Prefiling Interest on Economic Damages Falls Within HCAA Good-Cause Exception (Overruling Wallbank)

I. Introduction

Bianco v. Rudnicki (2025 CO 49) addresses how Colorado’s Health Care Availability Act (“HCAA”), section 13-64-302, caps damages in medical-malpractice actions and, specifically, whether prefiling prejudgment interest on economic damages may be awarded beyond the HCAA’s generally applicable $1 million total cap when a trial court has found “good cause” and “unfairness” warranting an award above the cap.

The underlying malpractice was catastrophic: petitioner Dr. Peter Bianco’s negligent delivery caused Alexander Rudnicki to be born with permanent brain damage and significant disabilities. After a jury awarded $4 million, the trial court found “good cause” to exceed the HCAA’s general cap because applying it would be “manifestly unfair.” A later dispute centered on whether the court could also award prefiling interest on reinstated economic damages above the $1 million cap.

The Colorado Supreme Court affirmed the court of appeals and held that prefiling interest accruing on economic damages is part of the economic damages award and therefore falls within the HCAA’s good-cause exception.

II. Summary of the Opinion

The Court interpreted section 13-64-302 to treat prefiling interest not as a standalone category of recovery, but as a component of the underlying damages category (economic or noneconomic). Because the HCAA permits courts, upon a showing of good cause and unfairness, to award “additional past and future economic damages only” beyond the $1 million cap, the Court concluded that prefiling interest on economic damages can exceed the cap when the good-cause exception applies.

In reaching that conclusion, the Court rejected and expressly overruled the contrary approach in Wallbank v. Rothenberg, 74 P.3d 413 (Colo. App. 2003), which had suggested that prefiling interest could not be awarded on the portion of a judgment exceeding $1 million even after a good-cause finding.

III. Analysis

A. Precedents Cited

• Rudnicki v. Bianco, 2023 COA 103 (“Rudnicki II”):
  The division affirmed the prefiling-interest award, reasoning that section 13-64-302 defines prefiling interest as “part of” the damages category awarded (economic or noneconomic), and therefore subject to both the cap and the good-cause uncapping mechanism for economic damages. The Supreme Court’s opinion substantially adopts this framing.
• Scholle v. Ehrichs, 2022 COA 87M, rev’d in part on other grounds, 2024 CO 22:
  Cited as consistent authority for the proposition that “prefiling, prejudgment interest is part of ‘damages’ capped under the HCAA, subject to being uncapped upon a showing of good cause and unfairness.” The Supreme Court relied on the same statutory logic (interest follows the underlying damages category).
• Wallbank v. Rothenberg, 74 P.3d 413 (Colo. App. 2003):
  The central conflicting authority. Wallbank had asserted that even with good cause, prefiling interest “may not be awarded” on amounts above $1 million because it is “included in the total limit.” The Supreme Court found the reasoning unclear and overruled Wallbank to the extent it conflicted with the Court’s interpretation.
• Rudnicki v. Bianco, 2021 CO 80 (“Rudnicki I”):
  Provided the procedural foundation for the remand that produced the contested interest award, after the Supreme Court reinstated pre-majority medical expenses and overruled contrary court of appeals precedent on that issue. While not determinative of the interest question, it explains how the economic-damages component was restored and then became interest-bearing.
• Nieto v. Clark’s Mkt., Inc., 2021 CO 48, and Bill Barrett Corp. v. Lembke, 2020 CO 73:
  Cited for core interpretive principles: de novo review, effectuation of legislative intent, and giving consistent, harmonious, sensible effect to the statutory scheme by applying plain language when unambiguous.
• Colo. Water Conservation Bd. v. City of Central, 125 P.3d 424 (Colo. 2005) (quoting Anderson v. Longmont Toyota, Inc., 102 P.3d 323 (Colo. 2004)):
  Used to support the presumption that the legislature legislates with awareness of its own enactments—here, that when it declared prefiling interest “included” within liability limitations, it did so knowing the $1 million cap has a statutory good-cause exception for economic damages.

B. Legal Reasoning

The interpretive problem arose from the interaction between two provisions of the HCAA:

1. Section 13-64-302(1)(b): establishes the general $1 million cap, but permits a court—“if, upon good cause shown,” and if applying the cap “would be unfair”—to award “additional past and future economic damages only.”
2. Section 13-64-302(2): states that prefiling interest is “deemed to be a part of the damages awarded” and “is included within each of the limitations on liability” in subsection (1).

Bianco advanced two plain-language arguments. First, because subsection (2) explicitly places prefiling interest within the statutory “limitations,” but does not expressly mention the good-cause exception, he argued interest cannot exceed the cap even when economic damages can. Second, he argued the statute creates three categories (past, future, and prefiling interest), and because the good-cause exception is limited to “past and future economic damages only,” interest is excluded.

The Court rejected both arguments by reading the statute as creating two operative damages categories: economic and noneconomic, with “past” and “future” simply describing timing, not separate statutory types. On that reading, subsection (2)’s directive that prefiling interest is “part of the damages awarded” means interest attaches to (and is classified with) the underlying damages category. Thus:

• Prefiling interest on noneconomic damages is part of the noneconomic award and is constrained by the HCAA’s noneconomic “hard cap.”
• Prefiling interest on economic damages is part of the economic award and therefore can be awarded above the $1 million cap when the court has made the statutory “good cause” and “unfairness” findings allowing “additional past and future economic damages.”

The Court also relied on the legislative-awareness presumption: by placing prefiling interest within the cap while simultaneously authorizing uncapping of economic damages for good cause, the legislature is presumed to have intended those provisions to operate harmoniously—meaning economic damages (including their prefiling interest component) are eligible for the exception.

C. Impact

The decision clarifies damages-cap arithmetic under the HCAA in cases where a court finds good cause and unfairness:

• Economic damages can exceed the general cap together with their prefiling interest component once the statutory exception is triggered, reducing incentives to litigate interest as an artificial carve-out.
• The ruling eliminates a previously available defense argument (based on Wallbank) that could substantially limit recovery where long delays between injury and filing generate significant prefiling interest—an issue that can be especially salient in cases involving minors or delayed discovery.
• By confirming that prefiling interest is categorized alongside the underlying damages, the opinion encourages litigants and trial courts to focus on the statutory predicates—“good cause” and “unfairness”—rather than on technical interest segregation to manage exposure above the cap.

IV. Complex Concepts Simplified

• Economic vs. noneconomic damages:
  Economic damages reimburse financial losses (e.g., medical costs, future care). Noneconomic damages compensate intangible harms (e.g., pain and suffering).
• HCAA “cap” and “hard cap”:
  The HCAA historically imposed an overall $1 million cap, but allowed courts to exceed it for “additional past and future economic damages only” upon good cause and unfairness. By contrast, the noneconomic limit is a “hard cap” that cannot be exceeded even with good cause.
• Prefiling prejudgment interest:
  Interest added to compensate a plaintiff for the time between when the claim arose and when the case was filed. It is distinct from post-filing interest, which runs after filing and may compound under applicable statutes.
• “Interest is part of damages”:
  Here, the Court treats interest not as an extra, separate bucket, but as part of the same bucket as the damages it is calculated on—economic interest stays economic; noneconomic interest stays noneconomic.

V. Conclusion

Bianco v. Rudnicki establishes that prefiling interest on economic damages is itself an element of economic damages for purposes of the HCAA and therefore may be awarded above the general $1 million cap when the trial court has found statutory “good cause” and “unfairness.” In doing so, the Colorado Supreme Court harmonized section 13-64-302(1)(b) and (2), reinforced a category-based approach to interest, and overruled the contrary limitation suggested by Wallbank v. Rothenberg. The practical significance is substantial: in uncapped economic-damages cases, plaintiffs are not forced to forfeit prefiling interest merely because the award exceeds the general cap, and defendants face exposure that more fully reflects the time-value component the legislature deemed part of damages.