Menapace v. Alaska Nat'l Ins. Co.
| Decision Date | 30 September 2020 |
| Docket Number | Civil Action No. 20-cv-00053-REB-STV |
| Citation | 491 F.Supp.3d 924 |
| Parties | Darin MENAPACE, Plaintiff, v. ALASKA NATIONAL INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — District of Colorado |
Alana Marie Anzalone, Anzalone Law Offices LLC, Denver, CO, Heather E. Hackett, Marc R. Levy, Matthew W. Hall, Levy Law P.C., Englewood, CO, for Plaintiff.
Jacob A. Rey, Evan Bennett Stephenson, Wheeler Trigg O'Donnell LLP, Denver, CO, for Defendant.
ORDER DENYING DEFENDANT'S RULE 56 MOTION FOR A DETERMINATION OF LAW
The matter before me is the relief requested in Defendant's Rule 56 Motion for a Determination of Law [#66],1 filed July 24, 2020. I deny the relief sought therein.
I have jurisdiction over this matter pursuant to 28 U.S.C. § 1332 (diversity of citizenship).
Summary judgment is proper when there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. FED. R. CIV. P. 56(a) ; Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). A dispute is "genuine" if the issue could be resolved in favor of either party. Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) ; Farthing v. City of Shawnee , 39 F.3d 1131, 1135 (10th Cir. 1994). A fact is "material" if it might reasonably affect the outcome of the case. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) ; Farthing , 39 F.3d at 1134.
A movant who will bear the burden of proof at trial on an issue must submit evidence to establish every essential element of its claim or affirmative defense. See In re Ribozyme Pharmaceuticals, Inc. Securities Litigation , 209 F.Supp.2d 1106, 1111 (D. Colo. 2002).2 Once the motion has been properly supported, the burden shifts to the nonmovant to show, by tendering depositions, affidavits, and other competent evidence, that summary judgment is not proper. Id. at 1518. All the evidence must be viewed in the light most favorable to the party opposing the motion. Simms v. Oklahoma ex rel. Department of Mental Health and Substance Abuse Services , 165 F.3d 1321, 1326 (10th Cir.), cert. denied , 528 U.S. 815, 120 S.Ct. 53, 145 L.Ed.2d 46 (1999).
On July 16, 2016, while driving a company vehicle and in the course and scope of his employment, plaintiff, Darin Menapace, was seriously injured when an oncoming car crossed the center lane of Highway 120 in Wyoming and collided head-on with Mr. Menapace's vehicle. Through his employer's Commercial Insurance Policy No. 16D AS 60374 (the "Policy"), issued by defendant Alaska National Insurance Company ("Alaska National"), Mr. Menapace was entitled to workers’ compensation benefits.3 To date, Alaska National has paid $90,771.04 in workers’ compensation benefits to Mr. Menapace. (Resp. App. , Exh. 3 at 2.)
Mr. Menapace also sought reimbursement from the at-fault driver's insurance carrier, USAA. Mr. Menapace later settled his claim against the other driver for the $100,000 limits of her USAA policy, and Alaska National recovered $46,666.67 in subrogation of the workers’ compensation benefits paid. However, Alaska National has stated its intention to take the full $100,000 as a setoff against Mr. Menapace's UIM claim. (Resp. App. , Exh. 3 at 3.) In support of that position, Alaska National relies on an exclusion in the Policy which states that the insurer will not pay for "any element of ‘loss’ if a person is entitled to receive payment for the same element of ‘loss’ under any workers’ [sic] compensation, disability benefits or similar law." (Motion App. , Exh. B ¶ D.2. at 2 of 5 [AlaskaNational_00088].)
Mr. Menapace's damages were in excess of the $100,000 bodily injury limits of the at-fault driver's USAA policy, and he requested Alaska National open an underinsured motorist ("UIM") claim.4 Following mediation of that claim, Alaska National paid him $150,000 in UIM benefits. This lawsuit, alleging claims for breach of contract and statutory and common law bad faith against Alaska National, followed.
Although Alaska National frames the issue as a matter of its putative subrogation rights, in effect what it seeks by this motion is a determination that it is entitled to a setoff for the workers’ compensation benefits it has paid Mr. Menapace against any UIM benefits he might recover in this case. Because such an outcome is contrary to public policy as expressed by the Colorado legislature and interpreted by the Colorado courts, I deny the motion.
Under Colorado law, an insurer who pays workers’ compensation benefits on behalf of an injured employee is subrogated to the rights of the injured employee against the "third party causing the injury." § 8-41-203(1), C.R.S. As interpreted by the Colorado Court of Appeals, however, a UIM insurer in not a third-party tortfeasor to whom the statute applies. Colorado Insurance Guaranty Association v. Menor , 166 P.3d 205, 213 (Colo. App. 2007) ; McMichael v. Aetna Insurance Co. , 878 P.2d 61, 64 (Colo. App. 1994), aff'd , 906 P.2d 92 (Colo. 1995) ; State Compensation Insurance Fund v. Commercial Union Insurance Co. , 631 P.2d 1168, 1169 (Colo. App. 1981) ; Nationwide Mutual Insurance Co. v. Hillyer , 32 Colo.App. 163, 509 P.2d 810, 811 (1973). Instead, and unlike a third-party tortfeasor, "[t]he liability of a UM/UIM insurer to the injured party is contractual, and the workers’ compensation insurer does not become a third-party beneficiary under the contract." Menor , 166 P.3d at 213. See also McMichael , 878 P.2d at 64.
Knight v. Insurance Co. of North America , 647 F.2d 127, 128 (10th Cir. 1981) (). Thus, despite the absence of a definitive statement on the subject from the Colorado Supreme Court, I have little trouble in concluding, based on the relevant appellate court decisions, appellate decisions in other states on similar questions, and "the general weight and trend of authority" in the relevant area of law, see Wade v. EMCASCO Insurance Co. , 483 F.3d 657, 666 (10th Cir. 2007), that a workers’ compensation insurer's right of subrogation does not extend to UIM benefits.5
In the face of this statutory and interpretive authority, Alaska National's suggestion that the Colorado Supreme Court has overruled these precedents is utterly meritless. First, in neither of the two decisions on which Alaska National relies – Sunahara v. State Farm Mutual Automobile Insurance Co. , 280 P.3d 649 (Colo. 2012), and American Family Mutual Insurance Co. v. DeWitt , 218 P.3d 318 (Colo. 2009) – was the Court asked to interpret the workers’ compensation subrogation statute or consider its interplay with a claim for UIM benefits. Moreover, and at best, the putatively critical language of these cases does little more than define the right of subrogation, where it exists , as the right to "stand in the shoes" of the subrogee. See Sunahara , 280 P.3d at 657 ; DeWitt , 218 P.3d at 323. Because a workers’ compensation carrier has no right of subrogation with respect to a claim to UIM benefits, however, these decisions are irrelevant here.
The matter becomes even clearer when one considers Colorado's UIM statute, which provides, relevantly, that "[t]he amount of the coverage available pursuant to this section shall not be reduced by a setoff from any other coverage ..." § 10-4-609(1)(c), C.R.S. "Any other coverage" has been defined to include workers’ compensation benefits. Adamscheck v. American Family Mutual Insurance Co. , 818 F.3d 576, 583 (10th Cir. 2016) ; Hillyer , 509 P.2d at 811 ; American Family Mutual Insurance Co. v. Ashour , 410 P.3d 753, 758 (Colo. App. 2017).
"Where there is a conflict between an insurance policy and a statute, the statute controls." Pacheco v. Shelter Mutual Insurance Co. , 583 F.3d 735, 740 n. 8 (10th Cir. 2009). See also DeHerrera v. Sentry Insurance Co. , 30 P.3d 167, 173 (Colo. 2001) (). Accordingly, the provision of the Policy which purports to absolve Alaska National from paying for "any element of ‘loss’ if a person is entitled to receive payment for the same element of ‘loss’ under any workers’ compensation, disability benefits or similar law," is contrary to the public policy of Colorado, and thus unenforceable. See Adamscheck , 818 F.3d at 582 ; Caldwell v. GEICO General Insurance Co. , 2010 WL 865773 at *11 (D. Colo. Mar. 8, 2010) ; Aetna Casualty & Surety Co. v. McMichael , 906 P.2d 92, 100 (Colo. 1995). Alaska National therefore is precluded from taking a setoff from Mr. Menapace's UIM benefits.
Alaska National nevertheless insists the result should be different here because it is both the workers’ compensation and the UIM insurer. I am unpersuaded. While double recovery is to be avoided, Barnett v. American Family Mutual Insurance Co. , 843 P.2d 1302, 1308 (Colo. 1993), the recovery of benefits which merely overlap is permissible, Toy v. American Family Mutual Insurance Co. , 2014 WL 321213 at *10 (D. Colo. Jan. 29, 2014) ; Calderon v. American Family Mutual Insurance Co. , 383 P.3d 676, 679 (Colo. 2016).6 Thus, the relevant inquiry is not...
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