Automobile Insurance SubrogationAutomobile Total Loss ThresholdsDeductible ReimbursementDiminution of ValueFirst Come, First Served: Subrogating Multiple Claims in Excess of Policy LimitsFuneral Procession Traffic LawsImputing Contributory Negligence of Driver to Vehicle OwnerLaws Regarding Using Cell Phones/Headphones/Texting While DrivingLoss Of UseMed Pay/PIP SubrogationOwner Liability For Stolen VehiclePayment of Sales Tax After Vehicle Total LossPedestrian and Crosswalk LawsRental Car Company Physical Damage and Loss of Use ClaimsRental Car Company’s Liability Insurance Primary or ExcessSlower Traffic Keep RightSudden Medical Emergencies While DrivingSuspension of Drivers’ LicensesUse of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles
Federal , State, and Local Governmental EntitiesMunicipal/County/Local Government Immunity and Tort LiabilityState Sovereign Immunity And Tort Liability
General Tort Laws/StatutesAnti-Indemnity StatutesContribution ActionsContributory Negligence/Comparative FaultDog Bite LawsEconomic Loss DoctrineParental ResponsibilitySpoliationStatute of LimitationsStatute of Limitations Exceptions
Health Insurance SubrogationHealth and Disability Insurance
InvestigationAdmissibility of Expert TestimonyPre-Suit Disclosure of Liability Policy Limits in Third-Party ClaimsRecording Conversations
Product Liability SubrogationProduct Liability Law
Property Subrogation“Matching Regulations” And Laws Affecting Homeowners Property ClaimsCondominium/Co-Op Waiver of Subrogation LawsDamage Property Without Market ValueGeneral Contractor Overhead And Profit Payments In First-Party ACV Property Damage ClaimsLandlord/Tenant Subrogation
Subrogation GenerallyAnti-Subrogation RuleCriminal RestitutionMade Whole DoctrineMedical Expenses, Insurance Write-Offs, and The Collateral Source Rule
Workers’ CompensationEmployee Leasing LawsHospital Lien LawsOCIP/CCIP Subrogation In Workers’ Compensation Construction CasesRecovery Of Increased Workers’ Compensation Premiums By EmployerWhich Workers’ Compensation “Benefits” Can Be Subrogated?Workers’ CompensationWorkers’ Compensation Claims by Undocumented Employees
Automobile Insurance Subrogation
Automobile Total Loss Thresholds
Total Loss Threshold: 100%
Cost of repairing vehicle exceeds retail fair market value. Retail value is determined by sources accepted by the insurance industry, which is usually when the cost of the repair exceeds market value. C.R.S. § 42-6-102 (17)(C).
Automobile and Property: No applicable statute, Administrative Code provision or case law exists. Colorado’s Department of Insurance orally advises that the standard practice is to reimburse insured for deductible on a comparative negligence basis.
Diminution of Value
First Party: “When an auto insurer promises to provide an insured with a vehicle ‘of like kind and quality,’ the insurer must provide the insured, through repair, replacement, and/or compensation, the means of acquiring a vehicle substantially similar in function and value to that which the insured had prior to his or her accident.” Hyden v. Farmers Ins. Exch., 20 P.3d 1222 (Colo. App. 2000).
Third Party: Courts have held that “the measure of damage is the difference between its value immediately before its damage and immediately thereafter, together with any expense of reasonable efforts to preserve or restore it.” Trujillo v. Wilson, 117 Colo. 430, 434, 189 P.2d 147, 150 (Colo. 1948); Larson v. Long, 219 P. 1066 (Colo. 1923) (permitting “admission of evidence of the [diminution] in value of defendant’s car on account of its having been in the accident” because such “[diminution] is an element of damage”).
First Come, First Served: Subrogating Multiple Claims in Excess of Policy Limits
Interpleader is looked on favorably in Colorado for efficiently resolving potential multiple actions in the same lawsuit, thereby conserving judicial and party resources. Benton v. Adams, 56 P.3d 81 (Colo. 2002). Interpleader allows a person subject to the possibility of competing claims to avoid the risk of double or multiple liability that could result from adverse determinations in different courts. Consequently, while interpleader should not automatically be granted, Colorado courts allow it liberally. Id.
Although there are no cases directly discussing the priority of paying multiple claims or the duty owed by a liability carrier with minimum liability limits when facing multiple liability, under Colorado law, every contract contains an implied duty of good faith and fair dealing. Mahan v. Capitol Hill Internal Medicine P.C., 151 P.3d 685 (Colo. App. 2006). Violating the duty of good faith and fair dealing gives rise to a claim for breach of contract. Whether a party acted in good faith is a factual question which depend on the facts of the individual situation involved. Platt v. Aspenwood Condominium Ass’n, 214 P.3d 1060 (Colo. App. 2009); Newflower Mkt., Inc. v. Cook, 229 P.3d 1058 (Colo. App. 2010).
Funeral Procession Traffic Laws
There are no state laws governing funeral processions, however, Denver Revised Municipal Code, § 517 provides that vehicles and escorts in a funeral procession have the right-of-way and may proceed regardless of traffic signals. These vehicles must be properly identified by lighted headlamps and drivers must follow the vehicle ahead of them as close as is practicable for safe operation. Even though funeral processions have the right-of-way, there must be actual or constructive notice to other drivers that such a procession is present. Franklin v. Nolan, 472 P.2d 166 (Colo. App. 1970).
Imputing Contributory Negligence of Driver to Vehicle Owner
Imputed Contributory Negligence Law: A driver’s negligence may not be imputed to the owner of a vehicle so as to limit an owner’s recovery for injuries or damage unless the owner-passenger is independently negligent and that negligence causes the injury. Watson v. Reg’l Transp. Dist., 762 P.2d 133 (Colo. 1988).
Vicarious Liability/Family Purpose Doctrine: No Vicarious Liability Statute.
To establish liability under the Family Car Doctrine, a plaintiff must establish that (1) the defendant is the head of the household; (2) the negligent driver is a member of the household; (3) the driver was given express or implied permission to operate the vehicle; and (4) the defendant owns or has control over the vehicle. Peterson v. Halsted, 829 P.2d 373 (Colo. 1992); Colo. Jury Instr., 4th Civil 11:18.
Sponsor Liability for Minor’s Driving: If minor is guilty of negligence or willful misconduct while driving a motor vehicle, liability will be imputed to the person who signed the affidavit of liability associated with the minor’s application for a drivers’ license. C.R.S. § 42-2-108.
When the Family Car Doctrine applies, it will impute unlimited liability to the parents. Therefore, this statute is important in cases of minors operating cars that are neither owned, nor controlled, by the head of the household, or when the parent who signed the affidavit is not the same person subject to vicarious liability under the Family Car Doctrine.
Laws Regarding Using Cell Phones/Headphones/Texting While Driving
Cell Phone/Texting: Anyone under the age of 18 may not use a cell phone or text while driving. Persons over the age of 18 may use a cell phone while driving, but may not text while driving. C.R.S. § 42-4-239.
Other Prohibitions: No person shall operate a motor vehicle while wearing earphones. Exceptions to this are built-in listening devices in protective headgear, or a headset/gear that only covers one ear and connects to a wireless phone. C.R.S. § 42-4-1411.
Comments: Any local laws are preempted by state law. C.R.S. § 42-4-239.
Loss Of Use
Loss of Use: Yes. An owner may recover for the loss of use of a vehicle for the length of time reasonably needed for repair, even if the property is not actually repaired (as long as the time needed is reasonably proven). Airborne, Inc. v. Denver Air Ctr., Inc., 832 P.2d 1086, 1089 (Colo. App. 1992). A vehicle need not actually be rented to use rental value as loss of use value. Cf. Francis v. Steve Johnson Pontiac–GMC–Jeep, Inc., 724 P.2d 84 (Colo. App. 1986). There is no caselaw expressly disallowing recovery for loss of use on a total loss claim. Accordingly, there is a strong argument that such a claim can be sustained.
Lost Profits: Yes. Loss profit damages may be calculated by the reasonable rental value of a chattel or alternatively, net lost profits that could have been earned by using the chattel. Plaintiff may elect which measure of recovery to pursue to make them whole. Koenig v. PurCo Fleet Services, Inc., 285 P.3d 979 (Colo. 2012).
Med Pay/PIP Subrogation
Med Pay: Med Pay Subrogation is prohibited by statute in Colorado. C.R.S. § 10–4–635(3)(a) precludes an insurer from bringing either damages or subrogation claims seeking to recover benefits paid under an insured’s Med Pay coverage. Although C.R.S. § 10–4–635(3)(a) does not use the word “subrogation” it is, on its face, an anti-subrogation provision. The statute expressly prohibits an insurer from bringing “a direct cause of action against an alleged tortfeasor for benefits paid under Med Pay coverage.” While the statute is not well written and arguments can probably be made to support med pay subrogation, the clear intent of the statute is to prevent / eliminate med pay subrogation in most instances. C.R.S. § 10-4-635(3)(a)
PIP: Coverage not applicable.
Made Whole: To date only applied in UM situations. Kral v. American Hardware Mut. Ins. Co., 784 P.2d 759 (Colo. 1989). Applies only when legislatively-mandated coverage would be reduced by subrogation rights such as UM, PIP and/or no-fault. Marquez v. Prudential Prop. Cas. Ins. Co., 620 P.2d 29, 32 (Colo. 1980).
Adopted no-fault in 1974 but repealed on July 1, 2003. C.R.S. § 10-4-713(1) (repealed) prohibited carriers paying no-fault benefits from subrogating unless it involved a “non-private passenger motor vehicle” as defined in § 10-4-713(2)(a).
Statute of Limitations: Statute of limitations is two (2) years for personal injury (non-auto). C.R.S. § 13-80-102. Statute of limitations is three (3) years for the auto accident brought under Motor Vehicle Financial Responsibility Act, Art. 7 of Title 42, C.R.S. § 13-80-101.
Owner Liability For Stolen Vehicle
Key In The Ignition Statutes: C.R.S. § 42-4-1206.
Common Law Rule: Actions of an alleged thief constitute an intervening independent and superseding proximate cause of plaintiff’s injuries and the vehicle owner is therefore not liable for plaintiff’s injuries. Strauch v. Gonzales, 494 P.2d 1300 (Colo. App. 1972); Lambotte v. Payton, 147 Colo. 207 (Colo. 1961).
Payment of Sales Tax After Vehicle Total Loss
First-Party Claims: Insurer shall pay title fees, sales tax, and any other transfer or registration fee associated with the total loss of a motor vehicle. C.R.S. § 10-4-639.
Third-Party Claims: Third-party total loss claims are evaluated in the same way as first-party total loss claims. C.R.S. § 10-4-639.
Pedestrian and Crosswalk Laws
C.R.S. § 42-4-802: No traffic control signals, vehicle must yield right-of-way to pedestrian. Pedestrians must not leave the curb in front of vehicle where vehicle does not have time to stop.
C.R.S. § 42-4-803: Pedestrians must yield right-of-way if there is no marked or unmarked crosswalk. No pedestrian shall cross a road diagonally. At adjacent intersections with traffic signals, crosswalks must be used.
Summary: Pedestrian violating statute putting a duty to yield right of when outside crosswalk constituted negligence per se. Nygren v. Dimond, 472 P.2d 169 (Colo. App. 1970). Pedestrian who crossed street where vehicle had right-of-way without keeping proper lookout was guilty of contributory negligence. Owens v. U.S., 194 F.2d 246 (10th Cir. 1952).
Rental Car Company Physical Damage and Loss of Use Claims
Recovery From Renter: Recovery of physical damage is not prohibited or otherwise regulated. Terms of rental agreement control. Car rental companies are specifically allowed to recover loss of use damages against renter even if they do not suffer any financial losses. Nothing in third-party context. Koenig v. PurCo Fleet Services, Inc., 285 P.3d 979 (Colo. 2012).
Recovery From Third-Party: Reasonable rental value is a proper measure of damages when a commercial entity is wrongfully deprived of the use of its chattel. Denver Bldg. & Const. Trades Council v. Shore, 287 P.2d 267 (Colo. 1955). In Denver, a construction contractor claimed third-party loss of use damages for heavy equipment kept idle as a result of a work stoppage. The court concluded that reasonable rental value provided a yardstick by which an accurate determination of damages could be made. In Koenig v. PurCo Fleet Services, Inc., 285 P.3d 979 (Colo. 2012), loss of use of a rental car was discussed and the court held that loss of use is an “intrinsic” loss when there is a rental car that has been damaged. Although this case involved the effort of a car rental company to recover loss of use damages from its renter—rather than a third-party tortfeasor—it wandered into a discussion of loss of use damage calculations generally and is, therefore, helpful in the third-party context. The car rental company does not need to separately show lost profits or that this particular car was needed for a particular customer. Instead, the loss of that car in and of itself had value that is a natural part of any damage claim, quite apart from physical damage itself. Loss of a car can’t be valueless. The fact that the company has other vehicles they could use does not negate the value of the vehicle they lost. If you take the position argued by some carriers that the loss of this car has no value, then anyone can take anyone’s property and as long as the property owner has a substitute, there is no value to that deprivation. Damages can be shown by lost profits or the reasonable rental value of the damaged vehicle, whether or not there was an available replacement. Buchanan v. Leonard, Wiebold & Bartlett, 127 F. Supp. 120 (D. Colo. 1954).
Rental Car Company’s Liability Insurance Primary or Excess
Summary: The auto policies of the renter and car rental company must be compared to see which provides primary as opposed to secondary liability coverage. When the car rental company’s policy promises primary coverage, it must provide at least up to the minimum limits of financial responsibility. Allstate Ins. Co. v. Frank B. Hall & Co. of California, 770 P.2d 1342 (Colo. App. 1989). If both policies contain “excess insurance” clauses, they will share equally in a loss on a co-primary basis until the policy with the lower limits is exhausted. Allstate v. Avis Rent-A-Car, 947 P.2d 341 (Colo. 1997). If the renter’s policy provides “excess” insurance but the car rental policy provides “umbrella” coverage, the personal policy will be considered primary. Frank B. Hall, supra. A rental car company’s liability policy will be primary unless the rental agreement states that the coverage is excess to all other coverage. U.S.F.& G. v. Budget Rent-A-Car Systems, Inc., 842 P.2d 208 (Colo. 1992).
Slower Traffic Keep Right
Statute: C.R.S. § 42-4-1001(2) and C.R.S. § 42-4-1013
Summary: Vehicles must be driven in the right lane except when overtaking and passing another vehicle proceeding in the same direction; when there is an obstruction in the right half of the roadway; upon a roadway divided into three marked traffic lanes; or upon a roadway restricted to one-way traffic. Slower traffic must keep right. Vehicles proceeding at less than the normal speed of traffic must keep right. The left lane is reserved for passing where the speed limit is 65 MPH or faster. It is illegal for a person to drive in the left lane, where the speed limit is 65 MPH or more, unless they are passing another vehicle, or the volume of traffic does not permit them to safely merge into a non-passing lane.
Sudden Medical Emergencies While Driving
Sudden Emergency Doctrine Abolished. Courts follow the comparative negligence scheme, taking into consideration the totality of the circumstances including the conduct leading up to and during the sudden emergency. Bedor v. Johnson, 292 P.3d 924 (Colo. 2013).
Sudden Emergency Doctrine was abolished because it simply restates comparative negligence while having the potential to mislead a jury. Bedor v. Johnson, 292 P.3d 924 (Colo. 2013).
Suspension of Drivers’ Licenses
Administrative Suspension: An operator/owner of a vehicle named in an accident report must file with the Executive Director of the Department of Revenue security sufficient to satisfy any judgment for damages resulting from the accident, and proof of financial responsibility for the future. C.R.S. § 42-7-301. If after twenty (20) days, owner/operator has not filed for a hearing complied with the statute, his driver’s license will be suspended until he files security and proof of financial responsibility. C.R.S. § 42-7-301.
Judgment: The director will suspend the license issued to any person upon receiving an affidavit from a judgment creditor that such person has failed for thirty (30) days to satisfy a final judgment. C.R.S. § 42-7-401. This suspension remains in effect until the judgment is satisfied. C.R.S § 42-7-402.
Contact Information: Colorado Dept. of Revenue, Division of Motor Vehicles, Attn: Accident Section, P.O. Box 173345, Denver, CO 80217-3345, (303) 205-5613, https://www.colorado.gov/dmv.
Use of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles
Authority: C.R.S. §§ 10-3-1301 to 1307.
Summary: Colorado requires non-OEM parts to be specified in the vehicle repair estimate, which should be accompanied by a disclosure statement that informs the insured that the part manufacturer or distributor warrants the parts, not the auto manufacturer. All non-OEM parts should feature some marking that identifies the part’s manufacturer. The name and trademark of the manufacturer of the non-OEM parts must be visible when practicable after installation.
Federal , State, and Local Governmental Entities
Municipal/County/Local Government Immunity and Tort Liability
Colorado Governmental Immunity Act (CGIA): A public entity is immune from liability in all tort claims for injury except as otherwise provided. Immunity is waived under certain circumstances and exceptions to that waiver are provided. C.R.S. §§ 24-10-101 – 120 (1971).
Notice Deadlines: Claims against public entity must be filed within 182 days of the injury or property damage. C.R.S. § 24-10-109(1). File with Atty General. File suit after denial or 90 days has passed. C.R.S. § 24-10-109(6). Use Statute of Limitations for that type of action. C.R.S. § 24-10-109(5).
Claims/Actions Allowed: A public entity includes city, county or political subdivision. Colo. Rev. Stat. § 24-10-103. Immunity is waived for contract actions, but not torts. Colo. Rev. Stat. § 24-10-101. Public entity immune from tort liability. Colo. Rev. Stat. § 24-10-106.
The CGIA (C.R.S. §§ 24-10-105 and 24-10-106(1)) permits negligence suits against the State’s political subdivisions, including actions against Denver Water if it was negligent and such negligence arose from the “operation and maintenance” of “a public water facility.” Great Northern Ins. Co. v. Denver Water, 2020 WL 6680360 (D. Colo. 2020).
Comments/Exceptions: Immunity is waived for the following:
- Operation of motor vehicle, except emergency vehicle.
- Dangerous condition of building.
- Dangerous condition of street.
- Operation/maintenance of public water facility, gas facility, sanitation facility, electrical facility, power facility, swimming facility.
C.R.S. § 24-10-106.
Damage Caps: $350,000 per person; $900,000 per occurrence, but no person may recover more than $350,000. C.R.S. § 24-10-114.
State Sovereign Immunity And Tort Liability
Tort Claims Act: Colorado Governmental Immunity Act. C.R.S. §§ 24-10-101 through 24-10-120.
A public entity is immune from liability in all tort claims for injury except as otherwise provided. C.R.S. §§ 24-10-101 – 120 (1971).
Notice Deadlines: Claims against the State shall be filed within 182 days of the injury. C.R.S. § 24-10-109. File with Atty General. File suit after denial or 90 days has passed. C.R.S. § 24-10-109(6). Use SOL for that type of action. C.R.S. § 24-10-109(5).
Claims/Actions Allowed: The Colorado Governmental Immunity Act generally bars action against the State and public entities for tort claims. Medina v. State, 35 P.3d 443 (Colo. 2001). A public entity, by resolution, may waive immunity. C.R.S. § 24-10-104.
Comments/Exceptions: Immunity is waived for claims resulting from:
(1) The operation of a vehicle owned by a public entity used in the scope of employment, except emergency vehicles;
(2) The operation of public hospital, correctional facility, or jail;
(3) The dangerous condition of public housing;
(4) The dangerous condition of a public roadway; and
(5) The operation and maintenance of public facilities.
C.R.S. § 24-10-106.
Damage Caps: $350,000 per person. $900,000 per occurrence, with no one person receiving more than $350,000. No punitive damages against the State. C.R.S. § 24-10-114.
General Tort Laws/Statutes
Prohibits Broad Indemnity and Intermediate Indemnity. Does Not Prohibit additional Insureds. Applies to Construction Contracts or Agreements. Colo. Rev. Stat. §§ 13-50.5-102; 13-21-111.5.
Doesn’t apply to breach of trust or of some other fiduciary obligation. This statute doesn’t apply to property owned or operated by railroads or public districts; nor does it apply to rental agreements. It doesn’t invalidate contract clauses that require a party to purchase insurance and to name the other party as an additional insured.
Modified Joint and Several Liability. Generally, a rule of several liability, except where defendants act in concert. C.R.S. § 13-21-111.5; Vickery v. Evans, 266 P.3d 390 (Colo. 2011).
A right of contribution exists in favor of a tortfeasor who has paid more than his pro-rata share of the common liability. A claim for contribution may be brought in the underlying action or as a separate action. Fibreboard Corp. v. Fenton, 845 P.2d 1168 (Colo. 1993); C.R.S. § 13-80-104(1)(b)(II)(B).
The statute of limitations is one year after judgment final. C.R.S. § 13-50.5-104. If no judgment, contribution plaintiff must discharge common liability within the applicable limitations period and initiate contribution action within one year of payment. In cases against architects, contractors, builders, etc., the general contractor must bring contribution/indemnity claim within 90 days after the claims arises. However, this statute does not toll the 6-year statute of repose under C.R.S. § 13-80-104. Thermo Dev., Inc. v. Cent. Masonry Corp., 195 P.3d 1166 (Colo. App. 2008). C.R.S. § 13-80-104(1)(b)(II)(B).
Contributory Negligence/Comparative Fault
Modified Comparative Fault. Damaged party cannot recover if it is 50% or more at fault. If 49% or less at fault, it can recover, although its recovery is reduced by its degree of fault. Plaintiff’s comparative negligence will offset defendant’s liability, and if plaintiff’s negligence is equal to or higher than the defendants combined, recovery is barred. C.R.S. § 13-21-111; Kussman v. Denver, 706 P.2d 776 (Colo. 1985); B.G.’s, Inc. v. Gross, 23 P.3d 691 (Colo. 2001).
Dog Bite Laws
Strict Liability upon the dog owner only in cases of “serious bodily injury”. Otherwise, a “One Bite” Rule jurisdiction or requires proof of a dangerous propensity (5 “classifications”). Only economic damages under Strict Liability. Colo. Rev. Stat. § 13-21-124.
Economic Loss Doctrine
Intermediate Rule. Colorado first adopted the ELD in Jardel Enters., Inc. v. Triconsultants, Inc., 770 P.2d 1301 (Colo. App. 1988). In Jardel, the court refused to permit a restaurant owner to bring a negligence claim against a subcontractor for lost profits resulting from the delayed opening of the restaurant when the subcontractor misread the building plans and constructed the building foundation in the wrong location. As a general rule, no cause of action lies in tort when purely economic damage is caused by negligent breach of a contractual duty. This ELD prevents recovery for negligence when the duty breached is a contractual duty and the harm incurred is the result of failure of the purpose of the contract. It has been applied in different contexts: Grynberg v. Agri Tech, Inc., 985 P.2d 59, 63 (Colo. App. 1999) (holding that the ELD bars negligence claim for failure to receive a particular return on cattle investment program); Terrones v. Tapia, 967 P.2d 216, 220 (Colo. App. 1998) (holding that the ELD bars negligence claim for lost profits as a result of restaurant owner’s inability to use drive-through window); Chellsen v. Pena, 857 P.2d 472, 477 (Colo. App. 1992)(citing ELD to bar action for negligent termination of employment); Scott Co. of California v. MK-Ferguson Co., 832 P.2d 1000, 1005 (Colo. App. 1991) (holding that the ELD bars subcontractor’s negligence claim because no independent duty was breached); Centennial Square, Ltd. v. Resolution Trust Co., 815 P.2d 1002, 1004 (Colo. App. 1991) (upholding dismissal of borrowers’ negligence claim against lender because no independent duty was breached); cf. Consolidated Hardwoods, Inc. v. Alexander Concrete Constr., Inc., 811 P.2d 440, 443 (Colo. App. 1991) (allowing homeowner’s negligence claim against subcontractor because independent duty was breached).
The ELD was originally born from product liability law, but the application of the ELD is broader, because it serves to maintain a distinction between contract and tort law. The difference between tort and contract obligations is the source of the duties of the parties. Tort obligations generally arise from duties imposed by law. Tort law is designed to protect all citizens from the risk of physical harm to their persons or to their property. These duties are imposed by law without regard to any agreement or contract. In contrast, contract obligations arise from promises made between parties. Contract law is intended to enforce the expectancy interests created by the parties’ promises so that they can allocate risks and costs during their bargaining.
No tort claim may be brought for economic damages flowing from breach of an express or implied contract, unless there is an independent, professional duty owed. Town of Alma v. Shanks, 10 P.3d 1256 (Colo. 2000) (e.g., insurance brokers, attorneys, accountants and architects). Negligent misrepresentation is an exception to the ELD. Colo. Nat’l Bank of Denver v. Adventura Associates, Inc., 757 F.Supp. 1157 (D. Colo. 1991). Under Colorado’s ELD, a party suffering purely economic loss from the breach of an express or implied contractual duty is barred from asserting a tort claim for such a breach, absent an independent duty of care under tort law; in order to determine whether the doctrine applies, a court must focus on the source of the duty alleged to have been violated. Loughridge v. Goodyear Tire & Rubber Co., 192 F. Supp.2d 1175 (D. Colo. 2002). However, because strict product liability imposes a duty on the product’s manufacturer to act reasonably in the design and manufacture of a product, in addition to any duty imposed by contract, the ELD will not prevent a plaintiff from pursuing a tort claim for damages to the product only or other economic damages flowing from the product’s failure. Loughridge, supra. The ELD will prevent a subcontractor’s tort claim against a design engineer for breach of his professional duty and negligent misrepresentation. BRW, Inc. v. Dufficy & Sons, Inc., 99 P.3d 66 (Colo. 2004). Under Colorado law, broad disclaimers of tort liability based on sale, use, or manufacture of product are disfavored and enforceable only if specifically agreed to in negotiations between a commercial seller and commercial buyer. U.S. Aviation Underwriters, Inc. v. Pilatus Bus. Aircraft, Ltd., 358 F. Supp.2d 1021 (D. Colo. 2005). When the loss extends beyond the economic risks allocated by contract to include the physical loss of the end product in which warranted components were installed, the ELD does not limit remedy to warranties, but instead permits claims for negligence or strict liability based on breaches of duty not to inject defective products into stream of commerce. Id. The Restatement (Second) Torts § 402A gives rise to duties independent of those manufacturers may choose to assume or disclaim in a warranty. Id. The ELD implicates some of the following types of economic harm that are sometimes recoverable through tort claims:
diminution in value;
cost of repair/replacement; and
damages other than physical harm to persons or property.
Property Damage/Personal Injury. Liability imposed on parents for child’s shoplifting or willful/malicious property damage or personal injury. C.R.S. § 13-21-107.
The limits of liability are $3,500.
Shoplifting. Liability imposed on parents for child’s shoplifting or willful/malicious property damage or personal injury. C.R.S. § 13-21-107.5.
The limits of liability are $250.
Minor’s Driving. If minor is guilty of negligence or willful misconduct while driving a motor vehicle, liability will be imputed to the person who signed the affidavit of liability associated with the minor’s application for a drivers’ license. C.R.S. § 42-2-108.
Child must be unemancipated and under 18-years-old.
Adverse Inference: Colorado recognizes adverse inference as a sanction for intentional destruction of evidence. The state of mind of the party that destroys the evidence is an important consideration in determining whether adverse inference is the appropriate sanction. In addition, in order to remedy the evidentiary imbalance created by the loss or destruction of the evidence, an adverse inference may be appropriate even in the absence of a showing of bad faith. Id. Special caution must be exercised to ensure that the inference is commensurate with the information that was reasonably likely to have been contained in the destroyed evidence. Pfantz v. K-Mart Corp., 85 P.3d 564 (Colo. App. 2003).
Statute of Limitations
Personal Property2 YearsC.R.S. § 13-80-102
Personal Property/Involving Auto3 YearsC.R.S. § 13-80-101
Personal Injury/Death2 YearsC.R.S. § 13-80-102
Personal Injury/Death/Involving Auto3 YearsC.R.S. § 13-80-101
Breach of Contract/Written/Oral3 YearsC.R.S. § 13-80-101(1)(a)
Breach of Contract/Liquidated Debt6 YearsC.R.S. § 13-80-103.5
Breach of Contract/U.C.C./Goods3 YearsC.R.S. § 13-80-101(1)(a)
Statute of Repose/Products7 YearsC.R.S. § 13-80-107 (1)(a)*
Statute of Repose/Real Property (Unless Hidden Defect)6 YearsC.R.S. § 13-80-104**
Breach of Warranty3 YearsC.R.S. § 13-80-101(1)(a)
Workers’ Comp Third Party Case2 YearsC.R.S. § 8-41-203
Strict Product Liability2 YearsC.R.S. § 13-80-106(1)
Statute of Limitations Exceptions
*7 Years from date product first used. C.R.S. § 13-80-107 (1)(a). Applies only to “new manufacturing equipment.” Exceptions: (1) injury caused by hidden defect; (2) prolonged exposure to hazardous material; (3) intentional misrepresentation; or (4) fraudulent concealment. C.R.S. § 13-80-107 (1)(b)-(c).
“Manufacturing equipment” means equipment used in the operation or process of producing a new product, article, substance, or commodity for purposes of commercial sale and different from and having a distinctive name, character, or use from the raw or prepared materials used in the operation or process. C.R.S. § 13-80-107 (2).
**6 Years from substantial completion of improvement to real property for actions against any architect, contractor, builder or builder vendor, engineer or inspector. C.R.S. § 13-80-104. If claim arises during 5th or 6th year after substantial completion, action shall be brought within two (2) years after cause of action.
Health Insurance Subrogation
Health and Disability Insurance
Statute of Limitations: 2 Years. C.R.S. § 13-80-102. 3 Years, if Motor Vehicle Involved. C.R.S. § 13-80-101.
Subrogation of Medical and Disability Benefits are allowed, but C.R.S. § 10-1-135(6)(a)(II) prohibits a direct subrogation claim against tortfeasor until 60 days prior to expiration of the statute of limitations. Made Whole and Common Fund Doctrine apply. C.R.S. § 10-1-135(3)(a)(I) and C.R.S. § 10-1-135(3)(c).
Admissibility of Expert Testimony
Admissibility Standards: Daubert
Case/Statutory Law: People v. Shreck, 22 P.3d 68 (Colo. 2001).
Comments: The trial court may consider Daubert for factors involving reliability (follow CRE 702).
Pre-Suit Disclosure of Liability Policy Limits in Third-Party Claims
Duty To Disclose: Yes. C.R.S. § 10-3-1117(2).
Failure To Disclose A Basis For Bad Faith: No Information.
Comments: Effective January 1, 2020, insurers writing commercial or personal auto policies must disclose insurance policies to their insureds and reveal the liability policy limits to third-party claimants. If the request is received from a third-party claimant or his attorney, § 10-3-1117(2)(a) requires the insurer provide within 30 days a statement that includes: (1) The name of the insurer; (2) The name of each insured party, as it appears on the declarations page; (3) The limits of the liability coverage; and (4) A complete copy of the insurance policy, including endorsements.
The statement must include the information above for each known policy of the named insured, including excess or umbrella policies, that may be relevant to the claim. The request must be presented to the carrier’s registered agent. Penalties for failure to comply with begin to accrue on the thirty-first day following receipt of a written request from the claimant. If the insured is sent a written request for policy information, the insured must disclose “the name and coverage of each known insurer of the insured party.” There is a $100 per day penalty in Colorado, plus attorney’s fees and costs, to enforce the penalty for violations of C.R.S. § 10-3-1117.
Mixed: An individual not involved in or present during a communication must have the consent of at least one party to record an electronic or oral communication. Colo. Rev. Stat. Ann. § 18-9-303 (1).
Product Liability Subrogation
Product Liability Law
Statute of Limitations/Repose: 2 years for personal injury and wrongful death. C.R.S. § 4-2-725. Discovery Rule applies. Statute of Repose is 10 years. C.R.S. § 13-21-403(3).
Liability Standards: Negligence, Strict Liability, Warranty.
Fault Allocations: Pure Comparative. C.R.S. § 13-21-406(1).
Non-Economic Caps/Limits On Actual Damages: Non-Economic Cap.
Punitive Y/N and Limits: Yes (Limits).
Heeding Presumption?: Yes. Staley v. Bridgestone/Firestone, Inc., 106 F.3d 1504, 1509 (10th Cir. 1997).
Innocent Seller Statute: Yes. C.R.S. § 13-21-402(1), (2).
Joint and Several Liability: No. C.R.S. § 13-21-111.5.
Available Defenses: Assumption of Risk; Misuse; Alteration; Learned Intermediary; Inherently Unsafe Products; State of Art; Presumption; Compliance With Government Standards; Seatbelts; Alcohol/Drugs.
Restatement 2nd or 3rd?: Restatement 3rd
“Matching Regulations” And Laws Affecting Homeowners Property Claims
Caselaw: After a windstorm damaged stucco outside a condominium, the insurer agreed to pay for patching the stucco but refused to pay for skim coating the stucco. The insured maintained that skim coating was necessary to create a uniform appearance. In April 2017, a District Court in Larimer County held for the insured finding that insurer must pay for the cost of skim coating to create a reasonably uniform appearance. Hamlet Condominium Ass’n v. American Mutual Family Ins. Co., 2016 CV 30594 (Co. Dist. Ct., April 12, 2017).
Condominium/Co-Op Waiver of Subrogation Laws
Associations must maintain property and liability insurance, but the insurer must waive its rights to subrogation against a unit owner and any member of his/her household. Colorado Common Ownership Act, C.R.S.A. § 38-33.3-313(d)(b).
Damage Property Without Market Value
Service Value: “…where diminution in value damages do not make the plaintiff whole and another measure of damages — cost of repair or replacement — may be more appropriate.” “For example, where the property has no market value, it is impossible to measure any diminution in value.” Goodyear Tire & Rubber Co. v. Holmes, 193 P.3d 821 (Colo. 2008) (citing 1 Dan B. Dobbs, Law of Remedies § 3.2, at 288 (2d ed.1993)).
Intrinsic Value: “Where the articles have no market value in the ordinary sense, such as used clothing, photographs, certain household goods and personal effects, then they may be given a reasonable value on the basis of their value to the owner.” Keefe v. Bekins Van & Storage Co., 540 P.2d 1132 (Colo. Ct. App. 1975) (citing Zenier v. Spokane Intern. R. Co., 300 P.2d 494 (Idaho 1956)).
Sentimental Value: “This is not to be any fanciful value which he might place upon them, but such reasonable value as from the nature and condition of the goods and the purpose to which they were adapted and used, they had to him.” Keefe v. Bekins Van & Storage Co., 540 P.2d 1132 (Colo. Ct. App. 1975) (citing Gouge v. Hoge, 218 P.2d 1036 (Okla. 1950)).
General Contractor Overhead And Profit Payments In First-Party ACV Property Damage Claims
Payment And Depreciation of GCOP/Sales Tax: When insured does not repair or replace the structure the insurer is prohibited from deducting contractors’ overhead and profit in addition to depreciation. Additionally, the DOI position is that the ACV of a structure under a replacement cost policy, when the policyholder does not repair or replace the structure, is the full replacement cost with proper deduction for depreciation. Deduction of contractors’ overhead and profit, in addition to depreciation, is not consistent with the definition of ACV. State of Colorado/Division of Insurance, Bulletin No. B-5.1 “Calculation of ACV: Prohibition Against Deducting Contractors’ Overhead and Profit From Replacement Cost Where Repairs Are Not Made.” (May 8, 2007). The Division of Insurance has taken a fairly straight-forward stance on requiring payment of overhead and profit, even when the work is not done. This implies that if the work is done, GCOP is required unless the contractor or architect does not include it. The insurer must consider, subject to the insurer’s underwriting requirements, an estimate from a licensed contractor or licensed architect submitted by the policyholder as the basis for establishing the replacement cost of a dwelling. C.R.S. § 10-4-110.8(8). No case law has interpreted to what extent the insurer must “consider” the estimate, but it suggests that if a contractor or architect includes GCOP, the insurer should include it.
A landlord’s insurer may recover against a tenant only if the landlord has the right to recover against the tenant. Employers Cas. Co. v. D.M. Wainwright, 473 P.2d 181 (Colo. 1970). The ultimate question presented is whether provisions of the written lease between the tenant and its landlord have circumscribed the landlord’s right of recovery under the circumstances of the case. U.S. Fidelity & Guar. Co. v. Let’s Frame It, Inc., 759 P.2d 819 (Colo. App. 1988) (redelivery clause in lease has applicability only to premises subject to lease, and cannot affect tenant’s liability for damage done to landlord’s other property).
An insurer can have no right of subrogation against its own insured since its insured is not a third party but one to whom a duty to pay a loss is owed. Transamerica Ins. Co. v. Gage Plumbing and Heating Co., 433 F.2d 1051 (10th Cir. 1970) (applying Kansas law). Under the ASR, an insurer may not seek recovery against its insured on a claim arising from the risk for which the insured was covered. DeHerrera v. Am. Family Mut. Ins. Co., 219 P.3d 346 (Colo. App. 2009). An insurer may not seek recovery against its insured on a claim arising from the risk for which the insured was covered. 1700 Lincoln, Ltd. v. Denver Marble & Tile Co., 741 P.2d 1270 (Colo. App. 1987). An insurer may sue to recover payments made for damages caused by a subcontractor’s negligence where a general contractor’s policy covered subcontractors for property damage, but not liability. Employers’ Fire Ins. Co. v. Behunin, 275 F. Supp. 399 (D. Colo. 1967). The ASR did not bar the auto insurer from recovering from the settlement the insured received from the tortfeasor as allowing reimbursement did not make the insurer’s medical payments coverage illusory. DeHerrera v. American Family Mut. Ins. Co., 219 P.3d 346 (Colo. App. 2009). To qualify as an insured on a policy, and thereby trigger the protection of the ASR, a subcontractor must show that they are an insured under the “plain language” of the policy. Fairfield Development, Inc. v. JDI Contractor & Supply, Inc., 703 F. Supp.2d 1211 (D. Colo. 2010) (applying Colorado law). In Continental Divide Ins. Co., the insurer of a property owner sued the property manager for indemnity and breach of contract, arising from a property damage judgment a commercial tenant obtained against the property owner and manager in the underlying action. The court held that the insurer was barred by the ASR because the insurer clearly covered the property manager for the conduct that gave rise to its liability, and the fact that the coverage was excess to manager’s primary insurance did not amount to an exclusion. The court discussed the “no-coverage” exception. If an insurer pays on behalf of one insured for damage caused by a second insured, under a policy that does not cover the second insured for the loss, the insurer may recover from the second insured by subrogation. This exception is sometimes called the “no-coverage exception.”
Colorado has an anti-indemnity statute (§ 13-21-111.5(6)) which prohibits one entity from contracting with another to obtain additional-insured coverage for liabilities arising from the former’s own negligence. Any promise to provide such additional insured coverage is unenforceable and the CGL Policy will not cover the second entity if the second entity’s negligence cause the loss. In such a case, the anti-subrogation rule is inapplicable. Higby Crane Services, LLC v. DCP Midstream, L.P., 2017 WL 3495478 (10th Cir. 2017).
In Higby Crane Servs., LLC v. Nat’l Helium, LLC, 2017 WL 3495478 (10th Cir. 2017), DCP Midstream, LP started a fire that damaged a crane belonging to Higby Crane Services, LLC. At the time of the fire, the crane was located on the grounds of a gas processing plant owned by DCP’s wholly-owned subsidiary, National Helium, LLC. Higby’s insurer, National Interstate Insurance Co., paid for the damage under the terms of a commercial inland marine policy. National and Higby then sued DCP, seeking to recover the cost to repair the crane. DCP argued that the Anti-Subrogation Rule barred recovery by National against DCP because DCP was National’s insured under a commercial general liability policy that also covered the loss. Plaintiffs argued that the CGL Policy cannot cover DCP for the loss at issue because the Additional Insured Provision is void under Colorado’s Anti-Indemnification Statute which bars a construction business from contracting out liability for its own negligence. The court held that the CGL Policy did not cover DCP under the circumstances of this case. Consequently, DCP is not National’s insured for the loss at issue and the Anti-Subrogation Rule is inapplicable.
Colorado allows for criminal restitution, as “[p]ersons found guilty of causing such suffering and hardship should be under a moral and legal obligation to make full restitution to those harmed by their misconduct,” and such restitution assists in rehabilitation and deterrent of future criminal conduct for criminal defendants. C.R.S. § 18-1.3-601.
The Colorado criminal restitution statute also states that anyone who suffered a loss as the result of a contractual relationship can be classified as a “victim,” and an insurer specifically fits this definition, as enumerated in the statute. C.R.S. § 18-1.3-602(4)(a)(lll).
Made Whole Doctrine
The Made Whole Doctrine was first introduced and accepted in Colorado in the limited context of UM coverage in 1989. Kral v. American Hardware Mut. Ins. Co., 784 P.2d 759 (Colo. 1989). In the same case, the Colorado Supreme Court answered the question of whether a conventional subrogation provision in a policy can displace the Made Whole Rule. Within that limited context, the Court determined that any subrogation clause was unenforceable to the extent that it would impair the ability of the insured to be made whole. Id. For years, Colorado courts made no direct pronouncements regarding the Doctrine’s application generally or to health insurance subrogation, and the legislature was reasonably quiet. That all changed with the passage of C.R.S. § 10-1-135 in 2010.
C.R.S. § 10-1-135 became effective on August 11, 2010 and is a global legislative pronouncement codifying several common law principles governing subrogation claims, including the Made Whole Doctrine. O’Donnell v. Sullivan, 2012 WL 3096703 (D. Colo. 2012). It applies to all cases pending recovery as of that date. Smith v. Jeppsen, 2012 WL 1493568 (Colo. 2012). Section 10-1-135 is meant to “ensure that each insured injured party recovers full compensation for bodily injury caused by the act or omission of a third party and that such compensation is not diminished by repayment, reimbursement, or subrogation rights of the payer of benefits.” C.R.S. § 10–1–135(1)(c). Beyond the issues of full compensation, the statute is also “intended to require a payer of benefits to pay a proportionate share of the attorney fees when the payer of benefits is a beneficiary of the attorney services paid for by the injured party.” C.R.S. § 10–1–135(1)(f).
This new statute limits the ability of a “payer of benefits” to subrogate or seek reimbursement of benefits in a third-party lawsuit or claim if the insured is not made whole. It applies to any insurer, HMO, health Plan or other provider of health care benefits, including an automobile insurance carrier. C.R.S. § 10-1-135(2)(c)(II) (2010).
Section 10-1-135 permits subrogation “only if the injured party has first been fully compensated for all damages arising out of the claim.” The statute does not specifically clarify what is meant by “fully compensated,” but it does provide us with a set of presumptions.
Section 10-1-135 not only applies the Made Whole Doctrine to all health insurance subrogation and automobile medical subrogation, but also legislates the Common Fund Doctrine by making subrogated carriers who successfully seek reimbursement responsible for a proportionate share of the insured’s attorney’s fees. C.R.S. § 10-1-135(1)(f) (2010). It applies to any third-party recovery by an insured, whether through settlement or judgment. C.R.S. § 10-1-135((3)(d)(I) (2010). Any provision in an insurance policy which provides contrary to this statute is void as against public policy. C.R.S. § 10-1-135(3)(a)(I) (2010).
When reimbursement or subrogation is allowed under this section, the amount recovered by the subrogated carrier cannot exceed: (1) the amount actually paid by the carrier, or (2) for benefits paid by a capitated Plan, the amount equal to 80% of the usual and customary charge for the same services provided on a non-capitated basis in the geographic region in which the services are provided. C.R.S. § 10-1-135(3)(b) (2010).
A “capitated” Plan pays a specified amount periodically to a health provider for a group of specified health services, regardless of quantity rendered or actual reasonable and necessary cost of medical services provided.
Section 10-1-135 does provide that if an insured settles within the available third-party liability policy limits or UM/UIM coverage limits pursuant to § 10-4-609, there is a rebuttable presumption that the insured has been made whole. C.R.S. § 10-1-135(3)(d)(1) (2010). If an insured litigates the case and receives a judgment, there is a presumption that the amount of the judgment fully compensates the insured. C.R.S. § 10-1-135(3)(d)(II) (2010).
If there are any disputes with regard to whether the insured has been made whole, they must be resolved according to the terms of § 10-1-135. If the insured feels he is not made whole, he must notify the subrogated carrier within 60 days of receipt of the recovery. C.R.S. § 10-1-135(4)(a)(II) (2010). Notice must include: (1) the total amount of recovery; (2) the coverage limits applicable to any available policy or Plan; and (3) the amount of costs charged to the insured. Id.
If the subrogated carrier wants to dispute that the insured has not been made whole, the dispute must be resolved by arbitration. C.R.S. § 10-1-135(4)(a)(III) (2010). The subrogated carrier or Plan must request arbitration no later than 60 days after receipt of notice from the insured. Id. In that event, the insured and carrier must jointly choose an arbitrator to resolve the dispute. If they cannot agree, the dispute is resolved by a panel of three arbitrators – one selected by the insured, one by the carrier, and one by the first two arbitrators.
Another troubling provision in § 10-1-135 is that a subrogated carrier is now prohibited from pursuing any subrogation directly against a third party, unless, within 60 days of the running of the applicable statute of limitations, the insured has not pursued a claim against the third party. C.R.S. § 10-1-135(6)(a)(II) (2010). A third party is also precluded from including the subrogated carrier on any settlement draft. C.R.S. § 10-1-135(6)(b)(II) (2010). Section 10-1-135 will not affect current Coordination of Benefits procedures, application of Colorado’s collateral source set forth in § 13-21-111.6, or subrogation rights of a workers’ compensation carrier under § 8-41-203. C.R.S. § 10-1-135(10) (2010).
Section 10-1-135 is a new statute with very little case law interpreting it. There are many questions which surround its application to automobile insurance subrogation and these questions will be addressed in time.
Medical Expenses, Insurance Write-Offs, and The Collateral Source Rule
Collateral Source Rule: CSR governed by both common law and statute. Collateral source evidence inadmissible and not deducted from verdict. Volunteers of Am. Colo. Branch v. Gardenswartz, 242 P.3d 1080 (Colo. 2010). CSR modified by statute. C.R.S. § 13-21-111.6 allows reduction of verdict by collateral source amount.
Contract Exception: When collateral source pays because of a contract entered into and paid for by the plaintiff, common law CSR follows. If collateral source is found liable for injuries, this exception doesn’t apply. Pre-verdict evidence of collateral source is excluded and may not be included for any purpose. Crossgrove v. Wal-Mart Stores, Inc., 280 P.3d 29 (Colo. App. 2010), aff’d, 276 P.3d 562 (Colo. 2012).
Recovery Of Medical Expenses Rule:
Private Insurance: Amount billed is proper measure of damages. Under contract exception to § 13-21-111.6, plaintiff is entitled to damages in the amount charged by the health care providers, as opposed to the amount paid by the plaintiff’s insurance carrier. Tucker v. Volunteers of Am. Colo. Branch, 211 P.3d 708 (Colo. App. 2008), aff’d and remanded sub nom., Volunteers of Am. Colo. Branch v. Gardenswartz, 242 P.3d 1080 (Colo. 2010). Where a plaintiff’s insurer has obliged a medical provider to accept a discounted rate for services (or a “write off” of a portion of the bill), the reduced rate constitutes a benefit received from a collateral source. Scholle v. Delta Air Lines, Inc., 2019 WL 2219704 (Colo. App. 2019). In Scholle, the court held:
- The Collateral Source Rule barred admissibility of the medical expenses paid by the workers’ comp insurer.
- The plaintiff could present evidence of the higher medical expenses actually billed by his medical providers.
- At most, the defendant, by way of its settlement with the comp carrier, may receive a post-trial set-off against any damages awarded to the plaintiff.
Medicare/Medicaid: No published decisions. However, unpublished federal court decision suggests that proper measure of damages is amount billed, not the amount paid. Krauss v. Beach, 2008 WL 4371939 (D. Colo. Sept. 23, 2008). However, as described herein, defendant is entitled to a post-verdict set-off for Medicaid payments, but not Medicare. In 2017, SB17-181 bill pending that would allow pre-verdict evidence of collateral source unless plaintiff agrees to have jury’s verdict reduced by lesser of: (1) amount of collateral source; or (2) amount of premiums or other contributions the plaintiff paid to those collateral sources. Original CSR retained if defendant convicted of second or subsequent DWI.
Related Law/Comments: Gratuitous medical care, including Medicaid, is covered under statutory rule and is set-off from the plaintiff’s damages award. However, contract exception means that collateral source from any contracts for which a plaintiff pays, whether in the form of money or employment, with the expectation of receiving future benefit, is not set-off. This includes Medicare and private medical insurance. Keelan v. Van Waters & Rogers, Inc., 820 P.2d 11457 (Colo. App. 1991), aff’d, 840 P.2d 1070 (Colo. 1992).
Medical Malpractice: Under Health Care Availability Act, post-verdict reduction by the amount of collateral source. However, no reduction where collateral is result of a contract entered into and paid for by the plaintiff, such as insurance, Medicare. C.R.S. § 13-64-402.
Workers’ Compensation: The carrier can settle directly with the tortfeasors and this extinguishes the employee’s claims for medical expenses, even if the employee was claiming the amounts billed as opposed to the amounts allowed by the fee schedule. Delta Air Lines v. Scholle, 2021 WL 1345492 (Colo. 2021); Gill v. Christopher Allen Waltz and Swift Transportation Co., LLC, 2021 WL 1345490 (Colo. 2021).
Employee Leasing Laws
By statute, Colorado allows the leasing company to be considered a “co-employer” of a work site employer’s employee, provided the leasing company actually instructs the employees at the work site, it sets and actually pays the employee’s compensation, and retains the right to control the details of the employee’s work. C.R.S. § 8-70-114(2).
Hospital Lien Laws
Statute: Colorado Revised Statutes §§ 38-27-101 – 106. Hospital Liens.
Perfecting Lien: To protect a lien in Colorado, a hospital must:
(1) Submit all reasonable and necessary charges for hospital care or other services for payment to insurer and primary medical payer of benefits available to and identified by or on behalf of the injured person, in the same manner as used by the hospital for patients who are not injured as the result of a third-party’s negligence. § 37-27-101(1).
(2) Notice must include name and address of the injured party, date of accident, name and location of hospital, and name of alleged tortfeasor. § 37-27-102.
(3) The notice is filed with the secretary of state. § 37-27-102.
(4) Within 10 days of filing the notice, notice shall be sent certified mail to the tortfeasor, or their legal representative, as well as the tortfeasor’s insurer. Notice can be satisfied if the notice is filed in any pending action. § 37-27-102.
Comments: A lien is not created until a hospital complies with the requirements of § 37-27-101. § 37-27-101(4). The filing of the lien must occur prior to any judgment, settlement, or compromise of the underlying claim. § 37-27-102. Until recently, hospital liens took precedence over all other liens. Effective August 9, 2017, attorneys’ liens now take precedence over hospital liens. § 13-93-114.
OCIP/CCIP Subrogation In Workers’ Compensation Construction Cases
OCIP Law: No statute or case law specifically dealing with effect of OCIP/CCIP.
Statutory Employer Law: Section 8-41-401 provides that any person, company or corporation which conducts any business by leasing or contracting out any part of its work to any lessee, sublessee, contractor, or subcontractor is deemed to be a “statutory employer” and liable for benefits to the employees of the uninsured employer. Workers’ compensation is the exclusive remedy for all contractors and subcontractors in the vertical chain of employment. Statutory employer entitled to immunity regardless of actual payment of benefits. Buzard v. Super Walls, Inc., 681 P.2d 520 (Colo. 1984).
Comments: To qualify as a statutory employer, the test is whether the entity is contracting out the work as a part of its regular business. That is, the work must be something he would normally accomplish with his own employees. The Colorado Supreme Court has expanded the “regular business test” so that it confers statutory employer status in almost all circumstances where the employer contracts out for routine, repetitive and regular services. Finlay v. Storage Tech. Corp., 764 P.2d 62 (Colo. 1988).
Recovery Of Increased Workers’ Compensation Premiums By Employer
Recovery For Increased Premiums? Undecided.
Statute/Case Law: None.
Rule Summary: There is no authority or precedent allowing or prohibiting the attempted recovery of damages for increased workers’ compensation insurance premiums by an employer from a third-party tortfeasor.
Which Workers’ Compensation “Benefits” Can Be Subrogated?
No statute, regulation, or case decision on point.
Section 8-41-203(b) provides that:
(b) Said insurance carrier shall not be entitled to recover any sum in excess of the amount of compensation for which said carrier is liable under said articles to the injured employee, but to that extent said carrier shall be subrogated to the rights of the injured employee against said third party causing the injury.
Section 8-41-203(c) provides that:
(c) The right of subrogation provided by this section shall apply to and include all compensation and all medical, hospital, dental, funeral, and other benefits and expenses to which the employee …[is]… entitled under the provisions of said articles, including parts 2 and 3 of article 46 of this title, or for which the employee’s employer or insurance carrier is liable or has assumed liability.
The employer and carrier are required to offer managed care or medical case management in the areas of major cities and towns, and to offer medical case management throughout the state. C.R.S. § 8-42- 101(3.6)(p).
The director establishes fees for which “all surgical, hospital, dental, nursing, vocational rehabilitation, and medical services, whether related to treatment or not, pertaining to injured employees under this section shall be compensated.” C.R.S. § 8-42- 101(3)(a)(1).
Statute of Limitations: 2 Years. C.R.S. § 8-41-203.
Can Carrier Sue Third Party Directly: Yes.
Right to Intervene: Yes, even after the statute of limitations runs.
Recovery from UM/UIM Benefits: No.
Subrogation Against Medical Malpractice: Yes.
Subrogation Against Legal Malpractice: No?
Recovery Allocation/Equitable Limitations: Economic Damages Only. No recovery from non-economic damages.
Employer Contribution/Negligence: No.
Attorney’s Fees/Costs: Pro-Rata.
Future Credit: Yes.
Auto No-Fault: Not after 7/1/03.
Workers’ Compensation Claims by Undocumented Employees
Statute: The statute expressly includes illegal aliens, but it doesn’t differentiate between legal and illegal. Colo. Rev. Stat. § 8-40-202(b).
Case Law: Champion Auto Body v. Gallegos, 950 P.2d 671 (Colo. App. Ct. 1997).
Comments/Explanation/Other: Illegal aliens may collect work-related injury benefits as long as work is related to the injury.