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Page 1 | Page 2 | Back to News |
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Settlement apportionment is separate cause of action
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Harrison v. Pinnacol Assurance, 02CA1682 (March 11, 2004): Claimant sustained an industrial injury in 1993. The workers' compensation insurer, Pinnacol, admitted liability and paid benefits to claimant. Claimant ultimately settled with the third party responsible for the accident. Pinnacol approved the settlement, which was not apportioned between economic and noneconomic damages. In 1994 and 1996, Pinnacol filed final admissions of liability (FALs), both of which asserted an offset under Pinnacol's subrogation rights and stated that Pinnacol would resume payment of benefits when the net settlement amount obtained by claimant was recovered. Claimant objected to both FALs, but made no specific objection to
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Pinnacol's asserted offset.
In 2001, claimant filed an application for hearing (AH) and requested that an administrative law judge (ALJ) apportion the settlement between economic and noneconomic damages. Pinnacol moved to dismiss the AH on the grounds that only the district court had jurisdiction to apportion. Claimant opposed the motion, but filed an action in district court to seek apportionment there. The ALJ deferred ruling on the motion pending outcome of the district court action. Pinnacol then moved to dismiss the district court action based on the two-year tort statute of limitations, C.R.S. § 13-80-102(1)(a). The trial court granted Pinnacol's motion and held that claimant's action was barred because it accrued upon
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the filing of the FAL in 1994.
The court of appeals affirmed. The court agreed that claimant's district court action was untimely. The court held that an apportionment case is a separate cause of action, and not an ancillary proceeding to a workers' compensation claim. Thus, claimant's objections to the FALs and the fact that the workers' compensation claim remained open were irrelevant. The court concluded that by the time Pinnacol filed the second FAL, claimant knew or should have known that he needed to commence an apportionment action if he wanted to avoid the harm resulting from the offset against noneconomic damages obtained in the settlement.
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Follow-up DIME procedures clarified
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Perales v. Napier Enterprises, Inc., (ICAO, December 12, 2003): The authorized treating physician (ATP) placed claimant at maximum medical improvement (MMI) with no impairment. Insurer filed a FAL. Claimant objected and requested a Division of Workers' Compensation (DWC) independent medical examination (DIME). The DIME physician concluded that claimant was not at MMI. Insurer referred claimant to a second ATP who later placed claimant at MMI with a 20% extremity rating. Insurer filed a FAL based on the 20% rating. Claimant objected to the second FAL but did not request a follow-up DIME within thirty days. Two months later claimant scheduled a "repeat IME" with the DIME physician. Respondents moved to strike the DIME as
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untimely, but a Prehearing ALJ (PALJ) allowed the DIME to proceed. An ALJ later reversed the PALJ's decision and struck the follow-up DIME.
ICAO affirmed. ICAO held that when a DIME physician determines that a claimant is not at MMI, the parties are returned to the same legal position which existed prior to the ATP's original MMI determination. Thus, when the ATP makes a second MMI determination and rating, the respondents must either file a FAL consistent with the ATP's report or request a follow-up DIME. If respondents file a FAL, then claimant has thirty days to request a follow-up DIME to challenge the ATP's MMI and impairment determinations.
On February 24, 2004, DWC Director Mary Ann Whiteside issued an Interpretive
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Bulletin that amends the DWC's policy regarding follow-up DIMEs to adhere to ICAO's decision in this case.
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