Harvey v. Farmers Ins. Exchange, No. 96CA2293

• Decision Date: 01 October 1998
• Docket Number: No. 96CA2293, No. 97CA0996.
• Citation: 983 P.2d 34
• Parties: Jodi Lynn HARVEY, Plaintiff-Appellant, and Julie Slack and Brett Slack, Plaintiffs-Appellants and Cross-Appellees, v. FARMERS INSURANCE EXCHANGE, a California corporation, Defendant-Appellee and Cross-Appellant, and Diversified Medical Resources Corporation, a Minnesota corporation, Defendant-Appellee.
• Court: Colorado Court of Appeals

983 P.2d 34

Jodi Lynn HARVEY, Plaintiff-Appellant, and Julie Slack and Brett Slack, Plaintiffs-Appellants and Cross-Appellees, v. FARMERS INSURANCE EXCHANGE, a California corporation, Defendant-Appellee and Cross-Appellant, and Diversified Medical Resources Corporation, a Minnesota corporation, Defendant-Appellee.

Nos. 96CA2293, 97CA0996.

Colorado Court of Appeals, Div. III.

October 1, 1998.

Rehearing Denied October 29, 1998.

Certiorari Granted September 13, 1999.

Burg & Eldredge, P.C., Michael S. Burg, Rosemary Orsini, Diane Vaksdal Smith, Englewood, for Plaintiffs-Appellants and Cross-Appellees.

Patterson & Nuss, P.C., Franklin D. Patterson, Englewood, for Defendants-Appellees and Cross-Appellants. Opinion by Judge PLANK.

Plaintiffs, Jodi Lynn Harvey and Julie and Brett Slack (the Slacks), appeal the amount of a judgment entered in favor of Julie Slack for willful and wanton negligence and bad faith breach of an insurance contract and the denial of their motion for treble exemplary damages. Defendant Farmers Insurance Exchange cross-appeals the amount of a judgment in favor of plaintiff Brett Slack on a claim of loss of consortium deriving from the negligence and bad faith claims of his wife, Julie Slack. In a separate appeal, now consolidated for disposition here, plaintiffs have challenged the trial court's award of costs to defendant. Diversified Medical Resources Corporation (Diversified), a defendant in the trial court, is not a party to these appeals. We affirm in part, reverse in part, and remand.

The relevant facts are not in dispute on appeal. Following an automobile accident, plaintiff Jodi Harvey was referred to a chiropractor selected by defendant from a list supplied by Diversified. The chiropractor was to perform an independent medical examination to determine whether defendant should pay benefits under an insurance policy it had issued. The chiropractor sexually assaulted Harvey and she complained to defendant. Defendant nevertheless denied benefits under its policy at least partly on the basis of the report of the chiropractor. Approximately one year later, claiming benefits under another policy issued by defendant, plaintiff Julie Slack was referred to the same chiropractor for an independent medical examination and was similarly sexually assaulted by the chiropractor. She complained to defendant and to the police and, following an investigation, the chiropractor's license was revoked on the basis of these and other complaints. Defendant nevertheless denied the claim for benefits under the policy based at least in part on the chiropractor's report.

Plaintiffs brought this action naming defendant, the chiropractor, and Diversified as defendants, asserting various claims including breach of contract, bad faith breach of an insurance contract, assault, battery, willful and wanton negligence, intentional infliction of emotional distress, and outrageous conduct. The chiropractor settled with plaintiffs and was dismissed from the suit. The defendants then jointly named the chiropractor as a non-party at fault pursuant to § 13-21-111.5(3)(b), C.R.S.1998.

The jury found in favor of Diversified on all claims against it, in favor of defendant as to all claims by plaintiff Jodi Harvey, in favor of plaintiff Julie Slack and against defendant on her claims of willful and wanton negligence and bad faith breach of an insurance contract, in favor of defendant on Julie Slack's remaining claims, and in favor of plaintiff Brett Slack on his claim of loss of consortium.

Over the objections of plaintiffs, the jury was instructed to apportion fault between defendant and the chiropractor, the alleged non-party at fault, on all claims on which the jury found in favor of Julie Slack. The jury found the chiropractor 60% at fault and defendant 40% at fault. In post-trial motions, defendant requested judgment notwithstanding the verdict and the Slacks requested treble exemplary damages and attorney fees. The court denied the motions. The first appeal followed.

Subsequent to the entry of those judgments and the filing of plaintiffs' notice of appeal, and over plaintiffs' objections, the court entered judgment awarding costs totaling $7,282.74 to defendant against plaintiff Julie Slack and $5,659.30 to defendant against plaintiff Jodi Harvey. In each instance, the award of costs was based on the plaintiff having recovered less than defendant's offer of settlement in accordance with § 13-17-202, C.R.S.1998. The second appeal followed.

I.

The Slacks argue that the apportionment of damages between defendant and the chiropractor as a non-party at fault on plaintiff Julie Slack's claim of bad faith breach of an insurance contract is incorrect because the chiropractor owed no duty to her and because defendant's duty of good faith was nondelegable. Under the facts presented here, we disagree.

A.

Before addressing the precise issue raised, we must first consider whether apportionment of liability is proper between defendants, or between defendants and designated non-parties at fault, when one or more are negligent by failing to use reasonable care to prevent the foreseeable harm resulting from the intentional tort of one or more others.

Colorado has abrogated the common law doctrine of joint and several liability among tortfeasors by adopting instead a comparative fault statutory scheme apportioning liability among the parties by their relative degree of fault (the liability apportionment statute). Under that statute, § 13-21-111.5, C.R.S.1998, when a non-party is allegedly at fault, the jury may also apportion fault to the non-party, and the parties are then liable only for the remainder of the judgment in proportion to the jury's determination of their fault. But, a designated non-party at fault is not liable for the amount of the judgment apportioned to it, nor is it bound by the determination of liability or the amount of damages in a subsequent action against it.

A former defendant who has settled with the plaintiffs may be designated a non-party at fault under the statute. Section 13-21-111.5(3)(b), C.R.S.1998. However, a party or non-party may not be apportioned fault on a claim if it did not owe a duty to the plaintiff. Miller v. Byrne, 916 P.2d 566 (Colo.App.1995). The existence of a duty is a question of law that we review de novo. Metropolitan Gas Repair Service, Inc. v. Kulik, 621 P.2d 313 (Colo.1980)

.

Colorado has also modified the doctrine of contributory negligence by the adoption of § 13-21-111, C.R.S.1998 (the comparative negligence statute). Prior to the adoption of that statute, any degree of negligence by the plaintiff constituted a complete defense barring plaintiff's recovery, except that the plaintiff's contributory negligence was not a defense when the defendant's conduct amounted to an intentional tort. White v. Hansen, 837 P.2d 1229 (Colo.1992). Now, under the comparative negligence statute, the plaintiff's claim against a defendant is barred if the extent of the plaintiff's negligence exceeds that of the defendant, and otherwise the plaintiff's award of damages is reduced by the proportion of its own negligence.

In construing the comparative negligence statute, our supreme court has indicated that "actions founded on intentional misconduct by the defendant were not subject to the defense of contributory negligence [by the plaintiff] and are not subject to comparative fault principles." White v. Hansen, supra (fn. 6); see also Carman v. Heber, 43 Colo. App. 5, 7, 601 P.2d 646, 648 (1979)

(when the plaintiff is negligent, "intentional wrongdoing on the part of the defendant [nevertheless] renders the comparative negligence statute inapplicable").

The issue of apportionment of liability between negligent and intentional tortfeasors, whether defendants or designated non-parties at fault, under the liability apportionment statute is a matter of first impression.

Section 13-21-111.5(1), C.R.S.1998, states in pertinent part:

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 .... (emphasis added)

In construing a statute, we must give effect to the plain meaning of each and every word and phrase unless the result is ambiguous or nonsensical. In such circumstances, we must determine the intent of the General Assembly in enacting the statute and give effect to that intent. San Miguel County Board of Equalization v. Telluride Co., 947 P.2d 1381 (Colo.1997).

Examining the statute here, we see that it includes something more than simple negligence because otherwise the phrase "or fault" would be mere surplusage. However, the word "fault" has several potentially relevant meanings. "Fault" is defined as synonymous with "negligence," as "a wrong tendency, course, or act," and also as "bad faith or mismanagement." Black's Law Dictionary 608 (6th ed.1990). Other definitions include "a failure to do what is right," "a wrongdoing of an excusable kind," and "a failure to do something required by law or the doing of something forbidden by law." Webster's Third New International Dictionary 829 (1981). Hence, we conclude that the meaning of the word "fault" in the statute is ambiguous as to whether it includes intentional misconduct.

Therefore, we turn to the legislative history of § 13-21-111.5(1) to ascertain the General Assembly's intent. All the relevant language of the statute was enacted by Colo. Sess. Laws 1986, ch. 108, § 1 at 680 (S.B. 70). During the conference committee debate on S.B. 70, the language of § 13-21-111.5(1) was modified to substitute "action" for "negligence action," and "negligence or fault" was substituted for "negligence" to be consistent throughout the statute. These changes were made in response to concerns that all actions...