The Colorado Supreme Court on Monday rejected a doctor’s argument that would have limited the amount of money a patient severely injured at birth would receive for his successful medical malpractice lawsuit two decades later.

Under state law, damages in medical malpractice cases are generally capped at $1 million as part of a 1988 reform intended to curb the costs of medicine and ensure continued availability of health care. There is a safety valve, however, permitting trial judges to override the cap if there is “good cause” to believe the limitation is unfair.

An El Paso County jury awarded Alexander Rudnicki $4 million in 2017 for injuries he suffered at birth more than 10 years earlier. Rudnicki’s trial judge found good cause existed and overrode the cap. After a stop at the Supreme Court to clarify the calculation of damages, then-District Court Judge David A. Gilbert reinstated $391,000 in damages he had previously deducted.

However, the total amount Rudnicki would receive based on the recalculation was nearly $1.4 million. The substantial increase was due to the interest awarded in two categories: Interest that started accruing from the time of the lawsuit’s 2014 filing, known as post-filing interest, and interest that began from the time Rudnicki was injured — pre-filing interest.

In November 2023, a three-judge panel for the Court of Appeals rejected defendant Peter Bianco’s challenge to the interest that had accrued between Rudnicki’s injuries at birth and the filing of his medical malpractice lawsuit. The panel explained the purpose of interest is to compensate an injured party for the time spent between their injury and when they are ultimately paid.

“Thus, prefiling, prejudgment interest is an element of damages subject to the $1 million damages cap,” wrote Judge Jaclyn Casey Brown. “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.”

Now before the Supreme Court a second time, lawyers for Bianco maintained state lawmakers never intended for pre-filing interest to push the total award to plaintiffs over the $1 million cap. His attorneys pointed out that if someone is injured at birth and waits at least 18 years before filing suit, medical malpractice defendants may be liable for huge amounts of interest before they even knew a complaint will be filed.

“It would be, in my view, a very dangerous interpretation to incentivize massive amounts of pre-filing, pre-judgment interest. Because we want these claims to be brought (promptly),” said lawyer Kendra N. Beckwith during oral arguments.

Rudnicki’s lawyers, meanwhile, explained that attorneys representing injured children typically wait to see how a doctor’s alleged medical malpractice will affect a child’s development. 

“If we bring the claims too early, when the children’s neurological deficits are not well understood, then we will be accused of having speculative damages and we will not prevail at trial,” said attorney Megan K. Matthews.

In the court’s Sept. 8 opinion, Justice Brian D. Boatright agreed that it was proper for pre-filing interest to push a successful plaintiff’s award over the $1 million cap, so long as a judge found good cause to override it.

“We now hold that prefiling interest accruing on economic damages is part of the economic damages award and thus falls within the good cause exception” to the $1 million cap, he wrote.

The case is Bianco v. Rudnicki et al.