June 23, 2018

Colorado Supreme Court: Survivor Statute Does Not Allow Personal Injury Award to be Limited

The Colorado Supreme Court issued its opinion in Guarantee Trust Life Insurance Co. v. Estate of Casper on Tuesday, May 29, 2018.

Unreasonable Delay and Denial of Insurance Benefits—Abatement—Actual Damages.

The supreme court considered the operation of C.R.S. § 13-20-101, Colorado’s survival statute, and C.R.S. § 10-3-1116(1), a statutory cause of action for the unreasonable delay or denial of insurance benefits. The court also considered the scope of the trial court’s authority to enter a final judgment nunc pro tunc.

The original plaintiff in this case died after receiving a favorable jury verdict but before that verdict had been reduced to a written and signed entry of final judgment. Defendant then moved to substantially reduce the jury award, arguing that the survival statute barred certain damages. The court concluded that the survival statute does not limit the jury’s verdict in favor of the original plaintiff. The court further concluded that an award of attorney fees under C.R.S. § 10-3-1116(1) is a component of the “actual damages” of a successful claim under that section and that, although the survival statute did not limit the damages awarded by the jury, the trial court abused its discretion by entering a final judgment nunc pro tunc.

The court of appeals’ judgment was affirmed in part and reversed in part.

Summary provided courtesy of Colorado Lawyer.

Tenth Circuit: District Court Erred in Excluding Evidence That has the Necessary Effect of a Dismissal

The Tenth Circuit Court of Appeals issued its opinion in HCG Platinum, LLC v. Prederred Product Placement Co. on Tuesday, October 17, 2017.

HCG Platinum, LLC (HCG) and Preferred Product Placement Corporation (PPPC) entered into a marketing and non-circumvention agreement, where PPPC agreed to place HCG products into specified retailers in exchange for a percentage of the proceeds, PPPC would disclose details of negotiations and projects with other business associates, and HCG would be prevented from interfering with PPPC’s agreements with any third-parties. The following year, HCG filed a breach of contract action against PPPC, alleging that PPPC breached the agreement by failing to execute a sales agreement with certain retailers. PPPC filed a counterclaim alleging that HCG breached the agreement by failing to pay outstanding commissions and by interfering with PPPC’s third-party relationships. The damages PPPC put forth were void of evidential support or significant written explanation.

HCG then moved to preclude PPPC from presenting any evidence of damages under the agreement. HCG argued that PPPC’s initial disclosures described projections that would be inadmissible without expert testimony and PPPC should not be able to put on any evidence of damages.

The district court stated that PPPC’s failure to supplement the damages aspect of its initial disclosures meant that PPPC could not introduce evidence of damages unless its discovery deficiency proved harmless or substantially justified. The district court then described an established “four factor test” regarding: (1) the prejudice or surprise to the party against whom the damages evidence would be offered, which is HCG; (2) HCG’s ability to cure that prejudice; (3) the extent to which the introduction of new damages evidence would disrupt the trial; and (4) whether bad faith or willfulness motivated PPPC’s discovery failures.

The district court addressed the fourth factor and found no support for a finding of bad faith. The district court then focused on prejudice and harmlessness and allowed arguments from both parties for the right way to think about the issue. HCG argued that the law compelled exclusion due to PPPC’s failure to disclose precise quantifications of damages, as well as claiming that the prejudice proved incurable and disruptive because reopening discovery and reviewing new documents would be burdensome and expensive. PPPC emphasized that its conduct caused only slight prejudice, which could be easily remedied through limited additional discovery.

The district court concluded that PPPC could not proceed to trial and entered a judgement in favor of HCG. PPPC appealed. The Tenth Circuit Court of Appeals reviewed the district court’s decision.

The Tenth Circuit concluded that the district court abused its discretion by imposing a discovery sanction that barred PPPC from pursing its counterclaims. The court  based this conclusion on the fact that the district court misapplied the four-factor test described above, and found that the record reflected that the district court reached an arbitrary outcome that overlooked all but the last factor of the test.

The Tenth Circuit reversed the district court’s judgment in favor of HCG on PPPC’s counterclaims and remanded to allow the district court to reevaluate the exclusion of PPPC’s damages evidence under the four factor test.

The Tenth Circuit also mentioned that district courts should consider the effectiveness of lesser sanctions, where the exclusion of evidence has the necessary force and effect of a dismissal. There are three reasons for this. First is that dismissal constitutes an extreme sanction that typically is appropriate only in cases of bad faith or willful misconduct. Second, the Federal Rules of Civil Procedure expressly empower the district courts to impose sanctions short of exclusion. And third is the notion that district courts should consider the appropriateness of lesser sanctions, where their discovery rulings have the effect of dismissal, which is in accord with the decisions of other circuits.

The Tenth Circuit held that where the exclusion of evidence has the necessary effect of a dismissal, as in this case, the district courts should, in conjunction with the traditional four factor test, consider the efficacy of less drastic alternatives, reserving the sanction of dismissal for cases involving bad faith or willfulness or instances where less severe sanctions would prove futile.

The Tenth Circuit Court of Appeals REVERSED the district court’s judgment in favor of HCG and REMANDED with instructions that the district court reevaluate the exclusion of PPPC’s damage evidence.

Tenth Circuit: Nursing Home Liable for Abuse to Resident

The Tenth Circuit Court of Appeals issued its opinion in Racher v. Westlake Nursing Home Limited Partnership on Thursday, September 28, 2017.

Mrs. Mayberry was abused by two certified nursing assistants while in Quail Creek Nursing Home, which is owned by Westlake. This case was filed against Westlake under Oklahoma law for negligence, negligence per se, and intentional infliction of emotional distress. At trial, the jury found for plaintiffs, Westlake appeals.

The two nursing assistants involved, Kaseke and Gakunga, worked at Quail Creek and were Mayberry’s caretakers. Both assistants had numerous write-ups in their personnel files for infractions and refusal to complete assigned duties, including sleeping on the job, which was grounds for immediate termination; however, neither were terminated for that infraction.

One of Mayberry’s daughters testified that the family began to notice bruising on Mayberry’s hands and arms soon after moving Mayberry to Quail Creek. These concerns went unexplained by Quail Creek. Although it was difficult for Mayberry to communicate due to dementia, Mayberry began to cry out to the family for help and that someone was hurting her mouth. To monitor Mayberry, the family placed a hidden camera in her room. The videos show Gakunga slapping Mayberry, forcibly stuffing Mayberry’s mouth with wadded up gloves, and performing compressions on Mayberry’s chest to force her to empty her bladder. Kaseke is seen watching this take place. Both assistants are seen roughly lifting Mayberry from her wheelchair and pushing her to lay down. Mayberry’s family brought the videos to Quail Creek’s attention. Both assistants were arrested. Mayberry died three months after the abuse was discovered.

Plaintiffs brought suit against Quail Creek due to the abuse that occurred and was perpetrated by Quail Creek employees, and on the grounds that Quail Creek is directly negligent in failing to investigate and report the incidents of abuse. At trial, the jury found that Westlake, the owner of Quail Creek, was liable on theories of negligence and negligence per se, that Westlake acted with reckless disregard for the rights of others, and that plaintiffs were entitled to compensatory damages in the sum of $1.2 million.

Westlake raised four issues on appeal: (1) whether the district court erred by failing to reduce compensatory damages to the statutory cap of $350,000; (2) whether the district court erred by failing to reduce the allegedly excessive compensatory damage award of $1.2 million or, in the alternative, to grant a new trial; (3) whether the district court erred by allowing allegedly improper closing argument regarding punitive damages during the first phase of the trial; and (4) whether the district court erred by admitting evidence of an unrelated incident subject to a limiting instruction.

As for the first issue, Oklahoma law caps noneconomic damages at $350,000 unless special findings are made. The district court concluded that the requirements for lifting the cap were satisfied in this case. The Tenth Circuit affirmed the district court decision. Because Westlake failed to raise the statutory damage cap at any point before the trial was completed, the Tenth Circuit held that Westlake waived the defense.

Next, Westlake argued that the compensatory damages awarded by the jury were excessive and that the district court erred by declining to either reduce the award or grant a new trial. The district court denied this motion because it concluded that there was substantial evidence in the record to support the jury’s award. Oklahoma recognizes a broad jury discretion in determining the amount of damages to award. The Tenth Circuit considered the entire trial record and viewed the evidence in the light most favorable to plaintiffs in concluding that the damages awarded were not excessive. The Circuit found that the jury could have reasonably concluded that Mayberry was abused on a daily basis and that the abuse caused emotional distress that was significant enough to have contributed to her death.

Westlake then argued that the district court erred by allowing counsel for plaintiffs to make arguments that invited an award based on consideration of deterrent and punitive rather than compensatory factors. Although the Tenth Circuit agreed that portions of the argument were improper at the time they were presented, Westlake failed to show that the argument led the jury to return a verdict based on passion or prejudice rather than the evidence presented at trial. The Tenth Circuit noted that not all errors require reversal. In this case, the Circuit found that the jury was not prejudiced by the poorly timed statements regarding the award of punitive damages. The jury was clearly instructed as to the correct procedure and the size of the awards, when considered in the context of the evidence presented at trial. The Tenth Circuit declined to warrant a new trial based on these circumstances.

Lastly, Westlake argued that the district court erred by admitting evidence of another incident subject to a limiting instruction. Prior to trial, Westlake had filed to exclude any evidence that Kaseke caused any physical or mental harm to any residents at Quail Creek on April 4th. This evidence at issue included two more instances of abuse, where two nursing students testified that Gakunga struck Mayberry on the forehead and put her into a cold shower, and Kaseke sprayed an unnamed resident in the face with cold water so violently that the resident’s dentures fell out. The district court denied Westlake’s motion because the evidence would be relevant, not unfairly prejudicial, and admissible if the abuse in Mayberrry’s case occurred after April 4th. The Tenth Circuit agreed with the district court because there was a limiting instruction given to the jury that properly allowed the jury to consider the incidents only if they took place before the alleged abuse of Mayberry.

The Tenth Circuit AFFIRMED the district court’s judgment.

Colorado Court of Appeals: Roaring Fork Transportation Authority Possessed Eminent Domain Power by Statute

The Colorado Court of Appeals issued its opinion in Sos v. Roaring Fork Transportation Authority on Thursday, November 16, 2017.

Eminent Domain—Inverse Condemnation Claim—Compensable Damages—Restoration Damages—Diminution in Value.

Sos owns property on which he owns and operates a tire business. The Roaring Fork Transportation Authority (RFTA) built a bus station on the property north of and adjacent to his property. Before RFTA began construction, an earthen embankment rested on the property line between Sos’s and RFTA’s properties. Sos regularly sold tires and other items on the embankment and, with the previous owner’s permission, on the northern property. As part of its construction, RFTA removed the embankment and built a wall on its property, and then restored the embankment, which the wall relies on for lateral support. Sos then wanted to remove the embankment to facilitate his business. He brought an inverse condemnation claim against RFTA because the bus station wall relies on his property for lateral support. RFTA moved for summary judgment and Sos moved for partial summary judgment, regarding whether a compensable taking or damages had occurred. The district court denied RFTA’s motion and granted Sos’s motion, determining that the force the bus station wall permanently imposed on the embankment constituted compensable damage under article II, section 15 of the Colorado Constitution, and that the proper measure of damages was restoration damages rather than diminution in value.

On appeal, RFTA argued that the district court erred in determining that RFTA possessed the power of eminent domain because the General Assembly had not granted RFTA this power expressly or by clear implication, and because it does not possess the power of eminent domain, Sos cannot establish an inverse condemnation claim. Pursuant to the plain language of C.R.S. § 43-4-604, RFTA has the power of eminent domain by clear implication.

RFTA next asserted that the district court erred in concluding that RFTA’s bus station wall caused compensable damage because the wall’s construction did not substantially diminish the value of Sos’s property or substantially change Sos’s use of his property. The district court found, with record support, that RFTA authorized the building of the bus station wall and that RFTA incorporated the embankment’s support into the bus station wall’s design and construction. The court, therefore, properly determined that the imposition of force on Sos’s embankment was the natural consequence of RFTA’s intentional construction of the bus station wall. Further, the record, including RFTA’s own expert opinions, supported the district court’s finding that the bus station wall imposed a new force on Sos’s embankment to such a degree that an engineered remedy was now required before the embankment could be excavated. The district court properly determined that RFTA damaged Sos’s property.

RFTA next contended that the district court erred in ruling that restoration costs rather than diminution of value was the proper measure of damages. The record shows that the diminution in value of Sos’s property after RFTA built the bus station was de minimis. But RFTA’s construction substantially limited Sos’s use and enjoyment of the embankment area. Therefore, the district court properly determined Sos’s damages under the measure of restoration costs.

RFTA further argued that the district court erred in allowing evidence of Sos’s business and personal uses for his property because such interests are non-compensable in condemnation cases. RFTA contended that Sos presented no admissible evidence regarding restoration costs or supporting the damages award. The Court of Appeals concluded that the district court’s damages award is supported by competent record evidence.

RFTA also argued that the district court erred in rejecting its proposed instructions regarding diminution of value being the proper measure of damages. The district court’s decision was supported by competent evidence and did not cause the commissioners to be inaccurately instructed on the law.

The judgment was affirmed.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Jury Award of Zero Noneconomic Damages Appropriate Where Injuries were De Minimis

The Colorado Court of Appeals issued its opinion in Miller v. Hancock on Thursday, November 16, 2017.

Non-economic Damages—Jury Award—De Minimis—Pre-Offer Costs—Pretrial Offer of Settlement.

Plaintiff Miller was involved in an automobile accident with defendants, Aragon and Hancock. Miller sued Aragon and Hancock to recover economic and noneconomic damages that he suffered as a result of that accident. Before trial, both Aragon and Hancock made statutory offers of settlement to Miller pursuant to C.R.S. § 13-17-202. The jury awarded Miller only economic damages. Miller filed a motion for new trial on damages, which the trial court denied. Each of the parties also moved to recover their costs, Miller as the prevailing party, and Aragon and Hancock pursuant to C.R.S. § 13-17-202, arguing that the final judgment Miller recovered did not exceed their respective pretrial settlement offers. The court did not award Miller costs against Hancock, but awarded Hancock the entire amount of her claimed costs that accrued after her first offer. The court awarded costs in favor of Miller and against Aragon and denied Aragon’s request for costs.

On appeal, Miller contended that the trial court erred by denying his motion for new trial on damages. He argued that a jury’s failure to award noneconomic damages is impermissible as a matter of law when the jury returns a verdict awarding economic damages. Miller contended that it was undisputed that his injuries were more than de minimis; however, his characterizations of the relevant facts and evidence lack record support. The jury could have reasonably concluded that Miller’s injuries from the accident were de minimis. Thus, the record here was sufficient to support the jury’s award of zero noneconomic damages.

Miller also argued that the trial court should have included his pre-offer costs when determining whether Hancock’s pretrial offers of settlement exceeded the amount Miller recovered from Hancock at trial. Whether a statutory offer includes pre-offer costs depends on the language of the offer. Hancock’s offers unambiguously included costs, so Miller was entitled to have his pre-offer costs included in his final judgment for the purpose of determining whether either of Hancock’s offers entitled her to recover her post-offer costs pursuant to C.R.S. § 13-17-202. Thus, the trial court erred by interpreting Hancock’s offers to exclude costs.

Miller next argued that the trial court erroneously reduced the costs he was entitled to recover, yet awarded Hancock the entire amount of her claimed costs without subjecting her costs to similar scrutiny. Here, the trial court abused its discretion when it reduced the amount of Miller’s recoverable costs without making adequate findings as to whether those costs were reasonable and necessary.

The order denying Miller’s motion for a new trial on damages was affirmed. The awards of costs to Hancock and Miller were reversed and the case was remanded for further proceedings to determine Miller’s costs and whether, after determining Miller’s costs, Hancock made a settlement offer pursuant to C.R.S. § 13-17-202 that exceeds the amount of Miller’s final judgment, inclusive of pre-offer costs and interest.

Summary provided courtesy of Colorado Lawyer.

Colorado Supreme Court: Damages Clause Not Void Where Non-offending Party Offered Choice of Actual or Liquidated Damages

The Colorado Supreme Court issued its opinion in Ravenstar, LLC v. One Ski Hill Place, LLC on Monday, September 11, 2017.

Freedom of Contract—Liquidated Damages Clauses—Contractual Damages.

In this case, the Colorado Supreme Court considered whether a liquidated damages clause in a contract is invalid because the contract gives the non-breaching party the option to choose between liquidated damages and actual damages. The court concluded that such an option does not invalidate the clause. Instead, parties are free to contract for a damages provision that allows a non-breaching party to elect between liquidated damages and actual damages. However, such an option must be exclusive, meaning a party who elects to pursue one of the available remedies may not pursue the alternative remedy set forth in the contract. Therefore, under the facts of this case, the liquidated damages clause in the contracts at issue is enforceable. Accordingly, the supreme court affirmed the judgment of the court of appeals.

Summary provided courtesy of Colorado Lawyer.

Colorado Supreme Court: 42 U.S.C. § 1988 Damages Not Properly Awarded Under Colorado Election Code

The Colorado Supreme Court issued its opinion in Frazier v. Williams, Colorado Secretary of State on Monday, September 11, 2017.

Election Proceedings under C.R.S. § 1-1-113—42 U.S.C. § 1983—Supremacy Clause.

The Colorado Supreme Court held that claims brought under C.R.S. § 1-1-113 are limited to those alleging a breach or neglect of duty or other wrongful act under the Colorado Election Code. The language of C.R.S. § 1-1-113 limits claims that may be brought to those alleging a breach or neglect of duty or other wrongful act under “this code,” meaning the Colorado Election Code. The court emphasized that Colorado courts remain entirely open for adjudication of 42 U.S.C. § 1983 (2012) claims, including on an expedited basis if a preliminary injunction is sought, and therefore C.R.S. § 1-1-113 does not run afoul of the Supremacy Clause. To the extent that Brown v. Davidson, 192 P.3d 415 (Colo. App. 2006), holds to the contrary, it is overruled.

Summary provided courtesy of Colorado Lawyer.

Colorado Supreme Court: § 1983 Claim May Not Be Brought in Colorado Election Code Proceeding

The Colorado Supreme Court issued its opinion in Williams, Colorado Secretary of State v. Libertarian Party of Colorado on Monday, September 11, 2017.

Election Proceedings under C.R.S. § 1-1-113—42 U.S.C. § 1983—Supremacy Clause.

As held in Frazier v. Willaims, 2017 CO 85, ___ P.3d ___, a 42 U.S.C. § 1983 (2012) claim may not be brought in a proceeding under C.R.S. § 1-1-113.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Set-Off to Other Liable Parties Should be Applied to Jury Verdict before Contractual Limitation

The Colorado Court of Appeals issued its opinion in Taylor Morrison of Colorado, Inc. v. Terracon Consultants, Inc. on Thursday, May 18, 2017.

Contract—Limitation on Liability—Setoff—Jury Award—Statutory Costs—Prejudgment Interest—Post-Judgment Interest—Expert Testimony—Willful and Wanton—Settlement Statute—Costs.

Taylor Morrison of Colorado, Inc. (Taylor) was the developer of a residential subdivision. Taylor contracted with Terracon Consultants, Inc. (Terracon) to provide geotechnical engineering and construction materials testing services for the development of the subdivision. Taylor and Terracon agreed to cap Terracon’s total aggregate liability to Taylor at $550,000 (Limitation) for any and all damages or expenses arising out of its services or the contract. After homeowners notified Taylor about drywall cracks in their houses, Taylor investigated the complaints and then sued Terracon and other contractors for damages relating to those defects. After trial, the jury awarded Taylor $9,586,056 in damages, but also found that Terracon’s conduct was not willful and wanton. The court concluded that the Limitation includes costs and prejudgment interest and applied it to reduce the jury’s $9,586,056 damages award to $550,000. It also deducted the $592,500 settlement received from the other liable parties to arrive at zero dollars. The court found that neither party prevailed for purposes of awarding statutory interest and further concluded that neither Terracon’s deposit of $550,000 into the court registry nor its email to Taylor addressing a mutual dismissal constituted a statutory offer of settlement that would have allowed Terracon a costs and fees award.

On appeal, Taylor contended that the trial court erroneously deducted the setoff from the Limitation instead of deducting it from the jury damages verdict. The correct approach is to first apply the setoff against the jury verdict and then apply the contractual limitation against this reduced amount. Thus, Terracon’s liability according to the Limitation should have been a final judgment of $550,000 for Taylor.

Taylor next contended that the trial court erred when it concluded that the Limitation, by its terms, includes statutory costs and prejudgment interest. The pertinent contract language states that the Limitation applies to “any and all” expenses “including attorney and expert fees.” Thus, the Limitation’s language covers costs associated with interpreting and enforcing the contract.

Taylor further argued that the trial court erred in ruling that the Limitation does not include prejudgment interest within its cap on liability. The Limitation caps Terracon’s liability for “any and all injuries, damages, claims, losses, or expenses.” (Emphasis in original.) Because prejudgment interest is a form of damages, the Limitation also covers prejudgment interest. Taylor also asserted that post-judgment interest is not covered by the Limitation. The Court of Appeals agreed because post-judgment interest is not an element of compensatory damages.

Taylor next argued that the trial court’s exclusion of expert testimony concerning willful and wanton conduct was reversible error. Here, the court allowed the experts to testify about the factual conduct and opine on Terracon’s performance using characterizations within their expertise, but prevented testimony about legal concepts outside their expertise and whether a legal standard was met.

Terracon argued on cross-appeal that the trial court erred by not awarding it costs under Colorado’s settlement statute. Terracon’s deposit of $550,000 into the court registry pursuant to C.R.C.P. 67(a) was not a settlement offer because Taylor did not have the option to reject it. The statute requires both an offer and a rejection; thus the statute was not triggered, and Terracon is not entitled to costs. Further, Terracon’s email did not comply with C.R.S. § 13-17-202 because this alleged “settlement offer” contained nonmonetary conditions that extended the offer beyond the claims at issue. Therefore, there was no error in denying costs to Terracon.

The judgment was reversed as to the final award and the case was remanded with instructions. The judgment and orders were affirmed in all other respects.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Jury Foreman’s Affidavit Allowable Under CRE 606(b) Due to Mistake in Entering Verdict

The Colorado Court of Appeals issued its opinion in Malpica-Cue v. Fangmeier on Thursday, April 6, 2017.

Mistake on Special Verdict Form—CRE 606(b).

Malpica-Cue sued Fangmeier for damages resulting from a car accident. After trial, the jury filled out a Special Verdict Form B that included three different damages amounts. All six jurors signed the form, and the judge read the verdict and each separate amount of damages aloud in open court. The jury foreman confirmed the verdict. Counsel for both parties declined to poll the jury.

Fangmeier filed a post-trial motion averring that while the jurors were still in the courthouse, defense counsel spoke with some of them about the amount of damages they had awarded. They said they had intended to award $2,500 for noneconomic losses, $18,373.38 for economic losses, and $0 for physical impairment or disfigurement. The total damages intended, $20,873.38, had mistakenly been added together and inserted on the line for physical impairment and disfigurement, making the total damages $41,746.76. Defense counsel told the court clerk that all six jurors agreed they had made a mistake on the verdict form and wanted to fix it. The judge denied counsel’s request to reconvene the jury that day and told him to file a motion.

Fangmeier filed a motion asking the court to vacate the jury verdict awarding $41,746.76 and enter judgment awarding $20,873.38. The motion included an affidavit from the jury foreman saying the jury had made a mistake. The district court denied the motion, stating that CRE 606(b) precluded it from considering the foreman’s affidavit.

On appeal, Fangmeier argued that the foreman’s affidavit should not have been precluded because an exception to Rule 606(b) allows jury testimony regarding “whether there was a mistake in entering the verdict onto the verdict form.” Here, all the jurors agreed that there should have been no recovery for physical impairment or disfigurement and the foreman misread the jury form, so the exception applies. While the affidavit by itself does not require the verdict to be changed, Fangmeier is entitled to an evidentiary hearing on the issue. Thus, it was error to not reconvene the jurors on the day the trial ended and in later failing to reconvene the jurors to ascertain the true verdict in response to the post-trial motion.

The order was vacated and the case was remanded.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Contract Exception to the Collateral Source Statute is Applicable in Post-Verdict Proceedings to Reduce Damages

The Colorado Court of Appeals issued its opinion in Pressey ex rel. Pressey v. Children’s Hospital Colorado on Thursday, March 9, 2017.

Medical Malpractice—Health Care Availability Act—Damages Cap—Medicaid—Collateral Source Statute—Contract Exception—Pre-majority Economic Damages—Minor—Statute of Limitations.

Naomi Pressey (Naomi), by and through her conservator Jennifer Pressey, sued Children’s Hospital Colorado (Hospital) for negligence. 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. After trial, the court reduced the damages to $1 million based on the legislative directive in C.R.S. § 13-64-302(1)(b) of the Health Care Availability Act (HCAA). The court approved Naomi’s motion to exceed the damages cap for good cause and entered judgment in her favor for $14,341,538.60.

On appeal, the Hospital argued 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. Sound public policy supports both the cap and the contract exception to the collateral source statute. The Colorado Court of Appeals concluded that the contract exception to the collateral source statute is applicable in post-verdict proceedings to reduce damages in medical malpractice actions under the HCAA. Medicaid benefits are paid on behalf of the injured party and are thus collateral sources subject to the contract exception. Accordingly, the trial court correctly did not consider Medicaid payments and private insurance in determining whether to exceed the HCAA damages cap.

The Hospital also argued that the trial court erred in denying its motion for judgment notwithstanding the verdict because Naomi failed to establish that she, rather than her parents, was entitled to her pre-majority economic damages. Parents own the legal right to seek reimbursement for a minor’s pre-majority economic damages. Here, Naomi’s parents did not relinquish this right and failed to institute a claim within the applicable statute of limitations.

The Hospital further argued that irrespective of the evidence of Medicaid and private insurance benefits, Naomi did not establish good cause to exceed the damages cap. The trial court considered a multitude of factors in concluding there was good cause. Its decision was not manifestly arbitrary, unreasonable, or unfair, and was not a misapplication of the law.

Lastly, the Hospital argued that Naomi received a duplicate award for future medical care and lost future earnings. The court concluded there is record support for the trial court’s findings that the damage award does not overlap with the future lost earnings award.

That portion of the judgment awarding pre-majority economic damages to Naomi was reversed. The judgment was affirmed in all other respects. The case was remanded for recalculation of the total amounts owed by the Hospital.

Summary provided courtesy of The Colorado Lawyer.

HB 17-1124: Local Governments that Ban Fracking Liable to Mineral Interest Owners for Damages

On January 26, 2017, Rep. Perry Buck and Sen. Tim Neville introduced HB 17-1124, “Concerning a Requirement that a Local Government that Interferes with Oil and Gas Operations Compensate Persons Damaged by the Interference.”

The bill specifies that a local government that bans hydraulic fracturing of an oil and gas well is liable to the mineral interest owner for the value of the mineral interest and that a local government that enacts a moratorium on oil and gas activities shall compensate oil and gas operators, mineral lessees, and royalty owners for all costs, damages, and losses of fair market value associated with the moratorium.

The bill was introduced in the House and assigned to the State, Veterans, and Military Affairs Committee. It is scheduled for hearing in committee on February 22, 2017, at 1:30 p.m.