Rains v. Kolberg Mfg. Corp., 93CA1863

• Citation: 897 P.2d 845
• Case Date: October 20, 1994
• Court: Court of Appeals of Colorado

Page 845

897 P.2d 845 Mark RAINS and Debby Rains, Plaintiffs-Appellees,
and
Aetna Casualty & Surety Co., a Connecticut corporation,
Intervenor-Appellant,
v.
KOLBERG MANUFACTURING CORP., a subsidiary of Portec, Inc., Defendant. No. 93CA1863.
Colorado Court of Appeals,
Div. III. Oct. 20, 1994.
Rehearing Denied Nov. 17, 1994.
Certiorari Denied June 19, 1995.

Page 846

Sears, Anderson & Swanson, P.C., Victoria C. Swanson, Colorado Springs, for plaintiffs-appellees.

James R. Florey, Jr., Gina Carter, Englewood, for intervenor-appellant.

Opinion by Judge KAPELKE.

Defendant, Aetna Casualty and Surety Company, appeals from the summary judgment entered by the trial court determining that Aetna had no subrogation claim to settlement proceeds to be paid by a third-party tortfeasor to Debby Rains, the wife of Mark Rains (claimant), Aetna's insured under a workers' compensation policy. We reverse and remand for further proceedings.

In October 1989, claimant suffered an industrial injury. He thereafter applied for and received workers' compensation benefits exceeding $143,000 paid by Aetna, which had issued a workers' compensation policy to claimant's employer.

In May of 1991, claimant and his wife filed a personal injury action against Kolberg Manufacturing Corporation, a machinery manufacturer. Claimant sought compensation for his injuries based upon a product liability theory, and his wife sought damages for loss of consortium. Aetna intervened in the third-party action against Kolberg, asserting a statutory subrogation interest pursuant to § 8-41-203, C.R.S. (1994 Cum.Supp.) in any proceeds of the suit to the extent of the workers' compensation benefits it had paid.

Following a settlement conference, claimant dismissed his claim against the third

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party, without receiving any compensation, and his wife agreed to a structured settlement valued at $100,000 for her loss of consortium claim. Aetna was not consulted regarding the settlement, and its consent to the terms of the settlement was neither sought nor obtained. The settlement did not compromise any claim that Aetna had asserted or could assert against Kolberg.

Aetna thereafter asserted its statutory subrogation claim to the settlement proceeds being paid to claimant's wife. The parties agreed that the question of entitlement to the proceeds was solely an issue of law and submitted the issue to the trial court by cross-motions for summary judgment pursuant to C.R.C.P. 56(h). The trial court concluded that, since the claim of claimant's wife for loss of consortium was separate and distinct from claimant's personal injury claim, the settlement proceeds paid to her were not subject to subrogation.

Aetna contends that the trial court erred in holding that it has no subrogation interest in the settlement proceeds paid to claimant's wife and argues that claimant and his spouse cannot unilaterally defeat Aetna's subrogation interest by denominating the settlement proceeds as compensation for the compromise of the wife's loss of consortium. We conclude that the cause must be remanded for further proceedings.

Section 8-41-203 provides that if an employee injured by the negligence of a third person elects to receive workers' compensation benefits, the payment of compensation operates as an assignment to the workers' compensation carrier of the cause of action against the third party. The insurance carrier thus becomes subrogated to...