CCIA v. Jorgensen, No. 98SC211.

• Citation: 992 P.2d 1156
• Decision Date: 18 January 2000
• Docket Number: No. 98SC211.
• Parties: COLORADO COMPENSATION INSURANCE AUTHORITY, Petitioner, v. James Thomas JORGENSEN and Doreen Harriet Jorgensen, Respondents.
• Court: Supreme Court of Colorado

992 P.2d 1156

COLORADO COMPENSATION INSURANCE AUTHORITY, Petitioner, v. James Thomas JORGENSEN and Doreen Harriet Jorgensen, Respondents.

No. 98SC211.

Supreme Court of Colorado, En Banc.

January 18, 2000.

Kennedy & Christopher, P.C., John R. Mann Clanahan, Tanner, Downing & Knowlton, P.C. Charles M. Pratt, Denver, Colorado, Attorneys for Petitioner.

Dwyer, Huddleson & Ray, P.C., Stephen J. Jouard, Megan L. Hayes, Fort Collins, Colorado, Attorneys for Respondents.

Justice MARTINEZ delivered the Opinion of the Court.

The issues before us arise in a lawsuit for personal injuries brought by James T. Jorgensen against three separate defendants who are no longer parties to this action. Because Jorgensen was receiving workers' compensation benefits from the Colorado Compensation Insurance Authority (CCIA) as a result of these injuries, CCIA intervened during the course of the litigation to protect its subrogation rights. After CCIA and Jorgensen reached a settlement with the tortfeasors, the trial court denied Jorgensen's motion to hold an evidentiary hearing to apportion the settlement proceeds between economic, non-economic and loss of consortium amounts. The trial court further held that CCIA has subrogation rights against the total net recovery. The court of appeals reversed, holding that the trial court has jurisdiction to apportion settlement proceeds and that CCIA's subrogation rights do not extend to the non-economic and loss of consortium recoveries. We granted certiorari in this action in tort to determine whether the court presiding over the personal injury claims has jurisdiction to apportion the settlement proceeds and to consider the extent of the subrogation rights of the compensation insurer.¹ We affirm the judgment of the court of appeals.

I.

While working on a construction project, Jorgensen fell through an opening on the roof of a junior high school. A piece of unsecured plywood covered the opening in the roof. There were no markers or warning signals alerting others that the opening was there. Jorgensen fell when he tried to lift the plywood covering the opening.

Jorgensen then filed a personal injury action against Poudre Valley Air, Allen Plumbing & Heating and URS Consultants. URS Consultants was subsequently dismissed as a party. Jorgensen claimed damages for injuries, pain and suffering, lost wages and medical expenses. His spouse filed a derivative claim against the defendants for loss of consortium.

As a result of the accident, Jorgensen received workers' compensation benefits in excess of $200,000 from CCIA. Consequently, CCIA intervened in the personal injury case in order to recover the benefits it had paid as well as future benefits for which it was liable.

Before a trial was held, Jorgensen and CCIA settled for nearly $3,000,000 with the two remaining defendants, Poudre Valley and Allen Plumbing & Heating. The settlement was for one lump sum without an allocation of specific amounts for each different claim. The parties did not agree to divide the settlement proceeds between economic, non-economic and loss of consortium amounts. Following the settlement, the trial court dismissed the claims against the defendants with prejudice pursuant to the parties' stipulation.

CCIA participated in the settlement negotiations and was a party to the final settlement. The parties stipulated that CCIA would receive $210,000 for benefits already paid to Jorgensen. The parties further agreed that CCIA would receive a reimbursement of lost wage benefits against the settlement, but failed to agree on future medical benefits payable under the Workers' Compensation Act.²

Jorgensen moved the trial court to hold an evidentiary hearing to allocate the settlement proceeds between economic and non-economic amounts. The trial court denied the motion and decided that CCIA has subrogation rights for its future obligations against the entire net settlement. Jorgensen and his spouse appealed.

The court of appeals reversed, holding that CCIA only had subrogation rights against the economic recovery and not against the non-economic and loss of consortium recoveries. See Jorgensen v. Colorado Compensation Ins. Auth., 967 P.2d 172, 173 (Colo.App. 1998)

. The court of appeals further recognized that the trial court had jurisdiction to allocate the settlement proceeds between economic, non-economic and loss of consortium amounts. See id. at 174.

II.

This case calls upon us to examine the extent to which an insurer is subrogated to a claimant's rights to recovery against a tortfeasor under the Workers' Compensation Act. As a preliminary matter, we discuss the jurisdiction of the trial court to allocate funds from a settlement in a personal injury case between loss of consortium, economic and non-economic amounts. We then address the limitations of an insurer's subrogation rights under the Workers' Compensation Act.

A.

CCIA argues that by apportioning the settlement proceeds, the trial court would infringe on the exclusive jurisdiction of the Division of Labor to determine workers' compensation matters under section 8-43-201, 3 C.R.S. (1999). According to CCIA, the trial court's apportionment would amount to a de facto determination of the offset for future workers' compensation benefits. Consequently, CCIA contends that the trial court does not have jurisdiction to apportion the settlement proceeds between economic, non-economic and loss of consortium amounts. We disagree.

As the court of appeals noted, the trial court had jurisdiction over the personal injury case. See Jorgensen, 967 P.2d at 174

. In the trial of personal injury cases, juries determine the amount of damages to award for various injuries and claims. See Bohrer v. DeHart, 961 P.2d 472, 475, 479 (Colo.1998) (jury apportionment between future and past economic and non-economic damages); Martinez v. St. Joseph Hosp. & Nursing Home of Del Norte, Inc., 878 P.2d 13, 15 (Colo.App. 1993) (jury apportionment of economic and non-economic proceeds in a tort case involving workers' compensation benefits). Of course, the trial court itself would determine the appropriate amounts for economic, non-economic and loss of consortium as the trier of fact if a jury were not requested.

Trial courts also have jurisdiction to accept settlements and to give effect to them. See Bruce W. Higley Defined Benefit Annuity Plan v. Kidder, Peabody & Co., 920 P.2d 884, 891 (Colo.App.1996)

(recognizing that a trial court approval of a settlement will not be overturned absent a strong showing of clear abuse of discretion); Mulei v. Jet Courier Serv., Inc., 860 P.2d 569, 571 (Colo.App.1993) (holding that although the trial court had dismissed the cause with prejudice, it retained jurisdiction to give effect to the settlement order).

We see no reason why the jurisdiction of the trial court over the amount recovered for various injuries is altered because a settlement is reached that does not address the allocation. Nor is it appropriate for the trial court to decline to apportion settlement proceeds from a case over which it has jurisdiction simply because there is a claim against the settlement for payment of workers' compensation benefits.

CCIA contends that prior decisions of the court of appeals support its contention that a trial court does not have jurisdiction to apportion settlement proceeds from a tortfeasor. Contrary to CCIA's argument, our examination of these decisions reveals that they are consistent with our conclusion that the court with jurisdiction over the tort claim also has jurisdiction to apportion the settlement proceeds.

CCIA argues that the court of appeals misapplied Jordan v. Fonken & Stevens, P.C., 914 P.2d 394 (Colo.App.1995). The court of appeals cited Jordan in support of its holding that a trial court has jurisdiction to apportion settlement proceeds paid by a tortfeasor. See Jorgensen, 967 P.2d at 174

. CCIA claims that Jordan supports the opposite conclusion. We disagree with CCIA and find no fault with the court of appeals' reading of Jordan.

In Jordan, the injured employee and the workers' compensation insurer settled a personal injury claim against the tortfeasor. See 914 P.2d at 394. After the settlement, the injured employee argued to an administrative law judge (ALJ), who presided over the workers' compensation claim, that the subrogation rights of the compensation insurer should be limited to economic damages. See id. at 395. The ALJ concluded that the subrogation rights of the compensation insurer reached the entire settlement. See id. A panel of the Industrial Claim Appeals Office upheld the decision of the ALJ refusing to apportion the proceeds of the tort action, and the court of appeals affirmed. See id. In recognizing that the Division of Labor has no jurisdiction to apportion the settlement proceeds from personal injury claims, the court offered that apportionment should "be determined either by agreement of all interested parties or by the tribunal having jurisdiction over a claimant's tort claim." Id. (emphasis added). The Jordan opinion suggests that the court with jurisdiction over the personal injury action can apportion the settlement proceeds.

In this case, Jorgensen asked the court with jurisdiction over the personal injury action, not the Division of Labor, to apportion the settlement proceeds between loss of consortium, economic losses and non-economic losses. In the brief filed with us, CCIA argues that, in this case, "the court of appeals held that the district court had jurisdiction to apportion the settlement between future medical benefits and non-economic losses." We do not agree with this interpretation of the holding of the court of appeals. CCIA correctly observes that the determination of the amount for future medical benefits is within the exclusive jurisdiction of the Division of Labor. The court of appeals agreed that the personal injury court could not determine the amount of the workers'...