The Colorado Court of Appeals issued its opinion in Schuessler v. Wolter on May 24, 2012.
Medical Malpractice—Workers’ Compensation Benefits—Jury Instruction—Negligence—Exclusion of Expert—Fair Debatability—Economic and Noneconomic Damages—Designated Nonparty—Comparative Fault—Prejudgment Interest—Subrogation Rights.
In these bad-faith cases, defendants James Wolter, MD and Pinnacol Assurance appealed the judgments entered on jury verdicts in favor of plaintiff Michael Schuessler, who cross-appealed certain trial court rulings. The judgment against Dr. Wolter was reversed and the case was remanded for a new trial as to him. The judgment against Pinnacol was affirmed in part and reversed in part, and the case was remanded for further proceedings.
Schuessler was injured on the job and filed a workers’ compensation claim with R. Merrill, Inc. (Merrill), his putative employer. Pinnacol, which provided workers’ compensation insurance coverage for Merrill, denied the claim. Dr. Wolter, a neurosurgeon, performed surgery on Schuessler for his injuries. The surgery caused damage to his spinal cord. Schuessler commenced a medical malpractice action against Dr. Wolter. Schuessler also filed a common law bad-faith breach of insurance contract action against Pinnacol, contending that it had wrongly denied him workers’ compensation benefits. The cases were consolidated, and a jury awarded damages to Schuessler against Pinnacol and Dr. Wolter.
On appeal, Dr. Wolter contended that the trial court erred in rejecting its proposed jury instruction, arguing that a physician does not guarantee or promise a successful outcome simply by treating or agreeing to treat a patient, and an unsuccessful outcome does not, by itself, mean the physician was negligent. Dr. Wolter’s expert specifically stated that the outcome could occur without negligence. Because the proffered instruction accurately stated the law and no other instruction informed the jury that Dr. Wolter could not be held liable merely because of a bad outcome, it was reversible error for the court to reject it.
Pinnacol asserted that the trial court erred in denying its motion for directed verdict or judgment notwithstanding the verdict. The defense of fair debatability is not in itself a complete defense to a bad-faith claim. Here, the reasonableness of Pinnacol’s conduct was disputed, and a reasonable person could reach the same conclusion as the jury. Accordingly, the trial court did not err in denying the motion.
Pinnacol also argued that the jury awarded excessive and duplicative economic and noneconomic damages to Schuessler, warranting a new trial. However, there was sufficient evidence in the record to support the award of economic damages. Additionally, there was support on record for the noneconomic damages award, and the amount awarded was not so grossly and manifestly excessive as to indicate that it was based on passion or prejudice.
Pinnacol further contended that the damages award was affected by the trial court’s erroneous failure to admit an exhibit it tendered at trial. Pinnacol’s exhibit depicted the amount and duration of its payments to Schuessler in chart form. Because the information contained in the exhibit was covered by other evidence introduced, the trial court abused its discretion in rejecting the exhibit.
Pinnacol asserted that the jury awarded duplicative damages because it awarded Schuessler the same amount of noneconomic damages that it awarded against Dr. Wolter. However, Pinnacol failed to overcome the presumptions that the jury followed the instruction not to award duplicative damages.
Pinnacol contended that the trial court erred in allowing Schuessler’s bad-faith insurance expert to testify at trial. There is no per se requirement that an expert should be excluded unless he or she has adjusted a workers’ compensation claim in Colorado, and Schuessler’s expert was otherwise qualified as an expert. Therefore, the court did not err in allowing this expert’s testimony.
Pinnacol asserted that the trial court erred in rejecting its tendered instruction concerning the liability of a designated nonparty. Pinnacol designated Merrill a nonparty at fault, but Pinnacol failed to establish that Merrill, as Schuessler’s employer, had a legal duty to Schuessler to maintain and immediately produce employment records such that a violation of that duty would give rise to a claim against it by Schuessler.
Pinnacol argued that the trial court erroneously rejected its instruction on the comparative fault of Schuessler. Pinnacol’s assertions that Schuessler was comparatively at fault because he asked for a postponement of the workers’ compensation hearing, failed to attend an appointment with a second doctor, and initially delayed several weeks before going to the doctor after the injury were insufficient to warrant an instruction.
Pinnacol asserted that the trial court’s award of costs should be reversed or reduced. The award of fees, which should be attributable only to the case against Dr. Wolter, should not be assessed against Pinnacol. The case was remanded to reverse this portion of the cost award.
Pinnacol also contended that the trial court improperly awarded prejudgment interest. Because Schuessler’s economic damages did not result from a personal injury inflicted by Pinnacol, the case was remanded for the court to properly compute the prejudgment interest on Schuessler’s economic damages based on the wrongful withholding statute, CRS § 5-12-102(1)(a).
Pinnacol argued that the trial court improperly ruled that it had waived its right to make a subrogation claim against Schuessler’s recovery from Wolter. Waiver is the intentional relinquishment of a known right. Here, Pinnacol did not waive its subrogation rights. Accordingly, on remand, Pinnacol may assert its subrogation rights.
Summary and full case available here.