Court Opinion

ID: 9587759
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:25:58.461322+00
Date Added: 2024-06-11T18:00:32.874180
License: Public Domain

Judge BRIGGS
specially concurs.
I join in Chief Judge Sternberg’s opinion and concur in affirming the judgment.
In regard to Part VI of that opinion, I agree that the trial court properly reconciled §§ 13-21-111.6 and 13-50.5-105, C.R.S. (1987 Repl.Vol. 6A) in refusing to credit the amount of Coppola’s settlement with the Si-mons (homeowners) against the liability of Eaton Corporation (manufacturer) as determined by the jury. This is because the “contract” exception to § 13-21-111.6, the collateral source statute, precludes application of that statute to the Coppola settlement, even if the statute were otherwise applicable. I further agree that only § 13-50.5-105 applies to the Coppola settlement and that, because the jury attributed 0% fault to Coppola, pursuant to § 13-50.5-105 the manufacturer is entitled to no offset because of Coppola’s involvement in the case.
I write separately because, in my view, the collateral source statute does not apply to the Coppola settlement agreement, without regard to the statute’s “contract” exception. I also write separately to emphasize why the reconciliation of these statutes urged by the manufacturer, in addition to ignoring the historical context of the statutes, would lead to arbitrary and inequitable result and would contravene important public policies.
I.
Section 13-21-111.6, the collateral source statute, provides in relevant part that the court must reduce the verdict by the amount by which the plaintiff has been indemnified or compensated by another “in relation to the injury, damage, or death sustained.” The statute itself refers to a reduction for the amount of a payment from another “in relation to” the injury — not from another who otherwise may be “liable in tórt,” as provided in 13-50.5-105. This choice of wording does not compel the conclusion that § 13-21-111.6 should apply not only to payments from a collateral source independent of any wrongdoing but also to compensation paid to avoid the risk of being found “liable in tort.”
As our supreme court has recognized, because the scope of § 13-21-111.6 is not entirely clear, we must look beyond its language to determine the construction most in accordance with the General Assembly’s intent. Van Waters & Rogers, Inc. v. Keelan, 840 P.2d 1070 (Colo.1986). To reach the conclusion urged by the manufacturer that the statute applies to those who have settled a tort claim but are assigned no fault at trial, we would again have to ignore the statute’s historical context.
Section 13-21-111.6 was enacted to restrict the scope of the “collateral source” rule in Colorado. Van Waters & Rogers, Inc. v. Keelan, supra. Colorado law had previously provided that compensation or indemnity received by an injured party from a “collateral source,” that is, a source “wholly independent of the wrongdoer,” and to which the wrongdoer had not contributed, would not diminish the damages otherwise recovei'able from the wrongdoer. Kistler v. Halsey, 173 Colo. 540, 545, 481 P.2d 722, 724 (1971); see 22 Am. Jur.2d Damages § 566 (1988).
Benefits from “collateral sources” have historically included payments from insurance policies, employee benefits, gratuities, and social legislation. See Restatement (Second) of Torts § 920A comment c (1979). What have not been considered payments from a *21collateral source are payments made in compensation for the injury in order to -avoid exposure to being found liable in tort at trial. See Restatement (Second) of Torts § 885 comment f (1979).
Further, understood in its historical context, it is not necessary to apply § 13-21-111.6 to such a settlement merely because the statute was enacted in part to avoid the problem of “double recovery.” See U.S. Fidelity & Guaranty Co. v. Salida Gas Service Co., 793 P.2d 602 (Colo.App.1989). The principle of preventing “double recovery” is merely another formulation of the collateral source rule. See Van Waters & Rogers, Inc. v. Keelan, supra; Restatement (Second) of Torts § 920A (1979). As the supreme court explained in Van Waters, the legislative history indicates § 13-21-111.6 was intended to limit the circumstances in which a plaintiff could recover both from a collateral source and from an alleged tortfeasor for the same benefits, such as costs of hospitalization.
There is no similar “double recovery” in the proper sense of that term when a plaintiff reaches what proves in hindsight to have been an advantageous settlement. It is that very possibility that encourages both injury victims and alleged tortfeasors to settle.
Our supreme court has rejected the notion that because an alleged tortfeasor pays more in settlement than the jury determines was its liability the plaintiff has somehow received an unjust windfall:
[T]he plaintiff always takes the opposite risk, that the settlement will amount to less than the ultimate jury award. Courts have never attempted to redress the inequities that appear in settlements when viewed with the aid of hindsight; otherwise, settlements would not be final and parties would be^reluctant to settle.
Kussman v. City & County of Denver, 706 P.2d 776, 778 (1985) (fn. 5).
There is no reason to reach a different result under our system of pro rata liability. See Schantz v. Richview, Inc., 311 N.W.2d 155, 156 (Minn.1981) (“It should be no concern of the nonsettling defendant how much the plaintiff received from the settling defen-dant_ [A]ll that should concern the non-settling defendant is that he not be required to pay more than his percentage share of the total damages which the jury determines the plaintiff sustained.”); Rogers v. Spady, 147 N.J.Super. 274, 277, 371 A.2d 285, 287 (App. Div.1977) (“Each tortfeasor is liable for the same percentage of the judgment as the percentage of negligence found attributable to him. A natural corollary to this is that when a claimant settles with a codefendant, that percentage of negligence found attributable to the settling codefendant will be deducted from the verdict returned against the other codefendants found liable.... Other jurisdictions with similar comparative negligence laws are in accord with this proposition.”); see also Brochner v. Western Insurance Co., 724 P.2d 1293, 1298-99 (Colo.1986) (“The principle of proportionate fault adopted by the General Assembly represents a rational and equitable approach to the problem of allocating ultimate responsibility between or among joint tortfeasors for the payment of damages to an injured party.” (emphasis added)).
I therefore agree with the court, for these additional reasons, that § 13-21-111.6 is not applicable to Coppola’s settlement with the homeowners.
In regard to § 13-50.5-105, the Chief Judge’s opinion properly places this statute in its historical context and construes it, in conformance with recognized tort principles, to apply to payments received from those who pay compensation for the injury to avoid exposure to tort liability at trial. Neither the 1986 amendment to § 13-50.5-105 nor the enactment of § 13-21-111.6 requires any different result. They in fact support our interpretation.
The amendment of § 13-50.5-105 and the enactment of § 13-21-111.6 were part of the tort-reform legislation of 1986. These were two of the various steps taken by the General Assembly to limit damage awards in certain respects. Van Waters & Rogers, Inc. v. Keelan, supra.
The amendment of § 13-50.5-105 changed the mechanism of crediting a settlement with an alleged tortfeasor to a remaining defendant. Under the original version of the statute the verdict was reduced by the amount of *22the settlement. The amendment changed the method of reduction, which is now based on the percentage of fault attributed at trial to those who have settled.
The amendment of § 13-50.5-105 and the enactment of § 13-21-111.6 were accomplished in conjunction with the enactment of § 13-21-111.5, C.R.S. (1987 Repl.Vol. 6A). That statute provides that no defendant shall be liable for an amount greater than that represented by the degree or percentage of negligence or fault attributable to that defendant.
These provisions accomplish the General Assembly’s goal of allocating responsibility for payment of damages on the basis of pro rata liability. See Brochner v. Western Insurance Co., supra. At the same time, they allow both the injury victims and the alleged tortfeasors to keep the benefit of any advantageous settlement.
Neither § 13-21-111.6 nor § 13-50.5-105 explicitly provide, and there is no reason to construe either to provide, that a tortfeasor who refuses to settle can choose a credit in the amount of the settlement instead of the percentage of fault assigned at trial. That option was removed with the amendment of § 13-50.5-105 in 1986 when the General Assembly completely removed any reference to a deduction for the amount of the settlement. In its place the statute now expressly provides for a reduction only of the percentage of fault attributed by the finder of fact to that tortfeasor.
The amendment of § 13-50.5-105 and enactment of § 13-21-111.6 as component parts of the 1986 tort-reform legislation support the court’s reconciliation of them in another way. The amendment and the new statute were approved within a week of each other and both bills had the same sponsors. Colo. Sess.Laws 1986, ch. 107 at 679 and ch. 108 at 680; see generally Epstein & Edelman, Seh-Off Under the Contribution and Collateral Source StaUites, 21 Colo.Law. 1421 (July 1992). If the intent had been that a defendant by refusing to settle should benefit by receiving credit for the amount of a settlement with another who at trial was found not at fault or negligent, the General Assembly could have so stated when it amended § 13-50.5-105.
Nor is there any apparent reason why, if the jury assigned 1% fault to a designated nonparty who earlier settled, the General Assembly would have intended § 13-50.5-105 to apply, resulting in a credit to defendant of only that percentage of fault, no matter how large the settlement, but at the same time intended to credit the defendant under § 13-21-111.6 with the entire amount of the settlement if the jury assigned 0% fault. It is even more difficult to understand why it should be assumed that the General Assembly intended that a defendant who refuses to settle can choose the greater reduction which results under the two statutes no matter what percentage of fault the jury assigns to the designated nonparty who settled.
The more reasonable reconciliation of the two statutes, consistent with them historical context and the goals of tort reform, is that only § 13-50.5-105 as amended applies to compensation paid to avoid exposure to liability at trial. Section 13-21-111.6 applies to payments from collateral sources independent of any alleged tort liability. See Wong v. Sharp, 734 F.Supp. 943 (D.Colo.1990).
II.
Aside from logic and history, we must presume that the General Assembly intended a just and reasonable result when enacting these statutes. See Smith v. Zufelt, 856 P.2d 8 (Colo.App.1992). The case before us nicely illustrates that the reconciliation of §§ 13-21-111.6 and 13-50.5-105 urged by the manufacturer leads to arbitrary and inequitable results the General Assembly could not have intended.
Here, the jury returned a verdict in favor of the homeowners in tjie total amount of $875,000. The jury determined that the manufacturer was 75% at fault, the Schnells 25%, and Coppola 0%. The homeowners had earlier received settlements paid on behalf of the Schnells for $100,000 and on behalf of Coppola for $300,000.
Under the manufacturer’s interpretation of the two statutes, because 25% of $875,000, or $218,750, is greater than the $100,000 re-*23eeived in settlement from the Schnells, the damages to be awarded the plaintiffs would first be reduced by $218,750. Then, because the $300,000 settlement from Coppola is greater than the zero degree of fault assigned at trial, the $300,000 would be deducted. The result is that the manufacturer would be liable to the plaintiffs for a total of $356,250, even though the jury had determined the manufacturer was liable for 75% of $875,000, or $656,250.
In comparison, the homeowners had received in settlements the total amount of $400,000. The jury determined that those who had settled with the homeowners were, in total, 25% at fault, equal to $218,750 in liability. In hindsight, the homeowners received the advantage of the two settlements. Yet under the manufacturer’s interpretation of these statutes, the homeowners would receive, in addition to the $400,000 in settlements, only $356,250 from the manufacturer, for a total of $756,250.
The result under the manufacturer’s proposed statutory construction would be that: (1) the manufacturer would benefit from refusing to settle, its liability, after being credited with the settlements, $300,000 less than its share of fault or negligence as determined by the jury; (2) the others who were facing exposure to tort liability and were willing to settle would share in none of the benefit taken from the homeowners; and (3) the homeowners, as a result of advantageous settlements and successful litigation, would receive in total less than the full amount of damages determined by the jury.
Other cases would lead to different arbitrary and inequitable results. For example, it is not unusual for the defendant to designate a nonparty the plaintiff did not name as a defendant. The plaintiff may then be forced to add that party as a defendant in order to decrease the risk of receiving less than full compensation for the injuries. The newly named defendant may then at some point settle with the plaintiff to avoid further costs and possible exposure to liability at trial. Under the manufacturer’s construction ■of the statutes, the remaining defendant would be entitled to a credit in the full amount of any settlement if the jury assigns no fault to the designated nonparty who has settled. Thus, the defendant would have benefited by precipitating additional and unwarranted litigation.
In addition, the defendant who refuses to settle would have achieved this benefit by taking away from the plaintiff the benefit of the settlement bargain. It was precisely this shifting of the advantages and disadvantages of prior settlements that our supreme court rejected in Kussman v. City & County of Denver, supra.
These arbitrary and inequitable results are avoided, consistent with the goals of tort reform, by construing only § 13-50.5-105 to apply to compensation paid to avoid exposure to tort liability.
III.
The final reason, and perhaps most important, for rejecting the reconciliation of §§ 13-21-111.6 and 13-50.5-105 urged by the manufacturer is to avoid violating two public policies of critical importance.
A.
The “overriding policy” of the Uniform Contribution Among Tortfeasors Act, of which § 13-50.5-105 is a part, is to insure full compensation for the plaintiffs injuries. Kussman v. City & County of Denver, supra. Nowhere in the language or legislative history of either § 13-21-111.6 or § 13-50.5-105 is there any intimation that the General Assembly has concluded that Colorado’s public policy should be to the contrary.
To be sure, as a result of tort reform, the occasions on which an injury victim may not receive full compensation have increased. But this is a result of the financial circumstances of the tortfeasors, who now are liable only for their pro rata shares of fault. If one cannot pay the assigned pro rata share, no longer is another tortfeasor liable for it. This is far different from assuming the General Assembly intended to create a statutory scheme which deprives injury victims of full compensation, even though all tortfeasors are able to pay their pro rata shares — injury victims who without full compensation might *24have to rely upon, and become a drain on, governmental resources.
The supreme court’s conclusion under the prior version of § 13-50.5-105, although in a different context, is equally applicable here to the amended statute:
In light of these considerations, we believe that a refusal to reduce the judgment by the settlement amount is justified under the Act even if it results in overcompensation to the plaintiff, particularly since a contrary rule would defeat, in cases such as the present one, the Act’s overriding goal of ensuring full compensation.
Kussman v. City & County of Denver, 706 P.2d at 781 (fn. 5).
B.
Equally if not more important, the public and judicial policies in Colorado favor the settlement of disputes. And, while a complete settlement is always preferable, even partial settlements should be encouraged, for these may be necessary steps leading to a complete settlement. See Stubbs v. Copper Mountain, Inc., 862 P.2d 978 (Colo.App.1993).
The General Assembly through tort-reform legislation has furthered its goal of providing for equitable sharing of payment for damages, but not without some cost to the goal of encouraging settlement. See Stubbs v. Copper Mountain, Inc., supra. That cost is at least minimized, with no impact on the goals of tort reform, by applying only § 13-50.5-105 to payments injury victims receive as compensation for their injuries from those who otherwise would face exposure to tort liability.
In contrast, the result of the manufacturer’s reconciliation of these statutes would be significantly to discourage injury victims from discussing settlement with one of several alleged tortfeasors. The injury victim would know that any benefit obtained from making what proves to have been a good settlement could be taken away and bestowed on the tortfeasors who refuse to settle, even to the extent that the injury victim could receive less than full compensation as determined at trial.
However, it is not just the injury victims who would be discouraged from settling:
[A] contrary result would discourage settlements in another way: the nonsettling tortfeasor would pay less than its proportionate share of damages after the settlement amount is deducted, and tortfeasors would have an incentive not to settle, hoping that intransigence would be rewarded when another tortfeasor settled for an amount in excess of its true liability.
Kussman v. City & County of Denver, 706 P.2d at 781 (fn. 5).
The construction urged by the manufacturer would provide unnecessary incentives both to injury victims and alleged tortfeasors not to settle: reason enough to reject such a construction.
IV.
It is often said that our primary task in construing statutory provisions is to ascertain and give effect to legislative intent. E.g., Property Tax Administrator v. Production Geophysical Services, Inc., 860 P.2d 514 (Colo.1993). Though true, the statement can be misleading: we analyze the statute, not psychoanalyze the General Assembly. See United States v. Public Utilities, 345 U.S. 295, 73 S.Ct. 706, 97 L.Ed. 1020 (1953) (Jackson, J., concurring).
It may be more accurate to say we seek a statutory construction consistent with the statute’s words, with the public policy we perceive conveyed by those words, and with other applicable public policies. When the words are susceptible of more than one meaning or leave their scope unclear, we derive the public policy being conveyed and its scope in part from the statute’s historical context, see § 2-4-203, C.R.S. (1980 Repl. Vol. IB), and in part from the assumption that the General Assembly intended a just and reasonable result consistent with other public policies. See §§ 2-4-201, C.R.S. (1980 Repl.Vol. IB) and 2-4-203.
Our task in this process is complementary of, not contradictory to, that of the General Assembly. Together we attempt to create a coherent and intelligible framework of general law. And, when legislation is enacted not *25as part of a comprehensive scheme but rather in isolation, as in the case of the tort reform of 1986, it is even more critical that we formulate synthesizing rules. See generally Tate, The Latu-Making Function of the Judge, 28 La.L.Rev. 211 (1968).
In urging us to adopt its construction of these statutes, the manufacturer relies in part on the rationale in several prior decisions of this court, including Smith v. Zufelt, supra, Gutierrez v. Bussey, 837 P.2d 272 (Colo.App.1992), and U.S. Fidelity & Guaranty Co. v. Salida Gas Service Co., supra. However, the interpretation the manufacturer would have us adopt ultimately ignores the historical context of §§ 13-21-111.5 and 13-50.5-105, leads to absurd and inequitable results, and violates other applicable public policies of substantial importance.
The holding today avoids these pitfalls, consistent with the goals of tort reform, with a simple but sound statutory interpretation: Section 13-50.5-105 applies to compensation paid to avoid exposure to liability in tort; section 13-21-111.6 applies to payments received from collateral sources unrelated to tort liability.