Court Opinion

ID: 9795633
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:34:02.326065+00
Date Added: 2024-06-11T08:30:41.896249
License: Public Domain

Judge WEBB
concurring in part and dissenting in part.
In my view, CIGA's complaint asserting a setoff against Menor's uninsured/ underin-sured motorist (UM/UIM) settlement proceeds should have been dismissed under C.R.C.P. 12(b)(5) because $ 10-4-508(1)(b), C.R.S.2006, provides that CIGA steps into the shoes of the insolvent workers' compensation carrier. Even if those proceeds cover some of Menor's economic loss, and thus duplicate his workers' compensation claim against that carrier, I disagree with the majority's reliance on § 10-4-512(1), CRS. 2006, to afford CIGA a setoff right that was never exercised by, and more importantly under settled law interpreting § 8-41-208, C.R.98.2006, would not have been available to, the insolvent carrier whose duties CIGA has assumed. Accordingly, and with respect, I dissent from part ILB of the majority's opinion.
The majority opinion accurately sets forth the facts, which are largely undisputed, as well as the applicable statutes and relevant Colorado case law.
Under § 10-4-508(1)(b), read without regard to § 10-4-512(1), CIGA could not expand the insolvent carrier's subrogation rights under § 8-41-203 to reach UM/ UIM benefits. Under § 10-4-512(1), read without regard to § 10-4-508(1)(b), CIGA could exercise broader rights than the insolvent carrier and set off such benefits to the extent they duplicated economic loss under a "covered" workers' compensation claim. Thus, these two provisions conflict.
If the language of a statute conflicts with other provisions, then a court may rely on other factors, such as legislative history, pri- or law, the consequences of a given construction of the statute, and the purpose of the statutory scheme, to determine the statute's meaning. See, eg., Allely v. City of Evans, 124 P.3d 911, 913 (Colo.App.2005).
I would resolve this conflict by furthering the public policies favoring full enjoyment of UM/UIM benefits and compensation of injured workers, as well as the avowed purpose of the Colorado Insurance Guaranty Association Act (Act), § 10-4-501, et seq., C.R.S. 2006, that claimants not suffer loss because of an insurer's insolvency. See § 2-4-2083, C.R.S.2006 (in discerning legislative intent, court should consider, inter alia, the consequences of a particular construction and the legislative declaration); Marquez v. Prudential Prop. & Cas. Ins. Co., 620 P.2d 29, 33 (Colo.1980). My reasons follow.
First, to the extent that CIGA sets off proceeds of Menor's UM/UIM settlement *217against his workers' compensation benefits, he will receive less than he would have if the insolvent carrier had remained in business and continued to pay those benefits. As a result, Menor will suffer a loss because of that insolvency, unless he can reopen his settlement with the UM/UIM carrier. This result contravenes one purpose in the legislative declaration, "to avoid ... financial loss to claimants ... because of the insolvency on an insurer." Section 10-4-50%, C.R.S.2006. While the majority notes "the problem of conserving resources to protect the financial stability of CIGA," the legislative declaration does not recognize this concern as counterbalancing any stated purpose of the Act.
Second, the limitations on CIGA's obligations in other sections of the Act, which the majority cites to explain why CIGA's right of setoff under § 10-4-512(1) prevails over the duties of the insolvent carrier that it assumed under § 10-4-508(1)(b), do not persuade me. Most notably, the limitation on "covered claims" over $100,000 in § 10-4-508(1)(a), C.R.S.2006, provides "except that the association shall pay the full amount of any covered claim arising out of workers' compensation policies," and the limitation on CIGA's aggregate liability in § 10-4 508.5(1)(a), C.R.S.2006, similarly provides "except in the case of a claim for benefits under workers' compensation coverage." Fontenot v. Haight, 764 P.2d 378 (Colo.App.1988), cited by the majority, did not involve a workers' compensation policy, and thus I find its discussion of § 10-4-508(1) inapposite here. The limitations based on the net worth of insureds- §§ 10-4-508(4) and 10-4-511(4), C.R.S.2006 ($10 million and $25 million, respectively)-are very unlikely to involve injured workers. Moreover, while these two sections could reduce the contractual obligations of an insolvent insurer, here the insolvent insurer's Hmited subrogation right, to which CIGA succeeds, is statutory. See § 8-41-208.
Third, Colorado cases recognize a strong public policy of compensating claimants to the full extent of UM/UIM coverage. Seq, eg., State Farm Mut. Auto. Ins. Co. v. Brekke, 105 P.3d 177, 185 (Colo.2004); DeHerrera v. Sentry Ins. Co., 30 P.3d 167, 174 (Colo.2001); Huizar v. Allstate Ins. Co., 952 P.2d 342, 345 (Colo.1998); cf. Am. Fam. Mut. Ins. Co. v. Murakami, 169 P.3d 192, 2007 WL 529244 (Colo.App. No. 05CA1472, Feb. 22, 2007)(discerning no public policy violation where statute expressly allowed insurer's setoff). Moreover, "we are directed to liberally construe the [Workers'] Compensation Act in order to effectuate its humanitarian purpose of assisting injured workers." Conley v. Indus. Comm'n, 43 Colo.App. 10, 12, 601 P.2d 648, 650 (1979). Indeed, in my view, the workers' compensation claim exceptions to §§ 10-4-508(1)(a@) and 10-4-508.5(1)(a), discussed above, incorporate this policy "of assisting injured workers" into the Act. But if CIGA obtains a setoff under § 10-4-512(1), then Menor loses the benefit of UM/UIM proceeds payable under his settlement with that carrier because he will not receive future workers' compensation benefits acknowledged by the insolvent carrier's FAL.
Fourth, while the majority states that § 10-4-512(1) "was enacted to avoid windfall or duplicate recoveries," the same has been said of § 8-41-208. See Rains v. Kolberg Mfg. Corp., 897 P.2d 845, 847 (Colo.App.1994); Rocky Mountain Gen. v. Simon, 827 P.2d 629, 632 (Colo.App.1992). Yet Colorado case law is uniform that subrogation under § 8-41-208 does not reach UM/UIM proceeds. See, e.g., McMichael v. Aetna Ins. Co., 878 P.2d 61 (Colo.App.1994), aff'd, 906 P.2d 92 (Colo.1995). Such proceeds are no more or less a windfall under § 8-41-208 than they are under § 10-4-512(1). Since this interpretation more than a decade ago, the General Assembly has not amended § 8-41-208 to preclude such windfalls, although that section was amended in 2002, 2008, and 2004. See Tompkins v. Deleon, 197 Colo. 569, 571, 595 P.2d 242, 243-44 (1979) (legislature is deemed to have acquiesced in prior judicial interpretation of a statute that the legislature amends without changing the ef-feet of the interpretation).
Finally, CIGA cites no legislative history from Colorado's adoption of the Act that would explain why § 10-4-512(1) should prevail over § 10-4-508(1)(b) in the UM/UIM context.©
*218Courts in other states that have adopted the model act recognize a guaranty association remains bound by a default judgment against, and a settlement entered into by, an insolvent insurer. See Martino v. Florida Ins. Guar. Ass'n, 383 So.2d 942, 944 (Fla.Dist.Ct.App.1980) (default judgment); Borchardt v. Carline, 617 So.2d 970, 973 (La.Ct.App.1993) (settlement); DeVane v. Kennedy, 205 W.Va. 519, 535, 519 S.E.2d 622, 638 (1999).
Further, because of the unique UM/UIM limitation on subrogation in Colorado and Colorado's strong public policy favoring full realization of UM/UIM benefits, I do not consider the out-of-state cases cited by the majority discussing provisions like § 10-4-512(1) as dispositive of CIGA's power to set off such benefits against its obligation to pay a covered workers' compensation claim.
In sum, I recognize the majority's interpretation as reasonable because unlike other provisions of the Act, § 10-4-512(1) creates no exception for workers' compensation claims. But without any guidance from Colorado legislative history, I would hold that CIGA's complaint seeking setoff under $ 10-4-512(1) against Menor's UM/UIM settlement proceeds fails to state a claim because CIGA stands in the shoes of the insolvent carrier under § 10-4-508(1)(b), and the insolvent carrier could not have reached those proceeds.