifty thousand dollars, present value per patient including any derivative claim by any other claimant, shall be attributable to noneconomic loss or injury....

The HCAA defines a health care professional as "any person licensed in this state or any other state to practice medicine, chiropractic, nursing, physical therapy, podiatry, dentistry, pharmacy, optometry, or other healing arts. The term includes any professional corporation or other professional entity comprised of such health care providers as permitted by the laws of this state." § 13-64-202(4), 6A C.R.S. (1992 Supp.). ⁴

The plain language of the statute indicates that any professional corporation or entity, which is comprised of the licensed health care professionals listed in the statute, is subject to the limits of the HCAA. Nothing in the definition of the HCAA suggests otherwise. Therefore, we conclude that based on the plain language of the statute, the HCAA is applicable to the present case.

Plaintiffs insist, however, that the inclusion of "professional corporations" and "professional entities" in the definition of a health care professional was intended only to prevent an injured plaintiff from avoiding the limitations of the HCAA by suing a professional entity rather than an individual who is expressly covered by the statute. We agree with plaintiffs insofar as their argument suggests that the definition of a health care professional precludes a plaintiff from avoiding the application of the HCAA through artful pleading. However, the statute clearly operates to preclude such an avoidance under the facts of this case. For example, the defendant has correctly observed that numerous, perhaps even the vast majority of, medical procedures require the assistance of unlicensed individuals such as Cunningham. In light of this fact, it is safe to assume that the legislature sought to prevent a plaintiff from naming some unlicensed employee whose conduct may have contributed to plaintiff's injuries as a defendant (in addition to the professional entity itself under a theory of respondeat superior ) and thereby avoid application of the HCAA.

To hold otherwise, and accept plaintiffs' narrow application of the act, would clearly frustrate the General Assembly's intent, as expressed in the legislative declaration, in passing the HCAA's damage limitation provisions. "Perhaps the best guide to [ascertaining the General Assembly's] intent is the declaration of policy which frequently forms the initial part of a enactment." St. Lukes Hosp. v. Industrial Comm'n, 142 Colo. 28, 32, 349 P.2d 995, 997 (1960). The legislative declaration of the HCAA states:

The general assembly determines and declares that it is in the best interests of the citizens of this state to assure the continued availability of adequate health care services to the people of this state by containing the significantly increasing costs of malpractice insurance for medical care institutions and licensed medical care professionals....

§ 13-64-102, 6A C.R.S. (1992 Supp.). In seeking to curb the increasing costs of malpractice insurance in this state, there is nothing in the HCAA which suggests the legislature sought to do so only by limiting recoveries for actions brought against licensed professionals or professional corporations and entities whose liability results solely from the conduct of those professionals. The reason that no such suggestion exists is clear: the negligent conduct of unlicensed employees, such as Cunningham, who contribute to providing health care services affects the insurance premiums that health care providers pay, just as the conduct of professionals within those entities does. ⁵ In short, the legislature did not distinguish between the status, i.e., licensed/unlicensed, professional/nonprofessional, of health care providers when it sought to check the rising costs of malpractice insurance by including professional corporations and entities within the coverage of the HCAA.

Thus, we find that the definition of a "health care professional" provided in the HCAA was intended to require the application of the statute under the circumstances presented here.

III

Plaintiffs next argue that if the HCAA applies, the statute must be struck down as unconstitutional because it infringes on the right to a jury trial in civil cases, and violates the guarantees of equal protection and due process of the law.

We note at the outset that "statutes facing a constitutional challenge are presumed to be constitutional, and the party challenging the statute bears the burden of proving it to be unconstitutional beyond a reasonable doubt." Firelock Inc. v. District Court, 776 P.2d 1090, 1097 (Colo.1989). We hold that the plaintiffs have failed to meet this burden. ⁶

A

Plaintiffs' first argument is that in limiting the amount of damages that may be recovered by a plaintiff suing a health care professional, the HCAA...