Schuessler v. Wolter
2012 COA 86
Colo. Ct. App.2012Background
- Schuessler, a maintenance worker, injured on the job; Pinnacol denied workers' comp benefits, later ALJ awarded benefits and Pinnacol paid.
- Schuessler sued Wolter for medical malpractice and Pinnacol for common law bad faith in handling the claim; cases were consolidated for trial.
- Wolter performed ACDF; postoperative outcome included spinal cord irritation, with experts agreeing on a bad outcome but disputing causation.
- Jury awarded damages: Wolter $1.475M total; Pinnacol $375k; posttrial, court reduced Wolter’s award under the Health Care Availability Act and denied Pinnacol’s subrogation claim.
- Pinnacol appeals on bad-faith standards, damages, and subrogation; Schuessler cross-appeals certain trial rulings.
- On appeal, the court reverses Wolter’s judgment and remands; partially affirms and remands regarding Pinnacol with subrogation, prejudgment interest, and cost allocations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Bad-faith instruction sufficiency | Schuessler relied on Day 15:4 to require instruction on bad outcome not equal to negligence. | Wolter contends instruction was required to state that bad outcome alone is not negligence. | Error to refuse 15:4; new trial required with proper instruction. |
| Directed verdict/JNOV on fair debatability | Schuessler contends denial of bad-faith verdict should stand; Pinnacol incomplete defense. | Pinnacol argues fair debatability defeats bad-faith claim as a matter of law. | Reasonableness disputed; jury, not law, should decide. |
| Damages: excess, duplicative, and admissibility | Damages supported by record; no double recovery; noneconomic damages justified. | Damages may be excessive/duplicative due to cross-claims and improper evidence. | No reversible error; damages affirmed with remand on some cost issues. |
| Subrogation waiver | Pinnacol may pursue subrogation; waiver not established by trial conduct. | Pinnacol waived subrogation by opposing jury instruction and relief. | Remand to decide subrogation rights; waiver not established as a matter of law. |
| Nonparty liability instruction | Nonparty-at-fault instruction should have been given if supported by evidence. | Merrill designation improper; no duty established for nonparty liability. | Instruction properly denied; no reversible error. |
Key Cases Cited
- Day v. Johnson, 255 P.3d 1064 (Colo.2011) (bad-outcome instruction governs negligence proof)
- Vaccaro v. American Family Ins. Group, 2012 COA 9 (Colo. App. 2012) (JNOV not warranted where reasonableness disputed)
- Zolman v. Pinnacol Assurance, 261 P.3d 490 (Colo. App. 2011) (fair debatability not automatic defense; requires facts)
- Goodson v. American Standard Ins. Co., 89 P.3d 409 (Colo. 2004) (emotional distress recoverable in bad faith claims)
- Jorgensen (Colorado Compensation Ins. Auth. v. Jorgensen), 992 P.2d 1156 (Colo. 2000) (insurer subrogation rights to avoid double recovery)
- Day v. Johnson, 255 P.3d 1069 (Colo. 2011) (pattern instruction on malpractice and outcomes)