Scholle v. Ehrichs
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In a medical malpractice case, the plaintiff, Susan Ann Scholle, acting as the personal representative for the Estate of Daniel B. Scholle, sued the defendants, Edward Ehrichs, M.D.; Michael Rauzzino, M.D.; and HCA-HealthONE, LLC. The plaintiff alleged that the defendants' negligence during a back surgery led to severe complications, including cardiac arrest, infection, kidney injuries, stroke, and the need for multiple additional surgeries. The jury found the defendants negligent and awarded the plaintiff over $9 million in economic damages.
The defendants argued that the damages should be capped at $1 million, as per the Health Care Availability Act (HCAA). The trial court, however, found good cause to exceed the cap, citing the severity of the plaintiff's injuries, the financial burden on his family, and the unfairness of limiting the damages due to the catastrophic outcome of the surgery.
On appeal, the Colorado Court of Appeals reversed in part, holding that the trial court erred by not considering the plaintiff's insurance contract liabilities in its good cause analysis. The court reasoned that the plaintiff's insurers had waived their subrogation rights, meaning the plaintiff was not responsible for repaying the $4.1 million billed by the hospital.
The Supreme Court of the State of Colorado reversed the appellate court's decision, holding that the contract exception to the collateral source statute prohibits a trial court from considering a plaintiff's insurance contract liabilities in determining whether good cause exists to exceed the HCAA's damages cap. The court remanded the case for the trial court to recalculate interest and enter judgment accordingly.
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