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Mid-Century Insurance Co. v. Travelers Indemnity Co.6/21/1999
Certiorari to the Colorado Court of Appeals
EN BANC
JUSTICE RICE does not participate.
Mid-Century Insurance Company (Mid-Century) appeals from the court of appeals judgment in Travelers Indemnity Co. v. Mid-Century Insurance Co., 961 P.2d 509 (Colo. App. 1997). The court of appeals affirmed the judgment of the District Court for the City and County of Denver (trial court) awarding treble damages to Travelers Indemnity Company of Illinois (Travelers) for Mid-Century's willful and wanton refusal to pay personal injury protection (PIP) benefits to Elizabeth Burns (Burns). Burns suffered injuries as a passenger in an automobile owned and operated by Mid-Century's named insured, Terry Murray (Murray).() The court of appeals held that Travelers, as equitable subrogee of Burns, could collect treble damages under section 10-4-708(1.8), in connection with obtaining reimbursement of the PIP payments it made to her after Mid-Century, the primary insurer, refused to pay them.()
We conclude that Travelers may not retain the treble damages award as part of its equitable subrogation; this claim belongs to Burns. Because she was not a party to the litigation between the insurance carriers, we reverse and remand with directions that the trial court amend its judgment to delete the treble damages award to Travelers.
I.
This case arises out of a dispute between Mid-Century and Travelers regarding payment of PIP benefits to Burns. On February 20, 1992, Murray, a Mid-Century insured, drove Burns, a Travelers insured, to work. Prior to reaching Burns's place of employment, Murray's car was involved in an accident that caused Burns to suffer bodily injuries. Burns submitted a claim for PIP benefits to Mid-Century. Mid-Century denied insurance coverage to Burns based on its position that Travelers was the primary insurer for her PIP benefits.() Burns subsequently filed a claim with the excess carrier, Travelers; Travelers reserved its subrogation rights while agreeing to pay Burns her PIP benefits due from Mid-Century.
Thereafter, Travelers filed a complaint against Mid-Century for a declaration that Mid-Century was the primary provider of PIP benefits for Burns and for reimbursement of PIP benefits it paid to her. The trial court ordered the parties to refer their dispute to some form of alternative dispute resolution; they attempted mediation but did not resolve their differences. This litigation resumed.()
The trial court subsequently granted Travelers' motion for summary judgment, finding and concluding that Mid-Century was the primary insurer for Burns's PIP benefits. The trial court initially determined that the jury should decide the reasonableness and necessity of the PIP reimbursement amount claimed by Travelers. Prior to trial, Travelers amended its complaint to add a claim for recovery of treble damages, prejudgment interest, and attorneys fees, pursuant to section 10-4-708(1.8), claiming that Mid-Century willfully and wantonly failed to pay PIP benefits it owed to Burns. The trial court reconsidered its prior order for jury trial on the issue of reasonableness and necessity of the PIP reimbursement amount, granted summary judgment in favor of Travelers on that issue, and determined that the only issue remaining for trial was whether Mid-Century willfully and wantonly refused to pay PIP benefits to Burns for purposes of the statutory treble damages provision.
The trial court submitted to the jury a special interrogatory() to answer whether Mid-Century had willfully and wantonly refused to pay PIP benefits to Burns when due. The trial court's instruction read, in pertinent part:
here is only
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