Weeks v. City of Colorado Springs

• Decision Date: 18 April 1996
• Docket Number: No. 94CA1961,94CA1961
• Citation: 928 P.2d 1346
• Parties: Billy F. WEEKS; Rhonda C. Weeks; and Rebecca S. Weeks, a minor, by and through her mother and next friend, Rhonda C. Weeks, Plaintiffs-Appellants and Cross-Appellees, v. The CITY OF COLORADO SPRINGS, d/b/a Memorial Hospital, Defendant-Appellee and Cross-Appellant. . IV
• Court: Colorado Court of Appeals

Page 1346

928 P.2d 1346

Billy F. WEEKS; Rhonda C. Weeks; and Rebecca S. Weeks, a minor, by and through her mother and next friend, Rhonda C. Weeks, Plaintiffs-Appellants and Cross-Appellees, v. The CITY OF COLORADO SPRINGS, d/b/a Memorial Hospital,

Defendant-Appellee and Cross-Appellant.

No. 94CA1961.

Colorado Court of Appeals,

Div. IV.

April 18, 1996.

As Modified on Denial of Rehearing

May 23, 1996.

Certiorari Denied Dec. 23, 1996.

Peter A. Goldstein, P.C., Peter A. Goldstein, Colorado Springs, for Plaintiffs-Appellants and Cross-Appellees.

Gallo & Godfrey, F. James Gallo and Jerome M. Reinan, Denver, for Defendant-Appellee and Cross-Appellant.

Opinion by Judge BRIGGS.

In this "pre-tort reform" personal injury action, plaintiffs, Billy F. Weeks and Rhonda C. Weeks (parents), and Rebecca S. Weeks (child), by and through her mother and next friend, Rhonda C. Weeks (mother), appeal the judgment of the trial court reducing to zero the damages awarded against defendant, The City of Colorado Springs, d/b/a Memorial Hospital (hospital). Plaintiffs also appeal, and the hospital cross-appeals, the court's post-trial order denying their respective requests for an award of costs. We affirm the judgment reducing the damages awarded plaintiffs to zero and that part of the post-trial order denying the hospital's request for an award of costs. We reverse that part of the post-trial order denying plaintiffs' request for an award of costs and remand for reconsideration.

The child was injured in 1985 when, in the hours after her birth at the hospital, she received a transfusion with an incorrect concentration of saline solution. As a result, the child suffered a seizure and permanent brain damage.

Plaintiffs filed a complaint against the hospital and the doctor who ordered and supervised the transfusion. Because the child was too young for her injuries to be evaluated, the case was continued for seven years. Trial was then set for August 1994.

More than ten days before trial, the hospital, acting pursuant to § 13-17-202, C.R.S. (1995 Cum.Supp.), made an unapportioned offer to settle all of plaintiffs' claims for $170,000. Plaintiffs did not accept the offer.

A few days before trial, plaintiffs accepted an unapportioned settlement offer from the co-defendant doctor for $650,000. In addition, the insurance companies for the two defendants had previously paid approximately $80,000 in existing medical bills. Although not clear from the record before us, the parents apparently agreed not to include those amounts in their claim for damages.

At trial, after the presentation of all evidence, the court determined that the hospital was negligent as a matter of law. The jury then found that the hospital's negligence caused plaintiffs' injuries. It awarded the child $139,400 and the parents $88,020.

Plaintiffs' claims for relief arose prior to tort-reform legislation establishing pro-rata liability among multiple defendants. Accordingly, the trial court applied Colo.Sess.Laws 1977, ch. 195, § 13-50.5-105 and required the amount of the settlement with the doctor to be subtracted from the total amount of damages awarded by the jury. Plaintiffs and the hospital stipulated that plaintiffs had settled their claims against the doctor for an amount greater than the jury verdict. The court therefore entered judgment for plaintiffs for zero in damages.

After trial, the mother applied to the probate court for approval of the earlier settlement with the doctor and allocation of the settlement proceeds. The probate court approved the settlement and, at the mother's request, allocated the proceeds as follows: $1,000 to each parent; $259,200 for attorney fees for plaintiffs' counsel; $65,038.44 for costs advanced by plaintiffs' counsel; $23,761.56 to be placed in a trust fund for the child; and the balance of $300,000 for the purchase of structured annuity benefits for the child, except that the parents would be reimbursed for loss of income and costs incurred before the child reached the age of majority.

Each party then moved to recover costs from the other. The court denied the motions.

I.

Plaintiffs contend that the trial court erred in not entering judgment for the parents in the amount of the damages awarded by the jury, offset only by the $2,000 the probate court allocated to the parents at their request. We disagree.

Under § 13-50.5-105, as it read at the time of the child's injury, a release or covenant not to sue "does not discharge any of the other tortfeasors from liability for the injury or wrongful death unless its terms so provide; but it reduces the claim against the others to the extent of any amount stipulated by the release...." Thus, when the only injuries involved in an action are those for which all tortfeasors are jointly or severally liable, either the settlement amount or the amount provided for in the settlement document, whichever is greater, must be deducted from the total judgment against the remaining tortfeasor. Greenemeier v. Spencer, 719 P.2d 710 (Colo.1986).

Here, though the offer accepted before trial by plaintiffs is not in the record, it apparently did not include an allocation of the settlement amount among their separate claims or allow the parents and child separately to accept or reject the offer. Thus, the trial court was required to deduct the total unallocated settlement amount from the total judgment against the hospital.

Contrary to plaintiffs' argument, the fact that probate approval of the settlement and an allocation of the proceeds was necessary does not require a different result. The ostensible allocation of $2,000 to the parents ignored that they were also to be reimbursed their expenses out of the child's annuity payments. More importantly, plaintiffs are not entitled to manipulate after trial the allocation of an unallocated pre-trial settlement in order to increase further a total recovery already in excess of the damages determined by the jury. See generally Kennedy v. Industrial Commission, 735 P.2d 891 (Colo.App.1986).

In making its allocation of the settlement proceeds after trial, in a proceeding that did not include either defendant, the probate court was concerned with protecting the best interest of the child, not with the impact of the allocation on the co-defendants. See generally C.R.P.P. 16; G. McPherson, Personal Injury Settlements with Minors, 21 Colo. Law. 1167 (1992). As the trial court noted, to permit plaintiffs to apportion the pre-trial settlement in a manner that avoids the offset required by statute would undermine the jury's determination of the extent of the hospital's liability.

The purpose of the statutory scheme is to provide injury victims full compensation, not excess compensation. The only exception that has been recognized is for an injury victim who has taken the risk in settling before trial that he or she may receive less in settlement than the ultimate jury award. Having taken that risk, the injury victim should not be denied the benefit of what proves to have been a beneficial settlement. See Kussman v. City & County of Denver, 706 P.2d 776 (Colo.1985); see also Smith v. Zufelt, 880 P.2d 1178 (Colo.1994). It is that very possibility that encourages both injury victims and alleged tortfeasors to settle.

Plaintiffs' attempt to manipulate after trial an unallocated pre-trial settlement frustrates the statutory goal of avoiding excess recovery by increasing plaintiffs' compensation even beyond the settlement amount they are entitled to keep, with no corresponding social benefit. See Kussman v. City & County of Denver, supra; see also Smith v. Zufelt, supra; Van Waters & Rogers, Inc. v. Keelan, 840 P.2d 1070 (Colo.1992); cf. Greenemeier v. Spencer, supra; Cox v. Pearl Investment Co., 168 Colo. 67, 450 P.2d 60 (1969). We therefore conclude that the trial court did not err in applying § 13-50.5-105 and entering a judgment which offset the settlement with the doctor and reduced the parents' award against the hospital to zero. See Greenemeier v. Spencer, supra.

II.

Plaintiffs next contend that, even if they may not collect any part of the judgment against the hospital, the trial court erred in concluding that they were not the prevailing parties at trial and thus not entitled to recover costs under C.R.C.P. 54(d) or § 13-16-104, C.R.S. (1987 Repl.Vol. 6A). We reverse and remand for reconsideration of whether to award costs to plaintiffs under C.R.C.P. 54(d).

A.

C.R.C.P. 54(d) provides: "Except when express provision therefor is made either in a statute of this state or in these rules, costs shall be allowed as of course to the prevailing party unless the court otherwise directs...." Thus, unless a statute or rule specifically prohibits an award of costs, the trial court may within its discretion award costs to the prevailing party. Rossmiller v. Romero, 625 P.2d 1029 (Colo.1981).

Here, in determining the prevailing party, the trial court applied the standard recited in Odenbaugh v. County of Weld, 809 P.2d 1059 (Colo.App.1990). The court in Odenbaugh, which likewise involved a request for costs under C.R.C.P. 54(d), had adopted the test articulated in Overland Development Co. v. Marston Slopes Development Co., 773 P.2d 1112 (Colo.App.1989). A division of this court had held in Overland that, for a contractual award of attorney fees, the "prevailing party" must have "succeeded upon a significant issue presented by the litigation and must have achieved some of the benefits he sought in the lawsuit." Overland Development Co. v. Marston Slopes Development Co., supra, 773 P.2d at 1115.

In this case, plaintiffs received no monetary or other benefit from the jury's verdict and could not have done so unless the award exceeded $650,000. The trial court therefore concluded plaintiffs were not the prevailing parties.

In applying the test of "prevailing party" adopted in Overland, the trial court did not have the benefit of the holding in Dennis I....