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County Workers Compensation Pool v. Davis9/16/1991
The question in this case is whether a workers' compensation insurer that has paid workers' compensation benefits to a worker for injuries sustained in the course of employment may be assessed a portion of the worker's attorney fees and court costs incurred in prosecuting a tort claim against the person who caused the worker's injuries when the tort claim is settled for an amount in excess of the insurer's liability for workers' compensation benefits. In Colorado Counties, Inc. v. Davis, 801 P.2d 10 (Colo. App. 1990), the court of appeals affirmed a judgment against the insurer for a pro rata share of the attorney fees and court costs incurred by the worker and held that the order of assessment was justified by considerations of fundamental fairness to the worker and the prevention of unjust enrichment to the insurer. We affirm the judgment of the court of appeals.
I.
The facts are undisputed. On January 16, 1987, the plaintiff, Wayne Davis, was riding as a passenger in an automobile and was injured when the defendant, Robert Emick, drove his automobile into the vehicle occupied by Davis. At the time of the accident Davis was acting in the course and scope of his employment with Prowers County and filed a workers' compensation claim with Colorado Counties, Inc., also known as County Workers Compensation Pool (hereinafter referred to as CCI), which was the insurer for Prowers County. CCI paid Davis $10,006.31 in workers' compensation benefits.
In April 1988, Davis filed a tort claim in negligence against Emick for the injuries and damages that Davis sustained in the accident. Davis' attorney prepared the pleadings, took several depositions, generally prepared the case for trial, and engaged in settlement negotiations with Emick's lawyer. Although CCI did not join or participate in the tort litigation, CCI took the position that it was entitled to receive a 100% reimbursement for the workers' compensation benefits previously paid to Davis and filed a complaint in intervention to protect its right to a full reimbursement. Davis responded to CCI's complaint in intervention by claiming that CCI, in the event of a favorable judgment or settlement in the tort action against Emick, should be required to bear a proportionate share of the litigation expenses incurred by Davis. Davis' tort claim against Emick was ultimately settled for $35,000.00, which was far in excess of the $10,006.31 previously paid by CCI to Davis in workers' compensation benefits. Shortly before the settlement Davis filed a motion requesting the trial court to determine whether CCI should be required to pay a proportionate share of Davis' attorney fees and court costs.
The district court conducted a hearing on Davis' motion and ruled that CCI was responsible for a proportionate share of Davis' attorney fees and court costs. In so ruling, the district court noted that CCI did not actively participate in the prosecution of the tort litigation, that the settlement was achieved solely through the efforts of Davis' attorney, that CCI derived a monetary benefit from the settlement, and that CCI would be unjustly enriched if it did not contribute to a portion of Davis' litigation expenses. The district court, after the settlement was effected, ordered CCI to pay Davis one-third of the gross amount of its workers' compensation subrogation interest of $10,006.31, or $3,302.00, as reimbursement for a share of Davis' attorney fees, and also $168.38 as reimbursement for a proportionate share of Davis' court costs of $590.81. The district court accordingly entered a judgment in favor of Davis and against CCI for the total sum of $3,470.38, plus interest at the rate of eight percent per annum.
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