Krieg v. Prudential Property and Cas. Ins. Co.

• Decision Date: 20 August 1984
• Docket Number: Nos. 83SC208,83SC433,s. 83SC208
• Citation: 686 P.2d 1331
• Parties: Harold J. KRIEG, Petitioner, v. PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY, a New Jersey corporation, Respondent. Cheryl L. ADAMS, Petitioner, v. SAFECO INSURANCE COMPANY, Respondent.
• Court: Colorado Supreme Court

Page 1331

686 P.2d 1331

Harold J. KRIEG, Petitioner, v. PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY, a New

Jersey corporation, Respondent.

Cheryl L. ADAMS, Petitioner, v. SAFECO INSURANCE COMPANY, Respondent.

Nos. 83SC208, 83SC433.

Supreme Court of Colorado En Banc.

Aug. 20, 1984.

Moyer, Beal & Vranesic, John R. Vranesic, Lakewood, for Petitioner krieg.

Hall & Evans, Robert M. Steiert, Denver, for respondent Prudential.

Harden, Schmidt & Hass, P.C., Ralph B. Harden, Fort Collins, for petitioner Adams.

Fischer & Wilmarth, Steven G. Francis, Fort Collins, for respondent Safeco Ins.

QUINN, Justice.

We granted certiorari to review two lower court judgments concerning the construction of section 10-4-706(1)(d)(I) of the Colorado Auto Accident Reparations Act (No Fault Act), §§ 10-4-701 to 723, 4 C.R.S. (1973 & 1983 Supp.), which authorizes the payment of personal injury protection (PIP) benefits for loss of income "during a period commencing the day after the date of the accident, and not exceeding fifty-two additional weeks." In one of the cases, Krieg v. Prudential Property & Casualty Insurance Co. (No. 83SC208), the Denver Superior Court construed the phrase "fifty-two additional weeks" to mean fifty-two consecutive weeks commencing the day after the accident. In the other case, Adams v. Safeco Insurance Co. (No. 83SC433), the court of appeals adopted a similar construction, holding that the eligibility period for loss of income benefits is fifty-two consecutive weeks that begin to run the day after the accident. Adams v. Safeco Insurance Co., 674 P.2d 999 (Colo.App.1983). Because both cases raise the identical issue, we consolidate them and affirm the judgments.

I.

On March 5, 1980, Harold J. Krieg was involved in an automobile accident and suffered a broken femur requiring the placement of an intermedullary rod in his leg. Krieg was insured under a policy with Prudential Property and Casualty Insurance Company (Prudential) for PIP coverage. The policy provided, in pertinent part, that Prudential would "pay, in accordance with [the Colorado No Fault Act], personal injury protection benefits for ... work loss ... incurred with respect to bodily injury ... caused by an accident arising out of the use or operation of a motor vehicle as a motor vehicle." The terms of the policy expressly limited Prudential's liability for PIP work loss benefits as follows:

"the maximum amount payable for work loss is one hundred percent (100%) of the first one hundred twenty-five dollars ($125) of loss of gross income per week (or pro rata for such amounts for a lesser period) and shall be payable only during a period commencing the day after the date of the accident, and not exceeding fifty-two weeks (52) from such day."

As a result of his injury, Krieg, whose gross income was in excess of $125 per week, was unable to work for a period of twenty-two weeks following the accident. Prudential paid Krieg all of his lost income benefits between March 5, 1980, and March 5, 1981. On June 19, 1981, however, more than fifty-two weeks after the accident, Krieg underwent surgery for the removal of the rod and was unable to work for an additional seven weeks. Prudential refused to pay Krieg for lost income benefits for the seven weeks of work loss following the June 1981 surgery. Krieg filed an action against Prudential in the Denver County Court, which entered judgment in Krieg's favor for $875 for lost income benefits, plus costs, attorney fees, and interest. The Denver Superior Court reversed the judgment, and this court thereafter granted Krieg's petition for certiorari. ¹

In the companion case, Cheryl L. Adams was injured in an automobile accident on December 13, 1975, while riding as a passenger in a car operated by Gaylene Hergenreder who had PIP insurance coverage with Safeco Insurance Company (Safeco). Adams, who also was earning in excess of $125 per week, lost seven weeks of work during the first year after the accident and an additional 18.21 weeks subsequent to the expiration of the initial fifty-two week period. Adams filed a claim with Safeco for payment of lost income benefits of $125 for 25.21 weeks or a total of $3,151.25. Safeco paid Adams $875 for the seven weeks of income loss during the first year after the accident, but refused to pay her benefits for the 18.21 weeks of work missed after the expiration of the initial fifty-two week period. Adams filed an action against Safeco for the additional benefits in the Larimer County District Court. The district court ruled in favor of Safeco and the court of appeals affirmed. ² Adams then filed a petition for certiorari, which we granted.

Krieg and Adams argue that the statutory phrase "not exceeding fifty-two additional weeks" in section 10-4-706(1)(d)(I) of the No Fault Act requires mandatory PIP lost income coverage for an aggregate period of fifty-two weeks irrespective of when the loss occurs. Prudential and Safeco, in contrast, contend that the phrase "not exceeding fifty-two additional weeks" means a singular and continuous unit of time commencing on the day of the accident and terminating fifty-two weeks thereafter.

II.

Because the issue before us is one of statutory construction, a review of the statutory scheme applicable to the claims in question will provide a helpful context for our analysis of the particular provision in controversy.

The basic purpose of the No Fault Act is "to avoid inadequate compensation to victims of automobile accidents" by requiring owners of motor vehicles "to procure insurance covering legal liability arising out of ownership or use of such vehicles and also providing benefits to persons occupying such vehicles and to persons injured in accidents involving such vehicles." § 10-4-702, 4 C.R.S. (1973); see Cingoranelli v. St. Paul Fire & Marine Insurance Co., 658 P.2d 863 (Colo.1983); Travelers Indemnity Co. v. Barnes, 191 Colo. 278, 552 P.2d 300 (1976). Section 10-4-706(1), in keeping with this purpose, requires the insurance agreement to provide the following minimum PIP benefits for a single accident victim without regard to fault: compensation up to $25,000 for medical care and treatment rendered "within three years after the accident," § 10-4-706(1)(b); compensation up to $25,000 for rehabilitative care and treatment rendered within five years after the accident, § 10-4-706(1)(c)(II); payment of benefits equivalent to 100% of the first $125 of income loss during a period commencing the day after the accident and not exceeding fifty-two additional weeks, § 10-4-706(1)(d)(I); and payment of expenses not exceeding fifteen dollars per day for essential services in lieu of those the injured party would have performed during the period "commencing the day after the date of the accident and not exceeding an additional fifty-two weeks," § 10-4-706(1)(d)(I). ³ These PIP benefits extend to the insured, household relatives of the insured, anyone occupying the vehicle with the insured's consent, and pedestrians. § 10-4-707(1), 4 C.R.S. (1973). The No Fault Act vests those third party accident victims to whom PIP benefits are payable with third party beneficiary status, thereby creating a direct contractual action against the PIP insurer. Cingoranelli, 658 P.2d at 867, 868 n. 8.

The statutory PIP benefits represent only minimum protections that an insurer must provide. Nothing in the No Fault Act, in other words, prohibits an insurer from expanding PIP coverage. With respect to lost income benefits, section 10-4-710(2)(a)(II) expressly requires an insurer to offer customers the option of accepting more extensive coverage than the statutory minimum provided in section 10-4-706(1)(d)(I):

"(2)(a) Every insurer shall offer for inclusion in a complying policy, in addition to the coverages described in section 10-4-706, at the option of the named insured:

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"(II) Payment of benefits equivalent to eighty-five percent of loss of gross income per week from work the injured person would have performed had he not been injured during the period commencing on the date of the accident."

The No Fault Act limits tort actions by accident victims against any person legally responsible for the accident to specified situations involving injuries of a serious nature. Section 10-4-714(1), 4 C.R.S. (1973), for example, permits a tort action against a person legally responsible for a motor vehicle accident only when the accident results in one of the following: death; dismemberment; permanent disability; permanent disfigurement; medical and rehabilitative expenses in excess of $500; and loss of earnings and loss of earning capacity extending beyond the fifty-two week period provided in section 10-4-706(1)(d)(I) and not compensated by an applicable complying policy. Section 10-4-714(2), 4 C.R.S. (1973), states that nothing in the Act "shall be construed to preclude recovery in such action against an alleged tort-feasor of benefits provided or economic loss recoverable in excess of the minimum coverages required in section 10-4-706(1)(b) to (1)(d)."

III.

Having outlined the general framework of the No Fault Act, we turn to the particular issue before us. The statutory context in which the phrase "not exceeding fifty-two additional weeks" appears is section 10-4-706(1)(d)(I), which states as follows:

"Required coverages. (1) Subject to the limitations and exclusions authorized by this [Act], the minimum coverages required for compliance with this [Act] are as follows:

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"(d)(I) Payment of benefits equivalent to one hundred percent of the first one hundred twenty-five dollars of loss of gross income per week, or pro rata for such amounts for a lesser period, from work the injured person would have performed had he not been injured during a period commencing the day after the date of the accident, and not exceeding fifty-two additional weeks ...."

Standing by itself, the phrase "not exceeding fifty-two additional...