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Rudnicki v. Bianco.

2023 COA 103. No. 22CA1246. Medical Malpractice—Pre-Majority Medical Expenses—Interest on Damages—Prejudgment Interest—Health Care Availability Act—Limitation of Liability—Law of the Case.

November 2, 2023

In 2005, Dr. Bianco caused Alexander Rudnicki severe injuries while using a vacuum extractor to assist in his birth. As a result of his injuries, Alexander has intellectual disabilities and is unlikely to be able to live independently in the future. In 2014, Alexander’s parents sued Dr. Bianco for medical malpractice. The parents’ individual claims were dismissed as time-barred, and the case was tried with Alexander as the sole plaintiff. A jury found that Dr. Bianco acted negligently and awarded Alexander a total of $4 million in damages, including more than $3.6 million in past and future economic damages. As relevant to this appeal, those economic damages included $391,000 for past medical expenses that Alexander had already incurred and future medical expenses he would probably incur from the date of judgment until he reached age 18 (pre-majority medical expenses). Dr. Bianco moved the district court to reduce Alexander’s damages award by the amount the jury attributed to his pre-majority medical expenses, and the court reduced the damages award by $391,000. Dr. Bianco also moved the court to reduce Alexander’s total award to $1 million based on the damages limitation in the Health Care Availability Act (HCAA). The court concluded that the jury’s findings were the proper measure of the fair, reasonable, and necessary damages that Alexander incurred, and it declined to further reduce the award. Lastly, Dr. Bianco moved the court to apply the HCAA damages cap to limit Alexander’s recovery of prejudgment interest for the period beginning on the date the action accrued and ending on the date the complaint was filed (prefiling, prejudgment interest). Ultimately, the court entered judgment in favor of Alexander for $4,633,174.59, consisting of $3,554,000 in damages plus $1,079,174.59 in prejudgment interest calculated from the date the suit was filed to the date of judgment (post-filing, prejudgment interest). Alexander appealed the decision to reduce the judgment by the amount of pre-majority medical expenses. The matter resulted in the Colorado Supreme Court’s decision in Rudnicki v. Bianco, 2021 CO 80, which abolished the common law rule precluding minors from recovering prefiling, prejudgment interest on pre-majority medical expenses. On remand from Rudnicki, the parties agreed that judgment should be entered in Alexander’s favor for $391,000 in damages for pre-majority medical expenses, but they disputed when prejudgment interest began to accrue and how much prejudgment interest could be awarded. The district court adopted Alexander’s proposed form of judgment, which included prefiling, prejudgment interest calculated from the date Alexander was born, as well as post-filing, prejudgment interest calculated from the date the complaint was filed. The court further ordered that its prior decision that Alexander’s damages could exceed the $1 million cap under the HCAA still applied, so the cap did not limit the amount that could be recovered as prejudgment interest.

On appeal, Dr. Bianco argued that the district court erred by including in its final judgment prefiling, prejudgment interest on Alexander’s pre-majority medical expenses, calculated from his date of birth, because he was not legally entitled to those damages until the Rudnicki decision. Prejudgment interest on damages awarded in a personal injury action is authorized by CRS § 13-21-101(1), which allows a plaintiff to recover prejudgment interest on damages “from the date the action accrued” until the day before the complaint was filed—prefiling, prejudgment interest—and from the date the complaint was filed to the date judgment entered—post-filing, prejudgment interest. The court of appeals determined that Rudnicki did not alter the date from which prefiling, prejudgment interest is calculated under CRS § 13-21- 101(1), and an award of such interest is consistent with the compensatory purpose of CRS § 13-21-101. Here, it is undisputed that Alexander’s injury and its cause were known on his birth date; his action against Dr. Bianco accrued on that date, and he is entitled to prefiling, prejudgment interest from that date to the day before his complaint was filed. Accordingly, the district court did not err by awarding Alexander prefiling, prejudgment interest from the date his cause of action accrued.

Dr. Bianco also contended that the district court erred by awarding prefiling, prejudgment interest resulting in a total award that exceeds the HCAA’s $1 million damages limitation. However, while prefiling, prejudgment interest is part of damages capped under the HCAA, such damages are subject to being uncapped on a showing of good cause and unfairness. Here, the district court found good cause to exceed the $1 million damages limitation and determined that it would be “manifestly unfair” to apply the limitation in this case, and Dr. Bianco did not challenge those findings on appeal. Prefiling, prejudgment interest is an element of Alexander’s past and future economic damages. Therefore, the court did not err by awarding prefiling, prejudgment interest on Alexander’s pre-majority medical expenses, even though his total damages award exceeded $1 million.

Lastly, Dr. Bianco argued that even if prefiling, prejudgment interest on economic damages may exceed the HCAA damages limitation, under the law of the case, the district court erred by departing from its previous ruling declining to award Alexander any prefiling, prejudgment interest. However, had the court ruled that Alexander was not entitled to prefiling, prejudgment interest on his award of pre-majority medical expenses that ruling would have been erroneous, and the court of appeals is not bound by the “law of the case” to affirm a lower court’s erroneous ruling.

The judgment was affirmed.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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