Simon v. State Compensation Ins. Authority

• Decision Date: 15 December 1994
• Docket Number: No. 93CA2211,93CA2211
• Citation: 903 P.2d 1139
• Parties: Mark SIMON, Cheryl Simon, and Malachai Simon, Plaintiffs-Appellants, v. The STATE COMPENSATION INSURANCE AUTHORITY, The State Compensation Insurance Fund, and The Colorado Compensation Insurance Authority, Defendants-Appellees. . IV
• Court: Colorado Court of Appeals

Page 1139

903 P.2d 1139

Mark SIMON, Cheryl Simon, and Malachai Simon, Plaintiffs-Appellants, v. The STATE COMPENSATION INSURANCE AUTHORITY, The State Compensation Insurance Fund, and The Colorado Compensation Insurance Authority Defendants-Appellees.

No. 93CA2211.

Colorado Court of Appeals,

Div. IV.

Dec. 15, 1994.

As Modified on Denial of Rehearing

April 6, 1995.

Rehearing Denied May 11, 1995.

Certiorari Granted Oct. 10, 1995.

Andrew T. Brake, P.C., Andrew T. Brake, Lee T. Judd, Denver, for plaintiffs-appellants.

Gale A. Norton, Atty. Gen., Stephen K. ErkenBrack, Chief Deputy Atty. Gen., Timothy M. Tymkovich, Sol. Gen., George S. Meyer, Asst. Atty. Gen., Denver, for defendants-appellees.

Opinion by Judge ROTHENBERG.

Plaintiffs, Mark Simon (Simon), Cheryl Simon, and Malachai Simon, appeal from the judgment of dismissal entered in favor of defendants, the State Compensation Insurance Authority (SCIA), the State Compensation Insurance Fund (SCIF), and the Colorado Compensation Insurance Authority (CCIA). We affirm.

According to plaintiffs' complaint, in 1982, Simon and his business partners applied for and received workers' compensation insurance with SCIF.

In 1984, Simon became the sole proprietor of the business and notified SCIF that he was the new insured. He paid premiums for workers' compensation insurance, up to and including January 1985.

In January 1985, Simon was injured during the course of his employment and required substantial medical care. He made a claim for insurance benefits with SCIF, which denied his claim on the basis that sole proprietors were not covered under the policy. Simon challenged the decision of the SCIF, and, following a hearing, the Administrative Law Judge (ALJ) found that Simon's injuries were covered under the policy.

On July 1, 1987, SCIA took over the operations of SCIF and became the responsible party for purposes of making payments under Simon's workers' compensation claim. SCIA disputed Simon's entitlement to temporary disability and medical benefits. He challenged the decision and, in an order dated July 12, 1989, the ALJ awarded Simon medical and temporary disability benefits. SCIA appealed both decisions to the Industrial Claims Appeals Panel, which affirmed the orders.

In April 1990, SCIA filed a general admission of liability regarding temporary/total disability. Simon objected to the admission of liability and filed a motion to reopen concerning the issue of any offsets to which SCIA may be entitled. Following a hearing, the ALJ again entered an order in favor of Simon which was affirmed on appeal.

In July 1990, CCIA assumed the obligations of SCIA. CCIA failed to make any payments to or on behalf of Simon until September 1992. Meanwhile, Simon became involved in the legislative process relating to the workers' compensation laws.

Alleging that defendants had released private, confidential, and/or false information regarding him which resulted in damaged relationships between Simon and his wife and son, plaintiffs filed this action against defendants seeking damages for: (1) violation of constitutional rights under 42 U.S.C. § 1983 (1988); (2) bad faith/breach of fiduciary duty; (3) outrageous conduct; (4) loss of consortium; (5) interference with familial relations; (6) invasion of privacy; and (7) violation of state and federal law. Plaintiffs provided notice of their claims as required by § 24-10-109, C.R.S. (1994 Cum.Supp.).

Defendants filed a motion to dismiss, contending that plaintiffs' tort claims were barred by the Colorado Governmental Immunity Act (the Immunity Act) and that plaintiffs' claim under 42 U.S.C. § 1983 (1988) also was barred because defendants were not "persons" within the meaning of the statute.

In response, plaintiffs claimed, inter alia, that the Immunity Act is unconstitutional and that defendants are persons within the meaning of § 1983 because they are state corporations. The trial court granted defendants' motion to dismiss.

I.

Plaintiffs first argue that their tort claims are not barred by the Immunity Act because the statute itself is unconstitutional. Plaintiffs claim defendants should be subject to the same liability as any private insurance carrier, and to allow these defendants governmental immunity denies plaintiffs equal protection and violates their rights to due process and access to the courts. We reject these contentions.

A statute is presumed to be constitutional, and the burden is on the party attacking the statute to establish its unconstitutionality beyond a reasonable doubt. Dove v. Delgado, 808 P.2d 1270 (Colo.1991).

The Immunity Act provides that a public entity is immune from liability in all claims for injury which "lie in tort or could lie in tort regardless of whether that may be the type of action or the form of relief chosen by the claimant." It further provides that sovereign immunity is waived by a public entity in certain circumstances. See § 24-10-106, C.R.S. (1988 Repl.Vol. 10A).

The CCIA was created by statute, namely § 8-45-101(1), C.R.S. (1994 Cum.Supp.), which provides, in pertinent part:

There is hereby created the Colorado compensation insurance authority which shall be a body corporate and a political subdivision of the state. The authority shall not be an agency of state government, nor shall it be subject to administrative direction by any state agency except as provided in this article, and except for the purposes of the Colorado Governmental Immunity Act ... and except for inclusion in the risk management fund and by the division of risk management.... (emphasis added)

A.

Equal Protection

Plaintiffs claim the Immunity Act denies them equal protection in that it allegedly denies them a fundamental right guaranteed by the Colorado Constitution, namely, the right of access to the courts to remedy injuries suffered. We do not agree.

Colo. Const. art. II, § 6, states in relevant part that: "Courts of justice shall be open to every person, and a speedy remedy afforded for every injury to person, property or character...." This provision simply provides that, if a right does accrue under the law, the courts will able to effectuate such right. O'Quinn v. Walt Disney Productions, Inc., 177 Colo. 190, 493 P.2d 344 (1972). See Allison v. Industrial Claim Appeals Office, 884 P.2d 1113 (Colo.1994) (certiorari review by court of appeals pursuant to § 8-43-307, C.R.S. (1994 Cum.Supp.) denies workers' compensation claimants the right of access to the courts).

Equal protection of the laws requires that the government treat similarly situated persons in a similar manner. When governmental action is subjected to an equal protection challenge, the level of judicial scrutiny varies with the type of classification employed and the nature of the right affected. Tassian v. People, 731 P.2d 672 (Colo.1987).

An equal protection challenge to legislation requires application of one of three standards of review, depending on the circumstances in which the challenge arises.

If the statutory classification abrogates a fundamental right or establishes a suspect class, the court must apply a strict scrutiny standard of review. Under such a standard, the state has the burden of establishing that the classification serves a compelling governmental interest and that the legislation is necessary for the accomplishment of such purpose. See Evans v. Romer, 854 P.2d 1270 (Colo.1993) (Evans I ) and Evans v. Romer, 882 P.2d 1335 (Colo.1994) (Evans II ) (Equal Protection Clause protects fundamental right to participate equally in the political process and state constitutional amendment which infringes on this right by "fencing out" an independently identifiable class of persons is subject to strict scrutiny).

An intermediate level of review is required if the classification affects a quasi-suspect class. See Willer v. City of Thornton, 817 P.2d 514 (Colo.1991).

If the statutory classification does not infringe on a fundamental right or adversely affect a suspect or quasi-suspect class, a rational basis standard of review controls. Under such a standard, equal protection of the laws is satisfied if the statutory classification has a reasonable basis in fact and bears a reasonable relationship to a legitimate governmental interest. The party challenging the legislation must establish beyond a reasonable doubt that the statutory classification is unreasonable or, if reasonable, is unrelated to any legitimate governmental objective. See Lee v. Colorado Department of Health, 718 P.2d 221 (Colo.1986).

Here, plaintiffs claim the Act infringes upon a fundamental right, namely, the right of access to the courts to remedy injuries suffered. However, the right of access to the courts has not been recognized as a fundamental right by our supreme court. See State Farm Mutual Automobile Insurance Co. v. Broadnax, 827 P.2d 531 (Colo.1992) (court applied rational basis test in analyzing right of access to courts). In fact, the constitutional right to access does not create a substantive right at all. It provides a procedural right to a judicial remedy whenever the General Assembly creates a substantive right under Colorado law. Thus, the "access right" guarantees access to the courts when an individual has a viable claim for relief. In re Marriage of Hartley, 886 P.2d 665 (Colo.1994).

Further, in Dove v. Delgado, supra, our supreme court held that the right to recover damages in tort is not a fundamental right.

Since there is no fundamental right involved, nor a classification triggering an intermediate standard of review, the rational basis standard of review applies. See Tassian v. People, supra.

Applying such a standard, we conclude that the Act does not violate plaintiffs' right to equal protection. In the Immunity Act's declaration of policy, the General Assembly recognized that the doctrine of sovereign immunity is in some instances an inequitable doctrine, but stated "that unlimited liability could disrupt...