Colorado Insurance Guaranty Ass'n v. Menor

suр- allege facts failed to Commerce acknowl- Town that the its assertion porting See ownership interests.

edged other 56(c) shall be (summary judgment CRCP. deposi- pleadings, if the forthwith

rendered affidavits, interrogatories, tions, answers issue genuine no show

and admissions the mov- and that fact exists any material a matter judgment as entitled

ing party is Pinder, 812 v. law); Serv. Comm'n Civil (the (Colo.1991) moving for party

P.2d 645 satisfy its burden

summary judgment in the evidence

demonstrating an absence party's nonmoving support

record case); v. Water Conserva- Black Sw. see also Bijou Dist., City Thornton supra; tion Co.,supra.

Irrigation shows the record we conclude

Accordingly, concerning fact of material disputed issue

no require us would estoppel

laches summary judgment.

disturb affirmed. judgment

The Judge ROTHENBERG

Judge concur.

TAUBMAN GUARANTY INSURANCE

COLORADO

ASSOCIATION, Plaintiff-

Appellant, Defendant-Appellee. MENOR, L.

Michael

No. 05CA2483. Appeals, Court of

Colorado

Div. II.

3,May 2007.

compensation benefits to Menor thereafter. See Alexander v. Appeals Indus. Claim Of- (Colo. ("CIGA fice, 42 nonprofit, unincorporated legal entity cere- ... ated to create a means for [Act] insureds to recover on claims insol- steps vent insurers.... into the shoes of the insolvent insurer to claims within coverage poli- and limits of the insurance cy.").

Sunstate also had an policy pro- viding uninsured and underinsured motorist (UM/UIM) coverage with St. Paul Fire and 2000, Company. ‍‌​‌​​​​​​‌‌​​‌​‌‌​‌​​‌​‌​‌‌‌‌​​‌‌​​​‌​‌‌​‌‌​​‌‌‌‍Marine LLC, Insurance In Menor Buck, McCrea, & B. McCrea Bruce filed a claim with Paul Parnes, Denver, Colorado, St. for Brett R. for Plain- negligence benefits because the driver whose tiff-Appellant. injuries caused the accident and his was Dodge, Buescher Goldhammer Kelman & uninsured. Menor apparently and St. Paul P.C., Denver, Colorado; Shelley Dodge, P. agreed to resolve that claim through arbitra- P.C., Schuyler, Law Office of G. Michael G. 2000, In tion. June Menor also filed a com- Schuyler, Village, Michael Greenwood Colo- plaint against County St. Paul in the Pueblo rado, Defendant-Apрellee. for alleging District Court entitlement to UM/ UIM policy. benefits under the St. Paul by Opinion Judge LOEB. 2001, Menor, Plaintiff, February Sunstate, In Guaranty and Colorado Insurance As- Paul St. entered into a settlement regarding (CIGA), appeals judgment sociation Menor's claim policy under the St. Paul a dismissing complaint district court for $265,000, defendant, Menor, lump payment sum periodic L. pursu- Michael 12(b). payments $33,700, paid annually ant to to be C.R.C.P. We reverse and re- beginning guaranteed proceedings mand for further June to on CIGA's years, complaint. last for 20 until June 2081. The set- agreement tlement was silent as to allo- 1997, Menor, In employed by who was apportionment cation or between economic Equipment, driving Sunstate was a vehicle Also, damages. and noneconomic there is no Sunstate, by owned and insured when vehi- indication in the record the settlement cle driven uninsured motorist veered was submitted to the district ap- court for path out of control and into the of Menor's proval. vehicle, severely injuring him. 2008, In November petition CIGA filed a Menor filed for workers' with Hearings the Division of Administrative policy benefits under Sunstate's terminate, modify, suspend workers' Indemnity with Industrial Company, and In- 10-4-512, benefits based on liability dustrial admitted for such benefits. C.R.S.2006, nonduplication Indemnity In Company, Fremont provision of the Act. CIGA asserted entitle- acquired which had Industrial and had sue- statutory offset, pursuant ment to a 10- obligations ceeded to its workers' 4-512(1), C.R.S.2006, that would reduce Me- compensation policy, filed a final admission nor's workers' benefits based (FAL) liability for permanent for total dis- on his insurance settlement with ability benefits and medical benefits. St. Paul to the extent the settlement was for Fremont became insolvent. Pur- damages. economic suant to the Guaranty Colorado Insurance seq., Association et Following hearing, C.R.S. an administrative law (the Act), (ALJ) responsibility judge CIGA assumed found that nonduplication for the claim and recovery provision continued to applicable grant- workers' was However, Overton, the ALJ petition. Props., supra. A court ed CIGA's Ltd. v. has jurisdiction if subject matter "the case is one jurisdiction not have that she did found offset, type[s] of cases that the court has finding the amount of determine offset, empowered to entertain the sover any, if been "amount of instead that eign from the court derives its authori hearing which Jorgensen in a must be determined Suthers, case, ty" Horton appor in the tort by the trial court (Colo.2002) Paine, Webber, (quoting Jackson and noneconomic dam tionment of economic Jorgen & Adams, Comp.Ins. Auth. v. Curtis, ages." See Colo. Inc. v. (Colo.1986)). (Colo.2000). sen, 992 P.2d 1156 action in the Pueblo then filed this "The Colorado Constitution vests dis Court, County pursuant 10-4- District subject juris general trict courts with matter judgment that the amounts requesting Props., in civil cases." Ashton Ltd. v. diction with Paul prior of Menotr's Overton, 1017; supra, 107 P.3d at see Colo. damages, thereby elimi- "were for economic 9(1) ("The VI, § art. district Const. courts obligations Menor for nating CIGA's general with shall be trial courts record compensationbenefits." jurisdiction, original jurisdic and shall have complaint moved to dismiss CIGA's cases, civil, probate, criminal tion in all 12(b)(1) for lack of under C.R.C.P. herein, provided except as otherwise 12(b)(5) jurisdiction and C.R.C.P. matter jurisdiction appellate shall have such can upon failure to state a claim which relief law."). prescribed by gener be As courts granted. be jurisdiction, courts in Colorado al the district authority questions to consider have the granted The district court the motion to equity legal and of and to award law subject juris- based on lack of matter dismiss Paine, Webber, equitable Jackson remedies. The district court did not rule on diction. Curtis, Adams, supra, 718 P.2d at & Inc. v. 12(b)(5) alternative C.R.C.P. conten- Menor's Overton, 518; Props., supra, Ltd. v. Ashton appeal followed. tion. This 107P.3d at 1017. Subject Matter I. Jurisdiction agree Both CIGA and Menor the ALJ erred in CIGA contends the district court correctly concluded that she did not have dismissing complaint under C.R.C.P. jurisdiction apportion the settlement 12(b)(1) ground the court lacked on the that Menor, Paul, Sunstate, among St. be subject jurisdiction matter over the case. in the settlement did not cause UM/UIM agree. We compensation benefits. volve workers' Ct. Supply Appeals MGM Co. Indus. Claim court's We review de novo district (Colo.App.2002) Office, 62 P.3d un legal on a motion to dismiss conclusions (ALJs jurisdiction to decide workers' have 12(b)(1) subject mat der for lack of C.R.C.P. cases). jurisdiction. Props., Ltd. v. Over ter Ashton ton, 107P.3d Jorgensen, relies on case inter- CIGA (Colo.App.2004). 841-208, preting subrogation rights under jurisdiction A over court must have C.R.S.2006, Compensation of the Workers' parties and the matter of the the jurisdiction proposition that for the judgment if be issue to be decided is to proceeds apportion review Stroud, Marriage valid. re jurisdiction over lies with the court that has (Colo.1981). "Subject juris matter Comp. Ins. Auth. v. tort claim. Colo. the authority the court's to deal diction concerns 1160; § 8- Jorgensen, supra, 992 P.2d at see in which it renders with the class of cases compensa- (providing that a workers' 41-2083 Stroud, judgment." Marriage In re su injured subrogated to the tion insurer pra, 631P.2d at 170. damages against rights to recover claimant's Subject jurisdiction is de tortfeasor). matter Jorgensen, when a set- Under an dispute tlement involves insurer's power a court's to resolve a fined as damages re- rights respect with to economic judgment. it Ashton which renders injured covered from a tortfeasor matter, preliminary As a we first con рursuant worker the insurer provides sider whether the Act CIGA with a may the ask court scrutinize settle- rights cause of action to enforce its ment, 10-4-512(1). hearing hold a court Although language expressly provide that section does not apportion economic and noneconomic dam- ages. Comp. Jorgensen, Auth. v. Colo. Ins. action, with a cause of we that it conclude implicitlydoes so. supra, 992 P.2d at 1166. County Menor contends that the Pueblo plaintiff alleges Whenever a that a District the tribunal Court is not had implicitly private right statute creates a

jurisdiction over the insurance set- UM/UIM action, question the critical is whether Menor, Paul, tlement between St. Suns- legislature intended such a result. For this tate, predeces- because neither CIGA nor its reason, рrivate we not will infer a sor, Fremont, participated the settlement. statutory action based on a violation unless points out when Fremont filed legislative we discern a clear intent to create its FAL in it made no claim of offset such a Gerrity cause action. & Oil Gas settlement, against (Colo. Corp. Magness, brought years and CIGA this lawsuit several ‍‌​‌​​​​​​‌‌​​‌​‌‌​‌​​‌​‌​‌‌‌‌​​‌‌​​​‌​‌‌​‌‌​​‌‌‌‍1997). after the tort and claimswere actu- ally settled. Menor further asserts that the

complaint he filed Paul was never When a statute expressly does not pros- provide served and was dismissed for failure to private remedy, for a civil a court ecute, and that because the settle- must determining consider three factors in ment never approved was filed with or particular whether a plaintiff has available a court, jurisdic- the district court did not take private plaintiff cause of action: whether the argues Jorgen- tion it. over Menor thus persons is within a class of intended to be case, distinguishable sen is from this both enactment; legislative benefited Jorgensen, because the district court that legislature create, whether intended to actually approved appor- the settlement later implicitly, private right action; albeit of proceeds, tioned the settlement and because implied remedy whether an civil would the workers' insurer there had be purposes legis consistent with the of the personal injury intervened in the action to Gerrity lative Corp. scheme. See Oil & Gas protect subrogation rights. its In Menor's (conclud Magness, supra, v. 946 P.2d at 928 view, Jorgensen, only under a district court ing private that there was no cause of action power has the to review a settlement for gas under the oil and conservation statute apportionment subrogation right or enforce a legislature because the intended that a com party when seeking right the the has been primary mission responsibility have for en original involved in the tort claim or settle- forcing provisions); the statute's Allstate ment proceedings involving and when the Parfrey, Ins. Co. v. 830 P.2d 911 already tort claim or settlement have taken (Colo.1992)(concluding pri there was a place in the district court. vate cause of action because these three ele met). ments were reject being We Menor's view as tоo subject an interpretation narrow mat Here, question there is no that CIGA is jurisdiction Colorado, ter of district courts in entity the protected by § intended to be 10- agree and we thus with CIGA that the dis 4-512. Assembly The General expressly subject trict jurisdiction court had matter provided nonduplication recovery for of over this case. Further, conserve CIGA's resources. we Here, complaint sought CIGA's Assembly, enforce conclude the enacting General § impliedly statutory right intended to create a § under of the payable Act to reduce an private amount on a cov- remedy civil for CIGA enforce its duplicative ered claim to the extent it right payments of a to reduce its to avoid nondu- recovery under Menor's insurance plication recovery by insureds. In our policy. view, goal providing nonduplication of inter previously if whether CIGA substantially frustrated strained be would settlement, remedy in the to enforce vened a civil without CIGA were Therefore, had we tort case or settlement or whether a under the statute. rights private civil that the existence adjudicated conclude in the dis actually filed or been fact that CIGA Despite trict court. provisions to enforce remedy for CIGA pur- with the overall for the is consistent the shoes of Fremont stepped 10-4-512 into expressed legislative compen scheme paying Menor's workers' poses purpose benefits, legal or discern no basis sation we in the Act. jurisdiction to why court's reason the district gen have district courts Becausе Colorado statutory claim for an offset consider except as civil matters jurisdiction over eral dependent on should under 10-4-512 be conclude that we further provided, otherwise intervened in Menor's whether CIGA UM/ jurisdic subject has matter district court no Paul. also see case We UIM Colo. claim. See to resolve CIGA's tion case, reason, of this under the circumstances ("Courts II, justice shall art. Const. super to have requiring the district court for every speedy and a reme open person, be be previous tort case or settlement vised a prop every injury person, dy afforded jurisdiction over CIGA's it fore could obtain character; justice erty or v. Pin claim. See Harrison apportionment sale, denial without should be administered (Cоlo. Assurance, nacol Harris, Ass'n v. delay."); Ins. Guar. Colo. separate is a ("apportionment case App.2004) (Colo.1992)(after plaintiff action, ancillary proceeding not an cause of her carrier had settled her insurance UM/ case"). Be to the workers' court, claim out UIM insurance separate cause of asserted a cause CIGA in dis declaratory judgment action filed a it we conclude action court, judicial seeking a determination trict in Menor's earlier no need to intervene had 10-4-512); rights and duties of its Paul, proceedings with St. Romer, (Colo.App. Sears jurisdiction over CIGA's court had district law, 1996) ("if right does accrue under actively in though it was not claim even to effectuate must be available the courts settle approving Menor's volved rights"). such Harris, Ins. Guar. Ass'n ment. See Colo. parties, both Contrary arguments of to the supra. Jorgensen dictates perceive we do not subject court had Accordingly, the district jurisdiction analysis in matter amount to determine the jurisdiction case, Jorgensen matter way or the other. this one offset, any, § 10- if claimed interpretation of 8- of CIGA's proper concerned the 4-512(1) and non- apportion economic and to compensation insur- workers' 41-203 and a damages Menor's economic that statute subrogation rights under er's Paul. with St. by against funds recovered an offset obtain Here, by party a tortfeasor. injured from 12(b)(5) statutory contrast, to assert II. GCR.C.P. CIGA seeks Act to re- of the right under court that district our conclusion Given a claim to оbligation on covered duce its subject have ruling that it did not erred injured by the funds recovered extent of case, we now jurisdiction over this matter policy. Al- insurance party under another that argument alternative address Menor's here, agree we that though not determinative properly complaint was nonetheless CIGA's analogy, to the extent Jorgensen helpful ais upon a claim for failure state dismissed that a district proposition it stands pursuant granted, be which relief could court, workers' rather than a 12(b)(5). the com- conclude We C.RCP. ap- ALJ, jurisdiction to matter has not be dismissed plaint should economic a settlement as between portion rule. damages. and noneconomic 12(b)(5) purpose of C.R.C.P. The However, argument reject Menor's we sufficiency com- legal is to test con jurisdiction is somehow the court's 212

plaint, judicial a Laningham, and we review district court's deter notice. Walker v. Van supra, mination of matter de novo. Ashton 148 P.3d at 397. this Overton, Props., supra, 107 at Litd. v. P.3d Here, complaint specifically refer- 12(b)(5) A 1018. C.R.C.P. motion is looked policy, enced the St. Paul disfavor, upon complaint with a and should complaint against Menor's district court appears beyond not it be dismissed unless a Paul, agreement. and the settlement prove doubt that a claimant can no set of 10-4-512(1) provides: Section support facts in of the claim which would complaint entitle claimant A relief Any person having a claim his should not for failure to be dismissed state any provision insurer under in his insur- long claim so as the claimant is entitled to policy ance which is also a covered claim upon any theory some relief law. Pub. required shall be to exhaust first his 377, Wyk, Serv. Co. v. Van 27 P.3d 385-86 Any policy. payable under such amount (Colo.2001); Laningham, Walker v. Van 148 on a covered claim part under this 5 shall 391, (Colo.App.2006). P.3d 394 be reduced the amount of such policy. under the claimant's insurance reviewing interpretation In statute, a court should look first to the dispute The here is whether the amount statute, language of the words and recovered poli Menor under the St. Paul phrases given therein should be effect ac cy duplicated any part of the workers' com cording plain ordinary meaning. to their pensation par benefits due from CIGA. The Fisher, 1053, Corp. Ball v. 1056 dispute tiеs do not that economic losses (Colo.App.2001). When a court construes a would be a "covered claim" under the statute, it should read and consider the stat (such pain while noneconomic losses interpret ute as a whole and it in a manner be, suffering) would not because such dam consistent, harmonious, giving and sensible ages are not compensa covered workers' parts. Welby effect all Gardens v. tion benefits See Reliance Ins. Co. v. County Equalization, Adams Bd. 71 P.3d Blackford, 578, 100 P.3d 580 (Colo. App.2004)(benefitsprovided to an in (Colo.2003); Andrews, People (Colo.1994). so, doing P.2d jured employee pursuant to the Workers' court interpret part should not or render of Compensation Act expenses, include medical meaningless the statute either or absurd. rehabilitation, vocational disability pay Reg't Transp. Lopez, Dist. v. ments as wages, for lost but (Colo.1996); Bostelman, People provide does not com (Colo.App.2005)(cert.granted pensation for damages, noneconomic such as 2006). Aug. pain suffering). provision contends that a in the St. A. Policy Exclusion Under UM/UIM policy any payment Paul excludes for losses Menor contends as a matter of compensation. covered under workers' The law, because the terms of the St. Paul UM/ precise language provides: of that exelusion policy specifically UIM insurance exclude compensation. "Workers' We won't cover by compensation losses covered workers' obligation protected that person un- has bеnefits, duplication recovery no of could ex compensation, disability der workers' bene- thus, § ist under CIGA is unemployment law, fits compensation or not payments entitled to reduce its to him any similar law." disagree. under the statute. We argues Menor that this exclusion in the deciding here, In policy applies whether to dismiss a such aas matter of complaint 12(b)(5), under C.R.C.P. the court law, he could not have received a double may only alleged consider the facts in the from the settlement with St. Paul. pleadings, However, documents attached as exhibits or we conclude that the exclusion is incorporated by not, itself, pleadings, reference in dispositive in as to whether Menor matters of which the court recovery. take received a double

213 §of view 8-41-208. See McMichael v. Aet Paul invoked this The issue of whether St. Co., (Colo.App.1994), na Ins. ‍‌​‌​​​​​​‌‌​​‌​‌‌​‌​​‌​‌​‌‌‌‌​​‌‌​​​‌​‌‌​‌‌​​‌‌‌‍64 negotiations in its with Menor was exclusion court, (Colo.1995); properly aff'd, it Comp. the trial nor is 906 P.2d 92 State not before reasons, Co., be appeal. us on There could Ins. Fund v. Commercial Ins. before Union (Colo.App.1981). P.2d us, The why might Paul not have unknown to St. if it invoked the liability injured invoked the exclusion. Even of a insurer to the UM/UIM exclusion, however, contractual, possible it that Paul party is is and the workers' com elements of dam- paid pensation could have Menor for insurer does not become third- beneficiary party under the contract. McMi might compensable age that also have been Co., compensation 64; under the Fremont workers' chael v. Aetnа Ins. P.2d at State result, Co., might be enti- policy, Comp. supra, and as a Fund v. Ins. Ins. Gulf 10-4-512(1). Indeed, 184; § Comp. tled to a setoff under at State Ins. Fund v. Com Co., complaint against supra, Menor's district court St. mercial Ins. 631 P.2d at 1169. The insurer does not become the specifically alleged Paul both economic view, damages. ego by pro noneconomic our none alter the tortfeasor virtue of a matter disposed these matters can be of as viding protection injuries to the insured for Comp. law, caused the tortfeasor. State Ins. they properly are more the sub- Co., ject supra, of factual determinations to be made Fund v. Ins. 628 P.2d at 184. Gulf on remand. the district court 88-41-2083, § Under Menor was enti Accordingly, we conclude that the case tled to recover benefits under both workеrs' must be remanded to the district court to compensation poli and the St. Paul UM/UIM hearing apportion conduct a to evaluate and Co., cy. supra, See McMichael v. Aetna Ins. benefits, as between economic and non- § P.2d at 64. Because 8-41-208 defines losses, under economic recovered rights compensation of a insurer workers' Paul. his settlement with St. tortfeasor, against a and the insur step er does not into the shoes of the tortfea- Subrogation B. Applicability of sor, a workers' insurer does § Rights Under 84-208 subrogation rights against not have Accordingly, agree insurance benefits. we that Menor contends the alternative not with Menor Fremont did have sub- CIGA, assuming obligations of Fre- rogation rights against paid by the benefits 10-4-508(1), C.R.S.2006, § pursuant mont policy. the St. Paul 8-41-208(1)(b), C.R.S.2006, bаrred under it, interpreting subroga- from a and the cases However, disagree we with Menor's recovery against proceeds tion UIM UM/ similarly contention that 8-41-203 limits insurance, provisions and that the 10-4- ability to assert its claim for relief 512(1) circum- inapplicable are Rather, this case. disagree. case. stances this We agree we with CIGA's contention that 8-41-208(1)(b) obligation amount of provides if an to reduce the Section injured by negli assumption not from its employee who has been to Menor is derived Fremont, obligations of the duties and but gence party of a third elects to take workers' benefits, enabling payment of com from the which is CIGA's own pensation operate assignment as an statute. shall

the workers' insurer of the em compensa- encоmpasses The Act ployee's cause of action "such other insurance, insurance, tion automobile Comp. person." State Ins. Fund v. Ins. Gulf types See various "other insurance." Co., (Colo.App.1981). C.R.8.2006. Therefore, § 8-41-208 establishes the work Act, purposes pertinent part, of in The statutory subro- ers' insurer's provide payment a for the are "to mechanism remedy gation against a tortfeasor. of covered claims under certain insurance However, delay payment in policies, a insurer is to avoid excessive UM/UIM policyhold- pur financial loss to claimants or third-party not a tortfeasor within the 8-41-203, insolvency § an payments pursuant of the of insurer ance to ers because this application rule has no where CIGA seeks to provide . and to an association assess right protection among nonduplication recovery insurers." assert of the cost of such 10-4-502, Further, 10-4-512(1) C.R.S.2006. Section § respect any under with re- by injured 10-4-505, C.R.S.2006, covery party against an § that his or her directs the Act insurer that is also a covered claim under the liberally "shall be construed effect Act, including against claims a in- purposes enumerated section surer such as Paul. an which section shall constitute aid and guide interpretation." reject We thus Menor's contention obligations because CIGA assumed the nonduplication In of recov addition to the upon insolvency, subrogation Fremont 10-4-512(1), ery § provision in which was §in limitations 8-41-208 and the cases inter- duplicate enacted to avoid windfall or recov it, Co., preting see McMichael v. Aetna Ins. eries, other sections of the Act address supro; Comp. State Ins. Fund v. Ins. problem conserving protect resources Gulf Co., supro; Comp. State Ins. Fund v. Com- stability the financial of CIGA.See Colo.Ins. Co., supra, mercial preclude Ins. CIGA as a Harris, supra, Guar. 827 P.2d at Ass'n proceeding matter of law from 10-4- example, 1141. For claim" "covered 512(1). any first-party the Act not "does include claim an insured whose net worth exceeds insolvent, company When an insurance is ten million dollars." Section "(ble shall deemed the insurer to the 10-4-508(1)(a), C.R.S.2006. Section C.R.S. obligation extent of its on the covered claims "(ble 2006, provides obligat that CIGA shall and to rights, such extent shall have all ed to the extent the covered claims exist duties, obligations of the insolvеnt insur- ing prior insolvency ... to determination of er as if the insurer had not become insol- obligation only but such shall include that 10-4-508(1)(b), vent." Section C.R.S.2006. amount each claim covered which is argues that because Fremont would exeess of one hundred dollars and is less right subrogation be barred from a against dollars," than one hundred thousand exclud insurer, well, CIGA is as be- ing workers' claims. Section cause it is deemed to stand in the shoes of 10-4-508.5, C.R.9.2006, upper addresses the disagree. Fremont. We pay limits of CIGA's total liabilities how view, 10-4-508(1)(b) properly our may ments be allocated between claimants interpreted to mean that CIGA is deemed to under certain cireumstances. Section 10-4- be the insurer to the obligation extent of its 511(4), C.R.S$.2006,provides that CIGA can claims, subject on covеred purposes to the paid recover the amount of claim covered provisions and other of the Act. See Fontenot liability obligations incurred an in (Colo. Haight, sured whose net worth is over million. $25 (§ 10-4-508(1) places CIGA in the stead of We conclude that these limitations of CIGA's only an insolvent insurer to the extent obligations purposes all further of the statutorily obligated CIGA itself is on a cov- by ensuring Act that CIGA's resources are claim). above, ered As discussed various equitably among pol distributed claimants or Act, provisions including of the 10-4- icyholders. 512(1), purposes by further its conserving the

Section does not address resources available to CIGA to claimants injured tortfeasor, party's rights against Thus, policyholders. being as well as injured party's against but rather an claim deemed to be the insurer to the extent of its any type his or her obligation claims, own insurer for of insur- on the covered CIGA is Act, ance that is also a claim provisions covered under the limited other such purposes and is intended to further nonduplication as the provision by ensuring of the Act nonduplication Any of re- 10-4-512. interpretation other would covery. that, although We thus conclude create every the anomalous result time obligations insurers have no CIGA assumed the' of an insol- 10-4-508(1)(b) insur- insurer, vent would auto-

215 Desai, supra, limita A.2d at matically from all other Strickler v. 813 656 release CIGA (citations omitted) Forbes, imposed in the Act and eliminate all (quoting tions Bethea v. 422, 1215, 1216, Act, Pa. A.2d 519 548 1218 to under the rights granted other § 10-4-512. Be including rights (1988)); see Ill. Ins. Guar. Fund v. Farm regular cause CIGA's function is to assume Co., 671, Ill.App.3d land Mut. 274 Ins. 210 insurers, (1995)(al- obligations of insolvent the non- 661, 856, 653 N.E.2d 858 recovery provision duplication of and other though the Fund is -deemed to be the insol simply meaning limiting provisions would be insurer, 'subject vent "its role is to the limita Instead, less. we conclude that CIGA as Act"); tions' of the Shaler v. Toms River obligations pay Fremont's Menor's sumed Assocs., Gynecology Obstetrics & 383 N.J.Su benefits, (As 650, 53, per. (App.Div.2006) 893 A.2d 57 any rights obligations and forth in other set obligation Jersey's sociation's under New Act, nonduplication of such as the recov payment version of the Act is limited to the 10-4-512(1). ery provision of See Fonte claims, "panacea of covered and it is not for Haight, supra. not problems all company caused Further, Act, including §§ 10-4- (quoting Carpenter Corp. insolvencies" Tech. 508(1)(b) 10-4-512(1), and is modeled after Co., 504, 172 v. Admiral Ins. N.J. 800 A.2d Liability Property the Post-Assessment (2002) 54, ); Jendrzejewski 66 v. Allstate Guaranty Insurance Association Model Co., 460, 583, N.J.Super. Ins. 775 A.2d proposed by the National as Association (the (App.Div.2001) purpose evident Act Insurance Commissioners. The Model Jersey's New version of 10-4-512 was to states, adopted in has been most courts by shielding conserve the assets of the Fund recognized poli in have numerous states liability it obligations from for the of insol cy concerns discussed above and have vent insurers where there is other insurance regarding reached a similar conclusion covering the same claim that is covered interplay between their state's version of policy); the insolvent insurer's Blackwell v. example, §§ in 10-4-508 and 10-4-512. For Assoc., Pa.Super. Pa. Ins. Guаr. Desai, 571 Pa. 813 A.2d 650 Strickler (1989) (not only A.2d should a (2002), Pennsylvania Supreme Court placed position, claimant not be in a better held: equally legislature "it is clear that the did not give Act was intended "to a measure [TJhe intend, in enacting Guaranty the Insurance policyholders protection ‍‌​‌​​​​​​‌‌​​‌​‌‌​‌​​‌​‌​‌‌‌‌​​‌‌​​​‌​‌‌​‌‌​​‌‌‌‍and claim- Act, that in all cases a claimant would be ants who are faced with financial loss be- in placed position the same he would have insolvency cause of the of certain carriers company been had the insurance remained property casualty It insurance." solvent"); Prop. Va. & Cas. Ins. Guar. Ass'n designed pay regard- was not all claims Co., v. Int'l Ins. 288 Va. 385 S.E.2d less of whether there are other sources of (1989) (rights obligations As recovery. The Association is a source of Virginia's version of the Act sociation under pay "last Member insurers resort." as- respects are not in all identical to those of Association, sessments to the derived from insurer, Virginia's the insolvent because ver premiums policyholders. Although [in- conjunc sion of 10-4-508 "must be read correctly point purpose out that a sureds] Act," tion with other sections of the which provide a of the fund is to source of recov- obligations impose further limitations on the ery of covered claims when an insurer Association, provi including the offset insolvent, becomes the fund should be re- recovery). duplications sion served to insureds of insolvent insur- reasons, reject For similar we also Menor's ers who have not recovered the same argument bеcause of damages another The re- from source. law, by Fremont's a matter of CIGAis bound quirement previous that a insurance re- in its failure to assert covery reduce the amount owed asserting precluded FAL and is thus from protect the limited Association serves 10-4-512(1). First, the FAL rights under depletion fund from when the insured has us, already before issues obtained a for the loss. is not the record loss, concerning the effect of that document some of Menor's economic and thus 12(b)(5) duplicate compensation on a should not be resolved C.R.C.P. his workers' claim carrier, motion, against disagree be determined I ma- but should with the Second, jority's 10-4-512(1), § district court on remand. as dis- reliance on CRS. above, 2006, subrogation rights cussed Fremont's to afford CIGA setoff was (or thereоf) by, §$ 8-41-208 lack are not never importantly exercised and more here, 8-41-208, applicable interpreting § where claim is as- under settled law CIGA's C.R.98.2006, specific statutory right to, un- serted under its would not have been available duplicative $ der to avoid a re- the insolvent carrier whose duties CIGA has Nevertheless, covery. acknowledge Accordingly, respect, we assumed. and with I remand, part majority's on have certain fact- dissent from ILB opin- of the specific equitable defenses to CIGA's claim ion. regard, on Fremont's FAL. In that based we majority opinion accurately The sets forth parties note the have not addressed whether facts, largely undisputed, which are rulings equita- the ALJ's on of these certain applicable well as the statutes and relevant judicata ble defenses would be to res Coloradocase law. thus, estoppel, or collateral we do not 10-4-508(1)(b), § Under read without re- appeal. consider that issue on 10-4-512(1), gard §to CIGA could not ex- Accordingly, we conclude fail CIGA did not pand the insolvent carrier's § against

to state a claim Menor under 10-4- rights 8-41-203 to reach UIM UM/ 512(1). Therefore, reject we Menor's conten- benefits. Under read without judgment tion that court the district 10-4-508(1)(b), regard §to could exer- should be affirmed on that basis. rights cise broader than the insolvent carrier they and set off such benefits to the extent Attorney III. Fees duplicated economic loss under a "covered" Thus, claim. these attorney Menor seeks an award of fees provisions 18-17-102, two conflict. pursuant (рrovid- C.R.98.2006 action, ing for such an award in- where an language If the of a statute conflicts with cluding justifica- appeal, an lacks substantial provisions, may rely other then a court on tion). judgment, Because we reverse the we factors, other legislative history, pri- such as necessarily appeal conclude that CIGA's does law, consequences given of a construc justification, not lack substantial and we thus statute, purpose tion of the and the deny request Menor's for fees. scheme, statutory to determine the statute's See, Evans, meaning. eg., Allely City judgment The of the district court is re- (Colo.App.2005). 124P.3d versed, and the case is remanded for further proceedings opinion. consistent with this I would furthering resolve this conflict public policies favoring еnjoyment full

Judge TERRY concurs. benefits and in jured workers, purpose as well as the avowed Judge in part WEBB concurs and dissents Guaranty of the Colorado Insurance Associa part. (Act), 10-4-501, tion Act seq., et C.R.S. Judge concurring in part WEBB that claimants not suffer loss because dissenting part. insolvency. insurer's See (in intent, discerning legislative C.R.S.2006 view, my complaint asserting consider, alia, court should inter the conse setoff Menor's underin- uninsured/ quences particular of a construction and the (UM/UIM) pro- sured motorist settlement declaration); legislative Marquez v. Pruden ceeds should have been dismissed under Co., Prop. tial & Cas. Ins. 12(b)(5) 10-4-508(1)(b), $ C.R.C.P. because (Colo.1980). My reasons follow. C.R.S.2006, provides steps that CIGA into First, compen- the shoes of the insolvent workers' to the extent that CIGA sets off proceeds proceeds sation carrier. Even if those cover of Menor's benefits, Co., (Colo.2001); Huizar v. against his workers' Allstate Ins. (Colo.1998); if the will receive less than he would have cf. Am. Fam. he Murakami, carrier had remained business Mut. Ins. Co. v. insolvent 05CA1472, (Colo.App. 2007 WL 529244 No. As a pay and continued to those benefits. result, a Menor will suffer loss because 22, 2007)(discerning public policy Feb. no insolvency, reopen that unless he can his violation where statute expressly allowed in setoff). Moreover, with the carrier. This UM/UIM surer's "we are directed legisla- liberally in purpose Compen result contravenes one the construe the [Workers'] declaration, ... Act in "to avoid financial loss sation order to effectuate its humani tive insolvency ... on tarian to claimants because of the purpose assisting injured workers." Comm'n, 10, Conley v. Colo.App. 10-4-50%, Indus. 43 an insurer." Section C.R.S.2006. (1979). 12, 648, Indeed, majority problem my 601 in notes "the P.2d 650 While view, protect the financial claim conserving excep resources to workers' CIGA," 10-4-508(1)(a@) stability legislative §§ declaration tions 10-4- 508.5(1)(a), above, recognize incorporate this concern as counter- does not discussed this injured balancing any purpose policy assisting stated of the Act. "of workers" into the Act. But if a CIGA obtains setoff under Second, the limitations on CIGA's obli § then Menor loses benefit gations in other sections of the which proceeds payable under his set majority explain why cites to CIGA's tlement with that carrier because he will not 10-4-512(1) § prevails setoff receive future workers' bene over the duties of thе insolvent carrier that it acknowledged by fits the insolvent carrier's 10-4-508(1)(b), § per assumed under do not FAL. notably, suade me. Most the limitation on $100,000 Fourth, majority §in 10-4- "covered claims" over while the states that 10-4-512(1) C.R.S.2006, 508(1)(a), § provides "except that "was enacted to avoid windfall recoveries," duplicate the association shall the full amount of the same has been § arising Kolberg covered claim out of workers' said of 8-41-208. See Rains 845, compensation policies," Mfg. Corp., (Colo.App. and the limitation on P.2d 897 847 § aggregate liability 10-4 1994); Simon, Rocky Mountain Gen. v. 827 508.5(1)(a), C.R.S.2006, 629, similarly provides (Colo.App.1992). 632 Yet Colorado subrogation case law is uniform "except in the case of a claim for benefits pro § 8-41-208 does not reach UM/UIM coverage." under workers' See, Haight, (Cоlo.App. e.g., Fontenot v. 764 P.2d 378 v. Aetna ceeds. McMichael Ins. 1988), Co., majority, (Colo.App.1994), aff'd, cited did not 878 P.2d 61 906 involve (Colo.1995). compensation policy, proceeds I find P.2d are no thus 92 Such 10-4-508(1) inapposite § § its discussion of more or less a windfall under 8-41-208 10-4-512(1). here. The limitations based on the net worth than they are under Since 10-4-508(4) interpretation ago, §§ insureds- and 10-4- this more than a decade ($10 511(4), Assembly mil C.R.S.2006 million and the General has not amended 8- $25 lion, windfalls, respectively)-are very unlikely preclude although in 41-208 to such Moreover, 2002, 2008, injured volve workers. while that section was amended in Deleon, Tompkins two these sections could reduce the contrac 2004. See 197 Colo. (1979) 569, 571, 242, (legisla 595 P.2d 243-44 insurer, obligations tual of an insolvent here acquiesced prior ture is deemed to have thе insolvent insurer's Hmited succeeds, right, statutory. judicial interpretation to which CIGA of a statute that See 8-41-208. legislature changing amends without the ef- interpretation). feet of the Third, recognize strong Colorado cases public policy compensating Finally, legislative history claimants CIGA cites no Seq, coverage. adoption the full extent of from of the Act Colorado's why pre- eg., explain State Farm Mut. Auto. Ins. Co. v. would should Brekke, (Colo.2004); 10-4-508(1)(b) De in the vail over Co., Sentry Herrera v. context.© Ins. adopted that have

Courts other states recognize guaranty ‍‌​‌​​​​​​‌‌​​‌​‌‌​‌​​‌​‌​‌‌‌‌​​‌‌​​​‌​‌‌​‌‌​​‌‌‌‍act associa model judgment a default

tion remains bound

against, by, entered into and a settlement v. Florida

insolvent insurer. See Martino (Fla. Ass'n,

Ins. Guar. 383 So.2d (default judgment); Dist.Ct.App.1980) Bor (La.Ct. Carline,

chardt v. 617 So.2d (settlement); Kennedy,

App.1993) DeVane v. 519, 535, 519 205 W.Va. S.E.2d

(1999).

Further, unique of the because

limitation on Colorado and strong public policy favoring full

Colorado's benefits,

realization of I do not

consider the out-of-state cases cited

majority discussing provisions like 10-4-

512(1) dispositive power of CIGA's to set obligation

off such benefits

a covered workers' claim. sum, I recognize majority's inter-

pretation as reasonable because unlike other

provisions creates exception

no any guidance

claims. But without from Colo- history, legislative

rado I would hold complaint seeking $ setoff under 10-

4-512(1) against Menor's settle- proceeds

ment fails to state a claim because

CIGA stands in the shoes of the insolvent 10-4-508(1)(b),

carrier under and the insol-

vent carrier could not have reached those

proceeds. Colorado,

The PEOPLE of the State of

Plaintiff-Appellee, DiAngelo CANODY,

James

Defendant-Appellant.

No. 05CA0549. Appeals,

Colorado Court of

Div. VI.

May 2007.

Case Details

Case Name: Colorado Insurance Guaranty Ass'n v. Menor

Court Name: Colorado Court of Appeals

Date Published: May 3, 2007

Citation: 2007 WL 1288494

Docket Number: 05CA2483

Court Abbreviation: Colo. Ct. App.