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Colorado Court of Appeals Opinions
March 28, 2013

The Court of Appeals summaries are written for the Colorado Bar Association by licensed attorneys Teresa Wilkins (Denver) and Paul Sachs (Steamboat Springs). Please note that the summaries of Opinions of the Colorado Court of Appeals are provided as a service by the Colorado Bar Association and are not the official language of the Court. The Colorado Bar Association cannot guarantee the accuracy or completeness of the summaries.

2013 COA 36. No. 10CA0789. People v. Henson.
Restitution—Fair Market Value—Lost Wages.

Defendant Cassandra Henson appealed the district court’s order imposing restitution in the amount of $8628.31. The order was affirmed in part and reversed in part.

Henson stole the victim’s purse, which contained, among other personal property, a 1.5 carat European cut diamond ring that had belonged to the victim’s grandmother. Ultimately, the victim recovered the ring, but it was returned to her with the diamond in an unfinished state and approximately .2 carats smaller than it had been when it was stolen. The court ordered Henson to pay a total of $8,628.31 in restitution, including $2,925 in lost wages and $4,425.45 for the diamond ring. Henson appealed the restitution order.

Henson argued that the district court abused its discretion in awarding restitution for the victim’s lost wages based on the days that she investigated the theft of her purse, because there was no evidence that the victim had actually lost wages on those days. The evidence sufficiently supported the district court’s finding that work was available to the victim, and the victim was unable to work for six-and-one-half days due to her investigation of and the additional activities necessitated by Henson’s theft. The Court of Appeals concluded that the district court did not abuse its discretion in awarding restitution in the amount of $2,925 for the victim’s lost wages.

Henson next contended that the district court erred in awarding restitution in the amount of $4,425.45 for the diamond ring. The district court properly sought to determine the amount of restitution to be awarded for the ring by (1) adding the replacement value of the diamond and the cost to repair the mount and mount the diamond, and (2) subtracting from that sum the value of the returned ring. Here, there is ample evidence in the record to support the district court’s findings that the cost of the replacement diamond was $4,750.45 and the cost to fix the ring mount and to mount the new diamond was $175. The evidence does not support the district court’s finding, however, that the value of the returned ring, which the victim decided to keep, was $500. Therefore, the district court’s order awarding restitution for the ring was reversed, and the case was remanded with instructions that the court reconsider the amount of such restitution.

2013 COA 37. No. 10CA1349. People v. Torrez.
Sexual Assault on a Child—Sentence Enhancers—Illegal Sentence—Concurrent Sentence—Consecutive Sentence—Sexually Violent Predator.

Defendant pleaded guilty to fourteen sex offenses. Among these were five pairs of sex offenses in which, he alleged on appeal, the two counts in each pair were based on identical evidence. The trial court sentenced him to consecutive sentences for the two counts in each of the pairs. Defendant appealed these consecutive sentences. The judgment was affirmed, the sentence was affirmed in part and reversed in part, and the case was remanded.

Defendant argued that counts 3, 7, and 15 of the information charged only sentence enhancers, not substantive crimes. Here, counts 3, 7, and 15 charged both substantive crimes—sexual assault on a child (counts 3 and 15) and sexual assault on a child by one in a position of trust (count 7)—as well as sentence enhancers. The Court of Appeals concluded that these counts identified the elements of the crimes charged and closely tracked the statutory language. Counts 3 and 15 are substantially the same as the statutory language of the crime of sexual assault on a child found in CRS §18-3-405. Count 7, which charged defendant with the crime of sexual assault on a child by one in a position of trust, closely tracked the language of CRS § 18-3-405.3. This substantial similarity means that defendant was adequately notified of the charges he faced so that he could prepare his defense and prevent further prosecution on the same charges if he were to be convicted or acquitted. The additional presence of a sentence enhancer in these counts does not undercut this conclusion.

Defendant also argued that the trial court imposed an illegal sentence when it ordered that he serve consecutive prison terms for counts 2 and 3, 9 and 10, 11 and 12, 14 and 15, and 19 and 20. On its face, the information provides support for the conclusion that the two counts in each pair resulted from the same act, so the evidence of the act is identical. Subsection 408(3) controls this case, and it requires that defendant receive concurrent sentences for the convictions of the paired counts because they relied on identical evidence. Further, subsections 408(3) and 1004(5)(a) do not conflict and can be construed harmoniously. Thus, subsection 1004(5)(a) does not create an exception to the general rule found in subsection 408(3) that a court must impose concurrent sentences for counts based on identical evidence. Therefore, the consecutive sentences for the two counts in each pair are illegal, and, to remedy that problem, concurrent sentences must be imposed for the two counts in each pair. As a result, the aggregate indeterminate sentence in this case was reduced from 300 years to life to 192 years to life.

Defendant further argued that the trial court abused its discretion when it imposed a maximum sentence. The trial court expressly found that the heinous nature of defendant’s crimes, including defendant’s repeated physical and sexual abuse of twins and the fact that he impregnated the girl four times beginning at age 12, justified the maximum possible sentence. Furthermore, there was ample evidence to support the trial court’s finding that defendant was highly likely to reoffend. These findings supported a conclusion that defendant is a sexually violent predator.

2013 COA 38. No. 11CA0105. People v. Sinovcic.
Prosecution Costs—Medical Treatment—Costs of Care.

Defendant appealed the district court’s order assessing prosecution costs against him for hospital care he received after arrest but before booking. That part of the order was reversed and the case was remanded.

Defendant resisted arrest, and officers used a taser gun to subdue and handcuff him. Following his arrest, the officers transported defendant to a hospital for treatment. After defendant was medically cleared, the officers transported him to the Summit County Jail, where he was booked.

On appeal, defendant contended that the district court erred by assessing the hospital costs as costs of prosecution under CRS § 18-1.3-701(2)(j). It was undisputed that the medical treatment was provided before defendant was formally charged and before the criminal proceeding began. Because the costs of defendant’s medical care were not specifically listed in the statute, and were not litigation-related costs incurred after the filing of formal legal charges against a defendant, the court erred in awarding such costs. Furthermore, because defendant did not receive the treatment during his custody in a jail or correctional facility, the district court properly held that the medical costs do not constitute “costs of care” under CRS § 18-1.3-701(5)(a). The district court’s order was vacated as to the hospital costs, and the case was remanded to the district court to reduce the total assessed fines and costs by $2,717.

2013 COA 39. No. 11CA0363. Groh v. Westin Operator, LLC.
Negligence—Hotel Contract—Duty of Care—Reasonableness—Breach—Proximate Cause—Previous Opinion Withdrawn.

Plaintiff Jillian Groh appealed the summary judgment entered in favor of defendant Westin Operator, LLC (Westin). The judgment was reversed in part and the case was remanded for further proceedings.

The Westin asked Groh and her guests to leave the hotel after Groh and her friends, who were intoxicated, became loud in the hotel. After Westin employees escorted Groh and her friends out through the hotel's front entrance, one of Groh’s friends, who was also intoxicated, attempted to drive them home. Several miles from the hotel, she rear-ended a vehicle that was traveling well below the speed limit. Groh sustained severe and permanent injuries.

On appeal, Groh argued that the Westin did not act reasonably in evicting Groh and her friends from the hotel, and that the trial court abused its discretion in granting summary judgment to Westin on her negligence claim. A hotel must evict a guest in a reasonable manner, which precludes ejecting a guest into foreseeably dangerous circumstances resulting from either the guest’s condition or the environment.

Here, a jury could find that the Westin set in motion the chain of events that led to Groh’s injury by entering her room without permission; deciding to evict her notwithstanding the absence of any complaints from other guests; and then—despite knowing that she was intoxicated and was accompanied by others who also were intoxicated—escorting her from the premises rather than allowing her to wait for a taxi in the lobby, a public area. Therefore, although the Westin properly terminated its contract with Groh and then could evict her, the disputed facts and favorable inferences in the record preclude finding, as a matter of law, that it did so in a reasonable manner. Because a reasonable jury could find a breach of this duty on the present record, the trial court erred in granting summary judgment to Westin on Groh’s negligence claim.

2013 COA 40. No. 11CA0553. People v. Iversen.
Detention Facility—Medical Marijuana—Mens Rea—Prosecutorial Misconduct.

Defendant appealed the judgment of conviction entered on a jury verdict finding him guilty of attempting to introduce marijuana concentrate into a detention facility. The judgment was affirmed.

While detained in a community corrections facility, defendant fell off his bed (top bunk), breaking his hip and injuring his back. To deal with his pain, defendant visited a doctor, who gave him a certificate for medical marijuana. On his return to the community corrections facility, facility officials seized the jar of marijuana concentrate defendant had purchased with the doctor’s certificate.

Defendant contended that, in excluding evidence of his receipt of a doctor’s medical marijuana certificate, the trial court impermissibly infringed on his constitutional right to present a defense. CRS § 18-8-203 requires only that a defendant know that he or she is introducing or attempting to introduce contraband into the detention facility; he or she need not know that the conduct is unlawful. Therefore, the trial court did not err in excluding the evidence concerning defendant’s receipt of a medical marijuana certificate, because it was irrelevant to the crime charged.

Defendant also contended that the prosecutor violated his rights to due process and a fair trial by misstating the law, denigrating the defense, and misleading the jury. The prosecutor correctly stated the law and appropriately responded to defense counsel’s argument. Although the prosecution misled the jury during closing argument by suggesting that defendant’s doctor’s appointment was not legitimate, it was not plain error requiring reversal.

2013 COA 41. No. 11CA1377. People v. Fair.
Probation—Revocation—Sex Offender—Request for Stay.

Defendant appealed the district court’s orders revoking his probation and denying his motion to stay the probation revocation proceedings and the sentence imposed on revocation. The orders were affirmed.

Defendant pleaded guilty to sexual assault, a class 4 felony. The trial court agreed with the recommendations contained in the offense-specific evaluation and presentence investigation report,and sentenced defendant to sex offender intensive supervision probation (SOISP) for a term of ten years to life. As part of the sentence, the court ordered defendant to “complete sex offender specific treatment.” Subsequently, defendant’s probation officer filed a motion to revoke defendant’s probation based on defendant’s termination from offense-specific treatment for refusing to admit to committing the offense. The court thereafter revoked defendant’s probation.

Defendant argued that the district court abused its discretion in revoking his probation and sentencing him to a term in the Department of Corrections (DOC). Probation is a privilege, not a right. If a probationer violates any condition of probation, the order of probation may be revoked. Because defendant violated the terms of his probation to complete sex offender specific treatment, the court did not abuse its discretion in revoking his probation and sentencing him to the DOC.

Defendant further contended that the district court’s refusal to continue the revocation proceedings denied him the opportunity to properly litigate his motion to vacate his guilty plea. Defendant cited no legal authority to support this argument, nor did he demonstrate how he would be prevented from litigating his post-conviction motion after this current appeal is discharged. Under these circumstances, the district court did not abuse its discretion in denying his request.

2013 COA 42. No. 11CA2141. Burnett v. State of Colorado, Dep’t of Natural Resources, Div. of Parks and Outdoor Recreation.
Negligence—Camping—Immunity—Waiver—Colorado Governmental Immunity Act—Public Facility—Injuries—Dangerous Conditions.

Sara Burnett appealed the trial court’s judgment dismissing her negligence claim against the Colorado Department of Natural Resources (CDNR). The judgment was affirmed.

Burnett was injured while camping in a designated campground in Cherry Creek State Park, which is operated by the CDNR, when she was struck by a falling tree branch while sleeping in her tent. Burnett contended that the trial court erred in determining that the CDNR did not waive immunity for her injuries under the Colorado Governmental Immunity Act (CGIA). Although the campsite and campground were public facilities under the CGIA, the tree itself was not a public facility and the state retained immunity for injuries resulting from branches falling from trees in unimproved parts of a state park. Because there is no waiver of immunity under the CGIA for dangerous conditions in an unimproved area within a state park, the trial court did not err in dismissing Burnett’s negligence claim.

2013 COA 43. Nos. 11CA2202 & 12CA0192. In re the Marriage of Doe and Bruce, Jr.
Dissolution of Marriage—Retirement Funds—Employee Retirement Income Security Act—Qualified Domestic Relations Order—Noncompliance Order.

Husband appealed the trial court’s judgment holding that his retirement funds were not exempt from assignment under a qualified domestic relations order (QDRO) to satisfy domestic support arrearages, and sanctioning husband for noncompliance with the QRDO transfer. The judgment was affirmed.

The parties’ marriage ended in 2010 and husband was ordered to pay wife $5,000 per month in child support and $12,000 per month in maintenance for four years, followed by $8,000 per month for two years. Husband, a tax attorney and partner at a large law firm, did not comply, resulting in the accumulation of $101,486 in support arrearages and the suspension of his law license. Wife then moved for a QDRO to collect the arrearages from the funds held in husband’s Employee Retirement Income Security Act (ERISA) retirement plan at the law firm.

Husband objected, arguing that Colorado and federal law prohibited assigning his retirement funds to wife to pay the arrearages. The trial court disagreed and ordered the transfer. Husband did not comply, so the court ordered that the QDRO transfer be completed without his signature, that he reimburse wife for her attorney fees, and that the suspension of his previous contempt sentence for violating other court orders be lifted. He appealed.

ERISA generally prohibits assignment or alienation of retirement plan funds. However, both ERISA and the Internal Revenue Code (IRC) provide that the anti-alienation provisions do not apply to funds assigned to a former spouse under a QDRO. A QDRO is a “domestic relations order” that assigns to an alternate payee the right to receive all or a portion of the benefits payable to a participant. Such an order is defined as made pursuant to a state domestic relations law that concerns the provision of child or spousal support, or marital property rights of a former spouse of a plan participant. Here, the QDRO was entered to satisfy husband’s unpaid obligations relating to the dissolution, and therefore originated under Colorado domestic relations law, and not, as argued by husband, under Colorado collections law.

A QDRO also may be used under ERISA to enforce maintenance and child support obligations imposed under a divorce decree. Thus, the trial court did not violate the anti-alienation provisions of ERISA and the IRC by issuing the QDRO to enforce husband’s unpaid support obligations.

Husband argued that regardless of the QDRO exception to ERISA’s anti-alienation clause, his retirement benefits are exempt under Colorado law because CRS § 13-54-102(1)(s) exempts pension or retirement fund plans, including those subject to ERISA “from levy and sale under writ of attachment or writ of execution.” The Court of Appeals agreed with wife that the statute is preempted by ERISA because it imposes limitations not imposed by ERISA. It found that CRS § 13-54-101(1)(s) conflicts with ERISA and therefore is preempted by ERISA in accordance with conflict preemption to the extent it imposes additional limitations not imposed by ERISA on a spouse’s right to receive retirement plan funds under a QDRO.

Husband also contended that the trial court erred by entering the noncompliance order without a hearing after he did not cooperate with the QDRO transfer. The Court disagreed. Husband did not request such a hearing, so there was no error in the trial court not holding one.

2013 COA 44. No. 11CA2586. Adolescent and Family Institute of Colorado, Inc. v. Colorado Dep’t of Human Services, Div. of Behavioral Health.
Declaratory Judgment—Confidential Patient Information in Drug Alcohol Coordinated Data System.

Plaintiff, Adolescent and Family Institute of Colorado, Inc., appealed from the district court’s declaratory judgment in favor of defendant, Colorado Department of Human Services, Division of Behavioral Health, Alcohol and Drug Abuse Division (ADAD). The judgment was affirmed.

The Colorado Department of Human Services is responsible for the administration of human services programs in the state, including drug and alcohol abuse treatment programs. ADAD is responsible for formulating and administering a comprehensive state plan for alcohol and drug abuse programs. To do so, defendant is authorized to “establish standards for approved treatment facilities that receive public funds or that dispense controlled substances or both.” Such a facility must be licensed by defendant to operate in Colorado.

Plaintiff is a private, for-profit facility that provides treatment for patients with substance abuse and mental health disorders. Plaintiff does not dispense controlled substances and the record did not disclose that it received public funds. Nonetheless, it had been licensed by defendant since 1984 and sought to maintain that status.

All licensees are responsible for accurate and timely submission of required data to defendant, including Drug Alcohol Coordinated Data System (DACODS) client treatment admission and discharge records. The DACODS form contains a patient’s first and last name, date of birth, social security number, zip code, and other demographic information.

Defendant did not require private treatment facilities to comply with the DACODS submission requirement until 2005. Plaintiff sought a waiver of the requirement to ensure it did not violate state and federal laws protecting the confidentiality of patient records. The request was denied, and defendant initiated administrative license revocation proceedings, which were dismissed with prejudice. Plaintiff then initiated proceedings in district court, seeking a declaratory judgment to determine whether the DACODS submission requirement was preempted by state and federal laws because the regulation and laws conflicted. The trial court ruled that the submission requirement was not preempted because it was not covered by the statutory psychotherapist–patient privilege and fell within certain statutory exceptions to the general prohibition against disclosures. Plaintiff asked the court to stay any licensure action by defendant against it pending appeal; the stay was granted.

Plaintiff first argued it was error to find that the DACODS submission requirement does not violate CRS § 13-90-107(1)(g). The Court of Appeals disagreed. The plain language of the statute refers to a “witness” and is located in Title 13, “Courts and Court Procedure.” The section protects people listed from being questioned in a manner that will result in their disclosures being used at any stage in litigation. It is a “testimonial” privilege. It therefore does not apply to the DACODS submission requirement.

Plaintiff then argued it was error to conclude that the DACODS submission requirement does not violate 42 USC § 290dd-2 and its implementing regulations. The trial court had ruled that defendant could require that plaintiff submit the information on the DACODS forms, but because defendant did not have a data retention and destruction policy, defendant could not enforce the requirement until such a policy had been enacted. The Court found no error.

The district court found that the federal statute did not apply because defendant is the “administrative agency that has direct control” over plaintiff and therefore is exempt under the terms of the statute. The Court found no case law or definition of what “direct administrative control” means in this context. However, it found persuasive the definition used by the Social Security Administration (SSA) to determine whether an institution is public or private for SSA purposes. Using that as guidance, the Court held the district court erred in finding that defendant had direct administrative control over plaintiff.

The Court then examined whether defendant’s collection activities fell within the audit or evaluation exception. It found that although the DACODS information may be used in the aggregate for multiple submissions required to be made under the statute, each such submission was a separate audit or evaluation within the exception, and therefore it did not apply.

The Court turned to whether defendant’s collection of DACODS information complied with the statutory requirements regarding how confidential information must be collected, stored, and destroyed. Defendant had no such policy. The Court agreed with plaintiff that in the absence of such a policy, gathering the DACODS information is a violation of 42 CFR Part 2.

Finally, the Court concluded that the district court erred by issuing the stay order because there had been no exhaustion of administrative remedies and the order was overbroad in staying the agency from taking any action against plaintiff. However, in vacating the post-judgment stay and affirming the declaratory judgment, the Court noted that defendant cannot require DACODS submission compliance until it has a data retention and destruction policy.

2013 COA 45. No. 12CA0088. City of Golden v. Aramark Educational Services, LLC.
Sales Tax Assessment—Summary Judgment.

Plaintiffs, the City of Golden and Jeff Hansen, in his official capacity as Golden’s Finance Director, appealed the district court’s summary judgment in favor of defendant, Aramark Education Services, LLC (Aramark). The summary judgment was reversed and the case was remanded to the district court to reinstate the assessment.

The Colorado School of Mines (CSM) and Aramark entered into a Food Services Management Agreement (FSMA) in which they agreed that Aramark would be the exclusive operator of the food service facilities in the CSM Student Center, including the residential dining hall and the Food Court, the I-Club, and other facilities. Aramark operated the Slate Café, the I-Club, the Food Court, Java City, Mines Park Convenience Store, and CSM concessions.

No CSM representative ever handles or takes possession of food either before or after it reaches those facilities. Aramark provided food that generally fell into one of six categories for purposes of this case. Golden levies a sales tax on all sales of tangible property that occur in Golden, including food, unless specifically exempted under the Golden Municipal Code (GMC). Aramark only collects and remits sales tax on CSM campus food sales made with cash, checks, credit, or debit cards. Aramark argued that other sales (as parts of meal plans or added to ID cards) were exempt under the GMC for (1) wholesale sales and (2) direct sales to state institutions “in their governmental capacities only.” Golden disagreed that these were exempt and assessed sales tax.

Aramark protested and received a hearing before Golden’s Finance Director, who upheld the assessment. Aramark appealed to the Colorado Department of Revenue, which reversed. Golden appealed to the Denver District Court and on cross-motions for summary judgment, the district court entered summary judgment in Aramark’s favor. Golden appealed.

The Court of Appeals began by noting the presumption that taxation is the rule and exemption from taxation is the rare exception. All reasonable doubts are resolved against the exemption.

Golden argued that Aramark’s food sales on the CSM campus are wholesale sales. Aramark countered that it sells the food to CSM on a wholesale basis and CSM resells the food to its students, faculty, staff, and guests. The Court held that when individuals purchase food from Aramark-operated food service facilities on CSM’s campus, Aramark is making retail sales to the customers, which are subject to Golden’s sales tax. However, on the issue of when the food is provided as part of a CSM meal plan, a summer conference or summer camp meal plan, or using “Munch Money,” the issue is much closer. However, because Golden’s arguments have sufficient merit to engender reasonable doubts, the issue was resolved in Golden’s favor.

Golden also argued that it was error to conclude that Aramark was exempt from Golden’s sales tax under the GMC’s “governmental capacity” exemption. Such a sale must be a “direct sale” to a department or institution of the State of Colorado. CSM is an institution of the State of Colorado, but it is less clear whether Aramark directly sells its food to CSM. Regardless, the Court concluded that the sales do not qualify because they were not made to CSM in its “governmental capacity only.” CSM has the power to rent, lease, maintain, operate, and purchase buildings and facilities for dining. Aramark does not sell food to CSM in its capacity of doing those things.

The Court additionally found that the sales were made to CSM in both its governmental and proprietary capacities. It was purchasing food in its governmental capacity of educating students, as well as for the private advantage of the faculty and for itself as a legal entity. The summary judgment was reversed and the case was remanded with instructions to reinstate the tax assessment.

2013 COA 46. No. 12CA0571. Bachelor Gulch Operating Co., LLC v. Board of County Commissioners of Eagle County.
Tax Abatement/Refund—Subdivision of Property During a Tax Year.

Bachelor Gulch Operating Company, LLC (Bachelor Gulch) appealed the order of the Board of Assessment Appeals (BAA) denying its petition for an abatement or refund of taxes for tax year 2007. The order was affirmed.

Bachelor Gulch owns a substantial portion of the Ritz Carlton Hotel in Eagle County (hotel). For tax year 2007, the Eagle County Assessor assigned the hotel an actual value of approximately $47 million. As of January 1, 2007, which was the assessment date for tax year 2007, the hotel was a single unit for tax assessment purposes. During that year, two new plats were filed that subdivided the original hotel unit, ultimately creating fifty-one separate “child parcels.” Fifty of these were residential condominiums created out of existing hotel rooms. The other was what remained of the hotel after the subdivision (hotel child parcel).

Following the subdivisions, the Assessor allocated the $47 million among the child parcels in proportion to the square footage of each. Approximately $36 million was allocated to the hotel child parcel. Bachelor Gulch petitioned the Board of County Commissioners of Eagle County for an abatement or refund of taxes, which was rejected. Bachelor Gulch then appealed to the BAA, and the appeal was denied.

The Court of Appeals was confronted with the question of what procedure an assessor should use when a property is subdivided during the course of a particular tax year, after the initial valuation and before the next statutory assessment date or a revaluation due to unusual conditions. Colorado statutes provide for the biennial appraisal and valuation of real and personal property for property tax purposes. Bachelor Gulch argued that CRS § 39-5-125(1) applied and the Assessor was required to determine the actual value of the hotel child parcel for 2007. The Court found that the statute unambiguously allows an assessor to conduct a valuation only when it is discovered the taxable property had been omitted from the assessment roll. Because that was not the case here, CRS 39-5-125(1) does not apply.

The Court found no Colorado statute that addresses the question of what to do when a property is subdivided after the initial valuation but before the next assessment date. The State Property Tax Administrator has provided guidance in the Assessor’s Reference Library (ARL). Specifically, the ARL provides that although subdivision and condominium plats can be processed at any time during the year, “the original parcel value and classification must remain the same as assigned to the property on the January 1 assessment date.” In addition, if a project is subdivided after the notice of valuation deadline, the current actual value as of the assessment date is apportioned to the lots or units in the project. Having found that the ARL governs this situation, the Court held that the BAA correctly found that the Assessor complied with its provisions. The order was affirmed.

2013 COA 47. No. 12CA0934. Jordan v. Safeco Insurance Company of America, Inc.
Summary Judgment—Underinsured Motorist Benefits.

Plaintiffs Philip and Roberta Jordan appealed the district court’s summary judgment in favor of defendant Safeco Insurance Company of America, Inc. (Safeco) on their claim that Safeco unreasonably denied them underinsured motorist (UIM) benefits. The judgment was affirmed.

In 2009, the Jordans were involved in an automobile accident with J.F., a minor driver. The Jordans were injured and sued J.F. J.F.’s automobile insurance policy covered damages for injury to others up to $100,000 per person or $300,000 per accident. The Jordans settled for $60,000 and $38,500, respectively.

The Jordans sought underinsured motorist (UIM) benefits under their policy with Safeco, asserting that the policy covered all damages unpaid under the settlements, up to the policy limit. Safeco maintained that their UIM coverage would be triggered only if either of them had damages exceeding the $100,000 limit of J.F.’s policy, which neither did.

The Jordans sued Safeco, asserting claims for (1) common law bad faith breach of an insurance contract; (2) unreasonable delay and denial of payment of a claim in violation of CRS §§ 10-3-1115 and -1116; and (3) deceptive trade practice in violation of the Colorado Consumer Protection Act (CCPA). The Jordans moved for summary judgment under their unreasonable delay claims, and Safeco moved for summary judgment on the same claims and the bad faith claim. The parties stipulated that neither could prove damages in excess of $100,000, and the court granted the Jordans’ motion to dismiss their own CCPA claim.

The court granted Safeco’s motion for summary judgment. On appeal, the Jordans challenged only the grant of summary judgment in favor of Safeco under CRS §§ 10-3-1115 and -1116 and conceded that no material facts were disputed.

The Court of Appeals concluded that Safeco’s denial of coverage was permissible under the clear language of the policy, as well as the unambiguous terms of CRS § 10-4-609. The policy language unambiguously provides that payment of UIM benefits are only for damages above the tortfeasor’s insurance policy liability limit. Here, the damages did not exceed those limits.

The Jordans also argued that under CRS § 10-4-609, an insured’s good faith settlement with a tortfeasor necessarily exhausts the tortfeasor’s liability limits. That section, as amended January 1, 2008, requires that UIM coverage “shall be in addition to any legal liability coverage and shall cover the difference, if any, between the amount of the limits of any legal liability coverage and the amount of the damages sustained.” This is plain and unambiguous language. The trigger is the exhaustion of the tortfeasor’s “limits of . . . legal liability coverage.” The judgment was affirmed.

2013 COA 48. No. 12CA1443. United Airlines v. Industrial Claim Appeals Office.
Workers’ Compensation—$75,000 Statutory Cap for Temporary Total Disability Benefits.

In this workers’ compensation action, United Airlines (employer) sought review of a final order of the Industrial Claim Appeals Office (Panel) affirming the administrative law judge’s (ALJ) denial of employer’s request for reimbursement of temporary total disability (TTD) benefits in excess of the $75,000 statutory cap. The judgment was affirmed.

After claimant sustained a compensable injury in 2007, employer admitted liability for TTD benefits. TTD benefits ceased when claimant was released to return to work in May 2011, by which time she had been paid $99,484.14. Shortly thereafter, a physician performed a division-sponsored independent medical examination and placed claimant at maximum medical improvement (MMI) with a permanent impairment of 5% of the whole person.

Relying on CRS § 8-42-107.5, which caps combined TTD and permanent disability benefits at $75,000 for a claimant whose impairment rating is 25% or less of the whole person, employer sought to recover the $24,483.14 it had paid in excess of the cap. Claimant responded that under CRS § 8-42-105(3), employer was required to continue paying TTD benefits until she was released to work.

The ALJ concluded the cap did not apply as long as claimant was entitled to receive TTD benefits. The Panel agreed and the Court of Appeals affirmed.

The Workers’ Compensation Act (Act) limits the total disability benefits that a claimant whose personal impairment rating is less than 26% may receive. However, the Act provides that benefits continue until one of a number of conditions is met.

Employer argued that benefits paid in excess of the cap must be repaid once claimant’s entitlement to TTD benefits has ended. The Court rejected that contention. Here, claimant received benefits to which she was entitled, and the amount in excess of the cap therefore did not constitute an overpayment.

The Court also found unpersuasive employer’s argument that allowing claimant to keep more than $75,000 in TTD benefits violates equal protection. Equal protection guarantees that similarly situated persons will receive like treatment under the law. Here, no fundamental right is affected or suspect class involved, so a “traditional or rational basis standard of review” applies.

Employer asserted that two classes of claimants are created by the Panel’s decision: those whose benefits will be capped because their benefits had not exceeded the cap when they reached MMI or were released to work, and those whose benefits exceeded the cap before they reached MMI or were released to work. This disparity does not, however, violate equal protection. First, the two classes are not similarly situated. Those claimants who take longer to reach MMI are different from those who take a shorter time. Second, even if they were similarly situated, requiring a claimant to pay back benefits to which he or she was entitled and needed would create hardships at odds with the purposes of the Act. Proceedings to recover excess payments also could burden the administrative process. These reasons rationally justify the resulting difference in treatment. The order was affirmed.

Colorado Court of Appeals Opinions