DELTA AIR LINES, INC., Petitioner, v. William SCHOLLE, Respondent.
Case No. 19SC546
Supreme Court of Colorado
April 12, 2021
Rehearing Denied May 3, 2021
484 P.3d 695
Attorneys for Respondent: Bendinelli Law Firm, P.C., Marco F. Bendinelli, Jessica L. Schlatter, S. Paige Singleton, Westminster, Colorado
Attorneys for Amicus Curiae Coloradans Protecting Patient Access: Messner Reeves LLP, Kendra N. Beckwith, Darren D. Alberti, Denver, Colorado
Attorneys for Amici Curiae Colorado Defense Lawyers Association, the Colorado Civil Justice League, and the American Tort Reform Association: Messner Reeves LLP, Heather A. Salg, Denver, Colorado, Homiak Law LLC, Kevin D. Homiak, Denver, Colorado
Attorneys for Amicus Curiae The Colorado Trial Lawyers Association: Burg Simpson Eldredge Hersh & Jardine, P.C., Nelson P. Boyle, Jessica L. Derakhshanian, Englewood, Colorado, Ogborn Mihm LLP, Thomas Neville, Denver, Colorado
En Banc
JUSTICE HART delivered the Opinion of the Court.
¶1 In this case and a companion case also announced today, Gill v. Waltz, 2021 CO 21, ––– P.3d ––––, we consider the consequences for an injured employee‘s claims against a third-party tortfeasor when the employee‘s workers’ compensation insurer settles its subrogation claim with that tortfeasor.1 We conclude that when, as here, a workers’ compensation insurer settles its subrogation claim for reimbursement of medical expenses with a third-party tortfeasor, the injured employee‘s claim for past medical expenses is extinguished completely. Because the injured employee need not present evidence of either billed or paid medical expenses in the absence of a viable claim for such expenses, the collateral source rule is not implicated under these circumstances. The court of appeals therefore erred in remanding for a new trial on medical expenses based on a perceived misapplication of that rule. Accordingly, we reverse.
I. Facts and Procedural History
¶2 William Scholle worked for United Airlines, Inc., driving luggage tugs from the terminal to waiting planes, loading or unloading the bags, and returning to the terminal. In June 2012, Scholle was stopped at a stop sign on a return trip to the terminal when he was rear-ended by Daniel Moody, an employee of Delta Air Lines, Inc. Scholle sustained several serious injuries that required him to miss work and to receive medical treatment over the course of several years. He promptly applied for and received workers’ compensation insurance benefits from United, a self-insured employer under Colorado‘s workers’ compensation scheme. Pursuant to Colorado‘s workers’ compensation laws, United covered all medical expenses resulting from Scholle‘s on-the-job injuries, as well as a portion of his lost wages. Scholle‘s medical providers apparently produced bills for the services he received that reflected costs in excess of what is permitted by the workers’ compensation fee schedule, though they never tried to collect amounts beyond those permitted by the fee schedule.
¶3 In 2014, United exercised its subrogation right and sued Delta and Moody to recover the payments it made to and on behalf of Scholle. Scholle separately sued Delta and Moody for their negligence, seeking to recover compensation for economic damages, noneconomic damages, physical impairment, and disfigurement he suffered as a result of the collision. The trial court consolidated the actions. Eventually, Delta settled United‘s subrogation claim, and the trial court dismissed United‘s case. Scholle‘s claims against Moody were later dismissed as well, leaving only Scholle and Delta as parties.
¶4 In pretrial motions in limine, Scholle argued that the collateral source rule should preclude Delta from admitting evidence of the amount paid by Scholle‘s workers’ compensation insurance to cover the medical expenses arising from his injuries. Instead, Scholle contended, the higher amounts billed by his medical providers reflected the true reasonable value of the medical services provided to him and should be admissible at trial.
¶5 The trial court disagreed, reasoning that when Delta settled with United, it effectively paid Scholle‘s medical expenses, such that amounts paid for those expenses were no longer payments by a collateral source. The court further noted that, under the workers’ compensation statute, any amount billed for medical treatment in excess of the statutory fee schedule is “unlawful,” “void,” and “unenforceable.”
¶6 At trial, the jury returned a verdict for Scholle totaling approximately $1.5 million. This verdict was, however, set aside after the court granted Delta‘s motion for a new trial due to misconduct by Scholle‘s counsel, the details of which are not relevant here. In the resulting bench trial, the court awarded Scholle $64,750 in noneconomic damages and $194,426 in economic damages. In light of Delta‘s settlement with United, the court reduced the award by the amount that United paid in workers’ compensation, effectively reducing Scholle‘s economic damages award to zero.
¶7 A split division of the court of appeals reversed the judgment with respect to Scholle‘s medical expenses. Scholle v. Delta Air Lines, Inc., 2019 COA 81M, ¶ 93, ––– P.3d ––––. The majority began by explaining the evidentiary component of Colorado‘s collateral source rule, codified at
¶8 Workers’ compensation payments, the majority concluded, are collateral source benefits because an employee‘s entitlement to receive them arises out of the employment contract between the employee and employer. Id. at ¶ 33. Delta had not contributed to the contract between Scholle and United and was not entitled to “reap the benefit of a contract for which [it] paid no compensation.” Id. at ¶ 34 (quoting Gardenswartz, 242 P.3d at 1083). Therefore, the majority determined, the trial court should not have permitted Delta to introduce evidence of the amounts United paid Scholle‘s medical providers for the services he received. Id. at ¶ 32.
¶9 The division majority rejected Delta‘s argument that because any amount billed in excess of the workers’ compensation fee schedule is “void,” “unlawful,” and “unenforceable,”
¶10 Judge Richman dissented on this issue, arguing that the court did not need to reach the evidentiary question presented in this case because Scholle‘s claim for past medical expenses was extinguished when Delta settled United‘s subrogation claim. Id. at ¶ 96 (Richman, J., concurring in part and dissenting in part). Further, the dissent reasoned that because any amount billed in excess of the workers’ compensation fee schedule was void as a matter of law, Scholle should not be permitted to pursue any amounts for past medical expenses in excess of what United already paid. Id. at ¶ 97.
¶11 Delta petitioned this court for certiorari review, which we granted.
II. Analysis
¶12 After discussing the appropriate standard of review, we turn to the text of the
A. Standard of Review
¶13 The dispute between the parties in this case is a matter of statutory interpretation and is therefore subject to de novo review. People v. Baker, 2019 CO 97M, ¶ 13, 452 P.3d 759, 762. Our principal responsibility when construing a statute is “to ascertain and give effect to the General Assembly‘s purpose and intent.” Id. In doing so, “we look to the entire statutory scheme in order to give consistent, harmonious, and sensible effect to all of its parts, and we apply words and phrases in accordance with their plain and ordinary meanings.” Bill Barrett Corp. v. Lembke, 2020 CO 73, ¶ 14, 474 P.3d 46, 49 (quoting Blooming Terrace No. 1, LLC v. KH Blake St., LLC, 2019 CO 58, ¶ 11, 444 P.3d 749, 752). If the statutory language is clear and unambiguous, we apply it as written without needing to apply other rules of statutory interpretation. Id.
B. Applicable Law—The Workers’ Compensation Act
1. Medical Benefits Provided by Workers’ Compensation
¶14 The WCA provides for a range of benefits to employees injured on the job, including medical expenses, lost wages, disability benefits, compensation for disfigurement, and death and burial benefits. See
¶15 The statute goes on to require the Director of the Workers’ Compensation Division to publish “a schedule fixing the fees for which all ... medical services ... pertaining to injured employees under this section shall be compensated.”
[i]t is unlawful, void, and unenforceable as a debt for any physician, chiropractor, hospital, person, expert witness, reviewer, evaluator, or institution to contract with, bill, or charge any party for services, rendered in connection with injuries coming within the purview of this article or an applicable fee schedule, which are or may be in excess of said fee schedule unless such charges are approved by the director.
2. Subrogation Rights of a Workers’ Compensation Insurer
¶16 Under the WCA, if an employee injured by a third party elects to receive workers’
¶17 Subrogation is the “substitution of one person for another; that is, one person is allowed to stand in the shoes of another and assert that person‘s rights against the defendant.” Am. Fam. Mut. Ins. Co. v. DeWitt, 218 P.3d 318, 323 (Colo. 2009) (quoting Dodd, Law of Remedies, § 4.3(4) (2d ed. 1976)). Thus, the insurer‘s subrogation right is derivative of the employee‘s rights, merely allowing the insurer to take over the employee‘s claims to the extent that the statute permits. Tate v. Indus. Claim Appeals Off., 815 P.2d 15, 18 (Colo. 1991).
¶18 The scope of the subrogation right provided to insurers by the WCA includes “all compensation and all medical, hospital, dental, funeral, and other benefits and expenses to which the employee ...[is] entitled” under the Act.
¶19 An insurer‘s subrogation right gives it several options when an on-the-job injury was caused by a third party and the insurer has paid workers’ compensation benefits. The insurer may choose to wait and see whether the employee pursues tort claims against the third party for the injury. If the employee does pursue a claim, the insurer is entitled (though not required) to intervene in the suit.
¶20 The shared right to pursue a third-party tortfeasor for compensation established by this subrogation scheme is significantly different from the treatment of an insurer‘s subrogation rights in the traditional insurance context. For most personal injury claims, subrogation is permitted “only if the injured party has first been fully compensated for all damages arising out of the claim.”
¶21 Because a workers’ compensation insurer pursuing or settling a subrogation
¶22 Of course, the insurer‘s resolution of the subrogated claim only extinguishes an employee‘s claims to the extent they are co-extensive with that subrogated claim. Colo. Comp. Ins. Auth. v. Jorgenson, 992 P.2d 1156, 1163 (Colo. 2000) (explaining that “the right of subrogation applies to the claimant‘s rights to recover against the tortfeasor for the same injuries for which she is entitled to worker‘s compensation benefits“). The WCA is explicit that “[n]othing in this section shall be construed as limiting in any way the right of the injured employee to ... proceed against the third party causing the injury to recover any damages in excess of the subrogation rights described in this section.”
C. Application
¶23 United paid for all Scholle‘s medical care related to the on-the-job injury, as well as other compensation provided under the WCA. The airline then pursued its subrogation claim directly against the third-party tortfeasors. Delta ultimately settled with United, and United‘s subrogation claim was dismissed. Because United was standing in Scholle‘s shoes when it pursued the claim against Delta, United‘s settlement extinguished any claim that Scholle would have had to recover medical expense damages for services provided in relation to the on-the-job injury and paid by workers’ compensation. As the U.S. District Court for the District of Colorado explained when confronting a nearly identical circumstance, “[t]he settlement, regardless of the terms, concluded the dispute with the defendants to the extent of the injuries and losses that were covered under the workers’ compensation statute.” Lebsack, 2017 WL 5444568, at *3.
¶24 Scholle argues that United‘s settlement could, at most, extinguish his right to pursue the amount that it paid for medical expenses but could not extinguish his right to recover the difference between the amount his medical providers billed for the services they provided and the amount that United actually paid for those services. He asserts that this argument is supported by the language of
¶25 We are unconvinced by this argument. The
¶26 Our conclusion is bolstered by the fact that the
¶27 For two reasons, this circumstance is easily distinguishable from the one we confronted in Gardenswartz, where we concluded that even though the plaintiff “could not be billed the difference between the amounts billed by his healthcare providers and his insurer‘s actual payments,” he could nonetheless seek to prove the reasonable value of the medical services he received by offering evidence of the amounts billed for those services. 242 P.3d at 1085. First, the question in Gardenswartz was simply what evidence could be presented to prove the reasonable value of medical services provided. Here, because Scholle‘s claim for damages arising out of medical services has been extinguished, the evidentiary question is not at issue. Second, there is a meaningful difference between amounts that cannot, under the terms of a private contract, be collected from an injured party and amounts that are declared void by statute. A bill that is void is more than uncollectable—it is “of no legal effect[,] ... an absolute nullity.” Void, Black‘s Law Dictionary (11th ed. 2019). Scholle‘s claim to damages for medical expenses above and beyond the claim settled by United can therefore not be rescued by analogy to Gardenswartz and our other collateral source rule case law.
¶28 Of course, Scholle is entitled to seek any damages from Delta that were not extinguished by the settlement of United‘s subrogation claim. These could include noneconomic damages or any economic damages not fully covered by workers’ compensation such as lost wages, physical impairment, disfigurement, and noncovered medical services.
¶29 Because Scholle‘s claim to damages for medical expenses was extinguished by United‘s settlement of its subrogation claim, there is no reason to present evidence of either the amounts billed or the amounts paid for medical expenses. Thus, the applicability of the pre-verdict evidentiary component of the collateral source rule is not at issue.
III. Conclusion
¶30 For the foregoing reasons, we conclude that an injured employee‘s claim to recover damages for past medical expenses is extinguished when the workers’ compensation insurer resolves its subrogation claim with the third-party tortfeasor. Because the injured employee no longer has a claim for damages arising out of past medical expenses covered by workers’ compensation, there is no reason to present evidence of either amounts billed or amounts paid for medical services, and the pre-verdict evidentiary component of the collateral source rule is not at issue. Accordingly, we reverse the judgment of the division below and remand the case for further proceedings consistent with this opinion.
JUSTICE GABRIEL dissents, and JUSTICE HOOD and JUSTICE BERKENKOTTER join in the dissent.
DELTA AIR LINES, INC. v. SCHOLLE
484 P.3d 695
JUSTICE GABRIEL, dissenting.
¶31 The majority concludes that when a workers’ compensation insurer settles its subrogated interest with a tortfeasor, the injured party‘s claim for past medical expenses is extinguished completely. Maj. op. ¶¶ 1, 30. From this premise, the majority concludes that plaintiff William Scholle had no reason to present evidence of either billed or paid medical expenses (because he no longer had a viable claim for those expenses) and therefore the collateral source rule was not implicated in this case. Id. at ¶¶ 1, 29.
¶32 I disagree with the majority‘s premise, and therefore I disagree with its conclusion. Unlike the majority, I perceive nothing in the applicable statutes that supports a conclusion that Scholle‘s claim for past medical expenses against defendant Delta Air Lines, Inc. was extinguished in full when United Airlines, as the workers’ compensation provider, settled its subrogated interest with Delta. To the contrary, I believe that the pertinent statutes expressly preserved Scholle‘s claim, subject to Delta‘s right to a setoff.
¶33 Accordingly, unlike the majority, I would conclude that the collateral source rule is at issue here, and applying that rule to the facts before us, I would further conclude that evidence of the amount of workers’ compensation benefits that United paid would be inadmissible in the trial of any claim by Scholle against Delta and, conversely, evidence of the reasonable value of the medical services provided to Scholle would be admissible in the trial of such a claim.
¶34 I would therefore affirm the division‘s judgment, and thus, I respectfully dissent.
I. Analysis
¶35 The majority accurately sets forth the relevant factual background, and I need not repeat that recitation here. I therefore will begin by explaining why I believe the majority errs in concluding that United‘s settlement of its subrogated interest with Delta extinguishes Scholle‘s entire cause of action for past medical expenses against Delta. Concluding then that the collateral source rule applies in this case, I offer my view as to how it should apply. I end by addressing what I perceive to be the concerning policy ramifications of the majority‘s ruling.
A. United‘s Subrogated Interest
¶36 The majority concludes that United‘s settlement of its subrogated interest with Delta completely extinguished Scholle‘s entire claim for past medical expenses. I respectfully disagree.
¶37
If any employee entitled to compensation under articles 40 to 47 of this title is injured or killed by the negligence or wrong of another not in the same employ, such injured employee or, in case of death, such employee‘s dependents, may take compensation under said articles and may also pursue a remedy against the other person to recover any damages in excess of the compensation available under said articles.
(Emphasis added.)
¶38 On its face, this provision expressly preserves Scholle‘s right to recover from Delta any damages in excess of the compensation available under the workers’ compensation statutes. See also Colo. Comp. Ins. Auth. v. Jorgensen, 992 P.2d 1156, 1162 (Colo. 2000) (“The
¶39
The payment of compensation pursuant to articles 40 to 47 of this title shall operate as and be an assignment of the cause of action against such other person to [the workers’ compensation insurer or fund], if compensation is payable from said funds, and otherwise to the person, association, corporation, or insurance carrier liable for the payment of such compensation. 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.
(Emphasis added.)
¶40 The majority construes this provision to mean that once United paid compensation benefits to Scholle, it became subrogated to Scholle‘s claim for all past medical expenses. Maj. op. ¶¶ 16-18, 21-23, 25. Accordingly, in the majority‘s view, when United settled its subrogated interest with Delta, Scholle‘s claim for past medical benefits was completely extinguished. Id. at ¶¶ 23, 25. But that is not what
¶41 Our case law has long made clear that this statute effects a partial assignment of plaintiff‘s claims. See, e.g., Jorgensen, 992 P.2d at 1165 (concluding that a workers’ compensation insurer‘s subrogation rights do not extend to every right to recovery that an injured employee and his or her dependents may have against a tortfeasor but rather reach only the employee‘s rights to recover the economic damages for which the carrier is liable or has assumed liability); see also Chavez, 275 P.3d at 740 (characterizing the
¶42
¶43 Accordingly, unlike the majority, I do not believe that United was subrogated to all of Scholle‘s rights against Delta to recover past medical expenses. Nor did United obtain an assignment of the entirety of Scholle‘s cause of action against Delta. Rather, United was subrogated only to the extent of the amounts that it paid on Scholle‘s behalf. And
¶44 For these reasons, I do not agree with the majority that United‘s settlement extinguished Scholle‘s entire claim for past medical expenses. Rather, it extinguished Scholle‘s claim only up to the amount of benefits that United paid him. And this, in turn, entitled Delta to a post-verdict setoff of that amount from any judgment that Scholle might ultimately recover against Delta.
¶45 Because I do not agree that United‘s settlement with Delta extinguished Scholle‘s entire claim for past medical expenses, I believe that Scholle retained part of that claim and therefore the collateral source rule is, in fact, at issue in this case.
¶46 In so concluding, I am not persuaded by the majority‘s reliance on
¶47 I am also unpersuaded by the majority‘s reliance on Ferrellgas, Inc. v. Yeiser, 247 P.3d 1022 (Colo. 2011), and Lebsack v. Rios, No. 16-cv-02356-RBJ, 2017 WL 5444568 (D. Colo. Nov. 14, 2017).
¶48 Ferrellgas did not involve a partial assignment or subrogated interest under the
¶49 Thereafter, Yeiser sued Ferrellgas for breach of contract, and a jury returned a verdict of approximately $314,000. Id. at 1025. The issue then became whether Ferrellgas was entitled to a setoff of the $212,000 that Farmers had paid Yeiser, or of only the $173,000 that Ferrellgas had paid to settle Farmers’ subrogation claim. Id. at 1027.
¶50 We ultimately concluded that Farmers had a subrogated interest in the $212,000 that it had paid and that, because it stood in Yeiser‘s shoes as to that amount, once it settled its interest, any claim that Yeiser had to recover that amount had been extinguished. Id. at 1027-28. Therefore, Ferrellgas was entitled to set off the full $212,000. Id. at 1028.
¶51 In my view, Ferrellgas does not support Delta‘s (or the majority‘s) view in the case now before us. Indeed, I believe that it supports my position. In particular, to the extent that Yeiser‘s right to recover any part of Farmers’ subrogated interest in Ferrellgas was extinguished, it was extinguished only to the extent of the benefits that Farmers had paid Yeiser, regardless of any amount that Farmers had agreed to accept from Ferrellgas to settle that subrogated interest. Id. at 1027-28.
¶52 The same is true in this case. For the reasons discussed above, United‘s subrogated interest was limited to the amount that it paid Scholle, in the same way that Farmers’ subrogated interest in Ferrellgas was limited to the amount that it paid Yeiser. When United settled its subrogated interest with Delta, it extinguished any right that Scholle may have had to recover the amount of benefits that United had paid him. Thus, Delta is entitled to a setoff of that amount, just like Ferrellgas was entitled to set off the full amount that Farmers had paid Yeiser. Nothing in Ferrellgas, however, said that Yeiser‘s entire claim was extinguished. To the contrary, Yeiser pursued her breach of contract claim against Ferrellgas and recovered over $100,000 more than the benefits that Farmers had paid her. In my view, Scholle is likewise entitled to pursue any damages that he could prove in excess of the amount that United had paid him.
¶53 In Lebsack, 2017 WL 5444568, at *1, an injured plaintiff had recovered workers’ compensation benefits and then sued the tortfeasors, but in the interim, the insurer sued the tortfeasors to recover its subrogated interest and then settled that claim. The question became whether the insurer‘s settlement extinguished both its subrogated interest and the plaintiff‘s claims or just its subrogated interest. Id. at *3. In an order, the federal district court concluded that the settlement extinguished the plaintiff‘s entire claim, citing Ferrellgas without any analysis or discussion of the above-noted distinctions between the claims at issue in that case and those before the federal court. Id.
¶54 We, of course, are not bound by the federal court‘s interpretation of our state‘s law. See First Nat‘l Bank v. Rostek, 182 Colo. 437, 514 P.2d 314, 316 n.1 (1973). In any event, for the reasons set forth above, I respectfully believe that the Lebsack court misread our applicable statutes and our decision
¶55 For these reasons, I believe that the collateral source rule is at issue in this case, and I proceed to explain how I would apply it here.
B. Collateral Source Rule
¶56 Colorado‘s collateral source rule includes two parts: (1) a pre-verdict evidentiary component, which is now codified at
¶57 Prior to the enactment of
¶58 To effectuate this policy goal, the common-law rule applied pre-verdict to preclude evidence of the plaintiffs’ receipt of collateral source benefits. Id. at ¶ 12, 276 P.3d at 565. The reason for such an exclusion was that such evidence could have led the fact-finder to reduce the plaintiffs’ damages award based on the fact that they had already recovered their losses from the collateral source. Id. In addition, the collateral source rule applied post-verdict to prohibit a trial court from reducing successful plaintiffs’ damages based on their receipt of collateral source benefits. Id. at ¶ 11, 276 P.3d at 565.
¶59 The application of the foregoing common-law collateral source rule often resulted in tort plaintiffs’ double recovery of medical expenses because a collateral source would pay the expenses incurred as a result of a tortfeasor‘s conduct and the plaintiffs could then recover the same expenses from the tortfeasor in the form of damages. Id. at ¶ 14, 276 P.3d at 565. To avoid this result, the legislature enacted
¶60
¶61
¶62 Applying the foregoing principles here, I do not believe that one could reasonably deny that the workers’ compensation benefits in this case were payments from a collateral source. Indeed, we made this clear eighty years ago. See Riss & Co. v. Anderson, 108 Colo. 78, 114 P.2d 278, 281 (1941) (stating that if a plaintiff‘s benefit plan is a part of the plaintiff‘s compensation as an employee, “then he bought and paid for such insurance” and, in that case, “a tortfeasor may not plead
¶63 Under our long-settled precedent, Delta may not take advantage of these capped rates, which existed solely because Scholle had insurance. See Volunteers of Am. Colo. Branch v. Gardenswartz, 242 P.3d 1080, 1083 (Colo. 2010) (noting that the collateral source rule prevented the tortfeasor from standing in the plaintiff‘s shoes and enjoying the same discounted medical rates that the plaintiff‘s insurer received). Indeed, to conclude otherwise would allow exactly what our collateral source rule has long prohibited. See id. ; see also Crossgrove, ¶ 16, 276 P.3d at 566 (noting that the collateral source rule prevents a tortfeasor from “benefitting from the plaintiff‘s purchase of insurance“).
¶64 Accordingly, I believe that the collateral source rule applies here, and under that rule‘s express language, the fact or amount of workers’ compensation benefits paid by United would be inadmissible in any action by Scholle against Delta. See
¶65 In so concluding, I am not persuaded by Delta‘s contention that the actual value of the provider‘s services is inadmissible because (1) Delta contributed to that collateral source payment and (2) the workers’ compensation schedule renders unlawful any billing above the scheduled amounts. I address these contentions in turn.
¶66 First, when our cases speak of a party‘s contributing to collateral source benefits, they are referring to, for example, payment of the premiums for the insurance coverage that the plaintiff had purchased. See, e.g., Gardenswartz, 242 P.3d at 1084-85 (noting that the contract exception to the collateral source rule denies a setoff of benefits resulting from a private insurance contract for which the injured party had paid monetary premiums); see also id. at 1083 (“If either party is to receive a windfall, the rule awards it to the injured plaintiff who was wise enough or fortunate enough to secure compensation from an independent source, and not to the tortfeasor, who has done nothing to provide the compensation and seeks only to take advantage of third-party benefits obtained by the plaintiff.“).
¶67 Here, Delta contributed nothing toward Scholle‘s workers’ compensation policy. Nor can its settlement with United be deemed to have done so. If it could, then any tortfeasor‘s partial settlement with an insurance carrier would be deemed to render the collateral source rule inapplicable. I am aware of no authority supporting such a position, and Delta cites no such authority.
¶68 Second, notwithstanding Delta‘s assertion to the contrary, the workers’ compensation schedule did not render evidence of the value of the provider‘s services inadmissible. In this regard, Gardenswartz and Forfar are instructive.
¶69 In Gardenswartz, 242 P.3d at 1082, the plaintiff‘s insurer had negotiated for substantially discounted rates with the plaintiff‘s
¶70 The same principle applies here. Specifically, Delta is seeking to enjoy the capped medical rates that the providers were required to accept as a result of the fact that Scholle had workers’ compensation insurance. Absent such insurance, however, Scholle would have been required to pay the full value of his providers’ medical services, and Delta is not entitled to take advantage of the capped rates resulting from the existence of workers’ compensation insurance (for which Scholle gave consideration in the form of his service as a United employee).
¶71 Forfar, ¶¶ 14-30, 436 P.3d at 584-86, is even more directly on point. In Forfar, the injured plaintiff‘s medical providers were covered by Medicare Plan B and thus could not recover more than Medicare allowed for their services. Id. at ¶ 14, 436 P.3d at 584. The question before the division was whether the collateral source rule‘s pre-verdict evidentiary component applied to the Medicare benefits paid, such that the plaintiff was permitted to introduce evidence of the reasonable value of the medical services that he received, notwithstanding the Medicare limits. Id. at ¶ 20, 436 P.3d at 585. The division concluded that the evidentiary bar applied because (1) the Medicare payments fell within the definition of a collateral source; (2) wrongdoers may not enjoy benefits procured by an injured plaintiff; and (3) a majority of courts have concluded that plaintiffs are entitled to claim and recover the full amount of the reasonable medical expenses charged, based on the reasonable value of such services. Id. at ¶¶ 21-28, 436 P.3d at 585-86. Thus, the division concluded that the Medicare benefits were a collateral source inadmissible as evidence under
¶72 In my view, the Forfar division‘s reasoning is persuasive and equally applicable here. The providers in this case, like those in Forfar, could not recover more than the amounts set forth by law. Because, however, the workers’ compensation benefits at issue were payments from a collateral source, the fact that such capped rates exist would not preclude Scholle from introducing evidence of the reasonable value of the services rendered to him.
¶73 I am likewise unpersuaded by Delta‘s assertion that evidence of the actual value of the medical services provided is tantamount to the enforcement of an illegal contract. It is not. Rather, it amounts to evidence of the reasonable value of the services rendered to Scholle absent workers’ compensation insurance, which our courts have said is the amount an injured party may recover. Gardenswartz, 242 P.3d at 1087-88 ; Forfar, ¶¶ 30-44, 436 P.3d at 586-88.
¶74 By contending that it was entitled to admit into evidence the amount of the benefits paid, Delta sought to take advantage of the fact that Scholle had insurance, but, as noted above, we have long held that a tortfeasor is not entitled to do so. See, e.g., Crossgrove, ¶ 16, 276 P.3d at 566 ; Gardenswartz, 242 P.3d at 1083-85. Indeed, holding to the contrary would overturn decades of our settled precedent.
¶75 For these reasons, I believe that the collateral source rule applies in this case and that it (1) precludes the admission in any action by Scholle against Delta of evidence of the amount of medical expenses paid by United and (2) permits Scholle to introduce
C. Policy Concerns
¶76 In reaching a contrary result, the majority‘s decision implicates what are, for me, a number of significant policy concerns.
¶77 First, for the reasons set forth above, I believe that the majority‘s decision undermines decades of settled precedent regarding the collateral source rule, and I thus expect that this decision will generate significant litigation in this area, to the detriment of the injured parties whom our legislature was trying to make whole.
¶78 Second, I fear that the majority‘s opinion will result in workers’ compensation insurers and tortfeasors in cases like this racing to settle the insurers’ subrogated interests, for the sole purpose of limiting the injured parties’ recovery. Again, this strikes me as contrary to what the legislature was trying to achieve when it expressly provided for dual claims, one owned by the employee and one owned by the insurance carrier. See Chavez, 275 P.3d at 740 ; see also Gardenswartz, 242 P.3d at 1082-83 (noting that an injured plaintiff should be made whole by the tortfeasor, and not by a combination of compensation received from the tortfeasor and collateral sources, because the wrongdoer should not be permitted to benefit from a contract for which it paid no compensation).
¶79 In any event, this case highlights for me the need for legislative clarification as to the nature of workers’ compensation carriers’ subrogated interests and the claims that injured workers retain when they accept workers’ compensation benefits and then separately pursue claims against tortfeasors. I respectfully urge the legislature to take up this issue.
II. Conclusion
¶80 For the foregoing reasons, I perceive nothing in the applicable statutes that supports a conclusion that Scholle‘s claim against Delta for past medical expenses was extinguished in full once United, as the workers’ compensation provider, settled its subrogated interest with Delta. To the contrary, I believe that the pertinent statutes expressly preserved Scholle‘s claim, subject to Delta‘s right to a setoff of the amount that United paid Scholle. I would thus conclude that the collateral source rule applies here and that evidence of the amount of workers’ compensation benefits that United paid would be inadmissible in the trial of any claim by Scholle against Delta and, conversely, evidence of the reasonable value of the medical services provided to Scholle would be admissible in the trial of such a claim.
¶81 Accordingly, I would affirm the judgment of the division below, and therefore, I respectfully dissent.
I am authorized to state that JUSTICE HOOD and JUSTICE BERKENKOTTER join in this dissent.
1 2Notes
We granted certiorari to review the following issue:Whether, in an action brought by an injured worker against a third-party tortfeasor, the collateral source rule as codified at
13-21-111.6, C.R.S. (2019) , precludes admission of the amount of medical expenses paid by the plaintiff‘s workers’ compensation insurer, where (1) amounts billed in excess of scheduled healthcare fees and rates allowed under the Workers’ Compensation Act are unlawful, void, and unenforceable, and (2) the third-party defendant has already extinguished the workers’ compensation insurer‘s subrogated interest in medical expenses paid by settling the insurer‘s claim.
Whether, in an action brought by an injured worker against a third-party tortfeasor, the collateral source rule as codified at
13-21-111.6, C.R.S. (2019) , precludes admission of the amount of medical expenses paid by the plaintiff‘s workers’ compensation insurer, where (1) amounts billed in excess of scheduled healthcare fees and rates allowed under the Workers’ Compensation Act are unlawful, void, and unenforceable, and (2) the third-party defendant has already extinguished the workers’ compensation insurer‘s subrogated interest in medical expenses paid by settling the insurer‘s claim.