In a case decided by the United States Court of Appeals for the Tenth Circuit (“Federal Appellate Court”) on July 17, 2020, the plaintiff had settled a medical malpractice lawsuit with the defendant orthopedic surgeons and physician assistants (“PAs”) but not against the defendant hospital, St. Anthony Summit Medical Center (“SASMC”), which employed the plaintiff’s nurses. SASMC filed a nonparty designation stating that the surgeons and PAs were wholly or partially at fault, thereby alerting the district court that comparative fault would be an issue. The district court struck the designation and did not allow SASMC to amend. At trial, the court refused to instruct the jury on comparative fault, thus allowing the plaintiff to recover twice for the same harm—from SASMC and from the settling codefendants. SASMC appealed.

The Federal Appellate Court stated that the district court’s holding in this case permitted the plaintiff to recover the full amount of their damages from SASMC despite the possibility that a jury might have allocated fault to the codefendants that settled. “The court’s holding contravenes the purpose of § 13-21-111.5(3)(b), which is to “ensure[] that a party that is found liable will not be responsible for more than its fair share of the damages.””

Colo. Rev. Stat. § 13-21-111.5(3)

Colo. Rev. Stat. § 13-21-111.5(1), the Colorado nonparty designation statute, provides: “In an action brought as a result of a death or an injury to person or property, no defendant shall be liable for an amount greater than that represented by the degree or percentage of the negligence or fault attributable to such defendant that produced the claimed injury, death, damage, or loss . . . . ”

Colo. Rev. Stat. § 13-21-111.5(3)(b) provides: “Negligence or fault of a nonparty may be considered if the claimant entered into a settlement agreement with the nonparty or if the defending party gives notice that a nonparty was wholly or partially at fault within ninety days following commencement of the action unless the court determines that a longer period is necessary. The notice shall be given by filing a pleading in the action designating such nonparty and setting forth such nonparty’s name and last-known address, or the best identification of such nonparty which is possible under the circumstances, together with a brief statement of the basis for believing such nonparty to be at fault.”

In Redden, the Colorado Supreme Court explained the requirement that a notice under § 13-21-111.5(3)(b) contain a brief statement of the basis for fault. It stated that a notice “need not prove negligence in the submitted designation, but the submission must go beyond bald allegation.” “[A] party must allege the basis for believing the non-party legally liable to the extent the non-party’s acts or omissions would satisfy all the elements of a negligence claim. A designation that alleges only causation is insufficient as a matter of law . . . . ” Redden, however, dealt with the designation of a nonparty that was never a party to the action, not with the designation of a codefendant with whom the plaintiff has settled.

As to whether § 13-21-111.5(3)(b) requires a defendant to file a nonparty designation in compliance with Redden in order for the factfinder to consider the negligence or fault of a settling codefendant, the Federal Appellate Court held: “Colorado law requires only that a defendant in such a situation “invoke” § 13-21-111.5. See id. SASMC’s first amended designation expressly invoked the provisions of § 13-21-111.5 by citing the statute and identifying the codefendants with whom the Blatchleys had settled. We conclude that the initial designation was sufficient to invoke the statute and give notice to the court of the settlements.”

The Federal Appellate Court further stated, “We also note that the district court’s holding in this case permitted the Blatchleys to recover the full amount of their damages from SASMC despite the possibility that a jury might have allocated fault to the codefendants that settled. The court’s holding contravenes the purpose of § 13-21-111.5(3)(b), which is to “ensure[] that a party that is found liable will not be responsible for more than its fair share of the damages” … we discern that by enacting the tort scheme of which § 13-21-111.5 is a part, the Colorado legislature intended to ensure that after a plaintiff settles with one tortfeasor, the award at trial is reduced by an amount proportionate to that tortfeasor’s fault. This avoids the inequitable results of the traditional common law scheme and comports with Colorado’s comparative fault regime.”

Source Blatchley v. St. Anthony Summit Medical Center, No. 18-1231.

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