Keelan v. Van Waters & Rogers, Inc.

• Decision Date: 18 July 1991
• Docket Number: No. 90CA0578,90CA0578
• Citation: 820 P.2d 1145
• Parties: Patrick A. KEELAN and Bonnie Keelan, Plaintiffs-Appellees, v. VAN WATERS & ROGERS, INC., Defendant-Appellant. . I
• Court: Colorado Court of Appeals

Page 1145

820 P.2d 1145

Patrick A. KEELAN and Bonnie Keelan, Plaintiffs-Appellees, v. VAN WATERS & ROGERS, INC., Defendant-Appellant.

No. 90CA0578.

Colorado Court of Appeals Div. I.

July 18, 1991.

Rehearing Denied Aug. 15, 1991.

Certiorari Granted Dec. 3, 1991.

Feder, Morris, Tamblyn & Goodstein, P.C., Stephen B. Schuyler, Leonard M. Goldstein, Denver, for plaintiffs-appellees.

Parcel Mauro Hultin & Spaanstra, P.C., Edward W. Stern, James L. Harrison, Denver, for defendant-appellant.

McDermott, Hansen, Anderson & Reilly, William J. Hansen, Denver, for amicus Colorado Trial Lawyers' Ass'n.

Opinion by Judge DUBOFSKY.

Defendant, Van Waters & Rogers, Inc., appeals a judgment entered on a jury verdict awarding plaintiffs, Patrick A. Keelan (Keelan) and Bonnie Keelan, damages for injuries incurred by Keelan when a jack from defendant's truck fell and struck him. Defendant's sole contention on appeal is that the trial court erred in refusing to offset Keelan's disability benefits from the amount awarded. We affirm.

Keelan was employed by the Denver Fire Department, and as a result of the injury here at issue, he was declared occupationally disabled by the Fire and Police Pension Association (FPPA) Board on February 24, 1989. He received statutory disability payments pursuant to a disability and survivor benefit plan instituted by the state for local police officers and fire fighters. See § 31-30-1001, et seq., C.R.S. (1986 Repl.Vol. 12B). Those benefits amounted to $16,996.56 by February 1990. The present value of future disability benefits based on his actuarial life-expectancy is approximately $300,000.

During trial, the jury was not informed of Keelan's right to receive disability benefits. On January 19, 1990, the jury returned a verdict of $421,000 in favor of plaintiffs ($411,000 for Keelan and $10,000 for Bonnie Keelan). The jury allocated $100,000 to Keelan for non-economic loss, $300,000 for economic loss, $6,000 for physical impairment, and $5,000 for head lacerations.

Following the verdict, defendant requested that the trial court reduce the verdict by offsetting the present value of all disability payments. The trial court denied defendant's request and disallowed any offset. Judgment, including interest, for $463,384.94 was entered in favor of plaintiffs.

I.

Defendant argues that the trial court erred in not requiring a setoff of disability payments from plaintiffs' judgment. We disagree.

Defendant maintains that § 13-21-111.6, C.R.S. (1987 Repl.Vol. 6A) was passed as part of the overall legislative tort reform package and the General Assembly's primary intent in passing such legislation was to limit the increasing costs of insurance. Relying on People v. Silvola, 190 Colo. 363, 547 P.2d 1283, cert. denied sub nom. Silvola v. Colorado, 429 U.S. 886, 97 S.Ct. 238, 50 L.Ed.2d 167 (1976), defendant contends that, in certain situations, the courts should ignore the literal language of a statute in order to implement the overall legislative intent. Furthermore, defendant argues that the legislative intent here is to prevent double recovery by an injured plaintiff and we should construe the exception set out below so narrowly as to make it inapplicable here.

We disagree with defendant's analysis as it applies to this statute.

Section 13-21-111.6 states:

"In any action by any person ... to recover damages for a tort resulting in death or injury ... the court, after the finder of fact has returned its verdict stating the amount of damages to be awarded, shall reduce the amount of the verdict by the amount by which such person ... has been or will be wholly or partially indemnified or compensated for his loss by any other person, corporation, insurance company, or fund in relation to the injury, damage, or death sustained; except that the verdict shall not be reduced by the amount by which such person, his estate, or his personal representative has been or will be wholly or partially indemnified or compensated by a benefit paid as a result of a contract entered into and paid for by or on behalf of such person." (emphasis added)

A statute is to be read in its entirety and effect given to the legislative intent as it is written. A court should not depart from the plain meaning of words in search of a legislative intent which the words of the statute do not plainly and effectively express. Rancho Colorado, Inc. v. City of Broomfield, 196 Colo. 444, 586 P.2d 659 (1978); People v. Howell, 701 P.2d 131 (Colo.App.1985).

Here, the legislative intent of the statute is clear on its face. The exception expresses the legislative intent not to require a setoff if a benefit is paid as a result of a contract entered into and paid for or on behalf of such person.

Defendant relies on U.S. Fidelity & Guaranty Co. v. Salida Gas Service Co., 793 P.2d 602 (Colo.App.1989) to support its contention that § 13-21-111.6 requires that Keelan's disability benefits be offset from the judgment. Salida Gas deals with the propriety of a setoff from the verdict of a previous settlement with another defendant. There, the court determined that § 13-21-111.6 required a setoff. Salida Gas is not, however, dispositive because it does not involve the exception to § 13-21-111.6 which is the issue here.

We thus conclude that the statute should be interpreted and applied as written and that the trial court was correct in so doing.

II.

Defendant next argues that the disability benefits paid to Keelan were provided through a statewide fund created by statute and that, therefore, they were not a result of an employment contract entered into and paid for on his behalf as required by the exemption in § 13-21-111.6. We disagree.

Payments made to injured parties as a gratuity have traditionally not been considered to be derivative from a contractual arrangement and a setoff has been permitted for such gratuitous payments. City of Englewood v. Bryant, 100 Colo. 552, 68 P.2d 913 (1937) (gratuitous medical care at county hospital); Gomez v. Black, 32 Colo.App. 332, 511 P.2d 531 (1973) (Colorado medicaid benefits).

However, historically, a tortfeasor has been required to compensate an injured party for economic medical losses even if the party has already been compensated through another source. The courts have concluded that it is better public policy that an injured party be twice compensated than that a wrongdoer be absolved of financial responsibility in such situations. This policy is known as the collateral source rule. See Kistler v. Halsey, 173 Colo. 540, 481 P.2d 722 (1971); Isbill Associates, Inc. v. City & County of Denver, 666 P.2d 1117 (Colo.App.1983).

At common law, disability payments have been subject to the collateral source rule, and tortfeasors could not setoff these payments from an award of damages. See Moyer v. Merrick, 155 Colo. 73, 392 P.2d 653 (1964); see also Goodboe v. Gabriella, 663 P.2d 1051 (Colo.App.1983). The virtually unanimous rule has been that a tortfeasor has no right to mitigate the damages awarded to a plaintiff because of disability funds that the plaintiff receives as a result of his injuries. See Annot., 75 A.L.R.2d 885 (1961).

This common law rule has been explicitly applied to disability payments made to injured fire fighters. In Texas Cities Gas Co. v. Dickens, 156 S.W.2d 1010 (Tex.App.1941), aff'd, 140 Tex. 433, 168 S.W.2d 208 (1943), the court held that payment of a disability pension to a fire fighter pursuant to an ordinance should not reduce the amount of damages owed by the tortfeasor. Bencich v. Market Street Railway Co., 29 Cal.App.2d 641, 85 P.2d 556 (1938); Accord Mullins v. Bolinger, 115 Ind.App. 167, 55 N.E.2d 381, 56 N.E.2d 496 (1944).

Here, the evidence establishes that Keelan was a fire fighter with an employment contract with the City of Denver. Under the terms of the contract he received a salary and "fringe benefits." These fringe benefits included disability compensation.

Because of funding difficulties at the local level, the State of Colorado in 1978 assumed responsibility for funding and administering a police and fire fighters' disability program. See § 31-30-1001, et seq. Defendant claims that this disability scheme is so separated from Keelan's employment contract with Denver that disability payments do not arise from their contractual arrangement and, therefore, the exemption in § 13-21-111.6 is inapplicable.

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