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United Fire & Casualty Co. v. Armantrout2/23/1995
Defendant, Robert J. Armantrout, Sr., was injured in two separate accidents, both of which occurred while in the course of his employment. His employer, Combined Insurance Company of America, its insurer, National Union Fire Insurance Company (subrogees), paid him workers' compensation benefits. Armantrout sued a third-party tortfeasor seeking damages for his injuries. He settled that case. When the parties to this appeal disagreed as to the amount, if any, of the settlement that was to be subject to the subrogees' claim, the tortfeasor's insurer brought this interpleader action. Both Armantrout and the subrogees appeal the judgment entered by the trial court. We reverse and remand with directions.
In September 1984, while in the course of his employment, Armantrout sustained a severe injury to his elbow when he slipped and fell at a motel. He applied for and received workers' compensation benefits from the subrogees for those injuries. In 1986, he filed suit against the owners of the motel.
While that suit was pending, Armantrout was badly injured in a one-car accident on April 1, 1988, also in the course of his employment. He again received workers' compensation benefits from the subrogees. Armantrout alleged that he fell asleep at the wheel and hit a bridge abutment because of pain medication he was taking and sleep deprivation he was experiencing due to the elbow injury. Therefore, he sought to recover damages against the motel owners for his injuries in both accidents.
On April 14, 1988, Armantrout and the subrogees entered into an assignment agreement which provided, in part, that Armantrout would prosecute an action against third parties "who may be legally liable for his injuries, damages, and losses, as a result of his falling down the stairway at the [motel]," and that the subrogee insurer assigned to Armantrout its "claims against . . . third parties who may be legally responsible to claimant for injuries, damages, and losses arising out of Claimant's fall . . . at the . . . motel." Armantrout agreed to hold in trust for the benefit of the subrogee insurer, and to pay to it from any gross recovery, a sum equal to the insurer's liability under the Workers' Compensation Act. The agreement also delineated how attorneys fees and costs would be allocated between the parties. The terms of the assignment agreement made no express reference to the automobile accident, which had occurred some two weeks earlier.
The trial on the suit against the motel owner resulted in a verdict in Armantrout's favor which, when reduced by comparative negligence, netted him $401,379.70. That jury also determined, in response to a special interrogatory, that none of Armantrout's total damages resulted from the automobile accident.
In January 1989, after receipt of the verdict, but prior to entry of judgment, Armantrout, the motel owner, and its insurer settled the case, and stipulated to vacating the verdict. By the terms of that settlement, Armantrout was to receive $495,000 as consideration for releasing the motel owners from all claims relating to the slip and fall in 1984 and the vehicular accident that occurred in 1988. The agreement, however, did not allocate the total amount between the two accidents or specify what amount, if any, compensated Armantrout for damages such as pain and suffering. The $495,000 settlement figure was the product of negotiation between the parties, the amount in excess of the jury verdict of $401,379.70 being attributable to part of the interest and costs that had accrued.
Relying upon the statute, ยง 8-41-203(1), C.R.S. (1994 Cum. Supp.), and the assignment agreement, the subrogees asserted both a sta
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