Jorgensen v. Colorado Compensation Ins. Authority, 97CA0210
| Decision Date | 05 February 1998 |
| Docket Number | No. 97CA0210,97CA0210 |
| Parties | 98 CJ C.A.R. 608 James T. JORGENSEN and Doreen H. Jorgensen, Plaintiffs-Appellants, v. COLORADO COMPENSATION INSURANCE AUTHORITY, Intervenor-Appellee. . IV |
| Court | Colorado Court of Appeals |
Dwyer, Huddleson & Ray, P.C., Stephen J. Jouard, Fort Collins, for Plaintiffs-Appellants.
Hale, Pratt, Midgley, Laitos, Green and Hackstaff, P.C., Charles M. Pratt, Denver, for Intervenor-Appellee.
Opinion by Judge NEY.
The sole issue in this appeal is whether a trial court may apportion settlement proceeds paid by a third-party tortfeasor among a workers' compensation claimant, the claimant's spouse, and the employer's insurer. We conclude that it may and, therefore, reverse the trial court order determining, without a hearing, that the Colorado Compensation Insurance Authority (CCIA) is entitled to offset any future obligation it may have for workers' compensation medical benefits to the extent of the net proceeds plaintiffs, James T. Jorgensen (claimant) and his wife, Doreen H. Jorgensen, received from the third-party tortfeasors. Accordingly, we remand the cause for further proceedings.
After sustaining a work-related injury, claimant received workers' compensation benefits from the CCIA, the employer's insurer. Also, acting pursuant to § 8-41-203(1), C.R.S.1997, claimant and his wife filed a tort claim against the third parties responsible for the injuries. The CCIA intervened in the tort claim.
Pursuant to an agreement among plaintiffs, the CCIA, and the third-party tortfeasors, plaintiffs received almost $3 million in a structured settlement, and the CCIA received $210,000. Although plaintiffs and the CCIA agreed that lost wage benefits were to be offset in full against the latter amount, there was no agreement as to the amount to be offset for the CCIA's future obligations for medical benefits. Nor was there any agreement as to the characterization of the settlement proceeds as economic damages, as opposed to non-economic damages.
Plaintiffs requested that the trial court hold an evidentiary hearing to determine what portion of their settlement was designated as payment for future medical benefits. The trial court denied the request and entered an order holding that CCIA's offset could be asserted against the net settlement.
Plaintiffs contend that the trial court erred by denying them a hearing on this issue. We agree.
The subrogation interest of a workers' compensation insurer is derived from § 8-41-203(1), which provides that if a claimant elects to receive workers' compensation,
the payment of compensation shall operate as and be an assignment of the cause of action against such other person to the [CCIA] ... or insurance carrier liable for the payment of such compensation. Said insurance carrier shall not be entitled to recover any sum in excess of the amount of compensation for which such carrier is liable under said articles to the injured employee, but to that extent said carrier shall be subrogated to the rights of the injured employee against said third party causing the injury.
Under this scheme, if a claimant recovers from the tortfeasor, the claimant must reimburse the insurer for any benefits paid. The insurer may also offset any portion of the recovery not used to reimburse the insurer for past benefit payments against any future benefits the insurer may have to pay. Thus, the claimant receives interim workers' compensation benefits, recovers from the tortfeasor, reimburses the insurer for the interim benefits, credits the insurer for potential future benefits, and keeps the remainder as excess damages. Tate v. Industrial Claim Appeals Office, 815 P.2d 15 (Colo.1991); United Fire & Casualty Co. v. Armantrout, 904 P.2d 1375 (Colo.App.1995).
However, this right of subrogation is not without limits. The insurer may recover only those losses compensable under the Act, and thus, the subrogation interest does not extend to damages for loss of consortium or other non-economic damages. Rains v. Kolberg Manufacturing Corp., 897 P.2d 845 (Colo.App.1994)(loss of consortium); Martinez v. Saint Joseph Hospital & Nursing Home of Del Norte, Inc., 878 P.2d 13 (Colo.App.1993)(non-economic damages, such as pain and suffering).
On this premise, plaintiffs argue that the trial court should determine what portion of the settlement is attributable to those losses that are not compensable under the Act. Plaintiffs rely on Jordan v. Fonken & Stevens, P.C., 914 P.2d 394, 395 (Colo.App.1995), where a division of this court rejected the notion that the Division of Labor had jurisdiction to decide the apportionment of a settlement with a third-party tortfeasor, and instead held that: "[T]his is an issue to be determined either by agreement of all interested parties or by the tribunal having jurisdiction over the claimant's tort claim."
The CCIA counters that the trial court lacks jurisdiction to enter any order other than...
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